# UNITED STATES
                                          SECURITIES AND EXCHANGE COMMISSION
                                                WASHINGTON, D.C. 20549
                                                       FORM 10-Q

(Mark One)

|[X] | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------

For the quarterly period ended   February 28, 2005

OR

|[   ] | TRANSITION
REPORT PURSUANT TO SECTION 13 AND 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|----- | ------------------------------------------------------------------------------------------

For the transition period from
________to ________

Commission File Number   0-16130

|NORTHLAND CRANBERRIES, INC.                           
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Wisconsin                                                      |  | 39-1583759                          
|(State or other jurisdiction of Incorporation or organization) |  | (I.R.S. Employer Identification No.)

|2321 West Grand Avenue
                                                     P.O. Box 8020
                                        Wisconsin Rapids, Wisconsin 54495-8020
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(Address of Principal Executive Offices)                                                                                                                                

Registrant's telephone
number, including area code   (715) 424-4444

|Not Applicable                                                                    
|----------------------------------------------------------------------------------
|(Former name, former address and former fiscal year, if changed since last report)

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 whether the registrant is an accelerated filer (as defined in Rule 12b-2).      Yes  
     No  X

Indicate
the number of shares outstanding of each of the issuer's classes of common stock, as of
the latest practicable date:

|                     |                |           
|-------------------- | -------------- | ----------
|Class A Common Stock | April 14, 2005 | 94,091,633

---

# NORTHLAND CRANBERRIES,
INC.

# FORM 10-Q INDEX

|         |                                                                                          |        
|-------- | ---------------------------------------------------------------------------------------- | -------
|PART I.  | FINANCIAL INFORMATION                                                                    | PAGE   
|Item 1.  | Financial Statements                                                                     | 3      
|         | Condensed Consolidated Balance Sheets                                                    | 3      
|         | Condensed Consolidated Statements of Income                                              | 4      
|         | Condensed Consolidated Statements of Cash Flows                                          | 5      
|         | Condensed Consolidated Statement of Shareholders' Equity                                 | 6      
|         | Notes to Condensed Consolidated Financial Statements                                     | 7 - 14 
|Item 2.  | Management's Discussion and Analysis of Financial Condition
   and Results of Operations | 15 - 22
|Item 3.  | Quantitative and Qualitative Disclosures About Market Risk                               | 22     
|Item 4.  | Controls and Procedures                                                                  | 22     
|PART II. | OTHER INFORMATION                                                                       
|Item 1.  | Legal Proceedings                                                                        | 23     
|Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                              | 23     
|Item 3.  | Defaults Upon Senior Securities                                                          | 23     
|Item 4.  | Submission of Matters to a Vote of Security Holders                                      | 23     
|Item 6.  | Exhibits                                                                                 | 23     
|         | SIGNATURE                                                                                | 24     
|         | Exhibit Index                                                                            | 25     

2

---

|PART
I FINANCIAL INFORMATION
|-----------------------------

|ITEM
1.  FINANCIAL STATEMENTS.
|------------------------------

|NORTHLAND
CRANBERRIES, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(DOLLARS IN THOUSANDS, EXCEPT PER
SHARE DATA)(Unaudited)
|------------------------------------------------------------------------------------------------------------------------

