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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

   
                                  Form 10-K/A-1
    


                                   (Mark One)
            [X] Annual Report Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934 (Fee Required)

                     For the Fiscal Year Ended June 28, 1997
                                       or
          [ ] Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                        For the Transition Period from to

                Registration Statement (Form S-4) Number 33-56517

   
                              AGRILINK FOODS, INC.
    
             (Exact name of registrant as specified in its charter)

      New York                                          16-0845824
(State of incorporation)                    (IRS Employer Identification Number)

                 90 Linden Place, PO Box 681 Rochester, NY 14603
               (Address of Principal Executive Offices) (Zip Code)

       Registrant's telephone number, including area code: (716) 383-1850
        Securities Registered Pursuant to Section 12(b) of the Act: NONE
        Securities Registered Pursuant to Section 12(g) of the Act: NONE

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 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 if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Aggregate market value of voting stock held by non-affiliates of the registrant:
                                      NONE
             Number of common shares outstanding at August 8, 1997:
                              Common Stock: 10,000


<PAGE>





   
                       FORM 10-K/A-1 ANNUAL REPORT - 1997
                              AGRILINK FOODS, INC.
    
                                TABLE OF CONTENTS

                                     PART I
<TABLE>
                                                                                                                         PAGE

ITEM  1.   Description of Business
<CAPTION>
<S>            <C>                                                                                                       <C>
               General Development of Business......................................................................      3
               Narrative Description of Business ...................................................................      3
               Financial Information About Industry Segments........................................................      5
               Packaging and Distribution...........................................................................      5
               Trademarks...........................................................................................      5
               Raw Material Sources.................................................................................      6
               Environmental Matters................................................................................      6
               Seasonality of Business..............................................................................      7
               Practices Concerning Working Capital.................................................................      7
               Significant Customers................................................................................      7
               Backlog of Orders....................................................................................      7
               Business Subject to Government Contracts.............................................................      7
               Competitive Conditions...............................................................................      7
               New Products and Research and Development............................................................      8
               Employees............................................................................................      8
               Cautionary Statement on Forward-Looking Statements...................................................      8
ITEM  2.   Description of Properties................................................................................      9
ITEM  3.   Legal Proceedings........................................................................................     10
ITEM  4.   Submission of Matters to a Vote of Security Holders......................................................     10

                                  PART II

   
ITEM  5.   Market for Registrant's Common Stock and Related Security Holder Matters.................................     11
ITEM  6.   Selected Financial Data..................................................................................     11
ITEM  7.   Management's Discussion and Analysis of Financial Condition and Results of Operations....................     12
ITEM  8.   Financial Statements and Supplementary Data..............................................................     19
ITEM  9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.....................     38
    

                                 PART III

   
ITEM 10.   Directors and Executive Officers of the Registrant.......................................................     39
ITEM 11.   Executive Compensation...................................................................................     42
ITEM 12.   Security Ownership of Certain Beneficial Owners and Management...........................................     44
ITEM 13.   Certain Relationships and Related Transactions...........................................................     44
    

                                     PART IV

   
ITEM 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K..........................................     46

           Signatures...............................................................................................     49
    
</TABLE>


<PAGE>
                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

                         GENERAL DEVELOPMENT OF BUSINESS

   
On September 18, 1997,  Curtice-Burns  Foods,  Inc. changed its name to Agrilink
Foods, Inc. The three recently consolidated business units of Agrilink, Comstock
Michigan Fruit,  Southern Frozen Foods, and Brooks Foods, are now called Curtice
Burns Foods ("CBF").

Agrilink Foods, Inc. (the "Company" or "Agrilink") is a producer and marketer of
processed  food  products,  including  canned and frozen fruits and  vegetables,
canned desserts and condiments,  fruit fillings and toppings, canned chilies and
stews, salad dressings, pickles, peanut butter and snack foods.

On November 3, 1994, Pro-Fac  Cooperative,  Inc.  ("Pro-Fac")  acquired Agrilink
(the "Acquisition"),  and Agrilink became a wholly-owned  subsidiary of Pro-Fac.
Pro-Fac is an agricultural cooperative corporation formed in 1960 under New York
law to process and market  crops grown by its members.  The  purchase  price and
fees and expenses related to the Acquisition were financed with borrowings under
a new  credit  agreement  (the "New  Credit  Agreement")  with  CoBank  ACB (the
"Bank"),  and the proceeds of the Company's  12.25 percent  Senior  Subordinated
Notes due 2005 (the  "Notes").  Pro-Fac has  guaranteed  the  obligations of the
Company  under  the New  Credit  Agreement  and the  Notes.  As a result  of the
indebtedness  incurred in connection with the  Acquisition,  Agrilink has higher
interest expenses than prior to the Acquisition.

Upon  consummation  of the  Acquisition,  Pro-Fac and Agrilink  entered into the
Pro-Fac   Marketing  and   Facilitation   Agreement   (the  "Pro-Fac   Marketing
Agreement").  The New Credit  Agreement  and the Notes  restrict  the ability of
Pro-Fac to amend the  Pro-Fac  Marketing  and  Facilitation  Agreement.  The New
Credit  Agreement  and the Notes also restrict the amount of dividends and other
payments that may be made by the Company to Pro-Fac.

The  Pro-Fac  Marketing  Agreement  provides  for  Pro-Fac  to supply  crops and
additional  financing  to  Agrilink,  for  Agrilink  to  provide  a  market  and
management  services  to  Pro-Fac,  and for  Pro-Fac to share in the profits and
losses of  Agrilink.  Pro-Fac is required to reinvest at least 70 percent of the
additional  patronage  income from Agrilink back into Agrilink.  To preserve the
independence  of Agrilink,  the Pro-Fac  Marketing  Agreement also requires that
certain of the  directors of Agrilink be  individuals  who are not  employees or
shareholders  of,  or  otherwise   affiliated  with,   Pro-Fac  or  the  Company
("Disinterested  Directors") and requires that certain decisions,  including the
volume of and the amount to be paid for crops received from Pro-Fac, be approved
by the Disinterested  Directors. See further discussion of the relationship with
Pro-Fac in NOTE 2 to the "Notes to Consolidated Financial Statements."

In January of 1995,  the Boards of Directors  of Agrilink  and Pro-Fac  approved
appropriate  amendments  to the  Bylaws of  Agrilink  Foods,  Inc.  to allow the
Company to qualify as a cooperative  under  Subchapter T of the Internal Revenue
Code. A private  letter  ruling  agreeing to this change was  received  from the
Internal  Revenue  Service in August 1995.  The effective date of the change was
June 25, 1995. As a  cooperative,  patronage  income is deductible to the extent
distributed to its members.  Accordingly,  taxation on patronage  income is only
imposed at the patron level.

Under the Pro-Fac Marketing Agreement, Agrilink manages the business and affairs
of Pro-Fac and provides  all  personnel  and  administrative  support  required.
Pro-Fac  pays  Agrilink a  quarterly  fee of  $25,000  for these  services.  See
"Certain Transactions."
    

                        NARRATIVE DESCRIPTION OF BUSINESS

The  Company  sells  products  in  three  principal  categories:  (i)  "branded"
products, which are sold under various Company trademarks,  (ii) "private label"
products, which are sold to grocers who in turn use their own brand names on the
products  and  (iii)  "foodservice"  products,  which  are  sold to  foodservice
institutions such as restaurants,  caterers,  bakeries,  and schools.  In fiscal
1997,  approximately  52 percent of the Company's net sales were branded and the
remainder  divided between private label and foodservice.  The Company's branded
products are listed under the "Trademarks" section of this report. The Company's
private  label  products  include salad  dressings,  salsa,  fruit  fillings and
toppings,  canned  puddings,  canned  and  frozen  vegetables,  Southern  frozen
vegetable specialty products,  and frozen and breaded products which are sold to
customers such as A&P, Brunos, Kroger, Piggly Wiggly, Safeway, SuperValu, Topco,
Wegmans  and  Winn-Dixie.  The  Company's  foodservice  products  include  salad
dressings,  pickles, fruit fillings and toppings,  canned and frozen vegetables,
frozen  Southern  specialties,  frozen  breaded and  battered  products,  canned
puddings, cheese sauces and canned and frozen fruit, which are sold to customers
such as Carvel, Church's,  Disney, Foodservice of America, KFC, MBM, McDonald's,
PYA, and Sysco.

   
Curtice Burns Foods ("CBF"): On September 18, 1997, the Comstock Michigan Fruit,
Southern Frozen Foods, and Brooks Foods
    
<PAGE>
   
business  units  were  consolidated  and are now  called  Curtice  Burns  Foods,
headquartered  in Rochester,  New York. The consolidated  entity  represents the
largest  business unit of Agrilink.  This  business  unit  produces  products in
several   food    categories,    including    fruit   fillings   and   toppings;
aseptically-produced  products;  canned and frozen  fruits  and  vegetables  and
popcorn.  Well-known brand names include "Chill Ripe," "Comstock,"  "Greenwood,"
"Just for Chili,"  "McKenzie's,"  "McKenzie's Gold King," "Pops-Rite," "Rich and
Tangy,"  "Silver  Floss,"  "Super Pop,"  "Southern  Farms," "Thank You," "Tropic
Isle," and  "Wilderness." In fiscal 1997,  approximately 36 percent of net sales
for these  businesses  represented  branded  products,  approximately 25 percent
represented  private label  products and  approximately  39 percent  represented
foodservice/industrial products.
    

This  business  unit is a major  supplier  of branded  and  private  label fruit
fillings to  retailers  and to  foodservice  institutions  such as  restaurants,
caterers,  bakeries and schools.  On July 21, 1995, the Company  acquired Packer
Foods,  Inc., and merged this pie filling operation into its existing  business.
(See  further  discussion  in  NOTE  3  of  "Notes  to  Consolidated   Financial
Statements.")

Aseptic  operations  produce  puddings and cheese  sauces for sale.  The aseptic
production process involves  preparation of the product in a sterile environment
beginning with batch formulation and continuing through packaging.  As a result,
once packaged, the product requires no further cooking. The Company believes its
aseptic production is a state-of-the-art facility.

This business unit  processes  fruits and  vegetables  under Company  brands and
private labels.  Additional  products include  value-added  items such as canned
specialty fruits and frozen vegetable blends. Success in the fruit and vegetable
processing  business  is driven,  among other  things,  by an ability to control
costs.   This  objective  is  managed  through   capital   investments  and  the
modernization  of  processing  equipment,  modifications  to  product  mix,  and
refinement to advertising strategies.  In fiscal 1997, $9.6 million was invested
in capital improvements.

   
This Agrilink'  business unit is also one of the nation's  leading  suppliers in
the  production  and  sale  of  frozen,   Southern-specialty  products  such  as
black-eyed peas, okra,  Southern squash, and Southern specialty side dishes that
include summer squash casserole, Southern-style creamed corn, and Southern-style
black-eyed peas in a savory sauce.
    

Canned beans and tomato products are sold in several Midwestern states under the
Brooks label. The category  includes  value-added  items such as Chili Hot Beans
and stewed tomatoes.

Subsequent  to fiscal  1997,  the Company and  Flanagan  Brothers,  Inc. of Bear
Creek,  Wisconsin,  contributed  all of  their  assets  involved  in  sauerkraut
production into one new entity. This new entity, Great Lakes Kraut Company, will
operate as a New York limited  liability  company,  with ownership split between
the two parties.  This joint venture  includes the Silver Floss brand, the No. 1
selling  sauerkraut  brand in the US,  and  Krrrrisp  Kraut,  the No. 1  selling
refrigerated poly-bag brand in the country.

   
During fiscal 1997,  Agrilink sold its private label canned vegetable  operation
to Seneca Foods,  along with its Blue Boy brand.  Included in this sale were the
Leicester,  New York  manufacturing  facility and LeRoy,  New York  distribution
warehouse.  The disposal did not include the  Greenwood and Silver Floss labels,
or sauerkraut,  glass beets, or frozen  vegetable  businesses.  This transaction
also included an agreement  requiring  Agrilink to handle all vegetable sourcing
for Seneca Foods at its New York plants.

On June 27, 1997,  URS Logistics,  Inc.  ("URS")  acquired the Company's  frozen
foods distribution center in Montezuma,  Georgia. In addition, the two companies
entered into a long-term  logistics  agreement  under which URS will manage this
facility and all frozen food  transportation  operations  of Agrilink in Georgia
and New York.
    

Nalley Fine Foods:  Nalley is  headquartered in Tacoma,  Washington.  It markets
canned meat products such as chilies and stews, pickles, salad dressings, peanut
butter and syrup,  which are sold  throughout  the Northwest and Western  United
States and Western Canada.  Approximately  three-quarters of Nalley products are
branded;  however,  private  label  accounts for a growing  percentage of Nalley
business.

The Nalley products have been a vehicle for both  geographic  expansion and line
extension.  Several of  Nalley's  products  have  leading  market  shares in the
Pacific  Northwest,  such as chili and "Nalley" and "Farman's"  pickles.  In the
Pacific  Northwest,  the Company's  "Nalley" and  "Bernstein's"  brands of salad
dressings have a combined market share of approximately 20 percent.

In  line  with  the  growing  trend  toward  private  label,   Nalley  has  been
aggressively  pursuing this growing business  segment.  Specifically,  Nalley is
executing  its store label  strategy on  specialty  products,  such as chili and
salsa,  salad  dressings  and canned  soups.  The private  label  customer  base
continues  to  expand  on a  national  basis  and  includes  Winn-Dixie  in  the
<PAGE>
Southeast,  Wegmans in Upstate  New  York,Topco  in the  Midwest,  and  Ralph's,
Safeway,  QFC,  Albertsons  and  Western  Family  on the West  Coast.  Specialty
businesses, such as International,  continue to grow in both branded and private
label products.

   
In April 1997, the Company acquired certain  businesses from Nalley Canada Ltd.,
a  privately  held,  independent  snack food  company and former  subsidiary  of
Agrilink.  The  acquired  Canadian  operations  include a $12  million  consumer
products  business that includes  Nalley's  chili and snack dips;  Adams Natural
Peanut Butter; Bernstein's Salad Dressings;  LaRestaurante Salsa and other niche
dressing and sauce products marketed throughout the western Provinces of Canada.

Snack Foods Group:  During fiscal 1997, two of the Agrilink'  snack  businesses,
Snyder of Berlin and Husman Snack Foods, were united under one management group.
The  two  entities  combined   resources  to  obtain  the  most  cost  efficient
operations. Tim's Cascade Potato Chips represents the Company's other snack food
operation. A brief description of each follows:
    


         Snyder of Berlin:  Snyder of Berlin,  located in Berlin,  Pennsylvania,
         produces and markets  several  varieties of potato chips in distinctive
         silver-colored  bags, as well as several  varieties of corn-based snack
         products  in  conventional  packaging,  primarily  under the "Snyder of
         Berlin"  brand.  Snyder  products are recognized for their unique taste
         and freshness among users in Mid-Atlantic states, which are some of the
         country's highest per capita snack consumption markets.

         Husman Snack Foods:  Husman Snack Foods,  located in Cincinnati,  Ohio,
         manufactures  and markets potato chips,  popcorn,  and cheese curls and
         distributes other snack items in Cincinnati and Dayton,  Ohio and areas
         of  Northern  Kentucky.  Husman  creates  a  unique  product  niche  by
         customizing  its product  development  and  promotions to local tastes.
         Multi-packs  and licensing  agreements  with local  restaurants are two
         ways Husman creates its value-added proposition.

         Tim's Cascade  Potato Chips:  Tim's  Cascade  Potato Chips,  located in
         Auburn, Washington, produces kettle-fried potato chips, popcorn, cheese
         curls,  and snack mix in the Washington,  Northern Idaho,  Oregon,  and
         Montana area.  Kettle frying produces a potato chip that is thicker and
         crisper than other potato chips.

                  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The business of the Company is  principally  conducted in one industry  segment,
the processing and sale of various food products.  The financial  statements for
the fiscal  years ended June 28, 1997 and June 29,  1996,  which are included in
this report,  reflect the  information  relating to that segment for each of the
Company's  last three  fiscal  years.  The fiscal 1995  amounts,  which are also
included in this report, are the total of Predecessor and Successor entities.

                           PACKAGING AND DISTRIBUTION

   
The food products  produced by the Company are  distributed to various  consumer
markets in all 50 states as well as in Canada. Branded lines of the CBF business
unit are sold through food brokers which sell  primarily to  supermarket  chains
and  various  institutional   feeders.   Nalley  has  its  own  sales  personnel
responsible  for sales  within the Pacific  Northwest  and uses food brokers for
sales in other marketing areas. Snyder's, Tim's and Husman products are marketed
through  distributors  (some of which are owned and operated by the Company) who
sell  directly  to retail  outlets  in the  Midwest,  Mid-Atlantic  and  Pacific
Northwest.
    

Customer brand operations encompass the sale of products under private labels to
chain stores and under the controlled  labels of buying groups.  The Company has
developed  central storage and  distribution  facilities that permit  multi-item
single shipment to customers in key marketing areas.

Curtice Burns Express ("CBX"), a subsidiary of the Company, is a licensed common
carrier  with  authority  in 48  states.  It is used by the  Company  to  obtain
backhaul volume on shipments via the Company's trucks or contract  haulers.  The
other divisions of the Company lease their equipment to CBX for these backhauls.

                                   TRADEMARKS

The major  brand  names  under  which  the  Company  markets  its  products  are
trademarks  of the Company.  Such brand names are  considered  to be of material
importance  to the  business  of the  Company  since  they  have the  effect  of
developing brand  identification  and maintaining  consumer loyalty.  All of the
Company's trademarks are of perpetual duration so long as periodically  renewed,
and it is currently  intended that the Company will maintain them in force.  The
major brand names utilized by the Company are:
<PAGE>
<TABLE>


      Product                                                     Brand Name
<CAPTION>
<S>                                 <C>    
Chilies, stews and soups            Brooks, Mariners Cove, Nalley, Riviera

Fruits and vegetables               Brooks, Chill-Ripe, Gold King, Gracias,  Greenwood,  Hoosier Sweets, Just for Chili, McKenzie's,
                                    McKenzie's Gold King, Naturally Good, Ritter, Southern Farms, Southland, Thank You, Tropic Isle

Fruit fillings and toppings         Comstock, Globe, Gracias, Thank You, Wilderness

Peanut butter                       Adams

Pickles                             Farman's, Nalley

Popcorn                             Pops-Rite, Super Pop

Puddings                            Gracias, Thank You

Salad dressings                     Bernstein's, Bernstein's Light Fantastic, Nalley

Sauerkraut                          Silver Floss, Farman's

Snack food                          Cheese Pleezers, Husman, La Restaurante,  Snyder of Berlin, Thunder Crunch, Tim's Cascade Chips,
                                    Naturally Good, Matthews

Syrup                               Lumberjack
</TABLE>

                              RAW MATERIAL SOURCES

In fiscal  1997,  the  Company  acquired  approximately  71  percent  of its raw
agricultural  products  from  Pro-Fac.  The Company  also  purchased on the open
market some crops of the same type and quality as those  purchased from Pro-Fac.
Such open market  purchases  may occur at prices higher or lower than those paid
to Pro-Fac for similar products. See further discussion of the relationship with
Pro-Fac in NOTE 2 to the "Notes to Consolidated Financial Statements."

The vegetable and fruit portions of the business can be positively or negatively
affected  by weather  conditions  nationally  and the  resulting  impact on crop
yields.  Favorable  weather  conditions  can  produce  high crop  yields  and an
oversupply  situation.  This  results in  depressed  selling  prices and reduced
profitability on the inventory  produced from that year's crops.  Excessive rain
or drought conditions can produce low crop yields and a shortage situation. This
typically  results in higher selling prices and increased  profitability.  While
the  national  supply  situation  controls  the  pricing,  the supply can differ
regionally because of variations in weather.

The Company  purchases all of its  requirements  for  nonagricultural  products,
including  containers,  in  the  open  market.  Although  the  Company  has  not
experienced  any  difficulty  in  obtaining  adequate  supplies  of such  items,
occasional periods of short supply of certain raw materials may occur.

                              ENVIRONMENTAL MATTERS

The disposal of solid and liquid waste material  resulting from the  preparation
and  processing  of foods and the  emission of wastes and odors  inherent in the
heating of foods during  preparation are subject to various federal,  state, and
local environmental laws and regulations.  Such laws and regulations have had an
important  effect  on  the  food  processing  industry  as  a  whole,  requiring
substantially  all firms in the  industry  to incur  material  expenditures  for
modification of existing processing facilities and for construction of new waste
treatment  facilities.  The  Company  is also  subject to  standards  imposed by
regulatory  agencies  pertaining  to the  occupational  health and safety of its
employees.  Management believes that continued measures to comply with such laws
and  regulations  will not have a material  adverse effect upon its  competitive
position.

