1


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    Form 10-K


                                   (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

                            CURTICE-BURNS 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>





<TABLE>
                         FORM 10-K ANNUAL REPORT - 1997
                            CURTICE-BURNS FOODS, INC.
                                TABLE OF CONTENTS

<CAPTION>
                                     PART I


                                                                                                                         PAGE
<S>   <C>     <C>                                                                                                          <C>   
ITEM  1.      Description of Business
                  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..............................................................     18
ITEM  9.      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.....................     37

                                    PART III

ITEM 10.      Directors and Executive Officers of the Registrant.......................................................     38
ITEM 11.      Executive Compensation...................................................................................     41
ITEM 12.      Security Ownership of Certain Beneficial Owners and Management...........................................     43
ITEM 13.      Certain Relationships and Related Transactions...........................................................     43

                                     PART IV

ITEM 14.      Exhibits, Financial Statement Schedules and Reports on Form 8-K..........................................     45

              Signatures...............................................................................................     48

</TABLE>


<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

                         GENERAL DEVELOPMENT OF BUSINESS

Curtice-Burns  Foods,  Inc. (the "Company" or "Curtice Burns") 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 Curtice
Burns (the "Acquisition"), and Curtice Burns 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,  Curtice
Burns has higher interest expenses than prior to the Acquisition.

Upon consummation of the Acquisition, Pro-Fac and Curtice Burns 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 Curtice Burns, for Curtice Burns to provide a market and
management  services  to  Pro-Fac,  and for  Pro-Fac to share in the profits and
losses of Curtice Burns.  Pro-Fac is required to reinvest at least 70 percent of
the additional  patronage  income from Curtice Burns back into Curtice Burns. To
preserve the independence of Curtice Burns, the Pro-Fac Marketing Agreement also
requires that certain of the directors of Curtice Burns 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  Curtice  Burns and  Pro-Fac
approved  appropriate  amendments to the Bylaws of Curtice -Burns 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,  Curtice Burns manages the business and
affairs of  Pro-Fac  and  provides  all  personnel  and  administrative  support
required.  Pro-Fac  pays  Curtice  Burns 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.

Comstock Michigan Fruit ("CMF"),  Southern Frozen Foods and Brooks Foods: During
fiscal  1997,  these three  separate  divisions  were  consolidated  and are now
headquartered in Rochester, New York. The consolidated entity represents Curtice
Burns largest  business  unit.  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.  In 1997,  the  Company's
aseptically  processed  puddings and aseptically  processed cheese sauces held a
significant portion of the national foodservice market.

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 Curtice Burns' 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,  Curtice  Burns 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  Curtice Burns 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 Curtice  Burns in
Georgia and New York.

Curtice  Burns Foods is renaming  this  combined  business and will announce the
name in the second quarter of fiscal 1998.

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
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.



<PAGE>


In April 1997, the Company acquired certain  businesses from Nalley Canada Ltd.,
a  privately  held,  independent  snack food  company and former  subsidiary  of
Curtice Burns. 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  Curtice  Burns'  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
CMF/Southern/Brooks  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

<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 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 18 and other statements
made in this Form 10-K 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
differ materially from

<PAGE>


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 Curtice Burns
in its business are either owned by Curtice Burns or one of its  subsidiaries or
leased from third  parties.  All of the  properties  owned by Curtice  Burns 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.  Curtice Burns 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.

<TABLE>
                       FACILITIES UTILIZED BY THE COMPANY

Type of Property (By Business Unit)                                                     Location                       Square Feet
<CAPTION>

<S>                                                                                     <C>                               <C>
CMF/SOUTHERN FROZEN FOODS/BROOKS:
   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>


                       FACILITIES UTILIZED BY THE COMPANY

<TABLE>
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 CMF/Southern Frozen Foods/Brooks
   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


<TABLE>
Curtice-Burns Foods, Inc.


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
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>        <C>
CMF, Southern Frozen Foods, and
   Brooks Foods1                         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 sold2            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 CMF,  Southern Frozen Foods, and Brooks Foods  administrative  operations were
consolidated during fiscal 1997.

2  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> 
CMF, Southern Frozen Foods, and Brooks Foods2                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-recurring3        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 CMF,  Southern Frozen Foods, and Brooks Foods  administrative  operations were
consolidated during fiscal 1997.