|                                                                         | February 28,
2005 | August 31,
2004
|------------------------------------------------------------------------ | ----------------- | ---------------
|ASSETS                                                                   |                   |                
|Current assets:                                                          |                   |                
|Cash and cash equivalents                                                |                   |                
|Accounts receivable - net                                                |                   |                
|Note receivable and accounts receivable - other                          |                   |                
|Inventories                                                              |                   |                
|Prepaid expenses and other current assets                                |                   |                
|Deferred income taxes                                                    |                   |                
|                                                                         |                   |                
|Total current assets                                                     |                   |                
|Property and equipment - net                                             |                   |                
|Other assets                                                             |                   |                
|Debt issuance cost - net                                                 |                   |                
|                                                                         |                   |                
|Total assets                                                             |                   |                
|                                                                         |                   |                
|LIABILITIES AND SHAREHOLDERS' EQUITY                                     |                   |                
|Current liabilities:                                                     |                   |                
|Accounts payable                                                         |                   |                
|Accrued liabilities                                                      |                   |                
|Current maturities of long-term debt:                                    |                   |                
|Outstanding principal payments                                           |                   |                
|Future interest payments from debt restructuring                         |                   |                
|                                                                         |                   |                
|Current maturities of long-term debt                                     |                   |                
|                                                                         |                   |                
|Total current liabilities                                                |                   |                
|Long-term debt, less current maturities:                                 |                   |                
|Outstanding principal payments                                           |                   |                
|Future interest payments from debt restructuring                         |                   |                
|                                                                         |                   |                
|Long-term debt, less current maturities                                  |                   |                
|                                                                         |                   |                
|Total liabilities                                                        |                   |                
|                                                                         |                   |                
|Shareholders' equity:                                                    |                   |                
|Common stock - Class A, $.01 par value, 94,091,633 shares                |                   |                
|issued and outstanding                                                   |                   |                
|Redeemable preferred stock - Series B, $.01 par value, 100 shares issued |                   |                
|and outstanding                                                          |                   |                
|Additional paid-in capital                                               |                   |                
|Accumulated deficit                                                      |                   |                
|                                                                         |                   |                
|Total shareholders' equity                                               |                   |                
|                                                                         |                   |                
|Total liabilities and shareholders' equity                               |                   |                
|                                                                         |                   |                

See notes to condensed
consolidated financial statements.

3

---

# NORTHLAND CRANBERRIES,
INC.CONDENSED CONSOLIDATED STATEMENTS
OF INCOME(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)(Unaudited)

|                                                           | For the Three Months Ended | For the Six Months Ended
|---------------------------------------------------------- | -------------------------- | ------------------------
|
|Net revenues                                               |                            |                         
|Cost of sales                                              |                            |                         
|                                                           |                            |                         
|Gross profit                                               |                            |                         
|Selling, general and administrative expenses               |                            |                         
|Write down of long-lived assets and assets                 |                            |                         
|held for sale                                              |                            |                         
|Gain (loss) on disposal of property & equipment   (Note 4) |                            |                         
|Other income                                               |                            |                         
|                                                           |                            |                         
|Income from  operations                                    |                            |                         
|Interest expense                                           |                            |                         
|(Loss) gain on debt extinguishment                         |                            |                         
|Interest income                                            |                            |                         
|                                                           |                            |                         
|Income (loss) before income taxes                          |                            |                         
|Income tax expense                                         |                            |                         
|                                                           |                            |                         
|Net income (loss) from continuing operations               |                            |                         
|                                                           |                            |                         
|Discontinued operations                                    |                            |                         
|Income (loss) from discontinued operations                 |                            |                         
|Gain on disposition of discontinued operations             |                            |                         
|                                                           |                            |                         
|Net income                                                 |                            |                         
|                                                           |                            |                         
|Net income per common share:                               |                            |                         
|Basic:                                                     |                            |                         
|Diluted:                                                   |                            |                         
|Shares used in computing net income per share:             |                            |                         
|Basic                                                      |                            |                         
|Diluted                                                    |                            |                         

See notes to condensed
consolidated financial statements.