Among the various programs for the protection of the environment which have been
adopted to date,  the most  important for the  operations of the Company are the
waste  water  discharge  permit  programs   administered  by  the  environmental
protection  agencies in those states in which the Company  does  business and by
the federal Environmental  Protection Agency. Under these programs,  permits are
required for processing  facilities which discharge  certain wastes into streams
and other bodies of water, and the Company is required to meet certain discharge
standards in accordance with compliance schedules  established by such agencies.
The Company has to date received  permits for all  facilities  for which permits
are required, and each year submits applications for renewal permits for some of
the facilities.
<PAGE>
While the Company  cannot  predict with  certainty the effect of any proposed or
future  environmental  legislation or regulations on its processing  operations,
management of the Company believes that the waste disposal systems which are now
in operation or which are being constructed or designed are sufficient to comply
with all currently applicable laws and regulations.

The Company is cooperating with  environmental  authorities in remedying various
leaks and spills at several of its  plants.  Such  actions  are being  conducted
pursuant to procedures approved by the appropriate  environmental authorities at
a cost that is not material.

Expenditures related to environmental  programs and facilities have not had, and
are not expected to have, a material  effect on the earnings of the Company.  In
fiscal 1997,  total capital  expenditures  of Pro-Fac and the Company were $13.7
million of which  approximately  $2.0 million was devoted to the construction of
environmental  facilities.  The Company estimates that the capital  expenditures
for  environmental   control  facilities,   principally  waste  water  treatment
facilities,  will be  approximately  $0.8  million  for the  1998  fiscal  year.
However, there can be no assurance that expenditures will not be higher.

                             SEASONALITY OF BUSINESS

From the point of view of sales,  the  business  of the  Company  is not  highly
seasonal,  since the demand for its products is fairly  constant  throughout the
year.  Exceptions  to this general rule include some  products  that have higher
sales volume in the cool weather  months (such as canned fruits and  vegetables,
chili,  and fruit  fillings  and  toppings),  and others that have higher  sales
volume in the warm weather months (such as potato chips and  condiments).  Since
many of the raw  materials  processed  by the  Company are  agricultural  crops,
production of these products is  predominantly  seasonal,  occurring  during and
immediately following the harvest seasons of such crops.

                      PRACTICES CONCERNING WORKING CAPITAL

The Company must maintain substantial  inventories  throughout the year of those
finished  products  produced from seasonal raw materials.  These inventories are
generally financed through seasonal borrowings.

A short-term  line of credit is extended to the Company  under  agreements  with
CoBank, ACB. This line of credit is used primarily for seasonal  borrowing,  the
amount of which  fluctuates  during  the year.  The line of credit is subject to
annual renewal.

Both the  maintenance  of substantial  inventories  and the practice of seasonal
borrowing are common to the food processing industry.

                              SIGNIFICANT CUSTOMERS

The Company's one principal  industry segment is not dependent upon the business
of a single customer or a few customers. The Company does not have any customers
to which  sales are made in an amount  which  equals 10  percent  or more of the
Company's  net sales.  The loss of even its  biggest  customer  would not have a
materially adverse effect on the Company.

                                BACKLOG OF ORDERS

Backlog of orders has not  historically  been significant in the business of the
Company.  Orders are filled  shortly after receipt from  inventories of packaged
and processed foods.

                   BUSINESS SUBJECT TO GOVERNMENTAL CONTRACTS

No material  portion of the business of the Company is subject to  renegotiation
of contracts with, or termination by, any governmental agency.

                             COMPETITIVE CONDITIONS

All products of the Company,  particularly branded products,  compete with those
of  national  and  major  regional  food  processors  under  highly  competitive
conditions.  Many  of the  national  manufacturers  have  substantially  greater
resources  than the Company.  The principal  methods of  competition in the food
industry are ready  availability of a broad line of products,  product  quality,
price, and advertising and sales promotion.

In recent years, and  particularly  when various food items are in short supply,
the  constant  availability  of a full  line of food  items and the  ability  to
deliver the required  items  rapidly and  economically  have been among the most
important competitive factors in the markets in which the Company operates.  The
Company  believes that it is competitive with national brands in this area since
distribution of many of
<PAGE>
its regional  brands and  custom-pack  food items are limited to areas which can
easily be served from its production and distribution  facilities.  In this way,
the problems  inherent in attempting to supply markets remote from its principal
areas of operation are minimized,  and the marketing area is  commensurate  with
the production and storage facilities.

Quality of product  and  uniformity  of quality  are also  important  methods of
competition.  The  Company's  relationship  with Pro-Fac gives the Company local
sources of supply,  thus  allowing  the  Company to  exercise  control  over the
quality  and  uniformity  of much of the raw  product  which it  purchases.  The
members of Pro-Fac  generally  operate  relatively  large  production units with
emphasis on mechanized growing and harvesting techniques. This factor is also an
advantage in producing uniform, high-quality food products.

The  Company's  pricing  is  generally  competitive  with  that  of  other  food
processors  for  products of  comparable  quality.  The branded  products of the
Company are  marketed  under  regional  brands and its  marketing  programs  are
focused on local tastes and preferences as a means of developing  consumer brand
loyalty.  The  Company's  advertising  program  utilizes  local media,  national
magazines, and in-store promotions.

Although  the  relative  importance  of  the  above  factors  may  vary  between
particular products or customers,  the above description is generally applicable
to all of the  products of the Company in the various  markets in which they are
distributed.

Profit  margins  for canned and frozen  fruits  and  vegetables  are  subject to
industry  supply and  demand  fluctuations,  attributable  to changes in growing
conditions, acreage planted, inventory carryover, and other factors. The Company
has  endeavored  to  protect  against   changing  growing   conditions   through
geographical  expansion of its sources of supply. The Company has emphasized the
merchandising of its own brands and expanded service and product development for
its high volume private label and foodservice customers. The percentage of sales
under brand names owned and promoted by the Company (including franchise brands)
amount  to  approximately  52  percent;   sales  to  the  foodservice   industry
(restaurants and institutional  customers)  represent  approximately 24 percent;
private label sales currently represent  approximately 20 percent;  and sales to
other manufacturers are approximately 4 percent of total sales.

An estimate of the number of competitors in the markets served by the Company is
very  difficult.  Nearly  all  products  sold by the  Company  compete  with the
nationally  advertised brands of the leading food processors,  including Borden,
DelMonte,  Green Giant, Heinz, Frito-Lay,  Kraft, Vlasic,  Birdseye, and similar
major brands, as well as with the branded and private label products of a number
of regional processors,  many of which operate only in portions of the marketing
area  served by the  Company.  While the major  brands are  dominant  in branded
products on a national  level,  the Company  believes  that it is a  significant
factor in many of the  marketing  areas  served  by one or more of its  regional
brands.

                    NEW PRODUCTS AND RESEARCH AND DEVELOPMENT

The amount expensed during the last three fiscal years on Company-sponsored  and
customer-sponsored  research  activities  relating  to  the  development  of new
products or the  improvement  of existing  products  was not  material,  and the
number of employees  engaged  full-time in such research  activities is also not
material.  While the Company  operates  test  kitchens  and pilot plants for the
development of new products,  the emphasis generally has been on the development
of related  products or  modifications  of existing  products for the  Company's
brands and customized  products for the Company's  private label and foodservice
businesses. No new products which require the investment of a material amount of
assets have been publicly announced.

                                    EMPLOYEES

As of June 28, 1997, the Company had 3,363  full-time  employees,  of whom 2,599
were  engaged  in  production   and  the  balance  in   management,   sales  and
administration.  As of that date,  the Company also employed  approximately  321
seasonal  and other  part-time  employees,  almost  all of whom were  engaged in
production.  Most of the  production  employees  are  members of  various  labor
unions.
The Company believes its relationship with its employees is good.

               CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

   
From time to time,  the  Company  makes  oral and  written  statements  that may
constitute  "forward-looking  statements"  as defined in the Private  Securities
Litigation  Reform  Act  of  1995  (the  "Act")  or by the  SEC  in  its  rules,
regulations,  and releases.  The Company  desires to take advantage of the "safe
harbor" provisions in the Act for  forward-looking  statements made from time to
time, including,  but not limited to, the forward-looking  information contained
in the Management's Discussion and Analysis (pages 12 to 19 and other statements
made in this Form 10-K/A-1 and in other filings with the SEC.
    

The Company cautions readers that any such forward-looking statements made by or
on behalf of the  Company are based on  management's  current  expectations  and
beliefs but are not  guarantees  of future  performance.  Actual  results  could
<PAGE>
differ  materially  from  those  expressed  or  implied  in the  forward-looking
statements. Among the factors that could impact the Company's ability to achieve
its goals are:

     the impact of strong competition in the food industry;

     the impact of weather on the volume and quality of raw product;

     the  inherent  risks  in  the  marketplace   associated  with  new  product
     introductions, including uncertainties about trade and consumer acceptance;

     the continuation of the Company's success in integrating operations and the
     availability of acquisition and alliance opportunities; and

     the Company's ability to achieve the gains in productivity and improvements
     in capacity utilization.

ITEM 2.       DESCRIPTION OF PROPERTIES

   
All plants,  warehouses,  office space and other  facilities used by Agrilink in
its business are either owned by Agrilink or one of its  subsidiaries  or leased
from third  parties.  All of the  properties  owned by  Agrilink  are subject to
mortgages in favor of the Bank. In general, each business unit occupies offices,
processing  plants and  warehouse  space.  Some business  units have  processing
plants located in rural areas that are convenient for the delivery of crops from
Pro-Fac members and warehouse locations dispersed to facilitate the distribution
of  finished  products.  Agrilink  believes  that  its  facilities  are in  good
condition and suitable for the operations of the Company.
    

Four of the properties are held for sale. These properties are located in Alton,
New York; Rushville, New York, Mt. Summit, Indiana; and Wall Lake, Iowa.

The  following  table  describes all  facilities  leased or owned by the Company
(other than the properties held for sale and certain public warehouses leased by
the Company from third  parties from time to time).  Except as otherwise  noted,
each facility set forth below is owned by the Company.

                       FACILITIES UTILIZED BY THE COMPANY

<TABLE>
              Type of Property (By Business Unit)                                       Location                        Square Feet
<CAPTION>
   
<S>                                                                                     <C>                               <C>
CURTICE BURNS FOODS:
    
   Office building, manufacturing plant and warehouse                                   Benton Harbor, MI                 239,252
   Distribution center                                                                  Coloma, MI                        400,000
   Manufacturing plant and warehouse                                                    Fennville, MI                     350,000
   Canning plant and warehouse                                                          Lawton, MI                        142,000
   Warehouse                                                                            Sodus, MI                         243,138
   Warehouse and office; public storage facility1                                       Vineland, NJ                      191,710
   Freezing plant; warehouse; office and dry storage                                    Barker, NY                        123,600
   Freezing plant                                                                       Bergen, NY                        138,554
   Cold storage and repack facility and public storage warehouse                        Brockport, NY                     429,052
   Cutting, curing and packaging plant                                                  Gorham, NY                         55,534
   Canning plant and warehouse; freezing plant                                          Oakfield, NY                      263,410
   Canning plant and warehouse                                                          Red Creek, NY                     153,076
   Cutting, curing and canning plant                                                    Shortsville, NY                   111,946
   Cutting and curing plant                                                             Waterport, NY                      21,626
   Manufacturing plant                                                                  Ridgway, IL                        50,000
   Distribution and warehouse                                                           North Bend, NE                     50,000
   Office, freezing plant, cold storage and repackaging facility                        Montezuma, GA                     591,300
   Office, freezing plant and cold storage                                              Alamo, TX                         114,446
</TABLE>

<PAGE>


<TABLE>
                       FACILITIES UTILIZED BY THE COMPANY

              Type of Property (By Business Unit)                                       Location                        Square Feet
<CAPTION>
<S>                                                                                     <C>                               <C>
NALLEY FINE FOODS:
   Office building, warehouse and tank farm                                             Enumclaw, WA                       87,313
   Office building, manufacturing plant and warehouse                                   Tacoma, WA                        412,564
   Parking lot and yards1                                                               Tacoma, WA                        305,470
   Warehouses1                                                                          Tacoma, WA                        568,556
   Receiving and grading station1                                                       Cornelius, OR                      11,700
   Receiving and grading station1                                                       Mount Vernon, WA                  110,806
   Receiving and grading station1                                                       Aurora, OR                          6,800
   Office building - Fuller Building1                                                   Tacoma, WA                         60,000

SNACK FOODS GROUP:
   Office, plant and warehouse                                                          Berlin, PA                        190,225
   Administrative, plant, warehouse and distribution center - Tim's1                    Auburn, WA                         34,000
   Plant, warehouse, and distribution center - Matthews1                                Auburn, WA                         37,442
   Office, plant and warehouse                                                          Cincinnati, OH                    113,576
   Distribution Center                                                                  Elwood City, PA                     8,000
   Distribution Center                                                                  Monessen, PA                       10,000

CORPORATE HEADQUARTERS:

   
   Headquarters office1 (Includes office space for CBF
    
   as well as a Corporate Conference Center)                                            Rochester, NY                      62,500

1Leased from third parties,  although certain related  equipment is owned by the
Company.
</TABLE>

ITEM 3.       LEGAL PROCEEDINGS

There are no material pending legal  proceedings  other than routine  litigation
incidental  to the business to which either the Company or Pro-Fac is a party or
to which any of their  property is subject.  Further,  no such  proceedings  are
known to be contemplated by governmental authorities.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.


<PAGE>


                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS

        All  of  the  capital  stock  of  the  Company  is  owned  by  Pro-Fac
        Cooperative, Inc.


ITEM 6. SELECTED FINANCIAL DATA


   
Agrilink Foods, Inc.
    


<TABLE>
FIVE YEAR SELECTED FINANCIAL DATA


(Dollars in Thousands)
<CAPTION>

                                                                                         Fiscal Year Ended June
                                                                       1997         1996         1995*        1994          1993
                                                                   ------------ ------------ ------------ ------------  --------


<S>                                                                 <C>          <C>           <C>          <C>           <C>      
Summary of Operations:
   Net sales                                                        $730,823     $739,094      $748,525     $ 829,116     $ 878,627
   Cost of sales                                                     539,081      562,926       530,139       592,621       632,663
                                                                    --------     --------      --------     ---------     ---------
   Gross profit                                                      191,742      176,168       218,386       236,495       245,964
   Selling, administrative, and general expenses                    (145,392)    (156,067)     (159,937)     (186,934)     (207,119)
   Gain on sale of Finger Lakes Packaging                              3,565            0             0             0             0
   Restructuring (including gains from disposal)                           0       (5,871)       (8,415)        7,768       (61,037)
   Change in control expenses                                              0            0        (2,150)       (3,500)            0
   Gain on assets net of additional costs incurred as a
     result of a fire                                                      0            0         4,154             0             0
                                                                    --------     ---------     --------     ---------     ---------
   Operating income/(loss) before dividing with Pro-Fac               49,915       14,230        52,038        53,829       (22,192)
   Interest expense                                                  (35,030)     (41,998)      (32,414)      (18,205)      (19,550)
                                                                    --------     --------      --------     ---------     ---------
   Pretax income/(loss) before dividing with Pro-Fac and before
     cumulative effect of an accounting change                        14,885      (27,768)       19,624        35,624       (41,742)
   Pro-Fac share of (income)/loss before cumulative effect of
     an accounting change                                             (7,442)       9,037        (9,616)      (16,849)       21,800
                                                                    --------     --------      --------     ---------     ---------
   Income/(loss) before taxes and cumulative effect of
     an accounting change                                              7,443      (18,731)       10,008        18,775       (19,942)
   Tax (provision)/benefit                                            (3,668)       6,853        (6,026)       (8,665)       (3,895)
                                                                    --------     --------      --------     ---------     ---------
   Income/(loss) before cumulative effect of an accounting change      3,775      (11,878)        3,982        10,110       (23,837)
   Cumulative effect of an accounting change before
     dividing with Pro-Fac                                             4,606            0             0             0             0
   Pro-Fac share of an accounting change                              (2,859)           0             0             0             0
                                                                    --------     --------      --------     ---------     ---------
   Net income/(loss)                                                $  5,522     $(11,878)     $  3,982     $  10,110     $ (23,837)
                                                                    ========     ========      ========     =========     =========

Balance Sheet Data:
   Working capital                                                 $  84,060     $107,875      $144,171     $ 104,049     $ 100,422
   Ratio of current assets to current liabilities                      1.8:1        2.0:1         2.3:1         1.7:1         1.6:1
   Total assets                                                     $542,561     $634,250      $672,284     $ 446,938     $ 493,729
   Long-term debt and senior-subordinated notes (excludes
     current portion)                                               $222,829     $309,683      $343,665     $  79,061     $  85,037
   Long-term obligations under capital leases (excludes
     current portion)                                            $       817        1,125      $  1,620     $ 124,973     $ 154,102

Other Statistics:
     Average number of employees:
     Regular                                                           3,507        3,886         3,838         5,169         5,325
     Seasonal                                                          1,068        1,478         1,540         1,596         1,347

<FN>
*    Represents the results of operations for both the Predecessor and Successor
     entities for fiscal 1995.
</FN>
</TABLE>
<PAGE>
ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

The purpose of this  discussion is to outline the most  significant  reasons for
changes in net sales,  expenses  and earnings  from fiscal 1995  through  fiscal
1997.  The  following  comparisons  to fiscal  1995  present  the results of the
Company  during the period prior to its  acquisition  by Pro-Fac,  ("Predecessor
entity")  as well  as the  period  subsequent  to its  acquisition,  ("Successor
entity"). The financial statements of the Predecessor and Successor entities are
not comparable in certain respects because of differences between the cost bases
of the assets held by the  Predecessor  entity compared to that of the Successor
entity  as  well  as  the  effect  on  the  Successor  entity's  operations  for
adjustments to depreciation, and interest expense.

   
The following tables  illustrate the Company's results of operations by business
unit for the fiscal years ended June 28, 1997, June 29, 1996, and June 24, 1995,
and the  Company's  total  assets by  business  as at June 28, 1997 and June 29,
1996.
    
<TABLE>
Net Sales
(Dollars in Millions)
<CAPTION>
                                                                            Fiscal Years Ended
                                                      6/28/97                      6/29/96                         6/24/95
                                                              % of                           % of                          % of
                                                 $            Total             $            Total             $           Total
                                               -----          -----           -----          -----          -------        -----
   
<S>                                            <C>            <C>             <C>           <C>             <C> 
CBF                                            440.2           60.2           431.2           58.4          419.5           56.0
Nalley Fine Foods                              182.4           25.0           189.2           25.6          181.2           24.2
Snack Foods Group                               67.3            9.2            63.7            8.6           60.5            8.1
                                               -----          -----           -----          -----          -----          -----
     Subtotal ongoing operations               689.9           94.4           684.1           92.6          661.2           88.3
Businesses sold or to be sold1                  40.9            5.6            55.0            7.4           87.3           11.7
                                               -----          -----           -----          -----          -----          -----
    
     Total                                     730.8          100.0           739.1          100.0          748.5          100.0
                                               =====          =====           =====          =====          =====          =====
   
<FN>
1  Includes  the sales of Finger  Lakes  Packaging,  the  portion  of the canned
   vegetable  business sold,  Nalley Canada Ltd., and Nalley US chips and Snacks
   business. See NOTE 3 to the "Notes to Consolidated Financial Statements."
    
</FN>
</TABLE>
<TABLE>
Operating Income1
(Dollars in Millions)
<CAPTION>
                                                                                     Fiscal Years Ended
                                                                   6/28/97                  6/29/96                   6/24/95
                                                                         % of                       % of                      % of
                                                              $          Total          $           Total          $          Total
                                                            -----        -----        -----         -----        -----        -----
   
<S>                                                         <C>          <C>          <C>         <C>            <C>          <C> 
CBF                                                          40.5         81.1         26.5        186.6          42.2         81.2
Nalley Fine Foods                                            10.8         21.7         (2.9)        (20.4)        18.7         35.9
Snack Foods Group                                             5.9         11.8          4.1          28.9          3.6          6.9
Corporate overhead                                          (10.5)       (21.0)        (6.8)        (47.9)       (10.3)       (19.8)
                                                            -----        -----        -----         -----        -----        -----
   Subtotal ongoing operations                               46.7         93.6         20.9         147.2         54.2        104.2
Businesses sold or to be sold and other non-recurring2        3.2          6.4         (6.7)        (47.2)        (2.2)        (4.2)
                                                            -----        -----        ------        -----        -----        -----
    
     Total                                                   49.9        100.0         14.2         100.0         52.0        100.0
                                                            =====        =====        =====         =====        =====        =====
<FN>
1  Excludes  cumulative  effect  of an  accounting  change.  See NOTE 1 to the
   "Notes to Consolidated Financial Statements."
   