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.
<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> 
 CMF, Southern Frozen Foods, and Brooks Foods3             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 recurring4     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    In  conjunction  with the  Acquisition,  net assets  were  adjusted to fair
     market value and additional  debt was incurred.  Accordingly,  depreciation
     and  interest  expense  have  increased,  making  year-to-year  comparisons
     difficult  to  analyze.  Nonetheless,   earnings  before  interest,  taxes,
     depreciation  and  amortization  (EBITDA)  for  ongoing  businesses  can be
     compared. 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    CMF, Southern Frozen Foods, and Brooks Foods administrative operations were
     consolidated during fiscal 1997.

4  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>
CMF, Southern Frozen Foods and
  Brooks Foods1                    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    CMF, Southern Frozen Foods, and Brooks Foods administrative operations were
     consolidated during fiscal 1997.

2  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, the focus of which
was the  implementation  of a strategic plan that outlined several major efforts
including debt reduction and structural changes.

During  fiscal 1997,  the  outstanding  debt of the Company was reduced by $86.8
million.  Ongoing efforts to improve cash flow through inventory control and the
proceeds received from the sales of Finger Lakes Packaging,  the New York canned
vegetable business, the Georgia distribution center, and the sale of idle assets
were the primary factors in the reduction of debt and related interest expense.

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. In addition
during fiscal 1997, the Company completed the restructuring program begun in the
fourth quarter of fiscal 1996.  These efforts  focused on  consolidation  of the
Southern Frozen Foods and Brooks  operations into CMF and the  consolidation  of
support services such as human resources and agricultural services.

Net Sales:  Total net sales in fiscal 1997 decreased $8.3 million or 1.1 percent
compared to the prior year period. Net sales from ongoing  operations,  however,
increased $5.8 million or 0.8 percent.  This increase is primarily  attributable
to increased  volume and improved pricing at both CMF and the Snack Foods Group.
The vegetable and fruit categories at CMF have experienced  improved pricing due
to overall demand and increasing sales to new customers.

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.

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.  Improved pricing in the
vegetable,  fruit,  and popcorn  categories at CMF have increased  profitability
from a year ago.  Nalley's,  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.
Increased sales from the Snack Foods Group also improved profitability.

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 are attributable to the significantly  improved earnings.  Overall, the
net decrease is attributed to a $5.8 million  decrease in selling,  advertising,
and trade promotions expenses resulted from

<PAGE>


decreased  spending at Nalley's.  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 CMF,  Southern
Frozen Foods, and Brooks locations, 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 is  preferable  because it  provides a better  matching of
costs with related revenues.  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.

                     CHANGES FROM FISCAL 1995 TO FISCAL 1996

EBITDA from ongoing businesses  declined $32.2 million from $76.5 million in the
prior year to $44.3 million in fiscal 1996.

Depressed  vegetable  pricing  significantly  impacted the  Company's  financial
results as well as much of the industry. The Company's vegetable category, which
includes  significant  segments of CMF and Southern Frozen Foods,  experienced a
71.2 percent  reduction in EBITDA  compared to the prior year.  Improvements  in
earnings of other product lines at CMF offset the vegetable earnings reduction.

Issues  impacting  Nalley  results  included the costly start up of the dressing
plant, other manufacturing  variances and increased  promotion expenses.  Nalley
EBITDA was $20.6 million lower than the prior year.  Several steps were taken to
address these problems, including senior management changes at the division.

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

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.

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  CMF/Southern  Frozen Foods  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 Southern Frozen Foods. 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 decrease 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  CMF/Southern
Frozen  Foods/Brooks  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.



<PAGE>


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
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, Curtice Burns 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 Curtice Burns
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  CMF/Southern
Frozen Foods,  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.  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.  Any material costs
associated  with this recall are  anticipated  to be covered under the Company's
insurance policies.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
                          INDEX TO FINANCIAL STATEMENTS


     ITEM                                                                                                                  Page
<CAPTION>

<S>                                                                                                                          <C>
Curtice-Burns Foods, Inc. and Consolidated Subsidiaries:
   Management's Responsibility for Financial Statements....................................................................   19
   Reports of Independent Accountants......................................................................................   20
   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.....................................................................   22
     Consolidated Balance Sheet at June 28, 1997 and June 29, 1996.........................................................   23
     Consolidated Statement of Cash Flows for the years ended June 28, 1997, June 29, 1996, and June 24, 1995..............   24
     Notes to Consolidated Financial Statements............................................................................   26
</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
Curtice Burns 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
present fairly,  in all material  respects,  the results of Curtice Burns 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.  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
Curtice Burns 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 Form10-K present fairly,  in all material  respects,
the  financial  position  of Curtice  Burns  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 Form10-K. 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>
Curtice-Burns 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>