4

---

# NORTHLAND CRANBERRIES,
INC.CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS(DOLLARS IN THOUSANDS)(Unaudited)

|                                                        | For the Six Months Ended
|------------------------------------------------------- | ------------------------
|
|Operating activities:                                   |                         
|Net income                                              |                         
|Adjustments to reconcile net income to net cash         |                         
|provided by operating activities:                       |                         
|Depreciation and amortization of property and equipment |                         
|Amortization of debt issuance costs and debt discount   |                         
|Provision for deferred income taxes                     |                         
|Provision for write down of assets held for sale        |                         
|Loss on disposal of property and equipment              |                         
|Gain on transaction with Ocean Spray                    |                         
|Gain on disposal of business                            |                         
|(Gain) loss on debt extinguishment                      |                         
|Changes in assets and liabilities:                      |                         
|Receivables, prepaid expenses and other current assets  |                         
|Inventories                                             |                         
|Accounts payable and accrued liabilities                |                         
|                                                        |                         
|Net cash provided by operating activities               |                         
|                                                        |                         
|Investing activities:                                   |                         
|Issuance of note receivable                             |                         
|Property and equipment purchases                        |                         
|Proceeds from disposal of business                      |                         
|Proceeds from disposals of property and equipment       |                         
|                                                        |                         
|Net cash provided by investing activities               |                         
|                                                        |                         
|Financing activities:                                   |                         
|Payments on long-term debt and other obligations        |                         
|Proceeds from issuance of long-term debt                |                         
|Dividends paid                                          |                         
|Proceeds from issuance of common stock                  |                         
|                                                        |                         
|Net cash used in financing activities                   |                         
|                                                        |                         
|Net increase in cash and cash equivalents               |                         
|Cash and cash equivalents, beginning of period          |                         
|                                                        |                         
|Cash and cash equivalents, end of period                |                         
|                                                        |                         
|SUPPLEMENTAL CASH FLOW INFORMATION-                     |                         
|Cash paid during the three months for:                  |                         
|Interest                                                |                         

See notes to condensed
consolidated financial statements.

5

---

# NORTHLAND CRANBERRIES,
INC.CONDENSED CONSOLIDATED STATEMENT
OF SHAREHOLDERS EQUITYSIX MONTHS ENDED
FEBRUARY 28, 2005(DOLLARS IN THOUSANDS)(Unaudited)

|                           | Common
Stock -
Class A | Additional
Paid-in
Capital | Accumulated
Deficit | Total
Shareholders'
Equity
|-------------------------- | ---------------------- | -------------------------- | ------------------- | --------------------------
|Balance, August 31, 2004   |                        |                            | $                   | 941                       
|Cash dividend paid         |                        |                           
|($.33 per share)           |                        |                            |                     |                           
|Net income                 |                        |                            |                     | 0                         
|                           |                        |                            |                     |                           
|Balance, February 28, 2005 |                        |                            | $                   | 941                       
|                           |                        |                            |                     |                           

See notes to condensed
consolidated financial statements.

6

---

# NORTHLAND CRANBERRIES,
INC.NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

|1. | BASIS
OF PRESENTATION
|-- | ---------------------

| | The
accompanying condensed consolidated financial statements have been prepared by Northland
Cranberries, Inc. (collectively with its subsidiaries, the Company) pursuant
to the rules and regulations of the Securities and Exchange Commission and reflect normal
and recurring adjustments, which are, in the opinion of the Company, considered necessary
to present fairly the financial position of the Company as of February 28, 2005 and
August 31, 2004, its related results of operations for the three and six months ended
February 28, 2005 and February 29, 2004 and its cash flows for the six months ended
February 28, 2005 and February 29, 2004. As permitted by these regulations, these
condensed consolidated financial statements do not include all information required by
accounting principles generally accepted in the United States of America to be included
in an annual set of financial statements, however, the Company believes that the
disclosures are adequate to make the information presented not misleading. The Companys
condensed consolidated balance sheet as of August 31, 2004 was derived from the
Companys latest audited consolidated financial statements. It is suggested that the
accompanying condensed consolidated financial statements be read in conjunction with the
latest audited consolidated financial statements and the notes thereto included in the
Companys Annual Report on Form 10-K for the fiscal year ended August 31, 2004.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Business
Risks  Ocean Spray Cranberries, Inc. (Ocean Spray), the industry
leader, which controls the bulk of the cranberry supply in North America, effectively
determines prices paid to growers for raw cranberries. In addition, the Company is
obligated during the next ten years to sell to Ocean Spray all cranberry concentrate not
otherwise sold by the Company to Apple & Eve, LLC (Apple & Eve) for
use in its Northland branded juice business for a purchase price equal to the
average price of concentrate sold by Ocean Spray to third party buyers during the prior
six month period (see Notes 3 and 4).
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net
Income Per Common Share  Net income per common share is calculated in
accordance with Statement of Financial Accounting Standards (SFAS) No. 128,
Earnings Per Share. Basic net income per common share is computed by dividing
net income by the weighted average number of common shares outstanding. Diluted net
income per common share is computed by dividing net income by the weighted average number
of common shares outstanding increased by the number of potential dilutive common shares
using the treasury stock method.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
weighted average shares outstanding used in calculating net income per common share for
the three and six months ended February 28, 2005 and February 29, 2004 consisted of the
following:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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|                           |  | For theThree Months Ended |  | For theSix Months Ended |  | 
|-------------------------- |  | ------------------------- |  | ----------------------- |  | 
|
|Basic shares outstanding   |  |                           |  | 94,091,633              |  | 
|Effect of dilution:        |  |                          
|Warrants                   |  |                           |  | 2,499,207               |  | 
|Options                    |  |                           |  | 4,260,805               |  | 
|                           |  |                           |  |                         |  | 
|Diluted shares outstanding |  |                           |  | 100,851,645             |  | 