2  In fiscal 1997, such amount  includes the operating  earnings and gain on the
   sale of Finger Lakes Packaging,  operating activities of the canned vegetable
   business,  final settlement of an insurance claim, and a loss on the disposal
   of property held for sale.    
</FN>
</TABLE>
   In fiscal 1996, such amount includes restructuring  initiatives and operating
   activities of both Finger Lakes Packaging and the canned vegetable business.
<PAGE>
   In fiscal 1995, such amount includes  change in control  expenses,  a gain on
   assets  resulting  from a fire  and  operating  activities  of  Finger  Lakes
   Packaging, the canned vegetable business,  Nalley Canada Ltd., and the Nalley
   US Chips and Snacks business.

   See NOTE 3 to the "Notes to Consolidated Financial Statements."

<TABLE>
EBITDA1,2
(Dollars in Millions)
<CAPTION>
                                                                                      Fiscal Years Ended
                                                                        6/28/97             6/29/96             6/24/95
                                                                             % of                 % of                  % of
                                                                    $        Total        $       Total        $        Total
                                                                  -----      -----      -----     -----      -----      -----

   
         <S>                                                      <C>        <C>       <C>       <C>         <C>        <C> 
         CBF                                                       57.1       74.4      44.4      101.6       55.0       72.7
         Nalley Fine Foods                                         16.2       21.1       2.3        5.3       22.9       30.3
         Snack Foods Group                                          7.6        9.9       6.0       13.7        5.4        7.1
         Corporate                                                (10.1)     (13.1)     (6.9)     (15.8)     (10.6)     (13.9)
                                                                  -----      -----      ----      -----      -----      -----
           Subtotal ongoing operations                             70.8       92.3      45.8      104.8       72.7       96.2
         Businesses sold or to be sold and other non recurring3     5.9        7.7      (2.1)      (4.8)       2.9        3.8
                                                                  -----      -----      ----      -----      -----      -----
    
           Total                                                   76.7      100.0      43.7      100.0       75.6      100.0
                                                                  =====      =====      ====      =====      =====      =====
   
<FN>
1  Earnings before interest,  taxes,  depreciation,  and amortization ("EBITDA")
   begins with the pretax  income of Agrilink  before  dividing with Pro-Fac and
   before  cumulative  effect of an accounting  change,  and adds to such amount
   interest  expense,  depreciation,  and  amortization  of  goodwill  and other
   intangibles.

   In  conjunction  with the  acquisition  of Agrilink  by Pro-Fac in 1994,  net
   assets were adjusted to fair market value and  additional  debt was incurred.
   Accordingly,  depreciation and interest expense have increased significantly,
   making year-to-year  comparisons of operating income and net income difficult
   to analyze.  Therefore,  management  believes  EBITDA is a  measurement  that
   allows the operations of the business to be measured in a consistent manner.

   EBITDA does not represent  information  prepared in accordance with generally
   accepted accounting  principles,  nor is such information considered superior
   to information  presented in accordance  with generally  accepted  accounting
   principles.
    
2  Excludes  cumulative  effect  of an  accounting  change.  See NOTE 1 to the
   "Notes to Consolidated Financial Statements."

   
3  In fiscal 1997, such amount  includes the operating  earnings and gain on the
   sale of Finger Lakes Packaging,  operating activities of the canned vegetable
   business,  final settlement of an insurance claim, and a loss on the disposal
   of property held for sale.    
</FN>
</TABLE>
   In fiscal 1996, such amount includes restructuring  initiatives and operating
   activities of both Finger Lakes Packaging and the canned vegetable business.

   In fiscal 1995, such amount includes  change in control  expenses,  a gain on
   assets  resulting  from a fire,  and  operating  activities  of Finger  Lakes
   Packaging, the canned vegetable business,  Nalley Canada Ltd., and the Nalley
   US Chips and Snacks business.

   See NOTE 3 to the "Notes to Consolidated Financial Statements."
<PAGE>
<TABLE>
Total Assets
(Dollars in Millions)
<CAPTION>
                                                             6/28/97                          6/29/96
                                                                       % of                               % of
                                                       $               Total               $              Total
                                                     -----             -----             -----            -----

                     
                  <S>                                <C>               <C>               <C>              <C> 
                  CBF                                329.0              60.6             339.5             53.5
                  Nalley Fine Foods                  144.4              26.6             134.1             21.1
                  Snack Foods Group                   26.7               4.9              27.8              4.4
                  Corporate                           42.5               7.9              71.6             11.3
                                                     -----             -----             -----            -----
    
                      Subtotal ongoing operations    542.6             100.0             573.0             90.3
                  Businesses sold or to be sold2       0.0               0.0              61.3              9.7
                                                     -----             -----             -----            -----
                      Total                          542.6             100.0             634.3            100.0
                                                     =====             =====             =====            =====
   
<FN>
1  Includes Finger Lakes Packaging and the portion of the canned  vegetable  business sold to Seneca Foods. See NOTE 3 to the "Notes
   to Consolidated Financial Statements."
</FN>
</TABLE>
    
                     CHANGES FROM FISCAL 1996 TO FISCAL 1997

   
Net income for fiscal 1997 of $5.5 million  represented a $17.4 million increase
over the prior  year's loss of $11.9  million.  Total EBITDA  before  cumulative
effect of an  accounting  change was $76.7  million  for the year ended June 28,
1997 versus $43.7 million in the prior year. EBITDA for ongoing business reached
$70.8  million  versus  the  prior  year's  $45.8  million.   This   significant
improvement  reflected the benefits from numerous initiatives  including:  (1) a
reduction  in debt by $86.8  million  which  included  the sales of Finger Lakes
Packaging,  the canned vegetable business,  the Georgia  Distribution  facility,
idle manufacturing  facilities,  and efforts to improve cash flow through better
management  of  working  capital  requirements  (see  NOTE  5 to the  "Notes  to
Consolidated  Financial  Statements");  (2)  the  implementation  of  structural
changes within the  organization,  including the consolidation of the operations
of Brooks Foods and Southern Frozen Foods into CBF; and (3) the consolidation of
support  services  such as  human  resources  and  agricultural  services..  The
reduction  in  interest  expense as a result of the debt  reduction  initiatives
improved  net income by $5.5 million and  consolidation  efforts  accounted  for
approximately   $2.0  million  of  the  $6.5   million   reduction  in  selling,
administrative, and general expenses.
    

Structural  changes within the Company's business units included a review of the
Nalley operations and the consolidation of several other operations.  EBITDA for
the Nalley  business  unit was $16.2  million  for the year ended June 28,  1997
versus  $2.3  million  in  the  prior  year.   These   results  were  driven  by
organizational changes and the absence of the significant start-up costs for the
new salad dressing line which were incurred throughout fiscal 1996.

   
Net Sales:  Total net sales in fiscal 1997 decreased $8.3 million or 1.1 percent
compared to the prior year period.  While total net sales  declined $8.3 million
from $739.1  million in fiscal 1996 to $730.8  million in fiscal 1997, net sales
from ongoing  operations  increased  $5.8  million.  This  increase is primarily
attributable to increased  volume and improved pricing at both CBF and the Snack
Foods Group.

The vegetable and fruit categories at CBF have experienced  improved pricing due
to overall demand and increasing sales to new customers.  See further discussion
in "Short- and Long-Term Trends.

Increases   at  the  Snack   Foods   Group  are   attributable   to   successful
sales/marketing efforts and the acquisition of Matthews Candy Company during the
fourth quarter of fiscal 1996. Net sales within the Snack Foods Group  increased
$3.6 million, of which $0.9
    
<PAGE>
   
million was  attributable  to the  acquisition of Matthew's and $2.7 million was
attributable  to continuing  business.  Management  believes the  acquisition of
Matthew's broadened its line of products and,  therefore,  enhanced its earnings
capability.  However,  due to the competitive nature of the snack food industry,
management  is unable to assess  whether such  increases  within the Snack Foods
Group will continue to be realized.

Gross  Profit:  Gross profit of $191.7  million in fiscal 1997  increased  $15.5
million or 8.8 percent  from $176.2  million in fiscal  1996.  This  increase is
attributable to improved  margins in all business  units.  The increase in gross
profit was benefited by improved/increased  pricing at the CBF business unit. As
highlighted  under  "Short - and  Long-Term  Trends,"  the  vegetable  and fruit
portions of the Company's  business can be positively or negatively  impacted by
the national crop yields.  The status of the national supply situation  controls
pricing.  During fiscal 1997, crop yields of commodities in markets in which the
Company  operates  were  below that of the prior  year and,  therefore,  pricing
levels within the commodities markets in which the Company competes were raised.
The increase in pricing favorably impacted gross profit by $9.5 million. Nalley,
which in the prior year  experienced  extremely  high start-up  costs on the new
salad  dressing  line,  has managed  through those issues and has  significantly
improved  margins.   Operating  improvements  made  at  Nalley,   primarily  the
elimination  of start-up  costs on the new salad  dressing  line,  reductions in
manufacturing  variances,  and reductions in promotional expenses improved gross
profit by $4.0 million. Increased sales from the Snack Foods Group also improved
profitability. The increase in sales within the Snack Foods Group contributed an
increase to gross profit of $1.5 million.

Selling,  Administrative,  and General Expenses:  Selling,  administrative,  and
general  expenses have decreased  $10.7 million as compared with the prior year.
This decrease is net of the inclusion of expenses  (approximately  $5.6 million)
relating  to the  Company's  incentive  program.  Payments  under the  incentive
programs in fiscal 1997 are attributable to the significantly improved earnings.
The net decrease is, however,  attributed to a $5.8 million  decrease in selling
($1.7 million),  advertising ($1.0 million), and trade promotions expenses ($3.1
million)  resulted  from  decreased  spending at Nalley's.  While the Company is
unable to determine the effect these  reductions  may have on sales,  management
believes  that  its  current  marketing/promotional  strategies  will not have a
negative effect on future earnings.  Reductions in other administrative expenses
accounted for $10.5 million and were primarily attributable to benefits from the
restructuring  initiative  that began  late in fiscal  1996.  These  initiatives
included the consolidation of the  administrative  functions at CBF and the sale
of Finger Lakes Packaging.
    

Gain on Sale of  Finger  Lakes  Packaging:  On  October  9,  1996,  the  Company
completed the sale of Finger Lakes Packaging to Silgan  Containers  Corporation,
an indirect,  wholly-owned subsidiary of Silgan Holdings, Inc., headquartered in
Stamford,  Connecticut.  A gain of approximately  $3.6 million was recognized on
this disposal.  The Company received proceeds of approximately $30 million which
were applied to Bank debt.  The  transaction  also  included a long-term  supply
agreement.

Interest  Expense:  The  decrease  in interest  expense of $7.0  million or 16.6
percent  resulted  from both the inventory  reduction  and cash flow  management
programs  initiated in fiscal 1996 as well as the debt  reduction in fiscal 1997
attributable  to the sales of  Finger  Lakes  Packaging,  the  canned  vegetable
business, and idle facilities.

Provision  for Taxes:  The  provision  for taxes in fiscal 1997 of $3.7  million
changed  $10.6  million  from the benefit of $6.9  million in fiscal  1996.  The
provision  for  taxes in  fiscal  1997  results  from  increased  earnings.  The
Company's  effective  tax rate in fiscal 1997 was 49.3  percent.  The  Company's
effective tax rate is negatively impacted by the  non-deductibility of goodwill.
A further  discussion  of tax  matters  is  included  at NOTE 6 to the "Notes to
Consolidated Financial Statements."

   
Cumulative Effect of a Change in Accounting: Effective June 30, 1996, accounting
procedures were changed to include in prepaid expenses and other current assets,
manufacturing  spare parts previously  charged  directly to expense.  Management
believes this change provides a better  matching of costs with related  revenues
when evaluating interim financial statements. The favorable cumulative effect of
the change (net of  Pro-Fac's  share of $2.9  million  and income  taxes of $1.1
million) was $1.7 million.  Pro forma amounts for the  cumulative  effect of the
accounting  change  on prior  periods  are not  determinable  due to the lack of
physical  inventory  counts  required to establish  quantities at the respective
dates.   Management   does  not  believe  that  the   difference  in  accounting
methodologies for spare parts had any material impact on the Company's  historic
financial statements.
    

                     CHANGES FROM FISCAL 1995 TO FISCAL 1996

   
The net loss for fiscal 1996 of $11.9  million  represented  a decrease of $15.9
million  over the prior year.  EBITDA from  ongoing  businesses  declined  $26.9
million from $72.7 million in the prior year to $45.8 million in fiscal 1996. (A
detailed   discussion  of  how  the  EBITDA  calculation  is  computed  and  the
significance  of EBITDA  appears at Footnote 1 of the EBITDA  table on page 13).
<PAGE>
Gross profit for fiscal 1996 declined $42.2 million.  The Company's  performance
was  negatively  impacted by a  reduction  in gross  profit  from the  vegetable
operations of $22.9 million.  In addition,  gross profit at Nalley  decreased by
$13.5 million.    

   
During fiscal 1996, the level of the supply of vegetables  resulted in depressed
vegetable  pricing for the Company and much of the industry as well. The Company
experienced a decrease in its pricing consistent with that of the industry. As a
result of this decrease in pricing,  the  Company's  vegetable  category,  which
includes significant segments of CBF, experienced a reduction in gross profit of
approximately $22.9 million.

Issues  impacting  Nalley  included the costly  start-up of the dressing  plant,
other manufacturing variances and increased promotion expenses.  Nalley earnings
were  $29.6  million  lower  than the prior  year.  Several  steps were taken to
address these  problems,  including  senior  management  changes at the business
unit. A major inventory  reduction  program across all divisions was implemented
in fiscal 1996.  Long-term  debt was reduced $37.5 million in fiscal 1996 due to
the cash flow generated from these programs and from additional  payments to the
Company by Pro-Fac.  (See NOTES 2 and 5 to the "Notes to Consolidated  Financial
Statements.")

During the fourth quarter of fiscal 1996, the Company initiated a corporate-wide
restructuring  program.  The  overall  objectives  of the  plan  were to  reduce
expense, improve productivity, and streamline operations. Efforts focused on the
consolidation of operations and the elimination of approximately  900 positions.
Reductions in personnel included operational and administrative  positions.  The
total fiscal 1996 restructuring charge amounted to $5.9 million,  which included
a fourth quarter charge of approximately  $4.0 million,  primarily  comprised of
employee  termination  benefits,  and  approximately  $1.9 million for strategic
consulting  which  was  incurred  throughout  the  year.  The  consolidation  of
operations  being  referred  to above  include the recent  consolidation  of the
Company's  Brooks  Foods and  Southern  Frozen  Foods  business  units  into the
operations  of  the  Company's   Comstock  Michigan  Fruit  business  unit.  The
consolidated  business unit is now called CBF. As a result of the consolidation,
positions  were  eliminated  at both the Brooks Foods and Southern  Frozen Foods
business units. In addition, positions were also eliminated at Comstock Michigan
Fruit and at Nalley.  All  employees  at these  locations  were  notified of the
Company's plans during the fourth quarter of fiscal 1996.  Management  estimates
that the  reduction  in costs  from its  restructuring  initiatives  amounts  to
approximately $2.1 million on an annual basis.

Net Sales:  The Company's net sales in fiscal 1996 of $739.1  million  decreased
$9.4  million or 1.3 percent from $748.5  million in fiscal 1995.  The net sales
attributable  to businesses sold or to be sold were $55.0 million in fiscal 1996
compared to $87.3  million in fiscal 1995.  The Company's net sales from ongoing
operations  were $684.1  million in fiscal 1996, an increase of $22.9 million or
3.5 percent from $661.2 million in fiscal 1995.

Net sales were benefited by volume gains in fruits and fillings and  vegetables.
However,  such volume  increases were offset by selling price  decreases  within
those  categories.  The net impact of volume and  pricing  changes in fruits and
fillings and  vegetables  were  approximately  $9.4  million and $11.7  million,
respectively.  Net sales  reductions  were  realized in the aseptic and chip dip
categories of $8.0 million and $3.8 million,  respectively.  Gross Profit: Gross
profit of $176.2 million in fiscal 1996 decreased  $42.2 million or 19.3 percent
from  $218.4  million in fiscal  1995.  Of this net  decrease,  a $14.0  million
reduction  was  attributable  to  businesses  sold or to be sold.  The remaining
decrease of $28.2 million from ongoing  operations  was the result of variations
in volume, selling prices, costs, product mix, and increased depreciation due to
the Acquisition.
    
<PAGE>
   
Reductions  at the  Company's  CBF  operations  primarily  relates to  depressed
vegetable pricing.
    

Reductions at the Company's Nalley operation  relates to higher costs on all the
product  lines,  but  particularly  in salad  dressings  due to  plant  start-up
activities.

Restructuring:  Restructuring  expenses,  as described  above,  amounted to $5.9
million in fiscal  1996.  Restructuring  expenses in fiscal 1995 of $8.4 million
reflect  the  impact of the sale of  certain  assets of the  Nalley US Chips and
Snacks business and other expenses relating to the disposal of this operation.

Change in Control Expenses:  Change in control expenses recorded in fiscal 1995,
amounting to $2.2 million, reflected non-deductible cost relating to the sale of
the Company (primarily legal, accounting, and investment banking fees).

   
Gain on Assets  Resulting From Fire Claim: The gain on assets resulting from the
fire claim  recorded  in fiscal  1995  amounted  to $4.1  million.  This  amount
represented the replacement value in excess of the depreciated book value of the
building and  equipment  destroyed on July 7, 1994 at CBF. This amount is net of
additional costs incurred.
    

Selling,  Administrative  and  General  Expenses:  Selling,  administrative  and
general expenses in fiscal 1996 of $156.1 million  decreased $3.8 million or 2.4
percent from $159.9  million in fiscal  1995.  This net decrease of $3.8 million
includes:
<TABLE>
(In Millions)
<CAPTION>

                                                                         Businesses
                                                              Sold or
                                                             to be Sold    Ongoing     Total

<S>                                                            <C>           <C>       <C>   
Change in trade promotions, advertising and selling costs      $(8.3)        $0.7      $(7.6)
Change in other administrative expenses                          2.5          1.3        3.8
                                                               -----         ----      -----
                                                               $(5.8)        $2.0      $(3.8)
                                                               =====         ====      =====
</TABLE>

   
The $0.7 million increase in trade promotions,  advertising and selling costs at
the Company's  ongoing  operations is the net from increased  costs at Nalley of
$3.7 million  (primarily in the canned and dressing  product  lines),  increased
costs of $1.0  million at the Snack  Group  offset by  decreases  at CBF of $4.0
million (primarily in the filling and topping product lines).
    

The $1.3 million  increase in other  administrative  costs  attributable  to the
Company's  ongoing  operations  was  primarily  related to increased  expense at
Nalley. The increased expense at Nalley included  administrative  expenses which
previously  had been allocated to Nalley Chips and Snacks and Nalley Canada Ltd.
The disposal of these businesses did not eliminate centralized functions leaving
costs which will be reduced over a period of time.

Interest  Expense:  Interest  expense in fiscal 1996 of $42.0 million  increased
$9.6 million or 29.6 percent from $32.4.  million in fiscal 1995.  This increase
was  primarily  attributable  to the increased  borrowing  and  increased  rates
related  to the  Acquisition  of the  Company  by  Pro-Fac.  The  impact  of the
Acquisition  was  reflected  for the full year in fiscal  1996 and for a partial
year in fiscal 1995.

Benefit/(Provision)  for Taxes:  The  benefit  for taxes in fiscal  1996 of $6.9
million  compared  to a  provision  of $6.0  million in fiscal  1995.  A further
discussion  of tax  matters  is  included  at NOTE 6 of "Notes  to  Consolidated
Financial Statements."

                         LIQUIDITY AND CAPITAL RESOURCES

The following  discussion  highlights the major  variances in the  "Consolidated
Statement of Changes in Cash Flows" for fiscal 1997 compared to fiscal 1996.

Net cash provided by operating activities decreased in fiscal 1997 primarily due
to an inventory-reduction program that favorably impacted fiscal 1996 cash flow.
Cash flow was also  positively  impacted  in fiscal  1996 due to the  receipt of
approximately   $8.5  million  in  insurance  proceeds  compared  to  the  final
settlement  of $4.0 million  received in fiscal 1997.  Earnings,  however,  were
greatly improved in fiscal 1997.

