10-Q

FORM 10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

x           Quarterly report pursuant to section 13 (a) or 15(d) of the Securities Act of 1934.

For the quarterly period ended September 30, 2011

or

¨           Transition report pursuant to section 13 (a) or 15(d) of the Securities Act of 1934.

Commission File No. 0-3026

PARADISE, INC.

INCORPORATED IN FLORIDA

I.R.S. EMPLOYER IDENTIFICATION NO. 59-1007583

1200 DR. MARTIN LUTHER KING, JR. BLVD.,

PLANT CITY, FLORIDA  33563

(813) 752-1155

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.         Yes   x      No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer ¨	Accelerated filer  ¨
Non-accelerated filer ¨	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)   Yes   ¨    No x

The number of shares outstanding of each of the issuer’s classes of common stock:

	Outstanding as of September 30,
Class	2011	2010
Common Stock
$0.30 Par Value	519,600 Shares	519,350 Shares

PARADISE, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2011

INDEX

		PAGE
PART I.	FINANCIAL INFORMATION
	ITEM 1.
	CONSOLIDATED BALANCE SHEETS:
	Assets
	As of September 30, 2011 (Unaudited), December 31, 2010 and September 30, 2010 (Unaudited)	2
	Liabilities and Stockholders’ Equity
	As of September 30, 2011 (Unaudited), December 31, 2010 and September 30, 2010 (Unaudited)	3
	CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED):
	For the three-month periods ended September 30, 2011 and 2010	4
	For the nine-month periods ended September 30, 2011 and 2010	5
	CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED):
	For the nine-month periods ended September 30, 2011 and 2010	6
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	7 – 9
	ITEM 2.
	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
	CONDITION AND RESULTS OF OPERATIONS	10 – 12
	ITEM 3.
	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK – N/A	13
	ITEM 4.
	CONTROLS AND PROCEDURES	13
PART II.	OTHER INFORMATION
	ITEMS 1 – 6.	14
SIGNATURES		15

PARADISE, INC.		COMMISSION FILE NO. 0-3026
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements

PARADISE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	AS OF				AS OF
	SEPTEMBER 30,		AS OF		SEPTEMBER 30,
	2011		DECEMBER 31,		2010
	(UNAUDITED)		2010		(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and Unrestricted Demand Deposits	$	95,564	$	4,772,056	$	789,042
Accounts Receivable,
Less, Allowances of $0 (09/30/11), $1,052,862 (12/31/10) and $0 (09/30/10)		6,461,091		3,619,735		5,889,664
Inventories:
Raw Materials		2,783,301		1,961,627		2,847,415
Work in Process		370,161		864,689		380,540
Finished Goods		6,368,290		3,220,268		7,585,845
Deferred Income Tax Asset		225,942		225,942		279,545
Income Tax Refund Receivable		221,446		-		251,728
Prepaid Expenses and Other Current Assets		400,786		348,407		502,998
Total Current Assets		16,926,581		15,012,724		18,526,777
Property, Plant and Equipment, Less, Accumulated Depreciation of $18,381,081 (09/30/11), $17,998,537 (12/31/10) and $17,861,158 (09/30/10)		4,293,875		4,338,717		4,443,563
Goodwill		413,280		413,280		413,280
Intangible Asset, Net		597,104		691,517		722,988
Other Assets		228,163		183,609		193,131
TOTAL ASSETS	$	22,459,003	$	20,639,847	$	24,299,739

See Accompanying Notes to these Consolidated Financial Statements (Unaudited)

2

	AS OF						AS OF
	SEPTEMBER 30,			AS OF			SEPTEMBER 30,
	2011			DECEMBER 31,			2010
	(UNAUDITED)			2010			(UNAUDITED)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Notes and Trade Acceptances Payable	$	1,118,364		$	247,836		$	4,337,184
Current Portion of Long-Term Debt		-			-			4,475
Accounts Payable		980,953			304,657			432,872
Accrued Liabilities		755,553			1,235,523			815,132
Income Taxes Payable		363,382			152,009			246,987
Total Current Liabilities		3,218,252			1,940,025			5,836,650
DEFERRED INCOME TAX LIABILITY		147,354			147,354			209,478
Total Liabilities		3,365,606			2,087,379			6,046,128
STOCKHOLDERS’ EQUITY:
Common Stock:  $0.30 Par Value, 2,000,000 Shares Authorized, 583,094 Shares Issued, 519,600 (09/30/11 and 12/31/10) and 519,350 (09/30/10) Shares Outstanding		174,928			174,928			174,928
Capital in Excess of Par Value		1,288,793			1,288,793			1,288,793
Retained Earnings		18,184,140			17,643,211			17,348,054
Accumulated Other Comprehensive Loss		(281,245	)		(281,245	)		(281,245	)
Treasury Stock, at Cost, 63,494 (09/30/11 and 12/31/10) and 63,744 (09/30/10) Shares		(273,219	)		(273,219	)		(276,919	)
Total Stockholders’ Equity		19,093,397			18,552,468			18,253,611
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	22,459,003		$	20,639,847		$	24,299,739