Curtice-Burns 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>


Curtice-Burns 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                                   (3,253)       (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                            21,486         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                                                     74,683          5,005              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                            58,122        (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>
Curtice-Burns 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 Curtice Burns in fiscal 1997, the following non-cash transactions occurred:
      Notes forgiven                                                                  $4,986       $  0      $      0      $0
                                                                                      ======       ====      ========      ==
   In conjunction with the purchase of Curtice Burns 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>


                            CURTICE-BURNS 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.

Curtice Burns 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 is  preferable  because it  provides a better  matching of
costs with related revenues.  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.

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  year;  thus at the end of each fiscal
year,  manufacturing  costs  incurred  by  seasonal  plants,  subsequent  to the
previous pack, are deferred and included in the accompanying balance sheet under
the caption "Prepaid manufacturing expense."

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.


<PAGE>



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.

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.

         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.



<PAGE>


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 Curtice  Burns 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
Curtice Burns,  it may be more or less than the price Curtice Burns 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 members of Pro-Fac. The volume and type of
crops to be  purchased  by Curtice  Burns  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.

<PAGE>

Additional  patronage income is paid to Pro-Fac for services provided to Curtice
Burns,  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 Curtice Burns.

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.: In April 1997, the Company acquired certain  businesses from
Nalley Canada Ltd., a privately held,  independent snack food company and former
subsidiary of Curtice  Burns.  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.  The purchase price of approximately  $5.0 million was paid
through the forgiveness of various long-term  receivables  issued to the Company
in connection with its sale of the stock of Nalley's 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 Curtice Burns 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 Curtice Burns 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
Curtice Burns.  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.

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
Curtice Burns.

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
CMF operations.



<PAGE>


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 Curtice Burns (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)

                                                       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  Curtice  Burns 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 Curtice  Burns'  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

<PAGE>


         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.

         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    Successor     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
                                                                                                           1/4/94-      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>                                               <C>            <C>      
Liabilities
  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 Curtice Burns and Pro-Fac  approved
appropriate  amendments  to the Bylaws of Curtice  Burns to allow the Company to
qualify as a  cooperative  under  Subchapter T of the Internal  Revenue Code. In
August  1995,  Curtice  Burns 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  Curtice  Burns and  Pro-Fac.  Tax expense is allocated to Curtice
Burns 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 Curtice Burns 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 Curtice  Burns 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  Southern  Frozen Foods  Division 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.

Southern  Frozen  Foods Fire:  In July 1994, a plant  operated by the  Company's
Southern Frozen Foods Division,  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  Curtice  Burns  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

Diana Bartalo                           1946         Treasurer and Director of Financial Reporting

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 CMF

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 CMF from March 1993 to May 1996.  He was Senior Vice  President  and Business
Unit  Manager   Foodservice   of  CMF  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).

Diana  Bartalo has been  Treasurer  since March 1996 and  Director of  Financial
Reporting  since 1992;  Assistant  Treasurer from 1988 to March 1996;  Corporate
Accounting Manager 1976-1992.  She held several  administrative  staff positions
1970-1976 and has been Assistant Treasurer of Pro-Fac since 1987.

Robert E. McMahon has been Vice  President  Information  Systems since  November
1993;  prior  to that he was Vice  President,  Information  Systems  for the CMF
Division 1992-1993 and Director of Corporate  Information Systems since December
1991.  He joined the CMF  Division  as Systems  Integration  Manager in 1989 and
became  Director  of  Information  Systems for that  Division in 1990.  Prior to
employment  with Curtice  Burns,  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,
CMF  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
Curtice Burns and Pro-Fac  since March 1995.  She joined the Company as Director
of Corporate Communications in 1991. Prior to joining Curtice Burns (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 CMF since May
1996. He had been Executive Vice  President and Chief  Operating  Officer of CMF
from December 1995 to May 1996. Prior to that he held  increasingly  responsible
positions at CMF, 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 CMF                    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 Curtice
     Burns 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 Curtice  Burns 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