Net cash  provided by investing  activities  increased  significantly  in fiscal
1997,  primarily  due to the sales of Finger Lakes  Packaging,  a portion of the
canned  vegetable  business,  the  Georgia  distribution  center,  and the  idle
facilities.  These actions were part of an overall  initiative in fiscal 1997 to
reduce the Company's  outstanding debt. Management believes that the significant
<PAGE>
reduction in debt will provide the Company with the added financial  flexibility
needed to operate the  business.  All proceeds  from asset sales were applied to
Bank debt in accordance with the terms of the New Credit Agreement.  Fiscal 1996
results  included  proceeds  from  the  disposition  of  Nalley's  Ltd.  and the
acquisition of Packer Foods.  The purchase of property,  plant, and equipment in
both years was for general operating purposes.

   
Borrowings:  Under the New Credit  Agreement,  as  amended,  Agrilink is able to
borrow up to $66.0  million  for working  capital  purposes  under the  Seasonal
Facility, subject to a borrowing base limitation, and obtain up to $18.0 million
in  aggregate  face  amount of letters of credit  pursuant to a Letter of Credit
Facility.  The borrowing base is defined as the lesser of (i) the total line and
(ii) the sum of 60 percent of eligible  accounts  receivable  plus 50 percent of
eligible  inventory.  On June 28, 1997,  Pro-Fac  established a seasonal line of
credit with the Bank. In doing so, the Bank limited the  Company's  availability
under the Seasonal  Facility to $66.0  million less  outstanding  borrowings  of
Pro-Fac.  Pro-Fac's  outstanding  borrowings under their seasonal line were $7.0
million at June 28, 1997.
    

The Company  believes  that the cash flow  generated by its  operations  and the
amounts  available under the Seasonal  Facility should be sufficient to fund its
working capital needs,  fund its capital  expenditures  and service its debt for
the foreseeable future.

As of June 28, 1997, (i) cash borrowings outstanding under the Seasonal Facility
were zero and (ii) additional  availability under the Seasonal  Facility,  after
taking into account the amount of the borrowing  base and Pro-Fac's  outstanding
borrowings, was $59.0 million. In addition to its seasonal financing, as of June
28, 1997, the Company had $34.2 million available for long-term borrowings under
the Term Loan Facility.

   
The New Credit  Agreement and Indenture  requires that Pro-Fac and Agrilink meet
certain  financial  tests and ratios and comply with certain other  restrictions
and limitations.  As of June 28, 1997, the Company is in compliance with, or has
obtained waivers for, all such covenants, restrictions and limitations.
    

Short- and  Long-Term  Trends:  Throughout  fiscal  1997 the  Company has worked
toward accomplishing the restructuring  initiatives begun in fiscal 1996. During
fiscal 1997, this program focused on debt reduction.  Ongoing  initiatives  will
include a focus on the Company's  core  businesses and growth  opportunities.  A
complete  description of the  acquisition and disposal  activities  completed is
outlined at NOTE 3 to the "Notes to Consolidated Financial Statements."

   
The vegetable and fruit  portions of the  business,  which  includes CBF, can be
positively  or  negatively  affected by weather  conditions  nationally  and the
resulting impact on crop yields.  Favorable weather  conditions can produce high
crop yields and an  oversupply  situation.  This  results in  depressed  selling
prices and reduced  profitability  on the  inventory  produced  from that year's
crops.  Excessive  rain or drought  conditions can produce low crop yields and a
shortage  situation.  This  typically  results  in  higher  selling  prices  and
increased  profitability.  While the  national  supply  situation  controls  the
pricing,  the supply can differ regionally because of variations in weather. The
effect of the 1996 growing  season on fiscal 1997  financial  results has been a
minor improvement from the prior year.
    

Supplemental  Information  on Inflation:  The changes in costs and prices within
the Company's  business due to inflation were not  significantly  different from
inflation in the United States economy as a whole. Levels of capital investment,
pricing and inventory  investment  were not materially  affected by the moderate
inflation.

Other Matters:

   
Restructuring: During the fourth quarter of fiscal 1996, the Company initiated a
corporate-wide   restructuring   program.   Approximately   $4  million  of  the
restructuring  charge comprised  employee  termination  benefits.  There were no
noncash write-offs included in the fiscal 1996 restructuring charge. The cost of
the strategic  consulting  activities was liquidated  through  payment in fiscal
1996. The $4.0 million reserve for employee  terminations is being liquidated in
accordance with severance agreements reached with such employees.  During fiscal
1997,  approximately  $2.0  million  of  this  reserve  was  liquidated.  It  is
anticipated  that the  remaining  reserve  will be  liquidated  during the first
quarter of fiscal 1998.
    

Information  Services  Reorganization:  On June 19,  1997,  Systems  &  Computer
Technology  Corporation  ("SCT") and the Company  announced a major  outsourcing
services and software agreement effective June 30, 1997. The ten-year agreement,
valued at approximately $50 million,  is for SCT's OnSite outsourcing  services,
ADAGE ERP software and  implementation  services and  assistance  in solving the
Year 2000 issue.
<PAGE>
   
Product Recall:  In February 1997, the Company issued a nationwide recall of all
"Tropic Isle" brand fresh frozen  coconut  produced in Costa Rica because it has
the potential to be contaminated with Listeria monocytogenes,  an organism which
can cause serious and sometimes  fatal  infections in small  children,  frail or
elderly people,  and others with weakened  immune  systems.  The total estimated
cost of the product  recall is $0.5  million.  This amount was  recognized as an
expense in fiscal  1997.  As of June 1997,  approximately  $0.4  million of such
amount had been  liquidated.  Should any  material  costs  associated  with this
recall  develop,  it is anticipated  that such amounts will be covered under the
Company's insurance policies.
    


ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEX TO FINANCIAL STATEMENTS
<TABLE>
     ITEM                                                                                                                  Page


   
Agrilink Foods, Inc. and Consolidated Subsidiaries:
<CAPTION>
   <S>                                                                                                                        <C>
   Management's Responsibility for Financial Statements..................................................................     20
   Reports of Independent Accountants....................................................................................     21
    
Consolidated Financial Statements:
   Consolidated Statement of Operations and Accumulated  Earnings/(Deficit) for the years ended
   
   June 28, 1997, June 29, 1996, and June 24, 1995.......................................................................     23
   Consolidated Balance Sheet at June 28, 1997 and June 29, 1996.........................................................     24
   Consolidated Statement of Cash Flows for the years ended June 28, 1997, June 29, 1996, and June 24, 1995..............     25
   Notes to Consolidated Financial Statements............................................................................     27
    
</TABLE>


<PAGE>














              MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS



Management is  responsible  for the  preparation  and integrity of the financial
statements  and related notes which begins on the page  following the "Report of
Independent Accountants." These statements have been prepared in accordance with
generally accepted accounting principles.

The Company's  accounting  systems include internal controls designed to provide
reasonable  assurance of the reliability of its financial records and the proper
safeguarding  and use of its assets.  Such  controls are  monitored  through the
internal and external audit programs.

The financial  statements have been audited by Price Waterhouse LLP, independent
accountants, who were responsible for conducting their examination in accordance
with generally accepted auditing  standards.  Their resulting reports are on the
subsequent pages.

The  Board  of  Directors  exercises  its  responsibility  for  these  financial
statements.  The independent  accountants  and internal  auditors of the Company
have full and free access to the Board.  The Board  periodically  meets with the
independent  accountants and the internal auditors,  without management present,
to discuss accounting, auditing and financial reporting matters.



/s/ Dennis M. Mullen                              /s/ Earl L. Powers
    Dennis M. Mullen                                  Earl L. Powers
    President and                                     Vice President Finance
    Chief Executive Officer                           Chief Financial Officer

August 1, 1997



<PAGE>

















                        Report of Independent Accountants


   
To the Shareholder and
Board of Directors of
Agrilink Foods, Inc.

In our opinion,  the  consolidated  statements  of  operations  and  accumulated
earnings/(deficit)  and of cash flows listed under Item 8 of this Form  10-K/A-1
present fairly,  in all material  respects,  the results of Agrilink Foods, Inc.
and its subsidiaries  ("Predecessor  Company") operations and cash flows for the
period  from June 26, 1994 to November 3, 1994,  in  conformity  with  generally
accepted   accounting   principles.   These   financial   statements   are   the
responsibility of the Predecessor Company's management; our responsibility is to
express  an  opinion  on  these  financial  statements  based on our  audit.  We
conducted our audit of these  statements in accordance  with generally  accepted
auditing  standards  which  require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audit provides a reasonable basis for the opinion expressed above.
    

As discussed in Note 2 to the financial statements,  as of November 3, 1994, the
Predecessor  Company  became a wholly owned  subsidiary of Pro-Fac  Cooperative,
Inc. In  conjunction  with this  change in  ownership,  identifiable  assets and
liabilities  were  adjusted  to  reflect  their  fair  values  at  the  date  of
acquisition.

   
Our audit of the consolidated financial statements also included an audit of the
financial  statement  schedule  listed in the  accompanying  index and appearing
under Item 14 of this Form 10-K/A-1.  In our opinion,  this financial  statement
schedule  presents fairly, in all material  respects,  the information set forth
therein  for the  period  from June 26,  1994 to  November  3, 1994 when read in
conjunction with the related consolidated financial statements.
    




PRICE WATERHOUSE LLP

Rochester, New York
August 1, 1997


<PAGE>















                        Report of Independent Accountants

   
To the Shareholder and
Board of Directors of
Agrilink Foods, Inc.

In our  opinion,  the  consolidated  balance  sheets  and  related  consolidated
statements of operations and  accumulated  earnings/(deficit)  and of cash flows
listed  under  Item 8 of this Form  10-K/A-1  present  fairly,  in all  material
respects,  the financial  position of Agrilink Foods,  Inc. and its subsidiaries
("Successor  Company")  at June 28, 1997 and June 29,  1996,  and the results of
their  operations  and their cash flows for each of the two fiscal  years  ended
June 28,  1997 and June 29,  1996 and the  period  November  4, 1994 to June 24,
1995,  in  conformity  with  generally  accepted  accounting  principles.  These
financial   statements  are  the  responsibility  of  the  Successor   Company's
management;  our  responsibility  is to express  an  opinion on these  financial
statements  based on our audits.  We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion  expressed
above.
    

As discussed in NOTE 1 to the "Consolidated Financial Statements," the Successor
Company changed its method of accounting for spare parts in 1997.

As discussed in Note 2 to the financial statements,  as of November 3, 1994, the
Predecessor  Company  became a wholly owned  subsidiary of Pro-Fac  Cooperative,
Inc. In  conjunction  with this  change in  ownership,  identifiable  assets and
liabilities  were  adjusted  to  reflect  their  fair  values  at  the  date  of
acquisition.

   
Our audits of the  consolidated  financial  statements also included an audit of
the financial  statement schedule listed in the accompanying index and appearing
under Item 14 of the Form 10-K/A-1.  In our opinion,  this  financial  statement
schedule  presents fairly, in all material  respects,  the information set forth
therein  for the  fiscal  years  ended June 28,  1997 and June 29,  1996 and the
period  November  4, 1994 to June 24,  1995 when  read in  conjunction  with the
consolidated financial statements.
    




PRICE WATERHOUSE LLP

Rochester, New York
August 1, 1997


<PAGE>
                              FINANCIAL STATEMENTS

   
<TABLE>
Agrilink Foods, Inc.
    
Consolidated Statement of Operations and Accumulated Earnings/(Deficit)
(Dollars in Thousands)
<CAPTION>
                                                                                                                        Fiscal 1995
                                                                                                         11/4/94 -        6/26/94 -
                                                                        Fiscal 1997      Fiscal 1996      6/24/95         11/3/94
                                                                         Successor        Successor     Successor       Predecessor
<S>                                                                      <C>              <C>            <C>              <C>     
Net sales                                                                $ 730,823        $ 739,094      $ 471,904        $276,621
Cost of sales                                                              539,081          562,926        334,329         195,810
                                                                         ---------        ---------      ---------        --------
Gross profit                                                               191,742          176,168        137,575          80,811
Selling, administrative, and general expenses                             (145,392)        (156,067)       (99,361)        (60,576)
Gain on sale of Finger Lakes Packaging                                       3,565                0              0               0
Restructuring charge                                                             0           (5,871)             0          (8,415)
Change in control expenses                                                       0                0              0          (2,150)
Gain on assets net of additional costs incurred as a result of a fire            0                0         (2,315)          6,469
                                                                         ---------        ---------      ---------        --------
Operating income before dividing with Pro-Fac                               49,915           14,230         35,899          16,139
Interest expense                                                           (35,030)         (41,998)       (24,790)         (7,624)
                                                                         ---------        ---------      ---------        --------
Pretax income/(loss) before dividing with Pro-Fac and before
   cumulative effect of an accounting change                                14,885          (27,768)        11,109           8,515
Pro-Fac share of (income)/loss before cumulative effect of an
   accounting change                                                        (7,442)           9,037         (5,554)         (4,062)
                                                                         ---------        ---------      ---------        --------
Income/(loss) before taxes and cumulative effect of an accounting change     7,443          (18,731)         5,555           4,453
Tax (provision)/benefit                                                     (3,668)           6,853         (3,291)         (2,735)
                                                                         ---------        ---------      ---------        --------
Income/(loss) before cumulative effect of an accounting change               3,775          (11,878)         2,264           1,718
Cumulative effect of an accounting change before
   dividing with Pro-Fac                                                     4,606                0              0               0
Pro-Fac share of an accounting change                                       (2,859)               0              0               0
                                                                         ---------        ---------      ---------        --------
Net income/(loss)                                                            5,522          (11,878)         2,264           1,718
Accumulated (deficit)/earnings at beginning of period                      (11,878)               0              0          58,121
Less cash dividends declared                                                (5,522)               0         (2,264)         (1,390)
                                                                         ---------        ---------      ---------        --------
Accumulated (deficit)/earnings at end of period                          $ (11,878)       $ (11,878)     $      0         $ 58,449
                                                                         =========        =========      =========        ========
<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>
<PAGE>
   
<TABLE>
Agrilink Foods, Inc.
Consolidated Balance Sheet
(Dollars in Thousands)
<CAPTION>
    

                                     ASSETS

                                                                                                          6/28/97        6/29/96


   <S>                                                                                                  <C>             <C>       
   Current assets:
     Cash and cash equivalents                                                                          $  2,836        $  8,873
     Accounts receivable trade, less allowances for bad debts of  $970
       and $836, respectively                                                                             48,661          47,259
     Accounts receivable, other                                                                            2,813           8,959
     Current deferred tax asset                                                                            8,198          11,724
     Inventories -
       Finished goods                                                                                     87,904          97,018
       Raw materials and supplies                                                                         27,001          33,556
                                                                                                        --------        --------
         Total inventories                                                                               114,905         130,574
                                                                                                        --------        --------
     Prepaid manufacturing expense                                                                         8,265          11,339
     Prepaid expenses and other current assets                                                             6,323           1,066
     Current investment in Bank                                                                              946               0
                                                                                                        --------        --------
         Total current assets                                                                            192,947         219,794
   Investment in Bank                                                                                     24,321          24,439
   Property, plant, and equipment, net                                                                   217,923         268,389
   Assets held for sale                                                                                    3,259           5,368
   Goodwill and other intangible assets less accumulated amortization of
     $10,053 and $5,961, respectively                                                                     96,429         103,760
   Other assets                                                                                            7,682          12,500
                                                                                                        --------        --------
         Total assets                                                                                   $542,561        $634,250
                                                                                                        ========        ========
                      LIABILITIES AND SHAREHOLDER'S EQUITY

                                                                                                         6/28/97        6/29/96
Current liabilities
   Current portion of obligations under capital leases                                                  $    558        $    547
   Current portion of long-term debt                                                                       8,075           8,075
   Accounts payable                                                                                       49,231          54,661
   Income taxes payable                                                                                    5,152           3,836
   Due to Pro-Fac                                                                                          4,312           2,215
   Accrued interest                                                                                        8,540           9,447
   Accrued employee compensation                                                                          11,063           8,368
   Other accrued expenses                                                                                 21,956          24,770
                                                                                                        --------        --------
         Total current liabilities                                                                       108,887         111,919
Long-term debt                                                                                            62,829         149,683
Senior subordinated notes                                                                                160,000         160,000
Obligations under capital leases                                                                             817           1,125
Deferred income tax liabilities                                                                           40,902          51,572
Other non-current liabilities                                                                             22,687          20,746
                                                                                                        --------        --------
         Total liabilities                                                                               396,122         495,045
                                                                                                        --------        --------
Commitments and Contingencies
Shareholder's Equity:
   Common stock, par value $.01; 10,000 shares outstanding, owned by Pro-Fac                                   0               0
   Additional paid-in capital                                                                            158,317         151,083
   Accumulated deficit                                                                                   (11,878)        (11,878)
                                                                                                        --------        --------
         Total shareholder's equity                                                                      146,439         139,205
                                                                                                        --------        --------
         Total liabilities and shareholder's equity                                                     $542,561        $634,250
                                                                                                        ========        ========

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>
<PAGE>
   
<TABLE>
Agrilink Foods, Inc.
Consolidated Statement of Cash Flows
    
(Dollars in Thousands)
<CAPTION>
                                                                                                                   Fiscal 1995
                                                                                                              11/4/94 -    6/26/94 -
                                                                           Fiscal 1997     Fiscal 1996        6/24/95      11/3/94
                                                                            Successor       Successor        Successor   Predecessor

<S>                                                                        <C>             <C>                <C>         <C>
Cash Flows From Operating Activities:
   Net income/(loss)                                                       $  5,522        $(11,878)          $  2,264$  $  1,718
   Adjustments to reconcile net income/(loss) to net cash provided by
   operating activities -
     Restructuring and disposals:
       Restructuring and net (gain)/loss from disposals                      (3,565)          5,871                  0      5,567
       Including net operating losses subsequent to decision to dispose           0               0                  0      2,848
     Gain on assets resulting from fire claim                                     0               0                  0     (6,469)
     Amortization of goodwill and other intangibles                           4,092           3,422              2,618        753
     Amortization of debt issue costs                                           800             800                600          0
     Depreciation                                                            22,680          26,081             13,864      6,228
     Cumulative effect of an accounting change                               (4,606)              0                  0          0
     Provision/(benefit) for deferred taxes                                   2,787          (6,853)             4,705     (4,205)
     Provision for losses on accounts receivable                                445             528                 91        292
     Equity in undistributed earnings of Bank                                (1,143)         (1,532)            (1,288)         0
     Change in assets and liabilities:
   
       Accounts receivable                                                   (1,856)         11,309             11,540    (12,722)
       Inventories                                                           (1,636)         33,347             67,022    (70,961)
       Income taxes payable/refundable                                          205           4,879             (1,043)     1,491
       Accounts payable and accrued expenses                                 (1,751)        (15,200)           (13,140)    (5,662)
       Payable to/receivable from Pro-Fac                                       466           2,754            (20,098)     9,650
       Other assets and liabilities                                             548          (1,514)            15,029     11,714
                                                                           --------        --------           --------   --------
Net cash provided by/(used in) operating activities                          22,988          52,014             82,164    (59,758)
                                                                           --------        --------           --------   --------
Cash Flows From Investing Activities:
   Purchase of property, plant, and equipment                               (16,876)        (18,038)           (26,891)    (5,689)
   Proceeds from disposals                                                   68,716           4,408                  0          0
   Proceeds from sales of idle facilities                                     4,465             597                  0          0
   Proceeds from investment in CoBank                                           315               0                  0          0
   Cash paid for acquisition                                                      0          (5,785)                 0          0
                                                                           --------        --------           --------   --------  
Net cash provided by/(used in) investing activities                          56,620         (18,818)           (26,891)    (5,689)
                                                                           --------        --------           --------   --------
Cash Flows From Financing Activities:
    
   Receivable from/payable to Pro-Fac                                             0               0            (42,000)    42,000
   Proceeds from issuance of short-term debt                                      0               0                  0     30,000
   Proceeds from issuance of long-term debt                                  18,000           5,400            359,000     10,886
   Payments on short term debt                                                    0               0            (30,000)         0
   Payments on long-term debt including acquisition-related financing fees (104,854)        (43,056)          (178,015)      (350)
   Payments on capital leases                                                  (503)           (825)            (1,259)   (11,344)
   Stock activity relating to Predecessor's equity                                0               0                  0         52
   Amounts paid to shareholders for acquisition                                   0               0           (167,800)         0
   Capital contribution by Pro-Fac                                            7,234          10,000              3,888          0
   Cash dividends paid to Pro-Fac                                            (5,522)              0             (2,264)    (1,390)
                                                                           --------        --------           --------   --------
Net cash (used in)/provided by financing activities                         (85,645)        (28,481)           (58,450)    69,854
                                                                           --------        --------           --------   --------
Net change in cash and cash equivalents                                      (6,037)          4,715             (3,177)     4,407
Cash and cash equivalents at beginning of period                              8,873           4,158              7,335      2,928
                                                                           --------        --------           --------   --------
Cash and cash equivalents at end of period                                 $  2,836        $  8,873           $  4,158   $  7,335
                                                                           ========        ========           ========   ========
Supplemental Disclosure of Cash Flow Information:
   Cash paid during the year for:
     Interest (net of amount capitalized)                                  $ 35,587        $ 41,508           $ 17,531   $  6,967
                                                                           ========        ========           ========   ========
     Income taxes, net                                                     $    676        $   (703)          $  5,567   $  1,417
                                                                           ========        ========           ========   ========

     Acquisition of Packer Foods and Matthews Candy Co.:
       Accounts receivable                                                        0       $   1,282           $      0   $      0
       Inventories                                                                0           3,902                  0          0
       Prepaid expenses and other current assets                                  0             270                  0          0
       Property, plant and equipment                                              0           6,044                  0          0
       Goodwill                                                                   0             493                  0          0
       Deferred tax asset                                                         0             264                  0          0
       Accounts payable                                                           0          (4,954)                 0          0
       Accrued expenses                                                           0            (418)                 0          0
       Other non-current liabilities                                              0          (1,098)                 0          0
                                                                           --------      ----------           $-------   --------
       Cash paid for acquisition                                           $      0       $   5,785           $      0   $      0
                                                                           ========       =========           ========   =========
</TABLE>
<PAGE>
   
<TABLE>
Agrilink Foods, Inc.
    