3

PARADISE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	FOR THE THREE MONTHS ENDED
	SEPTEMBER 30,
	2011			2010
Net Sales	$	9,446,944		$	8,391,798
Costs and Expenses:
Cost of Goods Sold (excluding Depreciation)		6,925,924			5,841,669
Selling, General and Administrative Expense		1,154,877			1,042,035
Depreciation and Amortization		163,336			173,780
Interest Expense		8,344			22,712
Total Costs and Expenses		8,252,481			7,080,196
Income from Operations		1,194,463			1,311,602
Other Income (Loss)		(23,906	)		(762	)
Income from Operations Before Provision for Income Taxes		1,170,557			1,310,840
Provision for Income Taxes		444,813			498,119
Net Income	$	725,744		$	812,721
Income per Common Share	$	1.40		$	1.56

See Accompanying Notes to these Consolidated Financial Statements (Unaudited)

4

PARADISE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	FOR THE NINE MONTHS ENDED
	SEPTEMBER 30,
	2011		2010
Net Sales	$	14,217,580	$	13,118,276
Costs and Expenses:
Cost of Goods Sold (excluding Depreciation)		10,264,721		9,334,451
Selling, General and Administrative Expense		2,666,303		2,602,380
Depreciation and Amortization		496,638		535,590
Interest Expense		8,344		25,847
Total Costs and Expenses		13,436,006		12,498,268
Income from Operations		781,574		620,008
Other Income		174,695		29,958
Income from Operations Before Provision for Income Taxes		956,269		649,966
Provision for Income Taxes		363,383		246,987
Net Income	$	592,886	$	402,979
Income per Common Share	$	1.14	$	0.78
Dividend per Common Share	$	0.10	$	0.05

See Accompanying Notes to these Consolidated Financial Statements (Unaudited)

5

PARADISE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	FOR THE NINE MONTHS ENDED
	SEPTEMBER 30,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	592,886		$	402,979
Adjustments to Reconcile Net Income to Net Cash
Used in Operating Activities:
Depreciation and Amortization		496,638			535,590
Loss on the Sale of Marketable Equity Securities		-			34,221
Decrease (Increase) in:
Accounts Receivable		(2,841,356	)		(4,099,758	)
Inventories		(3,475,169	)		(2,607,566	)
Prepaid Expenses		(52,379	)		(139,804	)
Other Assets		(57,589	)		(5,151	)
Income Tax Refund Receivable		(221,446	)		(251,728	)
Increase (Decrease) in:
Accounts Payable		676,296			(353,379	)
Accrued Expense		(479,970	)		(57,140	)
Income Taxes Payable		211,373			209,957
Net Cash Used in Operating Activities		(5,150,716	)		(6,331,779	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment		(344,344	)		(122,648	)
Proceeds from the Sale of Marketable Equity Securities		-			111,350
Net Cash Used in Investing Activities		(344,344	)		(11,298	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Proceeds of Short-Term Debt		870,528			4,150,265
Principal Payments of Long-Term Debt		-			(7,241	)
Dividends Paid		(51,960	)		(25,968	)
Net Cash Provided by Financing Activities		818,568			4,117,056
NET DECREASE IN CASH		(4,676,492	)		(2,226,021	)
CASH, AT BEGINNING OF PERIOD		4,772,056			3,015,063
CASH, AT END OF PERIOD	$	95,564		$	789,042
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest	$	8,344		$	25,847
Income Tax		371,446			276,663
Net Supplemental Cash Flows	$	379,790		$	302,510

See Accompanying Notes to these Consolidated Financial Statements (Unaudited)

6

PARADISE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1           BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Paradise, Inc. (the “Company”) have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission.  Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

The information furnished herein reflects all adjustments and accruals that management believes is necessary to fairly state the operating results for the respective periods.  The notes to the consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s Form 10-K for the year ended December 31, 2010.  The Company’s management believes that the disclosures are sufficient for interim financial reporting purposes.