| | The
shares outstanding used to compute the diluted earnings per share for the three and six
months ended February 28, 2005 and February 29, 2004 exclude outstanding options to
purchase 547,825 and 613,575 shares of Class A Common Stock, respectively. Those options
were excluded because their weighted average exercise prices were greater than the
average market price of the common shares and their inclusion would have been
antidilutive.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Accounting
for Stock Options  The Company accounts for stock-based compensation in
accordance with Accounting Principle Board Opinion No. 25, Accounting for Stock
Issued to Employees, as allowed by SFAS No. 123, Accounting for Stock-Based
Compensation. Stock options are granted at prices equal to the fair market value of
the Companys common stock on the grant dates; therefore no compensation expense is
recognized in connection with stock options granted to employees. The following table
illustrates the effect on net income and net income per share as if the fair value-based
method provided by SFAS No. 123 had been applied for all outstanding and unvested awards
in each period:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                      | For theThree Months Ended | For theSix Months Ended
|------------------------------------- | ------------------------- | -----------------------
|
|
|Net income                            |                           |                        
|Deduct: Total stock-based employee    |                           |                        
|compensation expense determined       |                           |                        
|under fair value based method for all |                           |                        
|awards, net of related tax effect     |                           |                        
|                                      |                           |                        
|Pro forma net income                  |                           |                        
|                                      |                           |                        
|Historical and pro forma net income   |                           |                        
|per common share:                     |                           |                        
|Basic:                                |                           |                        
|Pro forma                             |                           |                        
|Historical                            |                           |                        
|Diluted:                              |                           |                        
|Pro forma                             |                           |                        
|Historical                            |                           |                        

8

---

| | New
Accounting Pronouncements On December 16, 2004, the Financial Accounting
Standards Board (FASB) issued Statement No. 123R, Share-Based Payment (SFAS
123R), which requires compensation costs related to share-based payment
transactions to be recognized in the financial statements. With limited exceptions, the
amount of the compensation cost will be measured based on the grant-date fair value of
the equity or liability instruments issued. In addition, liability awards will be
remeasured each reporting period. Compensation cost will be recognized over the period
that an employee provides service in exchange for the award. SFAS 123R replaces FASB
Statement No. 123, Accounting for Stock Based Compensation and supercedes APB
Opinion No. 25, Accounting for Stock Issued to Employees. SFAS 123R is
effective for all interim or annual periods beginning after June 15, 2005. Early adoption
is encouraged and retroactive application of the provisions of SFAS 123R to the beginning
of the fiscal year that includes the effective date is permitted, but not required. The
Company has not yet adopted this pronouncement and is currently evaluating the impact
that the adoption of SFAS 123R will have on its consolidated financial position, results
of operations and cash flows.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
November 24, 2004, the FASB issued Statement No. 151, Inventory Costs(SFAS
151), an amendment of ARB No. 43, Chapter 4. SFAS 151 clarifies the accounting for
abnormal amounts of idle facility expense, freight, handling costs and wasted
material (spoilage). As such, this statement requires that those items be recognized as
current-period charges regardless of whether they meet the so abnormal criterion
outlined in ARB 43. SFAS 151 also introduces the concept of normal capacity and
requires the allocation of fixed production overhead to inventory based on the normal
capacity of the production facility. Unallocated overhead must be recognized as an
expense in the period in which it is incurred. SFAS 151 is effective for all interim or
annual periods beginning after June 15, 2005. Early adoption is encouraged and
retroactive application of the provisions of SFAS 151 to the beginning of the fiscal year
that includes the effective date is permitted, but not required. The Company has not yet
adopted this pronouncement and is currently evaluating the impact that the adoption of
SFAS 151 will have on its consolidated financial position, results of operations and cash
flows.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | LEGAL
PROCEEDINGS
|-- | -----------------