Consolidated Statement of Cash Flows (Continued)

(Dollars in Thousands)
<CAPTION>

                                                                                                                  Fiscal 1995
                                                                                                            11/4/94 -     6/26/94 -
                                                                                Fiscal 1997    Fiscal 1996   6/24/95      11/3/94
                                                                                 Successor      Successor   Successor   Predecessor

<S>                                                                              <C>              <C>       <C>              <C>   
Supplemental Schedule of Non-Cash Investing and Financing Activities:
   In conjunction with the purchase of certain businesses of  Nalley Canada Ltd.
   
     by Agrilink in fiscal 1997, the following non-cash transactions occurred:
       Notes forgiven                                                            $4,986           $  0      $      0         $0
                                                                                 ======           ====      ========         ==
   In conjunction with the purchase of Agrilink by Pro-Fac during fiscal 1995,
    
     the following non-cash transactions occurred:
       Transfer of Investment in CoBank from Pro-Fac                                  0              0        21,619         0
       Debt forgiven by Pro-Fac                                                       0              0       110,576         0
       Other assets contributed by Pro-Fac                                            0              0         5,000         0
                                                                                 ------           ----      --------        --
                                                                                 $    0           $  0      $137,195        $0
                                                                                 ======           ====      ========        ==    
       Capital lease obligations incurred                                        $  206           $113      $  1,562        $0
                                                                                 ======           ====      ========        ==

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>
<PAGE>
   
                              AGRILINK FOODS, INC.
    
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.       SUMMARY OF ACCOUNTING POLICIES

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance  with  generally  accepted  accounting  principles,   which  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from these
estimates.

   
Agrilink is a producer and marketer of processed food products, including canned
and frozen fruits and vegetables, canned desserts and condiments, fruit fillings
and toppings, canned chilies and stews, salad dressings,  pickles, peanut butter
and snack foods. The vegetable and fruit product lines account for approximately
70 percent of sales.  The Company's  products are primarily  distributed  in the
United States.
    

The  Company  is  a  wholly-owned   subsidiary  of  Pro-Fac  Cooperative,   Inc.
("Pro-Fac").  The financial  statements  contained herein present the results of
the  Company  during  the  period  prior  to its  acquisition  by  Pro-Fac  (the
"Predecessor  entity") as well as the period  subsequent to its November 3, 1994
acquisition  (the  "Successor   entity").   The  financial   statements  of  the
Predecessor  entity and Successor  entity are not comparable in certain respects
because  of  differences  between  the cost  bases of the  assets as well as the
effect on the Successor entity's  operations for adjustments to depreciation and
interest expense. The Acquisition was accounted for using the purchase method of
accounting.  In conjunction with the change in ownership all identifiable assets
and  liabilities  were  adjusted  to reflect  their  fair  values at the date of
acquisition.

Fiscal Year:  The financial  statements of the  Predecessor  entity  include the
period from June 26, 1994 through  November 3, 1994, the  acquisition  date. The
financial statements of the Successor entity include the period from November 3,
1994  through  June 24,  1995,  the  fiscal  year end (see  NOTE 2 of  "Notes to
Consolidated  Financial  Statements").  The fiscal year of the Successor  entity
corresponds with that of its parent,  Pro-Fac,  and ends on the last Saturday in
June.  Fiscal 1996 comprised 53 weeks and fiscal 1997 and 1995 each comprised 52
weeks.

Consolidation: The consolidated financial statements include the Company and its
wholly-owned  subsidiaries  after  elimination of intercompany  transactions and
balances.

   
Change in Accounting  Principle:  Effective June 30, 1996, accounting procedures
were  changed  to  include  in  prepaid   expenses  and  other  current  assets,
manufacturing  spare parts previously  charged  directly to expense.  Management
believes this change provides a better  matching of costs with related  revenues
when evaluating interim financial statements. The favorable cumulative effect of
the change (net of  Pro-Fac's  share of $2.9  million  and income  taxes of $1.1
million) was $1.7 million.  Pro forma amounts for the  cumulative  effect of the
accounting  change  on prior  periods  are not  determinable  due to the lack of
physical  inventory  counts  required to establish  quantities at the respective
dates.   Management   does  not  believe  that  the   difference  in  accounting
methodologies  for spare  parts  had any  material  impact on the  Cooperative's
historic financial statements.
    

Reclassification:  Certain items for fiscal 1996 and 1995 have been reclassified
to conform with fiscal 1997 presentation.

Cash  and  Cash  Equivalents:  Cash  and  cash  equivalents  include  short-term
investments  with  maturities  of three months or less.  Short-term  investments
amounted  to $5.3  million  at June  29,  1996.  There  were no such  short-term
investments at June 28, 1997 or June 24, 1995.

Inventories:  Inventories  are  stated  at the  lower of cost or  market  on the
first-in, first-out ("FIFO") method. Reserves recorded at June 28, 1997 and June
29, 1996 were $362,000 and $485,000, respectively.

Investment  in CoBank ("The  Bank"):  The  Company's  investment  in the Bank is
required as a condition of borrowing. These securities are not physically issued
by the Bank,  but the  Company  is  notified  as to their  monetary  value.  The
investment  is carried  at cost plus the  Company's  share of the  undistributed
earnings  of the  Bank  (that  portion  of  patronage  refunds  not  distributed
currently in cash).

   
Manufacturing  Overhead:  Allocation of manufacturing overhead to finished goods
produced is on the basis of a production period; thus at the end of each period,
manufacturing  costs  incurred  by  seasonal  plants,  subsequent  to the end of
previous pack operations,  are deferred and included in the accompanying balance
sheet under the caption " Prepaid manufacturing expense." Such costs are applied
<PAGE>
to finished goods during the next production period and recognized as an element
of costs of goods sold.
    

Property, Plant, and Equipment and Related Lease Arrangements:  Property, plant,
and equipment  are  depreciated  over the  estimated  useful lives of the assets
using the straight-line method, half-year convention, over 4 to 40 years.

Assets  held  for sale are  separately  classified  on the  balance  sheet.  The
recorded value represents an estimate of net realizable value.

Lease arrangements are capitalized when such leases convey  substantially all of
the risks and benefits  incidental  to ownership.  Capital  leases are amortized
over either the lease term or the life of the  related  assets,  depending  upon
available purchase options and lease renewal features.

Other  Assets:  Other  assets are  primarily  comprised of debt  issuance.  Debt
issuance  costs are amortized  over the term of the debt.  Amortization  expense
incurred in fiscal 1997,  1996, and 1995 was $800,000,  $800,000,  and $600,000,
respectively.

Income  Taxes:  Income  taxes are  provided  on income for  financial  reporting
purposes.  Deferred  income taxes resulting from temporary  differences  between
financial  reporting  and tax  reporting  are  appropriately  classified  in the
balance sheet.

Pension:  The  Company  and its  subsidiaries  have  several  pension  plans and
participate  in various  union  pension  plans  which on a combined  basis cover
substantially  all employees.  Charges to income with respect to plans sponsored
by the Company and its subsidiaries are based upon actuarially determined costs.
Pension  liabilities are funded by periodic payments to the various pension plan
trusts.

Goodwill and Other Intangibles: Goodwill and other intangible assets include the
cost in excess of the fair value of net  tangible  assets  acquired  in purchase
transactions and acquired  non-competition  agreements and trademarks.  Goodwill
and  other  intangible  assets,  stated  net of  accumulated  amortization,  are
amortized on a straight-line basis over 5 to 35 years. The Company  periodically
assesses whether there has been a permanent impairment in the value of goodwill.
This is accomplished by determining  whether the estimated,  undiscounted future
cash flows from operating activities exceed the carrying value of goodwill as of
the  assessment  date.  Should  aggregate  future  cash  flows be less  than the
carrying  value,  a writedown  would be  required,  measured  by the  difference
between the discounted future cash flows and the carrying value of goodwill.

Commodities  Options  Contracts:  In  connection  with the  purchase  of certain
commodities for anticipated manufacturing requirements, the Company occasionally
enters into  options  contracts  as deemed  appropriate  to reduce the effect of
price  fluctuations.  These  options  contracts are accounted for as hedges and,
accordingly,  gains and losses are deferred and  recognized  in cost of sales as
part of the product cost.  These activities are not significant to the Company's
operations as a whole.

   
Casualty  Insurance:  The  Company  is  insured  for  workers  compensation  and
automobile  liability  through a  primarily  self-insured  program.  The Company
accrues for the estimated losses from both asserted and unasserted  claims.  The
estimate  of  the  liability  for  unasserted  claims  arising  from  unreported
incidents is based on an analysis of  historical  claims  data.  The accrual for
casualty  insurance at June 27, 1997 and June 28, 1996 was $2.9 million and $3.0
million, respectively.
    

Earnings Per Share Data Omitted:  Earnings per share amounts are not  presented,
as subsequent to November 3, 1994, the Company is a  wholly-owned  subsidiary of
Pro-Fac.

Environmental  Expenditures:  Environmental expenditures that pertain to current
operations   are  expensed  or   capitalized   consistent   with  the  Company's
capitalization  policy.  Expenditures  that  result from the  remediation  of an
existing  condition  caused by past operations that do not contribute to current
or  future  revenues  are  expensed.  Liabilities  are  recorded  when  remedial
activities are probable, and the cost can be reasonably estimated.

Advertising:  Production  costs of commercials  and  programming  are charged to
operations in the year first aired. The costs of other advertising promotion and
marketing  programs  are  charged  in the  year  incurred.  Advertising  expense
incurred in fiscal year 1997, 1996, and 1995 amounted to $8,376,000, $9,831,000,
and $13,150,000, respectively.

Disclosures About Fair Value of Financial Statements:  The following methods and
assumptions  were used by the Company in estimating  its fair value  disclosures
for financial instruments:

         Cash,  Accounts   Receivable,   Accounts  Payable,  and  Other  Accrued
         Expenses:  The carrying amount  approximates  fair value because of the
         short maturity of these instruments.
<PAGE>
         Long-Term  Investments:  The carrying value of the Company's investment
         in CoBank  was $25.3  million at June 28,  1997.  As there is no market
         price for this investment,  a reasonable  estimate of fair value is not
         possible.

         Long-Term  Debt:  The fair  value of the  Company's  long-term  debt is
         estimated  based on the  quoted  market  prices for the same or similar
         issues or on the current  rates  offered to the Company for debt of the
         same remaining maturities.

New Accounting Pronouncements: During fiscal 1997, the Company adopted Financial
Accounting  Standards  Board  Statement  No. 123 ("SFAS 123"),  "Accounting  for
Stock-Based  Compensation"  As  the  Company's  Long-Term  Incentive  Plan  is a
compensatory  plan,  the  adoption  of SFAS  123 had no  significant  impact  on
operations.

NOTE 2.       CHANGE IN CONTROL OF THE COMPANY

In 1993, the Company's management and Board of Directors began exploring several
strategic  alternatives  for the Company,  including a possible  sale of all the
equity of the  Company.  Those  activities  ultimately  resulted  in the Company
entering  into an Agreement  and Plan of Merger with Pro-Fac and its  subsidiary
PFAC on September 27, 1994 (the "Merger  Agreement").  On November 3, 1994, PFAC
merged  into the  Company,  making  the  Company a  wholly-owned  subsidiary  of
Pro-Fac.

In connection  with the  acquisition,  PFAC sold $160.0 million of 12.25 percent
Senior  Subordinated  Notes (the  "Notes")  due 2005 and  entered  into a credit
agreement (the "New Credit  Agreement") with the Bank, which provided for a term
loan, a term-loan  facility,  a seasonal-loan  facility,  and a letter-of-credit
facility.  All obligations of PFAC under the Notes and the New Credit  Agreement
have become obligations of the Company.

The Acquisition  was accounted for using the purchase  method of accounting.  In
conjunction  with the  change in  ownership  all other  identifiable  assets and
liabilities  were  adjusted  to  reflect  their  fair  values  at  the  date  of
Acquisition.  These  allocations were finalized in fiscal 1996. In recording the
transaction,  approximately  $121.5  million was  recorded  to adjust  property,
plant, and equipment to fair market value, and the asset lives were adjusted for
assets acquired. In addition, approximately $110.0 million of goodwill and other
intangible  assets were  recorded as the excess of purchase cost over net assets
acquired.  Included in this amount was approximately  $42.0 million for deferred
tax adjustments to properly reflect the effects of the acquisition in accordance
with the SFAS No. 109, "Accounting for Income Taxes." (See further discussion of
tax matters at NOTE 6 to the "Notes to Consolidated Financial  Statements.") The
resulting  annual  amortization  of goodwill  and other  intangible  assets will
approximate  $4.0 million using lives ranging from 5 to 35 years.  There were no
other significant changes to accounting policies as a result of the Acquisition.

   
Following, in capsule form, is the consolidated, unaudited results of operations
of  Agrilink  Foods for the  fiscal  year  ended  June 24,  1995,  assuming  the
acquisition  by Pro-Fac  took place at the  beginning  of the fiscal  year.  The
column  headed  "Actual"  for  June  24,  1995 is the  total  of  Successor  and
Predecessor entities.
    

<TABLE>
(In Millions)
<CAPTION>

                              Fiscal Year Ended
                          (Pro Forma is Unaudited)

                               June 24, 1995
                            Actual      Pro Forma

 <S>                        <C>          <C>   
 Net sales                  $748.5       $748.5
 Income before taxes        $ 10.0       $  7.0
 Net income                 $  4.0       $  2.9
</TABLE>

   
Agreements with Pro-Fac: The Company's contractual  relationship with Pro-Fac is
defined in the Pro-Fac Marketing and Facilitation Agreement ("Agreement"). Under
the Agreement,  the Company pays Pro-Fac the commercial market value ("CMV") for
all crops supplied by Pro-Fac. CMV is defined as the weighted average price paid
by other commercial  processors for similar crops sold under preseason contracts
and in the open market in the same or  competing  market  area.  Although CMV is
intended  to be no more than the fair  market  value of the crops  purchased  by
Agrilink,  it may be more or less than the price  Agrilink would pay in the open
market in the absence of the Agreement.  For the fiscal years ended 1997,  1996,
and 1995 the CMV for all crops  supplied by Pro-Fac  amounted to $51.4  million,
$44.7 million, and $55.9 million, respectively.
    

Under the  Agreement  the Company is required to have on its board of  directors
some  persons  who  are  neither   members  of,  nor  affiliated   with  Pro-Fac
("Disinterested Directors"). The number of Disinterested Directors must at least
equal the number of directors who are
<PAGE>
   
members of  Pro-Fac.  The volume and type of crops to be  purchased  by Agrilink
under the Agreement  are  determined  pursuant to its annual profit plan,  which
requires the approval of a majority of the Disinterested Directors. In addition,
under the  agreement,  in any year in which the Company has earnings on products
which were processed from crops supplied by Pro-Fac  ("Pro-Fac  Products"),  the
Company pays to Pro-Fac,  as  additional  patronage  income,  90 percent of such
earnings,  but in no case more than 50  percent of all  pretax  earnings  of the
Company.  In years in which the  Company  has  losses on Pro-Fac  Products,  the
Company  reduces the CMV it would otherwise pay to Pro-Fac by 90 percent of such
losses,  but in no case by more  than 50  percent  of all  pretax  losses of the
Company. Additional patronage income is paid to Pro-Fac for services provided to
Agrilink,  including the provision of a long term, stable crop supply, favorable
payment  terms  for  crops,  and the  sharing  of risks  of  losses  of  certain
operations of the business. Earnings and losses are determined at the end of the
fiscal  year,  but are accrued on an estimated  basis  during the year.  For the
fiscal years ended 1997, 1996, and 1995 such additional patronage  income/(loss)
amounted to $10.3 million, $(9.0) million and $9.6 million, respectively.  Under
the Indentures related to the Notes, Pro-Fac is required to reinvest at least 70
percent of the additional Patronage income in Agrilink.
    

The  capital  contribution  of Pro-Fac to the Company at  acquisition  primarily
included  the  cancellation  of  indebtedness  and  capital  lease  obligations.
Subsequent to the acquisition date, Pro-Fac invested an additional $21.1 million
in the Company (including reinvested Additional Patronage Income).

NOTE 3.       RESTRUCTURING, ACQUISITIONS, AND DISPOSALS

Information  Services  Reorganization:  On June 19,  1997,  Systems  &  Computer
Technology  Corporation  ("SCT") and the Company  announced  they signed a major
outsourcing  services  and  software  agreement  effective  June 30,  1997.  The
ten-year  agreement,  valued at approximately $50 million,  is for SCT's, OnSite
outsourcing services and ADAGE ERP software and implementation services.

   
Nalley Canada Ltd.: On June 26, 1995,  Agrilink sold Nalley Canada Ltd., located
in Vancouver,  British Columbia, to a management group. The operations were sold
for  approximately  $8.0  million.  Approximately,  $4.0 million was received in
cash. The remainder of the proceeds were received  through a series of long-term
notes with maturities between 1998 and 2005. The notes beared interest at a rate
of 12 1/4%.

In April 1997, the Company acquired  certain  businesses from Nalley Canada Ltd.
The acquired  operations  include a $12.0 million  consumer  products  business,
which markets  throughout the western Provinces of Canada. The purchase price of
approximately $5.0 million was paid through the forgiveness of various long-term
receivables (including interest earned) issued to the Company in connection with
its sale of the stock of Nalley Canada Ltd. in 1995.
    

Brooks Foods: On April 30, 1997,  Hoopeston  Foods acquired  certain assets from
the Brooks Foods operating  facility.  The purchase price of approximately  $2.1
million was paid with  $400,000 in cash and a $1.7 million  ten-year  note.  The
proceeds were applied to outstanding  Bank loans.  No  significant  gain or loss
occurred as a result of this transaction. In addition, the two companies entered
into a copack and  warehouse  agreement  under  which  Hoopeston  will  produce,
package, and warehouse certain products.

   
Georgia  Frozen  Distribution  Center:  On June 27, 1997,  URS  Logistics,  Inc.
("URS")  acquired the Company's frozen foods  distribution  center in Montezuma,
Georgia.  In addition,  the two  companies  entered  into a long-term  logistics
agreement  under  which  URS  will  manage  its  facility  and all  frozen  food
transportation  operations  of  Agrilink  in Georgia  and New York.  The Company
received   proceeds  of  approximately   $9.1  million  which  were  applied  to
outstanding Bank loans. No significant gain or loss occurred as a result of this
transaction.

Sale of New York  Canned  Vegetable  Businesses:  On May 6, 1997,  Seneca  Foods
Corporation  ("Seneca")  acquired the Agrilink  Leicester,  New York  production
facility and the LeRoy, New York  distribution  center,  as well as the Blue Boy
brand.

Seneca and the  Company  have also  forged a  long-term  strategic  alliance  to
combine their  agricultural  departments  into one organization to be managed by
Agrilink.  The objective is to maximize sourcing  efficiencies of New York State
vegetable  requirements  for both  companies.  This  agreement  initially  has a
minimum ten-year term.
    