NOTE 2           RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In April 2011, the FASB issued Accounting Standard Update (“ASU”) 2011-02 A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring for the purpose of measuring the impairment of old receivables and evaluating whether a troubled debt restructuring has occurred.  An entity should disclose the total amount of receivables and the allowances for credit losses as of the end of the period of adoption related to those receivables that are considered newly impaired under ASC Section 310-10-35 for which impairment was previously measured under ASC Subtopic 450-20, Contingencies – Loss Contingencies.  The ASU is effective for the Company for the interim and annual periods beginning after June 15, 2011.  The adoption of this ASU did not have an impact on the Company’s consolidated financial statements or disclosures.

In May 2011, the FASB issued ASU 2011-04 Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.  The ASU expands ASC Topic 820’s existing disclosure requirements for fair value measurements and makes other amendments that could change how the fair value measurement guidance in ASC Topic 820 is applied.  The ASU is effective for the Company for the interim and annual periods beginning after December 15, 2011.  The adoption of this ASU is not expected to have an impact on the Company’s consolidated financial statements or disclosures.

In June 2011, the FASB issued ASU 2011-05 Presentation of Comprehensive Income, which revises the manner in which entities present comprehensive income in their financial statements.  The new guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements.  The ASU is effective for the Company for the interim and annual periods beginning after December 15, 2011.  The adoption of this ASU is not expected to have an impact on the Company’s consolidated financial statements or disclosures.

Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

NOTE 3           NET INCOME PER SHARE

Net income per share, assuming no dilution, is based on the weighted average number of shares outstanding during the period:  (519,600 as of September 30, 2011 and 519,350 as of September 30, 2010).

7

PARADISE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 4           SHORT-TERM DEBT

On June 30, 2011, Paradise, Inc. renewed its revolving loan agreement with the Company’s current financial institution that has a maximum limit of $12,000,000 and a borrowing limit of 80% of the Company’s eligible receivables plus up to 60% of the Company’s eligible inventory.  This agreement is secured by all of the assets of the Company and matures on June 30, 2013.  Interest is payable monthly at the bank’s LIBOR rate plus 1.9% or a floor of 3%, whichever is greater.

NOTE 5           BUSINESS SEGMENT DATA

The Company’s operations are conducted through two business segments.  These segments, and the primary operations of each, are as follows:

Business Segment	Operation
Fruit	Production of candied fruit, a basic fruitcake ingredient, sold to manufacturing bakers, institutional users, and retailers for use in home baking.  Also, based on market conditions, the processing of frozen strawberry products, for sale to commercial and institutional users such as preservers, dairies, drink manufacturers, etc.
Molded Plastics	Production of plastics containers and other molded plastics for sale to various food processors and others.

	September 30,		September 30,
	2011		2010
Net Sales in Each Segment
Fruit:
Sales to Unaffiliated Customers	$	8,700,855	$	7,589,776
Molded Plastics:
Sales to Unaffiliated Customers		5,516,725		5,528,500
Net Sales	$	14,217,580	$	13,118,276

For the nine month period ended, September 30, 2011 and 2010, sales of frozen strawberry products totaled $323,495 and $192,797, respectively.

The Company does not account for intersegment transfers as if the transfers were to third parties.

The Company does not prepare operating profit or loss information on a segment basis for internal use, until the end of each year.  Due to the seasonal nature of the fruit segment, management believes that it is not practical to prepare this information for interim reporting purposes.  Therefore, reporting is not required by accounting principles generally accepted in the United States of America.

8

PARADISE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

NOTE 5           BUSINESS SEGMENT DATA (CONTINUED)

	September 30,		September 30,
	2011		2010
Identifiable Assets of Each Segment are Listed Below:
Fruit	$	15,379,816	$	16,619,139
Molded Plastics		5,106,533		4,932,116
Identifiable Assets		20,486,349		21,551,255
General Corporate Assets		1,972,654		2,748,484
Total Assets	$	22,459,003	$	24,299,739

Identifiable assets by segment are those assets that are principally used in the operations of each segment.  General corporate assets are principally cash, land and buildings.