| | The
Company is subject to certain legal proceedings, claims and environmental matters that
arise in the ordinary course of business. Although the final results of such claims and
matters cannot be predicted with certainty, management believes that the ultimate
resolution of all such claims and matters will not have a material effect on the Companys
financial condition, results of operations or cash flows. Actual results could vary,
among other things, due to the uncertainties involved in litigation.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9

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|3. | DISPOSITION
OF BRANDED JUICE BUSINESS
|-- | -------------------------------------

| | On
February 22, 2005 the Company entered into an agreement with Apple & Eve pursuant to
which it sold certain assets of the branded juice business, including: (a) certain raw
materials, work-in-process and finished goods inventories, together with certain related
labels, bottles and other bottling and packaging materials owned by the Company on
February 22, 2005; (b) all the Companys interest in certain trade rights used or
held for use in connection with the business and operation of the Companys branded
juice business, including without limitation rights related to the Northlandtrademark,
certain trademarks held by the Companys wholly owned subsidiary, NCI Foods, LLC (NCI
Foods), and the Seneca trademark pursuant to the Trademark License Agreement
by and between the Company and Seneca Foods Corporation, a New York corporation (Seneca)
dated December 29, 1998 (the Seneca License Agreement); (c) all trade
accounts receivable of the Company related exclusively to the branded juice business; (d)
a list of certain customers of the branded juice business and all goodwill associated
therewith; (e) all of the Companys rights in, to and under certain contracts,
purchase orders and sales orders of the Company pertaining to the branded juice business;
(f) certain personal property; (g) all sales literature, promotional literature, catalogs
and similar materials of the Company associated exclusively with the branded juice
business, including but not limited to signs, signage and product memorabilia relating to
the branded juice business trade rights; (h) all transferable licenses, permits,
approvals, certifications and listings of the Company relating exclusively to the branded
juice business; and (i) the records and files of the Company relating exclusively to the
above-referenced assets of the branded juice business, including, without limitation,
transferring invoices, customer and vendor lists and operating and marketing plans, and
all other documents, tapes, discs, programs or other embodiments of information of the
branded juice business. As consideration for the purchased assets, Apple & Eve paid
to the Company, subject to a final working capital adjustment, approximately $10.8
million in cash, consisting of base consideration of approximately $9 million, $500,000
of which was placed in an escrow account, and a preliminary working capital adjustment of
approximately $1.8 million.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Pursuant
to the Purchase Agreement, Apple & Eve also assumed approximately $3.5 million of
selected current liabilities of the Company, including: (i) all liabilities and
obligations associated with any open purchase orders and contracts with respect to sales
of juice products related to the brands (excluding the cranberry juice concentrate, fresh
cranberry and frozen cranberry inventories of the Company); (ii) all liabilities and
obligations associated with any open purchase orders and contracts with vendors and
suppliers of raw materials related to the brands; (iii) all liabilities and obligations
associated with the Companys rights in, to and under certain contracts, purchase
orders and sales orders of the Company pertaining to the branded juice business and
arising after February 22, 2005; (iv) all trade accounts payable; (v) all liabilities and
obligations of the Company relating to coupons issued by the Company prior to February
22, 2005 and validly redeemed on or after April 26, 2005; (vi) all liabilities and
obligations of the Company associated with any product liability, breach of warranty or
similar claim for injury to person or property asserted after February 22, 2005 and
related to the branded juice business, but only to the extent based on events occurring
after February 22, 2005; (vii) except as otherwise provided in the Purchase Agreement,
all liabilities and obligations associated with certain employees employed by Apple & Eve
after February 22, 2005 that arise after February 22, 2005 and relate to Apple & Eves
employment of such employees; (viii) all liabilities and obligations associated with the
failure by Apple & Eve, the branded juice business or the purchased assets to comply
with any law, regulation, statute, ordinance or treaty after the closing of the
transaction, subject to the agreement of the parties set forth in the Purchase Agreement;
and (ix) liens that are considered permitted liens.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