The Company received proceeds of approximately  $29.4 million which were applied
to outstanding  Bank loans. No significant  gain or loss occurred as a result of
this transaction.
<PAGE>
Finger Lakes  Packaging:  On October 9, 1996, the Company  completed the sale of
Finger Lakes Packaging,  Inc.  ("Finger Lakes  Packaging"),  a subsidiary of the
Company to Silgan Containers Corporation,  an indirect,  wholly-owned subsidiary
of Silgan  Holdings,  Inc.,  headquartered in Stamford,  Connecticut.  A gain of
approximately  $3.6 million was  recognized on this  transaction.  Proceeds from
this sale were applied to outstanding Bank loans. The Company received  proceeds
of approximately $30.0 million.
   
The transaction also included a long-term  supply  agreement  between Silgan and
Agrilink.

Packer Foods:  On July 21, 1995, the Company  acquired Packer Foods, a privately
owned,  Michigan-based  food  processor.  The  total  cost  of  acquisition  was
approximately $5.4 million in notes plus interest at 10 percent to be paid until
the notes  mature in the year  2000.  The  transaction  was  accounted  for as a
purchase.  For its latest  fiscal year ended  December 31, 1994,  Packer had net
sales  of  $13  million,   operating  income  of  $300,000,  and  income  before
extraordinary items of $100,000. Packer Foods has been merged into the Company's
CBF operations.
    

Matthews Candy Co.: In the fourth  quarter of fiscal 1996, the Company  acquired
Matthews Candy Co., a privately owned  Washington-based  snack food distributor.
The total cost of the acquisition was approximately $0.4 million and was paid in
cash.  Matthews Candy Co. has been merged into the Tim's Cascade Chips operation
of the Company's Snack Foods Group.

Restructuring  initiatives  resulted in the following charges to earnings of the
Company in fiscal 1996 and 1995:

         Fiscal 1996 Restructuring  Charge:  During the fourth quarter of fiscal
         1996,   the   Company   began   implementation   of  a   corporate-wide
         restructuring  program.  The  overall  objectives  of the plan  were to
         reduce  expenses,  improve  productivity,  and  streamline  operations.
         Efforts focused on the  consolidation of operations and the elimination
         of  approximately  900 positions.  The total fiscal 1996  restructuring
         charge amounted to $5.9 million.  This amount included a fourth-quarter
         charge of approximately  $4.0 million which was primarily  comprised of
         employee  termination  benefits,  and  approximately  $1.9  million for
         strategic  consulting  incurred  throughout  the  year.  Reductions  in
         personnel included both operational and administrative positions.

         Fiscal 1995 Restructuring Charge: Included in fiscal 1995 results was a
         restructuring charge of $8.4 million to reflect the estimated impact of
         the sale of certain assets of the Nalley US Chips and Snacks  operation
         and other  expenses  relating  to the  disposal of this  operation.  On
         December  19,  1994  this  operation  was sold for  approximately  $2.0
         million.  This sale was contemplated by Pro-Fac in conjunction with the
         acquisition.

NOTE 4.       PROPERTY, PLANT AND EQUIPMENT AND RELATED OBLIGATIONS

The  following  is a summary  of  property,  plant  and  equipment  and  related
obligations at June 28, 1997 and June 29, 1996:

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                   June 28, 1997                   June 29, 1996
                                        Owned         Leased                          Owned           Leased
                                        Assets        Assets           Total          Assets          Assets            Total

<S>                                    <C>            <C>            <C>             <C>              <C>           <C>       
Land                                   $  5,755       $    0         $  5,755        $  6,005         $    0        $    6,005
Land improvements                         2,061            0            2,061           2,641              0             2,641
Buildings                                80,907          645           81,552          97,855            690            98,545
Machinery and equipment                 167,043        2,397          169,440         190,423          2,509           192,932
Construction in progress                 13,053            0           13,053          11,881              0            11,881
                                       --------       ------         --------        --------         ------        ----------
                                        268,819        3,042          271,861         308,805          3,199           312,004
Less accumulated depreciation            52,194        1,744           53,938          42,042          1,573            43,615
                                       --------       ------         --------        --------         ------        ----------
Net                                    $216,625       $1,298         $217,923        $266,763         $1,626          $268,389
                                       ========       ======         ========        ========         ======          ========
Obligations under capital leases1                     $1,375                                          $1,672
Less current portion                                     558                                             547
                                                      ------                                          ------
Long-term portion                                     $  817                                          $1,125
                                                      ======                                          ======

<FN>
1  Represents the present value of net minimum lease payments  calculated at the
   Company's  incremental  borrowing rate at the inception of the leases,  which
   ranged from 6.3 to 9.8 percent.

</FN>
</TABLE>
Interest capitalized in conjunction with construction  amounted to approximately
$342,000 and $470,000 in fiscal 1997 and 1996, respectively.
<PAGE>
The following is a schedule of future minimum lease  payments  together with the
present value of the minimum lease payments related to capitalized  leases, both
as of June 28, 1997.

<TABLE>
(Dollars in Thousands)
<CAPTION>

Fiscal Year Ending Last                         Capital          Operating      Total Future
   Saturday In June                              Leases            Leases        Commitment

       <S>                                       <C>             <C>              <C>
       1998                                      $  783          $ 5,368          $ 6,151
       1999                                         556            4,248            4,804
       2000                                         125            2,522            2,647
       2001                                          92            1,115            1,207
       2002                                          66              444              510
   Later years                                      200               71              271
                                                 ------          -------          -------
Net minimum lease payments                        1,822          $13,768          $15,590
                                                                 =======          =======
Less amount representing interest                   447
Present value of minimum lease payments          $1,375

</TABLE>
Total rent expense related to operating leases (including lease  arrangements of
less than one year which are not  included in the  previous  table)  amounted to
$11,204,000, $10,927,000, and $10,297,000 for fiscal years 1997, 1996, and 1995,
respectively.  The  fiscal  1995  amount  is  comprised  of  $4,280,000  for the
Predecessor entity and $6,017,000 for the Successor entity.

NOTE 5.       DEBT

Bank Facility:  The Bank Facility  includes Term Loan,  Seasonal  Facility,  and
Letter of Credit facilities. The outstanding borrowings under the Term Loan were
$65.2 million at June 28, 1997.

The Seasonal Facility provides  seasonal  financing of up to $66.0 million.  The
Letter of Credit Facility provides $18.0 million.

   
         Guarantees and Security:  All  obligations  under the Bank Facility are
         guaranteed  by  Pro-Fac  and  certain  subsidiaries  of  Agrilink  (the
         "Subsidiary  Guarantors").  The  Company's  obligations  under the Bank
         Facility and Pro-Fac's and the Subsidiary Guarantors' obligations under
         their  respective  guaranties  are  secured by all of the assets of the
         Company and each guarantor, respectively.
    

         The Bank has  extended  to a portion  of the Term Loan  Facility  for a
         limited  period of time  certain  fixed  rates that were in effect with
         respect to  indebtedness  repaid to the Bank on November  3, 1994.  The
         weighted-average  rate of interest applicable to the Term Loan was 8.60
         percent per annum for fiscal 1997.

         Borrowings under the Seasonal Facility are payable at the expiration of
         that portion of the facility,  which is December 1997;  except that for
         15 consecutive calendar days during each year, the borrowings under the
         Seasonal Facility must be zero.
<PAGE>
Short-term borrowings for the three years ended June 28, 1997 were as follows:

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                     Fiscal         Fiscal         Fiscal
                                                      1997           1996           19951

<S>                                                 <C>             <C>            <C>    
Balance at end of period                            $     0         $     0        $     0


Rate at fiscal year end                                 0.0%            0.0%           0.0%


Maximum outstanding during the period               $65,000         $94,000        $94,000


Average amount outstanding during the period        $24,900         $53,700        $66,500


 Weighted average interest rate during the period       7.3%            7.4%           7.3%




<FN>
1    The above amounts include borrowings from commercial banks and from Pro-Fac
     under existing and pre-existing loan agreements.
</FN>
</TABLE>

         The Letter of Credit  Facility  provides for the issuance of letters of
         credit through December 1997. Management anticipates timely renewals of
         both the Seasonal and the Letter of Credit facilities.

         Certain Covenants:  The Pro-Fac Bank Guarantee  requires Pro-Fac,  on a
         consolidated basis, to maintain specified levels with regard to working
         capital,   tangible  net  worth,  fixed  charges,   the  incurrence  of
         additional   debt,   and   limitations   on   dividends,   investments,
         acquisitions,  and asset sales.  The Company is in compliance  with, or
         has obtained waivers for, all covenants,  restrictions and requirements
         under the terms of the borrowing agreement.

         Commitment Fees: The Bank assesses  commitment fees of 0.55 percent on
         the seasonal  line and 0.25 percent on the unused  portion of the Term
         Loan.

         Fair Value:  Based on an  estimated  borrowing  rate at fiscal year end
         1997  of  8.7  percent  for  long-term  debt  with  similar  terms  and
         maturities,  the fair value of the Company's long-term debt outstanding
         under the New Credit Agreement was approximately  $64.8 million at June
         28, 1997.

         Based on an  estimated  borrowing  rate at fiscal  year end 1996 of 9.6
         percent for long-term debt with similar terms and maturities,  the fair
         value of the Company's  long-term debt outstanding under the New Credit
         Agreement was approximately $149.6 million at June 29, 1996.

The Senior  Subordinated  Notes  ("Notes"):  The Notes are limited in  aggregate
principal amount to $160.0 million and will mature on February 1, 2005. Interest
on the Notes  accrues  at the rate of 12.25  percent  per  annum and is  payable
semi-annually in arrears on February 1 and August 1.

         Guarantees  and  Security:   The  Notes  represent   general  unsecured
         obligations of the Company, subordinated in right of payment to certain
         other  debt  obligations  of  the  Company   (including  the  Company's
         obligations under the New Credit Agreement).

         Certain Covenants: The Notes limited the amount Pro-Fac can borrow from
         the Company to $10.0  million and provided  that,  if Pro-Fac  borrowed
         from a source  other than the  Company,  Pro-Fac  was  restricted  from
         borrowing  from the Company.  On June 28, 1996,  Pro-Fac  established a
         line of credit with the Bank and, therefore,  no longer can borrow from
         the Company.

   
         The Notes  also limit the  amount  and  timing of  dividends  and other
         payments  ("Restricted  Payments")  from the  Company  to Pro-Fac or to
         holders  of  other  Agrilink  debt or  equity.  No  dividends  or other
         Restricted  Payments  may be made if  there  is an  existing  event  of
         default under the Notes or if Agrilink' Fixed Charge Coverage Ratio (as
         defined  in the  Indenture,  a ratio  of  cash  flow  to  interest  and
         tax-adjusted dividends) for the preceding four quarters is not at least
         1.75 to 1.00. The amount of all dividends and other Restricted Payments
         subsequent  to the date of the Indenture is subject to an overall limit
         that is based on the  Company's net income and the amount of additional
         equity invested in the Company.
    
<PAGE>


         Fair Value:  Based on an estimated  borrowing  rate at 1997 fiscal year
         end of 11.1 percent for borrowings  with similar terms and  maturities,
         the fair value of the Notes was $174.7 million at June 28, 1997.

         Based on an  estimated  borrowing  rate at 1996 fiscal year end of 12.5
         percent for  borrowings  with similar  terms and  maturities,  the fair
         value of the Notes was $156.7 million at June 29, 1996.

Other Debt:  Other debt of $5.7 million carries rates up to 11.0 percent at June
28, 1997.

Maturities:  Total long-term debt maturities during each of the next five fiscal
years are as follows:  1998 through 1999, $8.1 million each; 2000, $9.0 million,
2001,  $15.5  million,  and 2002,  $10.1  million.  Provisions  of the Term Loan
require  annual  payments in the years through 2000 on October 1 of each year in
an amount  equal to the "annual  cash sweep"  (equivalent  to  approximately  80
percent of net income  adjusted  for certain  cash and  non-cash  items) for the
preceding fiscal year as defined in the Bank Facility.  As of June 28, 1997, the
Company had satisfied its  obligation  under this  provision.  Provisions of the
Term Loan also require that cash proceeds from the sale of businesses be applied
to the Term Loan.

NOTE 6.       TAXES ON INCOME

Taxes on income before the cumulative  effect of a change in accounting  include
the following:

<TABLE>
(Dollars in Thousands)
<CAPTION>
                                                                   Fiscal 1995
                                                           11/4/94 -        6/26/94 -
                      Fiscal 1997       Fiscal 1996        6/24/95          11/3/94
                       Successor         Successor        Successo        Predecessor

<S>                     <C>             <C>                <C>              <C>    
Federal -
  Current               $  567          $     0            $(1,368)         $ 5,834
  Deferred               2,639           (5,990)             3,810           (3,529)
                        ------          -------            -------          -------
                         3,206           (5,990)             2,442            2,305
                        ------          -------            -------          -------
State and foreign -
  Current                  314                0                (46)           1,106
  Deferred                 148             (863)               895             (676)
                        ------          -------            -------          -------
                           462             (863)               849              430
                        ------          -------            -------          -------
                        $3,668          $(6,853)           $ 3,291          $ 2,735
                        ======          =======            =======          =======
</TABLE>

A reconciliation  of the Company's  effective tax rate to the amount computed by
applying  the  federal  income tax rate to income  before  taxes and  cumulative
effect of a change in accounting is as follows:

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                                                                                 Fiscal 1995
                                                                                                           11/4/94 -     6/26/94 -
                                                                              Fiscal 1997    Fiscal 1996   6/24/95       11/3/94
                                                                               Successor      Successor   Successor     Predecessor

<S>                                                                              <C>         <C>            <C>           <C>   
Income tax provision/(benefit) at 34% in 1997 and 1996 and 35% in 1995           $2,530      $(6,380)       $1,942        $1,558
State income taxes, net of federal income tax effect                                484         (859)          552           294
Goodwill amortization                                                             1,041          784           637           167
Dividend received reduction                                                        (472)        (521)            0             0
Non-deductible legal and advisory expenses                                            0            0             0           753
Other, net                                                                           85          123           160           (37)
                                                                                 ------      -------        ------        ------  
                                                                                 $3,668      $(6,853)       $3,291        $2,735
                                                                                 ======      =======        ======        ======

Effective Tax Rate                                                                 49.3%      (36.5)%        59.3%          61.4%
                                                                                 ======      =======        ======        ======
</TABLE>
<PAGE>
The deferred tax (liabilities)/assets  consist of the following at June 28, 1997
and June 29, 1996:
<TABLE>

                                                           Fiscal                Fiscal
                                                            1997                  1996
<S>
Liabilities                                             <C>                   <C>      
  Depreciation                                          $(49,357)             $(61,350)
  Non-compete agreements                                    (462)                 (766)
  Long-term receivables                                     (538)                 (426)
  Prepaid manufacturing                                   (3,215)               (4,411)
  Other                                                     (215)                  (39)
                                                        ---------             ---------
                                                         (53,787)              (66,992)
                                                        ---------             ---------
Assets
  Inventory                                                2,322                 2,203
  Allowance for doubtful accounts                            377                   313
  Capital and operating loss carryforwards                 6,147                27,090
  Accrued employee benefits                                3,431                 3,014
  Insurance accruals                                       2,058                 2,031
  Pension/OPEB accruals                                    7,128                 6,368
  Restructuring reserves                                   1,332                 1,731
  Promotional reserves                                     1,592                     0
  Other                                                    2,908                 2,377
                                                        --------              --------
                                                          27,295                45,127
                                                        --------              --------
  Net deferred liabilities                               (26,492)              (21,865)
  Valuation allowance                                     (6,212)              (17,983)
                                                        --------              --------
                                                        $(32,704)             $(39,848)
                                                        ========              ========
</TABLE>

During  fiscal year 1997,  the Company  utilized  $22.1 million of net operating
loss  carryforwards  ($8.6  million of tax).  Additionally,  approximately  $5.1
million  of  net  operating  loss  carryforwards  ($1.7  million  of  tax)  were
transferred from Pro-Fac.
The benefits for these net operating losses had been recorded in previous years.

During  fiscal  year  1996,  the  Company  sold the  stock  of its  wholly-owned
subsidiary  Curtice Burns Meat Snacks,  Inc.  Substantially all of the assets of
this  subsidiary  were  previously  sold. The sale resulted in a capital loss of
$36.3 million  ($14.2  million of tax). As of the date of sale, a full valuation
allowance had been recorded against the capital loss carryforward as it was more
likely than not that a tax benefit  would not be  realized.  During  fiscal year
1997,  however,  the Company disposed of its Finger Lakes Packaging  subsidiary,
its New York canned vegetable  operation,  and a distribution center in Georgia.
As a result of these  disposals,  the  Company  utilized  $21.6  million  of its
capital loss carryforward. As the related valuation allowance was established in
conjunction  with the acquisition of the Company by Pro-Fac,  the recognition of
this capital loss  carryforward  reduced goodwill in fiscal 1997. As of June 28,
1997,  the Company has $14.7 million of a capital loss  carryforward  available.
The capital loss  carryforward  expires in 2001,  and any future  recognition of
this capital loss carryforward will also reduce goodwill.

   
In January  1995,  the Boards of  Directors  of Agrilink  and  Pro-Fac  approved
appropriate amendments to the Bylaws of Agrilink to allow the Company to qualify
as a  cooperative  under  Subchapter T of the Internal  Revenue  Code. In August
1995, Agrilink and Pro-Fac received a favorable ruling from the Internal Revenue
Service  approving  the  change in tax  treatment  effective  for  fiscal  1996.
Subsequent  to this date,  a  consolidated  return has been filed  incorporating
Agrilink  and  Pro-Fac.  Tax  expense  is  allocated  to  Agrilink  based on its
operations.
    

NOTE 7.       PENSIONS, PROFIT SHARING, AND OTHER EMPLOYEE BENEFITS

Pensions:  The Company  has  primarily  noncontributory  defined  benefit  plans
covering  most  employees.  The benefits for these plans are based  primarily on
years of service and  employees'  pay near  retirement.  The  Company's  funding
policy  is  consistent  with  the  funding   requirements  of  Federal  law  and
regulations.  Plan assets consist principally of common stocks,  corporate bonds
and US government obligations.

The Company also  participates in several union  sponsored  pension plans. It is
not  possible to  determine  the  Company's  relative  share of the  accumulated
benefit obligations or net assets for these plans.
<PAGE>
Pension cost for fiscal years ended 1997,  1996, and 1995 includes the following
components:

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                                                                         Fiscal 1995
                                                                                                    11/4/94 -        6/26/94 -
                                                                     Fiscal 1997    Fiscal 1996     6/24/95          11/3/94
                                                                      Successor      Successor     Successor       Predecessor

<S>                                                                   <C>           <C>             <C>              <C>    
Service cost -- benefits earned during the period                     $ 2,888       $  3,141        $ 2,427          $ 1,270
Interest cost on projected benefit obligation                           6,461          6,544          4,365            2,225
Return on assets
   Actual gain                                                         (4,884)       (19,430)             0           (1,717)
   Net amortization and deferral                                       (4,063)        12,123         (4,789)            (678)
                                                                      -------       --------        --------         -------  
     Total gain                                                        (8,947)        (7,307)        (4,789)          (2,395)
                                                                      -------       --------        --------         ------- 
Amortization of transition amount                                           0              0              0             (265)
Amortization of prior service cost                                        (22)             0              0               61
Amortization of (gain)/loss                                              (811)           (64)             0               57
                                                                      -------       --------        -------          -------  
                                                                         (431)         2,314          2,003              953
Union and other pension costs                                             282            385            147            1,182
                                                                      -------       --------        -------          ------- 
Net pension cost                                                      $  (149)      $  2,699        $ 2,150          $ 2,135
                                                                      =======       ========        =======          =======
</TABLE>

As a result  of the  change of  control  of the  Company,  the plan  assets  and
obligations  were  remeasured on November 3, 1994, and the entire balance of the
transition  obligation,  unrecognized prior service costs, and outstanding gains
and losses totaling  approximately $5.2 million were adjusted at the time of the
acquisition.