9

PARADISE, INC.		COMMISSION FILE NO. 0-3026
PART I.	FINANCIAL INFORMATION

Item 2.              Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward–Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.  All statements other than statements of historical fact should be considered “forward-looking statements” for the purpose of these provisions, including statements that include projections of, or expectations about, earnings, revenues or other financial items, statements about our plans and objectives for future operations, statements concerning proposed new products or services, statements regarding future economic conditions or performance, statements concerning our expectations regarding the attraction and retention of customers, statements about market risk and statements underlying any of the foregoing.  In some cases, forward-looking statements can be identified by the use of such terminology as “may”, “will”, “expects”, “potential”, or “continue”, or the negative thereof or other similar words.  Although we believe that the expectations reflected in our forward-looking statements are reasonable, we can give no assurance that such expectations or any of our forward-looking statements will prove to be correct.  Actual results and developments are likely to be different from, and may be materially different from, those expressed or implied by our forward-looking statements.  Forward-looking statements are subject to inherent risks and uncertainties.

Overview

Paradise, Inc.’s main business segment, glace’ fruit, a prime ingredient of fruitcakes and other holiday confections, represented 68.1% of total net sales during 2010.  These products are sold to manufacturing bakers, institutional users, supermarkets and other retailers throughout the country.  Consumer demand for glace’ fruit product is traditionally strongest during the Thanksgiving and Christmas season.  Historically, 80% of glace’ fruit product sales are recorded from the eight to ten weeks beginning in mid September.

Since the majority of the Company’s customers require delivery of glace’ candied fruit products during this relatively short period of time, Paradise, Inc. must operate at consistent levels of production from as early as January through the middle of November of each year in order to meet peak demand.  Furthermore, the Company must make substantial borrowings of short-term working capital to cover the cost of raw materials, factory overhead and labor expense associated with production for inventory.  This combination of building and financing inventories during the year, without the opportunity to record any significant fruit product income, results in the generation of operating losses well into the third quarter of each year.  Therefore, it is the opinion of management that any meaningful forecast of annual net sales or profit levels require analysis of a full year’s operations.

In addition, comparison of current quarterly results to the preceding quarter produces an incomplete picture on the Company’s performance due to year-to-year changes in production schedules, seasonal harvests and availability of raw materials, and in the timing of customer orders and shipments.  Thus, the discussion of information presented within this report is focused on the review of the Company’s current year-to-date results as compared to the similar period last year.

Paradise’s other business segment, Paradise Plastics, Inc., a wholly owned subsidiary of Paradise, Inc., produces custom molding products that are not subject to the seasonality of the glace’ fruit business.  This segment represents all injection molding and thermoforming operations, including the packaging for the Company’s fruit products.  Only sales to unaffiliated customers are reported.

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PARADISE, INC.		COMMISSION FILE NO. 0-3026
PART I.	FINANCIAL INFORMATION

Item 2.              Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

The First Nine Months

Paradise, Inc.’s fruit segment net sales increased 14.6% compared to the similar reporting period last year, primarily due to timing differences in the receipt of customer orders and corresponding shipping dates for delivery of the Company’s retail glace’ fruit products.  Paradise, Inc. recognizes revenue based upon shipment of goods to its customers.  Changes in shipping dates requested by retail glace’ customers between interim reporting dates will lead to fluctuations in net sales. Paradise, Inc. has been consistent in previous filings to disclose that interim filings are not reliable indicators of year-end results.  The Company must wait until all orders and re-orders for glace’ fruit products leading up and through the holiday season have been fulfilled before any determination of profitability is ascertained.

Paradise Plastics, Inc., a wholly owned subsidiary of Paradise, Inc., which is not subject to seasonal fluctuations as the glace’ fruit business, generated net sales from non-affiliated customers of $5,516,725 for the first nine months of 2011 compared to $5,528,500 for the similar reporting period for 2010.  Net sales through the third quarter of 2011 remained consistent with the similar  reporting period for 2010 as increased orders from industries as diverse as medical supplies, food processing and aerospace offset decreases in plastics orders received from industries related to the housing market.