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 Curtice Burns for the following aggregate
amounts:



<PAGE>

<TABLE>
    
                                      RELATIONSHIP             GROSS PURCHASES
       NAME                            TO PRO-FAC               IN FISCAL 1997
<CAPTION>

<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>
Curtice-Burns Foods, Inc. and Consolidated Subsidiaries:
   Management's Responsibility for Financial Statements..................................................................   19
   Reports of Independent Accountants....................................................................................   20
   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...................................................................   22
     Consolidated Balance Sheet at June 28, 1997 and June 29, 1996.......................................................   23
     Consolidated Statement of Cash Flows for the years ended June 28, 1997, June 29, 1996, and June 24, 1995............   24
     Notes to Consolidated Financial Statements..........................................................................   26

<FN>
         (2)    The following additional financial data are set forth herein:
</FN>
</TABLE>


                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
                                                                                                                      SCHEDULE II

Curtice-Burns Foods, Inc.
Valuation and Qualifying Accounts
For the Three Fiscal Years Ended June 28, 1997
<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>       
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.


<TABLE>
     (c) EXHIBITS:
<CAPTION>

      Exhibit
      Number                  Description

     <S>      <C>                                                  
       3.3(2) Certificate of Incorporation of Curtice Burns.

       3.4(3) Bylaws of Curtice Burns.

      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 Curtice Burns' 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"), Curtice Burns 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, Curtice Burns and the Bank.

     10.6(2)  Marketing and Facilitation Agreement,  dated as of November 3, 1994, between Pro-Fac and Curtice Burns.

     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    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 Curtice Burns 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  Curtice Burns and
              the Bank.

     10.17(4) Modifications  E - F of Term Loan,  Term Loan  Facility,  and Seasonal Loan Agreement  Between  Curtice Burns 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    Modifications  G - K of Term Loan,  Term Loan  Facility,  and Seasonal Loan Agreement  Between  Curtice Burns and
              Bank.

     10.21    OnSite Services Agreement with Systems & Computer Technology.

     10.22    Raw Product Supply Agreement with Seneca Foods Corporation.

     10.23    Reciprocal Co-Pack Agreement with Seneca Foods Corporation.

     18(5)    Accountant's Report Regarding Change in Accounting Method

</TABLE>


<PAGE>



     (c) EXHIBITS (Continued):

<TABLE>
           Exhibit
           Number                                                                            Description
<CAPTION>

           <S>       <C>                            
           21.1      List of Subsidiaries.

           27        Financial Data Schedule.

<FN>
  (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.
</FN>
</TABLE>



<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.



                            CURTICE-BURNS FOODS, INC.



Date:  August 21, 1997               By:   /s/ Earl L. Powers
                                           Vice President Finance and
                                           Chief Financial Officer

                           
                                POWER OF ATTORNEY


KNOW ALL MEN BY THESE PRESENTS,  that each person whose signature  appears below
constitutes and appoints DENNIS M. MULLEN and EARL L. POWERS,  and each of them,
his  true  and  lawful   attorneys-in-fact   and  agents,  with  full  power  of
substitution and resubstitution for him and in his name, place and stead, in any
and all  capacities to sign any and all amendments to this Annual Report on Form
10-K and to file the same,  with all  exhibits  thereto and other  documents  in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the  premises,  as fully to all  intents  and  purposes as he might or
could  do  in  person,   hereby   ratifying   and   confirming   all  that  said
attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.



<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/ Robert V. Call, Jr.       Chairman of the Board; Director  August 21, 1997
   (ROBERT V. CALL, JR.)



/s/ Bruce R. Fox              Director                         August 21, 1997
   (BRUCE R. FOX)



/s/ Cornelius D. Harrington   Director                         August 21, 1997
   (CORNELIUS D. HARRINGTON)



/s/ Steven D. Koinzan         Director                         August 21, 1997
   (STEVEN D. KOINZAN)



/s/ Walter F. Payne           Director                         August 21, 1997
   (WALTER F. PAYNE)



/s/ Frank M. Stotz            Director                         August 21, 1997
   (FRANK M. STOTZ)



/s/ Dennis M. Mullen          President and Chief Executive    August 21, 1997
   (DENNIS M. MULLEN)         Officer and Director
                              (Principal Executive Officer)



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