The pension plan's funded status was as follows:

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                                 June 28, 1997             June 29, 1996              June 24, 1995
                                                                 -------------             -------------              -------------
                                                                    Assets                    Assets                    Assets
                                                                    Exceed                    Exceed                    Exceed
                                                                  Accumulated               Accumulated                Accumulated
                                                                   Benefits                  Benefits                   Benefits

<S>                                                                <C>                        <C>                      <C>      
Actuarial present value of benefit obligations:
   Vested benefit obligation                                       $(72,223)                  $(74,108)                $(65,350)
                                                                   ========                   ========                 ========
   Accumulated benefit obligation                                  $(75,138)                  $(77,035)                $(69,449)
                                                                   ========                   ========                 ========

Projected benefit obligation                                       $(84,280)                  $(85,307)                $(78,809)
Plan assets at fair value                                            88,979                     89,716                   74,897
                                                                   --------                   --------                 --------
Plan assets in excess of/(less than) projected benefit obligation     4,699                      4,409                   (3,912)
Unrecognized net (gain)/loss                                        (15,913)                   (18,456)                  (8,787)
Unrecognized prior service cost                                        (243)                      (266)                       0
                                                                   --------                   --------                 --------
                                                                    (11,457)                   (14,313)                 (12,699)
Union and other pension plans                                        (2,125)                    (2,318)                  (2,243)
                                                                   --------                   --------                 --------

Pension liability                                                  $(13,582)                  $(16,631)                $(14,942)
                                                                   ========                   ========                 ========
</TABLE>

In 1997,  the assumed  discount rate,  assumed  long-term rate of return on plan
assets and the assumed long-term rate of compensation increase were 8.0 percent,
10.0 percent,  and 4.5 percent,  respectively.  The year-end  projected  benefit
obligation  decreased by  approximately  $2.6 million due to the increase in the
discount rate from 7.75 percent to 8.0 percent.

In 1996,  the assumed  discount rate,  assumed  long-term rate of return on plan
assets,  and the  assumed  long-term  rate of  compensation  increase  were 7.75
percent,  10.0 percent, and 4.50 percent,  respectively.  The year end projected
obligation  increased by  approximately  $7.6 million due to the decrease in the
discount rate from 8.5 percent to 7.75 percent.
<PAGE>
In 1995,  the assumed  discount rate,  assumed  long-term rate of return on plan
assets,  and the  assumed  long-term  rate of  compensation  increase  were 8.50
percent, 10.0 percent, and 4.50 percent, respectively.


Postretirement Benefits Other Than Pensions: Generally, other than pensions, the
Company does not pay retirees' benefit costs.  Isolated  exceptions exist, which
have evolved from union negotiations,  early retirement  incentives and existing
retiree commitments from acquired companies.

The  Company has not  prefunded  any of its  retiree  medical or life  insurance
liabilities. Consequently there are no plan assets held in a trust, and there is
no expected  long-term rate of return assumption for purposes of determining the
annual expense.

The plan's funded status was as follows:

<TABLE>
(Dollars In Thousands)
<CAPTION>

                                                                                       June 28, 1997     June 29, 1996


<S>                                                                                      <C>               <C>    
Accumulated postretirement benefit obligation:                                          
  Fully eligible active participants                                                     $   169           $   141
  Other active participants                                                                   75               108
  Retirees                                                                                 2,360             2,446
                                                                                         -------           -------
     Total                                                                                 2,604             2,695
  Less Plan assets at fair value                                                               0                 0
                                                                                         -------           -------
  Accumulated postretirement benefit obligation in excess of fair value of assets         (2,604)           (2,695)
  Unrecognized gains                                                                        (378)             (443)
                                                                                         -------           -------
  Accrued postretirement benefit cost                                                    $(2,982)          $(3,138)

                                                                                         =======           =======
</TABLE>
Net periodic postretirement benefit cost included the following components:

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                                                        Fiscal 1995
                                                                                11/4/94 -          6/26/94 -
                                                                                6/24/95            11/3/94
                                             Fiscal 1997      Fiscal 1996      Successor         Predecessor

<S>                                             <C>               <C>            <C>                <C> 
Service cost                                    $  8              $ 23           $ 15               $  8
Interest cost                                    199               222            154                 74
Net amortization and deferral                    (15)                0              0                 46
                                                ----              ----           ----               ----
Net periodic postretirement benefit cost        $192              $245           $169               $128
                                                ====              ====           ====               ====
</TABLE>

The  weighted-average,  assumed  discount  rate  used  to  measure  the  benefit
obligations  was 7.75  percent at the  beginning  and 8.00 percent at the end of
fiscal  1997.   The  change  in  the  discount   rate  caused  the   accumulated
postretirement benefit obligation to decrease by approximately $53,000.

The annual rate of increase in the per capita cost of health care  benefits  was
assumed to be 10.0  percent  for 1997 and 11.0  percent  for 1996.  The rate was
assumed to decrease gradually to 5.0 percent by the year 2007 and remain at that
level thereafter.

The health  care cost  trend rate  assumption  has a  significant  effect on the
amounts reported.  To illustrate,  increasing the assumed health care cost trend
rates by one  percentage  point in each  year  would  increase  the  accumulated
postretirement  benefit  obligation  (APBO) and the aggregate of the service and
interest  cost  components  of the net periodic  postretirement  benefit cost as
follows:
<PAGE>
<TABLE>
(Dollars in Thousands)
<CAPTION>
                                                  Successor
                                                 Fiscal 1997
                                           Current         1% Higher
                                            Trend            Trend

<S>                                        <C>               <C>   
APBO                                       $2,604            $2,696
Service cost + interest cost               $  207            $  215

</TABLE>
Profit  Sharing/401(k):  Under the prior  Deferred  Profit  Sharing Plan and the
Non-Qualified  Profit Sharing Plan, the Company allocated to all salaried exempt
employees a percentage  of its earnings in excess of 5.0 percent of the combined
long-term  debt and equity (as  defined) of Pro-Fac and the  Company.  In fiscal
1995, $1.4 million was allocated to the plans.

On October 1, 1995, the Company merged the Deferred Profit Sharing Plan into the
401(k) Investment Plan. Under the new combined plan, the Retirement  Savings and
Incentive Plan ("RSIP"), the Company makes an incentive contribution to the Plan
if certain  pre-established  earnings goals are achieved.  The maximum incentive
contribution  is 3 percent of base  salary  earned  during the fiscal  year.  In
addition,  the Company contributes 401(k) matching contributions to the Plan for
the benefit of  employees  who elect to defer a portion of their salary into the
plan. During fiscal 1997 and 1996 the Company  allocated  $500,000 and $400,000,
respectively,  in the form of matching  contributions and $400,000 and $211,000,
respectively,  in the form of  incentive  contributions  for the  benefit of its
employees.

   
Long-Term  Incentive Plan: On June 24, 1996, the Company  introduced a long-term
incentive  program,  the  Agrilink  Foods  Equity  Value  Plan,  which  provides
performance  units to a select  group of  management.  The  future  value of the
performance  units is determined by the  Company's  performance  on earnings and
debt repayment.  The performance units vest 25 percent each year after the first
anniversary of the grant,  becoming 100 percent vested on the fourth anniversary
of grant.  One-third of the appreciated  value of units in excess of the initial
grant price is paid as cash  compensation  over the subsequent  three years. The
final  value  of  the  1997  performance  units  is  determined  on  the  fourth
anniversary  of grant.  The total units granted were 176,278 at $25.04 per unit,
and 7,996 at $13.38  per unit in June  1997,  and  248,511 at $13.38 per unit in
June 1996.  In fiscal 1997,  approximately  $1.5  million was  allocated to this
plan.

The value of the grants from the Agrilink  Foods Equity Value Plan will be based
on the Company's future earnings and debt repayment.
    

Employee  Stock  Purchase  Plan:  During  fiscal 1996 the Company  introduced an
Employee Stock Purchase Plan which affords employees the opportunity to purchase
semi-annually,  in cash or via payroll  deduction,  shares of Class B Cumulative
Pro-Fac Preferred Stock to a maximum value of 5 percent of salary.  The purchase
price of such shares is par value,  $10 per share.  During fiscal 1997 and 1996,
31,435 and 33,364 shares,  respectively,  were held by employees, and 833 shares
were subscribed to as of June 28, 1997.

NOTE 8.       SUBSEQUENT EVENTS AND OTHER MATTERS

Formation of New Sauerkraut Company:  Subsequent to fiscal year-end,  on July 1,
1997,  the Company  and  Flanagan  Brothers,  Inc.,  of Bear  Creek,  Wisconsin,
contributed  all their assets  involved in  sauerkraut  production  into one new
sauerkraut company. This new company, Great Lakes Kraut Company, will operate as
a New York limited  liability  company,  with  ownership  split  between the two
companies.  Management  anticipates the alliance will  positively  impact fiscal
1998 earnings.

Legal Matters:  The Company is party to various litigation and claims arising in
the ordinary  course of business.  Management  and legal counsel for the Company
are of the opinion that none of these legal actions will have a material  effect
on the financial position of the Company.

   
Commitments:  The Company's  Curtice Burns Foods business unit has guaranteed an
approximate  $1.4  million  loan for the City of  Montezuma to renovate a sewage
treatment plant operated in Montezuma on behalf of the City.

Curtice  Burns  Foods Fire:  In July 1994,  a plant  operated  by the  Company's
Curtice Burns Foods business unit, located in Montezuma, Georgia, was damaged by
fire.  All material  costs  associated  with the  facility  repairs and business
interruption  were covered under the  Company's  insurance  policies.  A gain on
assets   destroyed  in  the  fire  was  recognized  by  Agrilink  prior  to  the
Acquisition.
    

ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
              AND FINANCIAL DISCLOSURE

Not applicable.
<PAGE>
                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Management  and  Directors:  Effective  upon  consummation  of the  Acquisition,
Pro-Fac  established  a management  structure  for the Company,  providing for a
Board of Directors consisting of one management director,  Pro-Fac Directors and
Disinterested  Directors. The number of Pro-Fac Directors is equal to the number
of Disinterested Directors. The Chairman of the Board is a Pro-Fac Director. The
management and directors are listed below.  The Company may in the future expand
the Board of  Directors,  but  Pro-Fac  has  undertaken  to cause the Company to
maintain a Board on which the number of  Pro-Fac  Directors  does not exceed the
number  of  Disinterested  Directors.  Both  the New  Credit  Agreement  and the
Indenture provide that there will be a Change of Control if, for a period of 120
consecutive  days,  the  number  of  Disinterested  Directors  on the  Board  of
Directors of the Company is less than the greater of (i) two and (ii) the number
of directors of the Company who are Pro-Fac Directors.

Set forth below is certain  information  concerning the individuals who serve as
directors  and officers of the Company as well as other  corporate  officers and
the individuals who serve as presidents and chief executive  officers of certain
of the Company's divisions.

<TABLE>
                                       Year of
      Name                              Birth                            Positions
<CAPTION>

<S>                                     <C>          <C>                                                            
Dennis M. Mullen(1)                     1953         President and Chief Executive Officer and Director

Roy A. Myers                            1931         Retired President and Chief Executive Officer and Director

William D. Rice                         1934         Senior Vice President Strategic Development and Secretary

Robert E. McMahon                       1941         Vice President Management Information Systems

Earl L. Powers                          1944         Vice President and Chief Financial Officer

Beatrice B. Slizewski                   1943         Vice President Corporate Communications

Lois J. Warlick-Jarvie                  1958         Vice President Human Resources

Stephen R. Wright                       1947         Executive Vice President Agriculture

Carl W. Caughran                        1953         President and Chief Executive Officer of Nalley Fine Foods

   
Bernhard Frega                          1950         President and Chief Executive Officer of CBF
    

Tim Kennedy                             1948         President and Chief Executive Officer of Tim's Cascade Chips

David R. Ray                            1945         President and Chief Executive Officer of Husman and Snyder

Robert V. Call, Jr.(2)                  1926         Director and Chairman of the Board

Bruce R. Fox(2)                         1947         Director

Cornelius D. Harrington, Jr.(3)         1927         Director

Steven D. Koinzan(2)                    1948         Director

Walter F. Payne(3)                      1936         Director

Frank M. Stotz(3)                       1930         Director

<FN>
(1) Management Director.

(2) Pro-Fac Director.

(3) Disinterested Director.
</FN>
</TABLE>

   
Dennis M.  Mullen  has been the  President  and Chief  Executive  Officer  since
January  1997 and a  Director  of the  Company  since  May  1996.  He was  Chief
Operating  Officer  from  since  May 1996 to  January  1997 and  Executive  Vice
President since January 1996. He had been President and Chief Executive  Officer
of CBF from March 1993 to May 1996.  He was Senior Vice  President  and Business
Unit  Manager   Foodservice   of  CBF  from  1991  to  1993,   and  Senior  Vice
President-Custom  Pack Sales for Nalley from 1990 to 1991.  Prior to  employment
with the Company, he was President and Chief Executive Officer of Globe Products
Company.
    
<PAGE>
Roy A. Myers was  President  and Chief  Executive  Officer from November 1994 to
January 1997.  Mr. Myers retired in January 1997.  Prior to his  retirement  Mr.
Myers served as a Director and Executive Vice President of the Company from 1987
to the completion of the  Acquisition  (at which time he was appointed the Chief
Executive Officer). He served as Vice  President-Operations  of the Company from
1985 to 1987 and as Vice President of the Company from 1983 to 1985. He has been
an employee of the Company or a predecessor to the Company since 1955 in various
other capacities including Industrial Relations Manager,  Operations Manager and
President of the Corporate Services Division.  He was General Manager of Pro-Fac
from 1987 until the  completion of the  Acquisition,  having served as Assistant
General Manager from 1983 to 1987.

William D. Rice has been  Senior  Vice  President  Strategic  Development  since
February 1997 and  Secretary of the Company  since 1989. He was Chief  Financial
Officer from 1969 to February 1997. He was Treasurer of the Company from 1975 to
1996.  He was Vice  President-Finance  of the Company from 1969 to 1991.  He was
Assistant  Treasurer of Pro-Fac  from 1970 to February  1997  (Management  Chief
Financial Officer for Pro-Fac).

   
Robert E. McMahon has been Vice  President  Information  Systems since  November
1993;  prior  to that he was Vice  President,  Information  Systems  for the CBF
Division 1992-1993 and Director of Corporate  Information Systems since December
1991.  He joined the CBF  Division  as Systems  Integration  Manager in 1989 and
became  Director  of  Information  Systems for that  Division in 1990.  Prior to
employment with Agrilink, he held management,  executive and technical positions
with such  organizations  as Abbott Labs, BASF, IBM, MTech, and Price Waterhouse
LLP.

Earl L.  Powers  has been Vice  President  and  Chief  Financial  Officer  since
February 1997. He was Vice President and Corporate Controller from March 1993 to
February 1997, and Vice President  Finance and Management  Information  Systems,
CBF  Division  of the  Company  from 1991 to March  1993.  Prior to joining  the
Company,  he was Controller of various Pillsbury Company divisions 1987-1990 and
various other executive management positions at the Pillsbury Company 1976-1987.

Beatrice B.  Slizewski has been Vice President of Corporate  Communications  for
Agrilink  and Pro-Fac  since  March 1995.  She joined the Company as Director of
Corporate  Communications  in 1991. Prior to joining Agrilink  (1988-1991),  she
worked as a marketing and public  relations  consultant for J.P.  Associates,  a
business  consulting  agency in  Rochester,  New York.  Previous  food  industry
experience  includes 14 years with the R.T. French Company  (1974-1988) -- eight
years in public relations and six years in various accounting functions.
    

Lois J.  Warlick-Jarvie  has been Vice President  Human  Resources since January
1993;  Corporate  Director Human  Resources  July 1991 to January 1993;  Manager
Compensation,  Benefits and Risk Management  January 1989 to July 1991;  various
administrative staff positions within the Company 1982 to 1989.

Stephen R. Wright has been Executive  Vice President  since November 6, 1996. He
was Senior Vice  President -  Procurement  of the Company from November 1994 and
Vice  President --  Procurement  for the Company  from 1990 to  November,  1994,
having served as Director of  Commodities  and  Administration  Services for the
Company from 1988 to 1990. He became General Manager of Pro-Fac in March 1995.

Carl W. Caughran has been President and Chief  Executive  Officer of Nalley Fine
Foods   since  March  1996.   Prior  to  joining  the   Company,   he  was  Vice
President/General  Manager of Borden's  Eastern Snacks Group 1993 to 1995,  Vice
President/General  Manager of Borden's  Western  Snacks Group 1991 to 1993,  and
held various executive positions at Borden 1983 to 1991.

   
Bernhard Frega has been President and Chief  Executive  Officer of CBF since May
1996. He had been Executive Vice  President and Chief  Operating  Officer of CBF
from December 1995 to May 1996. Prior to that he held  increasingly  responsible
positions at CBF, beginning in 1974 in sales and marketing.  He became Marketing
Director in 1984, Vice President Private Label in 1987 and Senior Vice President
for Consumer Products in 1995.
    

Tim Kennedy has been  President and Chief  Executive  Officer of Tim's since its
acquisition  by the Company in 1989.  Prior to that,  he was President and Chief
Executive  Officer at Tim's  which was a  privately-held  corporation  since its
inception in 1986.

David R. Ray has been  President  and Chief  Executive  Officer of Husman  since
1995. He was Executive Vice President and Chief Operating Officer of Husman 1990
to 1995 and Director of Sales for Chips and Snacks at Nalley 1987 to 1990.
<PAGE>
Robert V. Call,  Jr. has been a Director of the Company since the  completion of
the  Acquisition.  Mr. Call had been a Director of the Predecessor  entity since
1986 until  completion  of the  Acquisition  (at which time he resigned  and was
reappointed).  He has been a Director of Pro-Fac since 1962. He was President of
Pro-Fac from 1986 to March 27,  1995,  having  served as Treasurer  from 1973 to
1984. He has been a member of Pro-Fac  since 1961. He is a vegetable,  fruit and
grain farmer (My-T Acres, Inc., Batavia, NY).

Bruce R. Fox has been a Director  of the  Company  since the  completion  of the
Acquisition.  He has been a Director of Pro-Fac  since 1974. He was Treasurer of
Pro-Fac from 1984 until March 27, 1995,  when he was elected  President.  He has
been a member of Pro-Fac  since 1974.  Mr. Fox is a fruit and  vegetable  grower
(N.J. Fox & Sons, Inc., Shelby, MI).

Cornelius D. Harrington,  prior to his retirement,  was President of the Bank of
New  England-West  in  Springfield,  MA or a  predecessor  to  the  Bank  of New
England-West  from 1978 to December 1990. He was Chief Executive  Officer of the
Bank of New  England-West  from 1984 to December 1990.  Until 1987, he served as
Chairman of the Board of Directors of BayState  Medical  Center in  Springfield,
MA. He has been a Director of the Farm Credit Bank of Springfield  since January
1994.

Steven D. Koinzan has been a Director of the Company since the completion of the
Acquisition.  He has been a Director of Pro-Fac  since 1983. He was Secretary of
Pro-Fac from March 1993 until March 27, 1995, when he was elected Treasurer.  He
has been a member of Pro-Fac since 1979.  Mr.  Koinzan is a popcorn,  field corn
and soybean farmer (Koinzan Farms; Norden, Nebraska).

Walter F.  Payne has been a  Director  of the  Company  since  January  1996 and
President  and Chief  Executive  Officer of Blue Diamond  Growers since 1992. He
held  various  positions at Blue Diamond  Growers  between 1973 and 1992.  He is
currently on the Board of Directors  of the Almond Board of  California  and the
International Nut Council,  a board alternate for the National Council of Farmer
Cooperatives,  and a member of the Board of Trustees for the Graduate  Institute
of Cooperative Leadership.

Frank M. Stotz has been a Director of the Company  since the  completion  of the
Acquisition.  Mr.  Stotz  retired  in 1994  from his  position  as  Senior  Vice
President - Finance of Bausch & Lomb Incorporated.  Before joining Bausch & Lomb
in that  capacity in 1991,  Mr.  Stotz was a partner with Price  Waterhouse.  He
joined Price  Waterhouse in Chicago in 1954, was admitted to partnership in 1966
and retired from the firm in 1991 to join Bausch & Lomb.  From 1980 to 1991,  he
was partner in charge of the  Rochester  office of Price  Waterhouse.  Mr. Stotz
serves on the  Boards of  Trustees  of St.  John  Fisher  College,  The  Genesee
Hospital, The Rochester Center for Governmental Research and The Automobile Club
of  Rochester.  He is also a member  of the  Bishop's  Council  of the  Catholic
Diocese of Rochester.

Term of Office:  All  directors of the Company will hold office from the date of
election  until  the next  annual  meeting  of the  shareholder  or until  their
successors are duly elected and qualified. Each executive officer of the Company
will hold  office from the date of election  until his  successor  is elected or
appointed.

There are no family  relationships  between any Director,  executive officer, or
any person  nominated or chosen by the Company to become a Director or executive
officer.  Officers  of the  Company  serve for a term of office from the date of
election to the next  organization  meeting of the Board of  Directors  or until
their  respective  successors are elected and  qualified,  except in the case of
death, resignation, or removal.
<PAGE>
ITEM 11.      EXECUTIVE COMPENSATION

The following tables show the cash  compensation and certain other components of
the  compensation of the chief  executive  officer and certain other most highly
compensated executive officers of the Company,  earned during fiscal years ended
June 28,  1997,  June 29,  1996,  and June 24,  1995  (collectively,  the "Named
Executive Officers").