Consolidated cost of sales, as a percentage of net sales, increased 1.0% during the first nine months of 2011 compared to the similar reporting period for 2010 as increases in the cost of raw fruit commodities and freight-in expenses absorbed from the Paradise, Inc.’s suppliers outpaced the Company’s ability to past these increases to its customers.  Inventory as of September 30, 2011 decreased $1,292,048 compared to inventory levels as of September 30, 2010. This continues a trend in the Company’s effort to reduce its overall inventory position as Paradise, Inc. finances the majority of its raw materials with short-term borrowing from its revolving  line of credit.  For the nine months ended September 30, 2011, interest expense incurred related to inventory purchases equaled $8,344 compared to $25,847 for the similar reporting period for 2010.

Selling, general & administrative expenses for the first nine months of 2011 increased 2.5%  compared to the previous year’s reporting period as freight out expenses related to the delivery of the Company’s glace’ fruit orders outpaced savings generated in administrative payroll and related employee benefits.

Depreciation and amortization expenses decreased $38,952 or 7.3% for the first nine months of 2011 compared to the similar reporting period of 2010 as fixed assets that became fully depreciated during the past twelve months exceeded the amount of new assets placed into service.

Summary

Paradise Inc.’s consolidated net sales increased 8.4% for the first nine months of 2011 compared to the similar reporting period for 2010 as timing differences resulted in a greater amount of purchase orders received and shipped for glace’ fruit orders from existing long term customers during September, 2011  compared to October, 2010.  However, with more than 80% of Paradise, Inc.’s annual fruit segment net sales scheduled to commence in mid September and continue throughout the fourth quarter of 2011, no meaningful financial analysis may be developed from this interim filing.  As stated in previous interim filings, only a full year’s reporting will provide the necessary information to determine the Company’s profitability.

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PARADISE, INC.		COMMISSION FILE NO. 0-3026
PART I.	FINANCIAL INFORMATION

Item 2.              Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make assessments, estimates and assumptions that affect the amounts reported in the consolidated financial statements.  We evaluate the accounting policies and estimates used to prepare the consolidated financial statements on an ongoing basis.  Critical accounting estimates are those that require management’s most difficult, complex, or subjective judgments and have the most potential to impact our financial position and operating results.  For a detailed discussion of our critical accounting estimates, see our Annual Report on Form 10-K for the year ended December 31, 2010.  There have been no material changes to our critical accounting estimates during the nine months ended September 30, 2011.

Recently Issued Accounting Pronouncements

In April 2011, the FASB issued new guidancefor the purpose of measuring the impairment of old receivables and evaluating whether a troubled debt restructuring has occurred.  An entity should disclose the total amount of receivables and the allowances for credit losses as of the end of the period of adoption related to those receivables that are considered newly impaired under the new guidance for which impairment was previously measured under previously authoritative guidance.  The guidance is effective for us for the interim and annual periods beginning after June 15, 2011.  The adoption of this guidance did not have an impact on our operations.

In May 2011, the FASB issued new guidance that expands existing disclosure requirements for fair value measurements and makes other amendments that could change how the fair value measurement guidance is applied.  The guidance is effective for us for the interim and annual periods beginning after December 15, 2011.  The adoption of this guidance is not expected to have an impact on our operations.

In June 2011, the FASB issued new guidance that revises the manner in which entities present comprehensive income in their financial statements.  The new guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements.  The guidance is effective for us for the interim and annual periods beginning after December 15, 2011.  The adoption of this guidance is not expected to have an impact on our operations.

We do not believe that other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the Securities and Exchange Commission will have a material impact on the Company’s present or future consolidated financial statements.

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PARADISE, INC.		COMMISSION FILE NO. 0-3026
PART I.	FINANCIAL INFORMATION

Item 3.              Quantitative and Qualitative Disclosure and Market Risk – N/A

Item 4.              Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have, within 90 days of the filing date of this quarterly report, evaluated the Company’s disclosure controls and procedures.  Based on their evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded, as of September 30, 2011, that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the applicable Securities and Exchange Commission rules and forms.  During the year ended December 31, 2010, the Company identified a weakness in internal control over the timing of issuing credit memos for products returned into inventory.  Procedures were established during the nine months ended September 30, 2011 to ensure the timeliness of issuing credit memos when products are returned.  There were no other changes in the Company’s internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  The most recent evaluation of these controls by the Company’s Chief Executive Officer and Chief Financial Officer did not identify any additional deficiencies or weaknesses in the Company’s internal controls over financial reporting; therefore, no corrective actions were taken.