---

| | The
Company and Apple & Eve also entered into a Concentrate Purchase and Supply
Agreement, under which Apple & Eve committed to purchase from the Company on a
monthly basis, during the period from February 22, 2005 to February 22, 2006, all of the
cranberry concentrate in the Companys inventory of cranberry juice concentrate as
of February 22, 2005 (the Existing Inventory), for an aggregate purchase
price equal to approximately $6.7 million. In addition, for the period beginning on
October 1, 2005 and ending on the earlier of September 30, 2014 or the termination of the
Companys toll processing agreement with Ocean Spray, Apple & Eve has the option
in each year to purchase on a monthly basis up to the total amount of cranberry juice
concentrate available to the Company under its toll processing agreement with Ocean Spray
at a price that does not exceed the price at which the Company can sell cranberry juice
concentrate to Ocean Spray under the toll processing agreement.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
a result of this transaction the Company recognized a gain of approximately $5.1 million.
The Company used the net proceeds resulting from the sale of the branded juice business
to pay down outstanding principal balances on its Revolver A, Revolver B and term loan
credit facilities, and to pay related expenses due to the administrative agent.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Consolidated Financial Statements and related notes have been restated for the three and
six months ended February 28, 2005 and February 29, 2004, where applicable to reflect the
branded juice business as a discontinued operation.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Operating
results of the discontinued operations were as follows:
| | -----------------------------------------------------------------

|                                | For theThree Months Ended | For theSix Months Ended
|------------------------------- | ------------------------- | -----------------------
|
|
|Revenue                         |                           |                        
|Cost of sales                   |                           |                        
|                                |                           |                        
|Gross profit                    |                           |                        
|Selling, general and            |                           |                        
|administrative expense          |                           |                        
|Net income (loss) from          |                           |                        
|discontinued operations         |                           |                        
|                                |                           |                        
|Diluted income (loss) per share |                           |                        
|from discontinued operations    |                           |                        

|4. | OCEAN
SPRAY TRANSACTION
|-- | -----------------------

| | On
September 23, 2004, the Company entered into agreements with Ocean Spray pursuant to
which: (i) it sold its processing plant, storage facility and certain offices located in
Wisconsin Rapids, Wisconsin to Ocean Spray for approximately $28 million, subject to
certain adjustments and including a $2.5 million escrow; (ii) Ocean Spray paid to the
Company a non-refundable (but creditable) $5.0 million cash fee in exchange for the
option to purchase up to 14 of the Companys 17 cranberry marshes at prices that
aggregate to $47.5 million (before the option fee); (iii) the Company agreed to, for a
period of ten years, deliver all of the cranberries harvested from its currently-owned
marshes and its contract growers marshes to Ocean Spray, which Ocean Spray will
receive, clean, bin, store and process into juice concentrate for a fixed fee; (iv) Ocean
Spray agreed to, for a period of ten years, purchase cranberry concentrate not otherwise
used in the Northland branded juice business; and (v) the Company agreed to
dismiss with prejudice its antitrust lawsuit against Ocean Spray. As a result of this
transaction, the Company recognized a gain of $7.7 million.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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|5. | INVENTORIES
|-- | -----------

| | Inventories
as of February 28, 2005 and August 31, 2004 consisted of the following (in thousands):
| | --------------------------------------------------------------------------------------------------

|                    | February 28,
2005 | August 31,
2004
|------------------- | ----------------- | ---------------
|Raw materials       |                   |                
|Finished goods      |                   |                
|Deferred crop costs |                   |                
|                    |                   |                
|Total inventories   |                   |                
|                    |                   |                