<TABLE>
Executive Compensation
Summary Compensation Table
<CAPTION>

                                                                                                                          RSIP/
                                                                                                                       Matching
                                                                                                                     Contributions
                                                                                                Annual                  Deferred
                                                                                          Compensation1                    Profit
Name and Principal Position                                       Year            Salary           Bonus2                Sharing


<S>                                                                <C>          <C>               <C>                  <C>     
Dennis M. Mullen -                                                 1997         $349,181          $210,000             $  8,013
   President and Chief Executive Officer                           1996         $216,107          $      0             $  1,465
                                                                   1995         $179,558          $ 71,207             $  7,265

Roy A. Myers -                                                     1997         $224,000          $125,280             $  2,736
   Retired President, Chief Executive Officer, and Director        1996         $410,154          $      0             $  2,672
                                                                   1995         $339,927          $200,539             $ 10,609

William D. Rice -                                                  1997         $259,422          $107,000             $  5,990
   Senior Vice President Strategic Development and Secretary       1996         $249,642          $      0             $  1,656
                                                                   1995         $240,065          $116,143             $  9,791

Stephen R. Wright                                                  1997         $180,043          $ 80,000             $  4,321
   Executive Vice President                                        1996         $156,789          $      0             $  1,627
                                                                   1995         $128,685          $ 51,628             $  4,520

Earl L. Powers                                                     1997         $187,179          $107,000             $  4,492
   Vice President Finance and Chief Financial Officer              1996         $157,990          $      0             $  1,642
                                                                   1995         $150,392          $ 60,333             $  6,099

   
Bernhard Frega                                                     1997         $175,769          $ 90,000             $  4,341
   President and Chief Executive Officer of CBF                    1996         $141,677          $      0             $  1,675
    
                                                                   1995         $119,600          $ 42,500             $  4,539

<FN>
1  No Named Executive  Officer has received  personal benefits during the period in excess of the lesser of $50,000 or 10 percent of
   annual salary.

2  Pursuant to the  Management  Incentive  Plan of the Company  (the  "Incentive
   Plan"), additional compensation is paid if justified by the activities of the
   officers and employees  eligible under the Incentive Plan and by the earnings
   of the Company and of Pro-Fac Cooperative, Inc. ("Pro-Fac").
</FN>
</TABLE>
<PAGE>
<TABLE>
Long-Term Incentive Plan - Awards in Last Fiscal Year
<CAPTION>

                                                                                             Estimated Future Payouts
                                     (b)                              (c)                Under Non-Stock Price Based Plans
                              Number of Shares             Performance or Other             (d)                      (e)
           (a)                 Units or Other            Period Until Maturation         Threshold                  Target
          Name                Rights Granted (1)                or Payout                ($ or #)                ($ or #)(2)
------------------------     -------------------         -----------------------         ---------               -----------

<S>                               <C>                          <C>                           <C>                     <C>
Roy A. Myers                           0                       6/25/2001                     $0                      $0
Dennis M. Mullen                  32,085                       6/25/2001                     $0                      $0
William D. Rice                   23,636                       6/25/2001                     $0                      $0
Stephen R. Wright                 13,970                       6/25/2001                     $0                      $0
Earl L. Powers                    14,056                       6/25/2001                     $0                      $0
Bernhard Frega                    15,041                       6/25/2001                     $0                      $0

   
<FN>
(1)  On June 25, 1997, the Company issued  performance  units under the Agrilink
     Foods Equity Value Plan ("EVP") to a select group of management. The future
     value of the performance  units is determined by the Company's  performance
     on earnings and debt repayment.  The performance units vest 25 percent each
     year after the first anniversary of the grant,  becoming 100 percent vested
     on the fourth  anniversary of grant.  One-third of the appreciated value of
     units in excess of the  initial  grant  price is paid as cash  compensation
     over the subsequent  three years.  The final value of the 1997  performance
     units is determined on the fourth anniversary of grant.

(2)  The value of the June 25, 1997 grants from the Agrilink  Foods Equity Value
     Plan will be based on the Company's future earnings and debt repayment. The
     beginning  value of these  performance  units was set at a level  requiring
     improved earnings and debt-repayment performance.  The target payouts shown
     above  are  based on the  value of the  performance  units at  fiscal  1997
     earnings  and debt  levels and would yield no payout from the plan at those
     levels. If future  performance  equals fiscal 1997 performance,  no payouts
     will be made from the plan  relative  to the  options  granted  on June 25,
     1997.
</FN>
</TABLE>
    

Retirement  Plans: The Company's  Master Salaried  Retirement Plan (the "Pension
Plan") provides  defined  retirement  benefits for its officers and all salaried
and clerical  personnel.  The  compensation  upon which the pension benefits are
determined  is  included  in the  salary  columns of the  "Summary  Compensation
Table."

For retirement  before age 65, the annual  benefits are reduced by an amount for
each year prior to age 65 at which such retirement  occurs so that if retirement
occurs at age 55, the benefits are 70 percent of those payable at age 65.

The  approximate  number  of years of Plan  participation  under  the  Company's
Pension  Plan as of June 28,  1997,  of the  Executive  Officers  listed  in the
Summary Compensation Table are as follows: Roy A. Myers-34,  Dennis M. Mullen-7,
William D.  Rice-25,  Stephen  R.  Wright-23,  Earl L.  Powers-5,  and  Bernhard
Frega-21.

On January 28, 1992, the Company adopted an Excess Benefit Retirement Plan which
serves to provide  employees  with the same  retirement  benefit they would have
received from the Company's  Master  Salaried  Retirement  Plan under the career
average base pay formula, but for changes required under the 1986 Tax Reform Act
and the compensation limitation under Section 401(a)(17) of the Internal Revenue
Code,  which was  $150,000 on January 1, 1994,  having been  revised in the 1992
Omnibus Budget Reform Act.
<PAGE>
The following table shows the estimated  pension  benefits  payable to a covered
participant,  at age 65,  at the  specified  final  average  pay,  and  years of
credited service levels under the Company's Master Salaried  Retirement Plan and
the Excess Benefit Retirement Plan.

<TABLE>
                                               Pension Plan Table

                                           Years of Plan Participation
    Final        ------------------------------------------------------------------------------------
 Average Pay          15                 20                25               30                35
 -----------     ------------       ------------      ------------     -------------     ------------

  <S>               <C>              <C>               <C>              <C>               <C>      
  $125,000          $22,142          $  29,008         $  35,775        $  42,721         $  49,805
   150,000           27,392             36,008            44,525           53,221            62,055
   175,000           32,642             43,008            53,275           63,721            74,305
   200,000           37,892             50,008            62,025           74,221            86,555
   225,000           43,142             57,008            70,775           84,721            98,805
   250,000           48,392             64,008            79,525           95,221           111,055
   275,000           53,642             71,008            88,275          105,721           123,305
   300,000           58,892             78,008            97,025          116,221           135,555
   325,000           64,142             85,008           105,775          126,721           147,805
   350,000           69,392             92,008           114,525          137,221           160,055
   375,000           74,642             99,008           123,275          147,721           172,305
   400,000           79,892            106,008           132,025          158,221           184,555

</TABLE>
Termination Protection Provisions: The Company has adopted a Salary Continuation
Agreement for Mr. Mullen,  whereby, two years of salary and benefit continuation
will be provided if Mr. Mullen's  employment is  involuntarily  terminated on or
before  December  31, 1998,  for reasons  other than for "cause" as such term is
defined in the Agreement.

Directors  Compensation:   In  fiscal  1997,  non-employee  directors  who  were
designated by Pro-Fac  received an annual stipend of $6,000 per year,  plus $200
per day for attending  Board or Committee  meetings.  In fiscal 1997,  all other
outside directors, Messrs. Harrington,  Payne, and Stotz received an annual rate
of $18,000 in addition  to $600 per day.  The  Chairman of the Board  receives a
fixed amount in lieu of the standard  attendance  fees and annual  stipend.  The
Company  accrued an annual  stipend of $24,700  for Mr.  Call as Chairman of the
Board. Mr. Myers was not paid directors' fees.

ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

All of the  outstanding  capital  stock  of the  Company  is  owned  by  Pro-Fac
Cooperative, Inc.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   
Management  believes  all  transactions  were on terms no less  favorable to the
Cooperative than could have been reached with unaffiliated third parties.
    

Borrowings by Pro-Fac:  The Indenture  governing the Notes permitted the Company
to make demand loans to Pro-Fac for working  capital  purposes in amounts not to
exceed  $10.0  million at any time,  each such loan to bear  interest  at a rate
equal  to the  rate in  effect  on the  date of such  loan  under  the  Seasonal
Facility.  The loan  balance was  required to be reduced to zero for a period of
not less than 15 consecutive days in each fiscal year.  Except for the foregoing
provision  and except for  Pro-Fac's  guarantee  of the Notes and the New Credit
Agreement,  as long as  Pro-Fac  has the  right  to  borrow  under  the  Pro-Fac
Marketing and Facilitation  Agreement,  the Indenture does not permit Pro-Fac to
incur any other indebtedness. During fiscal 1996, Pro-Fac repaid amounts due the
Company and incurred debt from the Bank.

Equity Ownership in CoBank: As part of its historical lending  arrangements with
the Bank, which is a cooperative,  Pro-Fac made investments in the Bank. Pro-Fac
made these  investments  through (i) a capital  purchase  obligation  equal to a
percentage, set annually based on the Bank's capital needs, of its interest paid
to the Bank and (ii) a patronage  rebate on interest paid by Pro-Fac to the Bank
based on the Bank's  earnings,  which is paid in cash and capital  certificates.
The  investments in the Bank represent a percentage of the previous  five-years'
average  borrowings  from the  Bank.  As of June 28,  1997,  the  amount  of the
Company's investment in the Bank was approximately $25.3 million.

   
Purchase of Crops From  Pro-Fac:  Each of the members of Pro-Fac  sells crops to
Pro-Fac  pursuant  to a general  marketing  agreement  between  such  member and
Pro-Fac,  which  crops in turn are sold to the  Company  pursuant to the Pro-Fac
Marketing  and  Facilitation  Agreement.   During  fiscal  1997,  the  following
directors   and  executive   officers  of  Pro-Fac   directly  or  through  sole
proprietorships or corporations,  sold crops to Pro-Fac and provided harvesting,
trucking  and waste  removal  services to Agrilink for the  following  aggregate
amounts:
    
<PAGE>
<TABLE>

                                                                    RELATIONSHIP                                GROSS PURCHASES
            NAME                                                     TO PRO-FAC                                 IN FISCAL 1997

<S>                                                                  <C>                                           <C>    
Dale E. Burmeister................................................   Director                                         183,000
Robert V. Call, Jr................................................   Director                                       2,254,000
Glen Lee Chase....................................................   Director                                         199,000
Tommy R. Croner...................................................   Director and Secretary                           261,000
Robert DeBadts....................................................   Director                                         422,000
Albert P. Fazio...................................................   Director and Vice President                      144,000
Bruce R. Fox......................................................   Director and President                           935,000
Steven D. Koinzan.................................................   Director and Treasurer                           475,000
Kenneth A. Mattingly..............................................   Director                                         806,000
Allan W. Overhiser................................................   Director                                          30,000
Paul E. Roe.......................................................   Director                                         733,000
Darrell Sarff.....................................................   Director                                          75,000
</TABLE>

                   DIRECTORS AND OFFICERS LIABILITY INSURANCE

As authorized  by New York law and in accordance  with the policy of that state,
the Company has  obtained  insurance  from Chubb Group  Insurance  insuring  the
Company against any obligation it incurs as a result of its  indemnification  of
its officers  and  directors,  and insuring  such  officers  and  directors  for
liability  against  which  they  may not be  indemnified  by the  Company.  This
insurance  has a term  expiring  on  August  15,  1998,  at an  annual  cost  of
approximately  $80,000.  As of this date, no sums have been paid to any officers
or directors of the Company under this indemnification insurance contract.
<PAGE>
                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) (1)    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEX TO FINANCIAL STATEMENTS

The Following Appear in ITEM 8 of This Report
<TABLE>

    ITEM                                                                                                                 Page
<CAPTION>

   
<S>                                                                                                                         <C>
Agrilink Foods, Inc. and Consolidated Subsidiaries:
   Management's Responsibility for Financial Statements..................................................................   20
   Reports of Independent Accountants....................................................................................   21
    
   Consolidated Financial Statements:
     Consolidated Statement of Operations and Accumulated Earnings/(Deficit) for the years ended
   
     June 28, 1997, June 29, 1996, and June 24, 1995.....................................................................   23
     Consolidated Balance Sheet at June 28, 1997 and June 29, 1996.......................................................   24
     Consolidated Statement of Cash Flows for the years ended June 28, 1997, June 29, 1996, and June 24, 1995............   25
     Notes to Consolidated Financial Statements..........................................................................   27
    

         (2)    The following additional financial data are set forth herein:

</TABLE>
                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
                                                                                                                SCHEDULE II
   
Agrilink Foods, Inc.
Valuation and Qualifying Accounts
    
For the Three Fiscal Years Ended June 28, 1997

                                                                                                Fiscal 1995
                                                                                         11/4/94          6/26/94 -
                                                     Fiscal 1997      Fiscal 1996        6/24/95          11/3/94
                                                     Successor         Successor        Successor*      Predecessor*


<S>                                               <C>                <C>               <C>              <C>       
Allowance for doubtful accounts
  Balance at beginning of period                  $     836,000      $   673,000       $  683,000       $1,066,000
  Additions charged to expense                          446,000          537,000           91,000          292,000
  Deductions                                           (312,000)        (374,000)        (101,000)        (427,000)
                                                  -------------      -----------       ----------       ----------
  Balance at end of period                        $     970,000      $   836,000       $  673,000       $  931,000
                                                  =============      ===========       ==========       ==========

Inventory reserve**
  Balance at beginning of period                  $    485,000       $   144,000       $        0       $  379,000
  Net change                                          (123,000)          341,000          144,000          635,000
                                                  ------------       -----------       ----------       ----------
  Balance at end of period                        $    362,000       $   485,000       $  144,000       $1,014,000
                                                  ============       ===========       ==========       ==========

Tax valuation allowance***
  Balance at beginning of period                  $ 17,983,000       $ 7,366,000       $        0       $        0
  Net change                                       (11,771,000)       10,617,000        7,366,000                0
                                                  ------------       -----------       ----------       ----------
  Balance at end of period                        $  6,212,000       $17,983,000       $7,366,000       $        0
                                                  ============       ===========       ==========       ==========

<FN>
    *  Valuation accounts were revalued by the acquiring company.


  **   Difference between FIFO cost and market applicable to inventories.


***    See further discussion regarding tax matters at NOTE 6 to the "Notes to Consolidated Financial Statements."
</FN>
</TABLE>

Schedules  other than those listed above are omitted because they are either not
applicable  or not  required,  or  the  required  information  is  shown  in the
financial statements or the notes thereto.
<PAGE>
(3)  The following  exhibits are filed herein or have been previously filed with
     the Securities and Exchange Commission:

     (b) Reports on Form 8-K:

         No reports on Form 8-K were filed in the fourth quarter of fiscal 1997.

     (c) EXHIBITS:

                Exhibit
                Number                       Description
   
                 3.3(2)      Certificate of Incorporation of Agrilink.

                 3.4(3)      Bylaws of Agrilink.

                10.1(2)      Indenture,  dated  as  of  November  3,  1994  (the
                             "Indenture"),  among PFAC, Pro-Fac and IBJ Schroder
                             Bank  &  Trust  Company  ("IBJ"),  as  Trustee,  as
                             amended by First Supplemental  Indenture,  dated as
                             of November 3, 1994, each with respect to Agrilink'
                             12.25 percent  Senior  Subordinated  Notes due 2005
                             (the "Notes").

                10.2(2)      Term Loan,  Term Loan  Facility and  Seasonal  Loan
                             Agreement,  dated as of  November  3,  1994,  among
                             Springfield  Bank for  Cooperatives  (the  "Bank"),
                             Agrilink and PFAC.
    
               10.3(2)       Parent Guaranty, dated as of November 3, 1994, by 
                             Pro-Fac in favor of the Bank.

               10.4(2)       Parent Security  Agreement,  dated as of November
                             3, 1994 between Pro-Fac and the Bank.
   
                10.5(2)      Mortgage,  Open End Mortgage,  Deed of Trust, Trust
                             Deed, Deed to Secure Debt, Purchase Money Mortgage,
                             Assignment,   Security   Agreement   and  Financing
                             Statement   dated  November  3,  1994  among  PFAC,
                             Agrilink and the Bank.

                10.6(2)      Marketing and Facilitation Agreement, dated as of
                             November 3, 1994, between Pro-Fac and Agrilink.
    
                10.7(2)      Management Incentive Plan, as amended.

                10.8(2)      Supplemental Executive Retirement Plan, as amended.

                10.10(2)     Master Salaried Retirement Plan, as amended.

                10.11(2)     Non-Qualified Profit Sharing Plan, as amended.

                10.12(2)     Excess Benefit Retirement Plan.
   
                10.13(6)     Salary Continuation Agreement - Dennis M. Mullen.

                10.14(1)     Modification  A of Term Loan,  Term Loan  Facility,
                             and Seasonal  Loan  Agreement,  dated as of January
                             26, 1995, between Agrilink and the Bank.
    
                10.15(1)     Second Amendment to Non-Qualified Profit Sharing
                             Plan.
   
               10.16(3)      Modifications B-D of Term Loan, Term Loan Facility,
                             and Seasonal Loan Agreement Between Agrilink and
                             the Bank.

               10.17(4)      Modifications E-F of Term Loan, Term Loan Facility,
                             and Seasonal Loan Agreement Between Agrilink and 
                             the Bank.
    
                10.18(4)     Equity Value Plan Adopted on June 24, 1996.

                10.19(4)     Seasonal Loan Agreement Between Pro-Fac and the
                             Bank Dated June 28, 1996.
   
                10.20(6)     Modifications G-K of Term Loan, Term Loan Facility,
                             and Seasonal Loan Agreement Between Agrilink and
                             Bank.

                10.21(6)     OnSite Services Agreement with Systems & Computer 
                             Technology.

                10.22(6)     Raw Product Supply Agreement with Seneca Foods 
                             Corporation.

                10.23(6)     Reciprocal Co-Pack Agreement with Seneca Foods
                             Corporation.
    
                18(5)        Accountant's Report Regarding Change in Accounting
                             Method
<PAGE>
     (c) EXHIBITS (Continued):

                Exhibit
                Number       Description

   
                21.1(6)      List of Subsidiaries.

                27(6)        Financial Data Schedule.
    

(1)  Incorporated by reference from Registration Statement No. 33-60273.

(2)  Incorporated  by reference from  Registration  Statement No.  33-56517,  as
     amended.

(3)  Incorporated by reference from the Registrant's  1995 Annual Report on Form
     10-K.

(4)  Incorporated by reference from the Registrant's  1996 Annual Report on Form
     10-K.

(5)  Incorporated  by reference  from the  Registrant's  First Quarter Report on
     Form 10-Q.

   
(6)  Incorporated  by reference  from  Registrant's  1997 Annual  Report on Form
     10-K.
    
<PAGE>
                                  SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.



   
                              AGRILINK FOODS, INC.



Date: December 18, 1997                     By: 
    
                                                     Earl L. Powers
                                               Vice President Finance and
   
                                                  Chief Financial Officer
                                               (Principal Financial Officer
                                              and Principal Accounting Officer)
    
<PAGE>


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

   SIGNATURE                        TITLE                                DATE



   
*/s/                       Chairman of the Board; Director
    
   (ROBERT V. CALL, JR.)



   
*/s/                       Director
    
   (BRUCE R. FOX)



   
*/                         Director
    
   (CORNELIUS D. HARRINGTON)



   
*/s/                       Director
    
   (STEVEN D. KOINZAN)



   
*/s/                       Director
    
   (WALTER F. PAYNE)



   
*/s/                       Director
    
   (FRANK M. STOTZ)



   
*/s/                       President and Chief Executive Officer
    
   (DENNIS M. MULLEN)      and Director
                           (Principal Executive Officer)



   
  /s/ Earl L. Powers       Vice President Finance and           August 21, 1997
   (EARL L. POWER          Chief Financial Officer
                           (Principal Financial Officer
                           and Principal Accounting Officer)
    

SUPPLEMENTAL  INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.

NO ANNUAL REPORT OR PROXY MATERIAL HAS BEEN SENT TO REGISTRANT'S SHAREHOLDER AND
NONE IS INTENDED TO BE SENT.



   
Dated:  December 18, 1997                   *By:  /s/ Earl L. Powers
        -----------------                        --------------------
                                                 Earl L. Powers, as
                                                  Attorney-in-Fact