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PARADISE, INC. COMMISSION FILE NO. 0-3026

PART II.            OTHER INFORMATION

Item 1.                Legal Proceedings – N/A

Item 1A.             Risk Factors – N/A

Item 2.                Unregistered Sales of Equity Securities and Use of Proceeds – N/A

Item 3.                Defaults Upon Senior Securities – N/A

Item 4.                Submission of Matters to a Vote of Security Holders – N/A

Item 5.                Other Information – N/A

Item 6.                Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit
Number	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K.

   None.

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PARADISE, INC. COMMISSION FILE NO. 0-3026

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PARADISE, INC.
A Florida Corporation
/s/ Melvin S. Gordon	Date:	November 14, 2011
Melvin S. Gordon
Chief Executive Officer and Chairman
/s/ Jack M. Laskowitz	Date:	November 14, 2011
Jack M. Laskowitz
Chief Financial Officer and Treasurer

15

EX-31.1

Exhibit 31.1

Sarbanes-Oxley Section 302

Certification of Chief Executive Officer

I, Melvin S. Gordon, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Paradise, Inc.

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 Date: November 14, 2011

 /s/ Melvin S. Gordon

Melvin S. Gordon

Chief Executive Officer and Chairman

EX-31.2

Exhibit 31.2

Sarbanes-Oxley Section 302

Certification of Chief Financial Officer

I, Jack M. Laskowitz, certify that:

1.      I have reviewed this quarterly report on Form 10-Q of Paradise, Inc.

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 14, 2011

/s/ Jack M. Laskowitz

Jack M. Laskowitz

Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification of CEO pursuant to

18 U.S.C. Section 1350 as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Paradise, Inc. on Form 10-Q for the period ending September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Melvin S. Gordon, as Chief Executive Officer of Paradise, Inc., certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of Paradise, Inc.

/s/ Melvin S. Gordon	Date:  November 14, 2011
Melvin S. Gordon
Chief Executive Officer and Chairman

EX-32.2

Exhibit 32.1

Certification of CFO pursuant to

18 U.S.C. Section 1350 as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Paradise, Inc. on Form 10-Q for the period ending September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jack M. Laskowitz, as Chief Financial Officer of Paradise, Inc., certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of Paradise, Inc.

/s/ Jack M. Laskowitz	Date:  November 14, 2011
Jack M. Laskowitz
Chief Financial Officer and Treasurer

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CONSOLIDATED BALANCE SHEETS [PARENTHETICAL] (USD $)	Sep. 30, 2011	Dec. 31, 2010	Sep. 30, 2010
Allowances Receivable	$ 0	$ 1,052,862	$ 0
Accumulated Depreciation	$ 18,381,081	$ 17,998,537	$ 17,861,158
Common Stock, Par Value (in dollars per share)	$ 0.30	$ 0.30	$ 0.30
Common Stock, Shares Authorized	2,000,000,000	2,000,000	2,000,000
Common Stock, Shares Issued	583,094	583,094	583,094
Common Stock, Shares Outstanding	519,600	519,600	519,350
Treasury Stock	63,494	63,494	63,744

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CONSOLIDATED STATEMENTS OF INCOME (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Net Sales	$ 9,446,944	$ 8,391,798	$ 14,217,580	$ 13,118,276
Costs and Expenses:
Cost of Goods Sold (excluding Depreciation)	6,925,924	5,841,669	10,264,721	9,334,451
Selling, General and Administrative Expense	1,154,877	1,042,035	2,666,303	2,602,380
Depreciation and Amortization	163,336	173,780	496,638	535,590
Interest Expense	8,344	22,712	8,344	25,847
Total Costs and Expenses	8,252,481	7,080,196	13,436,006	12,498,268
Income from Operations	1,194,463	1,311,602	781,574	620,008
Other Income (Loss)	(23,906)	(762)	174,695	29,958
Income from Operations Before Provision for Income Taxes	1,170,557	1,310,840	956,269	649,966
Provision for Income Taxes	444,813	498,119	363,383	246,987
Net Income	$ 725,744	$ 812,721	$ 592,886	$ 402,979
Income per Common Share (in dollers per share)	$ 1.40	$ 1.56	$ 1.14	$ 0.78
Dividend per Common Share (in dollars per share)			$ 0.10	$ 0.05

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Document And Entity Information	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Entity Registrant Name	PARADISE INC
Entity Central Index Key	0000076149
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	parf
Entity Common Stock, Shares Outstanding	519,600	519,350
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2011

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NET INCOME PER SHARE

9 Months Ended

Sep. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

NOTE 3           NET INCOME PER SHARE

Net income per share, assuming no dilution, is based on the weighted average number of shares outstanding during the period:  (519,600 as of September 30, 2011 and 519,350 as of September 30, 2010).

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2011

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1           BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Paradise, Inc. (the “Company”) have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission.  Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

The information furnished herein reflects all adjustments and accruals that management believes is necessary to fairly state the operating results for the respective periods.  The notes to the consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s Form 10-K for the year ended December 31, 2010.  The Company’s management believes that the disclosures are sufficient for interim financial reporting purposes.

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SHORT-TERM DEBT

9 Months Ended

Sep. 30, 2011

Debt Disclosure [Abstract]

Short-term Debt [Text Block]

NOTE 4           SHORT-TERM DEBT

On June 30, 2011, Paradise, Inc. renewed its revolving loan agreement with the Company’s current financial institution that has a maximum limit of $12,000,000 and a borrowing limit of 80% of the Company’s eligible receivables plus up to 60% of the Company’s eligible inventory.  This agreement is secured by all of the assets of the Company and matures on June 30, 2013.  Interest is payable monthly at the bank’s LIBOR rate plus 1.9% or a floor of 3%, whichever is greater.

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BUSINESS SEGMENT DATA

9 Months Ended

Sep. 30, 2011

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 5           BUSINESS SEGMENT DATA

The Company’s operations are conducted through two business segments.  These segments, and the primary operations of each, are as follows:

Business Segment	Operation
Fruit	Production of candied fruit, a basic fruitcake ingredient, sold to manufacturing bakers, institutional users, and retailers for use in home baking.  Also, based on market conditions, the processing of frozen strawberry products, for sale to commercial and institutional users such as preservers, dairies, drink manufacturers, etc.
Molded Plastics	Production of plastics containers and other molded plastics for sale to various food processors and others.

	September 30,		September 30,
	2011		2010
Net Sales in Each Segment
Fruit:
Sales to Unaffiliated Customers	$	8,700,855	$	7,589,776
Molded Plastics:
Sales to Unaffiliated Customers		5,516,725		5,528,500
Net Sales	$	14,217,580	$	13,118,276

For the nine month period ended, September 30, 2011 and 2010, sales of frozen strawberry products totaled $323,495 and $192,797, respectively.

The Company does not account for intersegment transfers as if the transfers were to third parties.

The Company does not prepare operating profit or loss information on a segment basis for internal use, until the end of each year.  Due to the seasonal nature of the fruit segment, management believes that it is not practical to prepare this information for interim reporting purposes.  Therefore, reporting is not required by accounting principles generally accepted in the United States of America.

	September 30,		September 30,
	2011		2010
Identifiable Assets of Each Segment are Listed Below:
Fruit	$	15,379,816	$	16,619,139
Molded Plastics		5,106,533		4,932,116
Identifiable Assets		20,486,349		21,551,255
General Corporate Assets		1,972,654		2,748,484
Total Assets	$	22,459,003	$	24,299,739

Identifiable assets by segment are those assets that are principally used in the operations of each segment.  General corporate assets are principally cash, land and buildings.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 592,886	$ 402,979
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities:
Depreciation and Amortization	496,638	535,590
Loss on the Sale of Marketable Equity Securities	0	34,221
Decrease (Increase) in:
Accounts Receivable	(2,841,356)	(4,099,758)
Inventories	(3,475,169)	(2,607,566)
Prepaid Expenses	(52,379)	(139,804)
Other Assets	(57,589)	(5,151)
Income Tax Refund Receivable	(221,446)	(251,728)
Increase (Decrease) in:
Accounts Payable	676,296	(353,379)
Accrued Expense	(479,970)	(57,140)
Income Taxes Payable	211,373	209,957
Net Cash Used in Operating Activities	(5,150,716)	(6,331,779)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment	(344,344)	(122,648)
Proceeds from the Sale of Marketable Equity Securities	0	111,350
Net Cash Used in Investing Activities	(344,344)	(11,298)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Proceeds of Short-Term Debt	870,528	4,150,265
Principal Payments of Long-Term Debt	0	(7,241)
Dividends Paid	(51,960)	(25,968)
Net Cash Provided by Financing Activities	818,568	4,117,056
NET DECREASE IN CASH	(4,676,492)	(2,226,021)
CASH, AT BEGINNING OF PERIOD	4,772,056	3,015,063
CASH, AT END OF PERIOD	95,564	789,042
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest	8,344	25,847
Income Tax	371,446	276,663
Net Supplemental Cash Flows	$ 379,790	$ 302,510

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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2011

Accounting Changes and Error Corrections [Abstract]

Accounting Changes and Error Corrections [Text Block]

NOTE 2           RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In April 2011, the FASB issued Accounting Standard Update (“ASU”) 2011-02 A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring for the purpose of measuring the impairment of old receivables and evaluating whether a troubled debt restructuring has occurred.  An entity should disclose the total amount of receivables and the allowances for credit losses as of the end of the period of adoption related to those receivables that are considered newly impaired under ASC Section 310-10-35 for which impairment was previously measured under ASC Subtopic 450-20, Contingencies – Loss Contingencies.  The ASU is effective for the Company for the interim and annual periods beginning after June 15, 2011.  The adoption of this ASU did not have an impact on the Company’s consolidated financial statements or disclosures.

In May 2011, the FASB issued ASU 2011-04 Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.  The ASU expands ASC Topic 820’s existing disclosure requirements for fair value measurements and makes other amendments that could change how the fair value measurement guidance in ASC Topic 820 is applied.  The ASU is effective for the Company for the interim and annual periods beginning after December 15, 2011.  The adoption of this ASU is not expected to have an impact on the Company’s consolidated financial statements or disclosures.

In June 2011, the FASB issued ASU 2011-05 Presentation of Comprehensive Income, which revises the manner in which entities present comprehensive income in their financial statements.  The new guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements.  The ASU is effective for the Company for the interim and annual periods beginning after December 15, 2011.  The adoption of this ASU is not expected to have an impact on the Company’s consolidated financial statements or disclosures.

Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

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CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2011	Dec. 31, 2010	Sep. 30, 2010
ASSETS
Cash and Unrestricted Demand Deposits	$ 95,564	$ 4,772,056	$ 789,042
Accounts Receivable, Less, Allowances of $0 (09/30/11), $1,052,862 (12/31/10) and $0 (09/30/10)	6,461,091	3,619,735	5,889,664
Inventories:
Raw Materials	2,783,301	1,961,627	2,847,415
Work in Process	370,161	864,689	380,540
Finished Goods	6,368,290	3,220,268	7,585,845
Deferred Income Tax Asset	225,942	225,942	279,545
Income Tax Refund Receivable	221,446	0	251,728
Prepaid Expenses and Other Current Assets	400,786	348,407	502,998
Total Current Assets	16,926,581	15,012,724	18,526,777
Property, Plant and Equipment, Less, Accumulated Depreciation of $18,381,081 (09/30/11), $17,998,537 (12/31/10) and $17,861,158 (09/30/10)	4,293,875	4,338,717	4,443,563
Goodwill	413,280	413,280	413,280
Intangible Asset, Net	597,104	691,517	722,988
Other Assets	228,163	183,609	193,131
TOTAL ASSETS	22,459,003	20,639,847	24,299,739
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes and Trade Acceptances Payable	1,118,364	247,836	4,337,184
Current Portion of Long-Term Debt	0	0	4,475
Accounts Payable	980,953	304,657	432,872
Accrued Liabilities	755,553	1,235,523	815,132
Income Taxes Payable	363,382	152,009	246,987
Total Current Liabilities	3,218,252	1,940,025	5,836,650
DEFERRED INCOME TAX LIABILITY	147,354	147,354	209,478
Total Liabilities	3,365,606	2,087,379	6,046,128
STOCKHOLDERS' EQUITY:
Common Stock: $0.30 Par Value, 2,000,000 Shares Authorized, 583,094 Shares Issued, 519,600 (09/30/11 and 12/31/10) and 519,350 (09/30/10) Shares Outstanding	174,928	174,928	174,928
Capital in Excess of Par Value	1,288,793	1,288,793	1,288,793
Retained Earnings	18,184,140	17,643,211	17,348,054
Accumulated Other Comprehensive Loss	(281,245)	(281,245)	(281,245)
Treasury Stock, at Cost, 63,494 (09/30/11 and 12/31/10) and 63,744 (09/30/10) Shares	(273,219)	(273,219)	(276,919)
Total Stockholders' Equity	19,093,397	18,552,468	18,253,611
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 22,459,003	$ 20,639,847	$ 24,299,739