|6. | DEBT
|-- | ----

| | Debt
as of February 28, 2005 and August 31, 2004 consisted of the following (in thousands):
| | -------------------------------------------------------------------------------------------

|                                                 | February 28,
2005 | August 31,
2004
|------------------------------------------------ | ----------------- | ---------------
|Term loans payable                               |                   |                
|Fee note payable                                 |                   |                
|Restructured insurance company note              |                   |                
|Other obligations                                |                   |                
|                                                 |                   |                
|Subtotal principal obligations                   |                   |                
|Future interest payments from debt restructuring |                   |                
|                                                 |                   |                
|Total long-term debt                             |                   |                
|Less current maturities of long-term debt        |                   |                
|                                                 |                   |                
|Long-term debt, net                              |                   |                
|                                                 |                   |                

| | On
February 22, 2005, the Company entered into a Second Amendment to Amended and Restated
Loan and Security Agreement, Waiver, Consent and Release with two of its lenders, Wells
Fargo Foothill, Inc. (Wells Fargo) and Ableco Finance LLC (Ableco)
which, among other things, (a) provides that upon satisfaction by the Company of all
payment obligations owing to Wells Fargo under the existing loan agreement: (i) Wells
Fargo will terminate its participation as a lender under the credit facility; (ii) Wells
Fargo will resign as administrative agent; and (iii) Ableco will replace Wells Fargo as
administrative agent, (b) amends the maturity date of the credit facility to October 31,
2005, and obligates the Company to maintain a fixed charge coverage ratio, measured on a
month-end basis, of 1.2 to 1.0 during the period from March 1, 2005 through the maturity
date of October 31, 2005 and (c) provides that upon the established application of the
net sale proceeds: (i) the Revolver A commitment of Wells Fargo will be reduced to zero;
(ii) the Revolver B commitment of Ableco will be reduced to $2,500,000; and (iii) the
outstanding principal balance on the term loan will be equal to or less than $12,000,000.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

---

| | As
of February 28, 2005 and August 31, 2004, the Company was in compliance with financial
covenants contained in its debt agreements.
| | -------------------------------------------------------------------------------------------------------------------------------------

|7. | INCOME
TAXES
|-- | ------------

| | The
Company accounts for income taxes using an asset and liability approach that generally
requires the recognition of deferred income tax assets and liabilities based on the
expected future income tax consequences of events that have previously been recognized in
the Companys financial statements or tax returns. In addition, a valuation
allowance is recognized if it is more likely than not that some or all of the deferred
income tax assets will not be realized.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | NOTE
RECEIVABLE
|-- | ---------------

| | On
January 28, 2004, the Company made a loan of $800,000 to an independent cranberry grower
who is a former officer of the Company, which is secured by a subordinated mortgage of
the growers cranberry marsh (the Loan). The Loan, which is recorded
within Other Assets on the accompanying consolidated balance sheet, was made in
connection with the restructuring of certain debt obligations of the grower, $1.0 million
of which were previously guaranteed by the Company. The proceeds of the Loan were used to
pay off the indebtedness of the grower to its bank, enabling the Company to obtain from
the bank a release of its obligations under the guarantee.Principal payments due
under the terms of the loan were received during the three months ended February 28,
2005. The outstanding principal balance of the Loan as of February 28, 2005 was $708,300.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. | COMMITMENTS
|-- | -----------

| | The
Company has multiple-year crop purchase contracts with 44 independent cranberry growers
pursuant to which the Company has contracted to purchase all of the cranberries harvested
from up to 1,738 contracted acres owned by these growers, subject to federal marketing
order limitations. These contracts generally last for five years, and pay the growers at
a market rate, as defined, for all raw cranberries delivered (plus $3 per barrel in
certain circumstances) and certain incentives for premium cranberries.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company and Ocean Spray entered into an agreement for a period of ten years pursuant to
which Ocean Spray will receive, clean, store and process into concentrate all cranberries
harvested from the Companys and its contract growers cranberry properties for
a fixed fee (see Note 4).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

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|10. | DIVIDEND
PAID
|--- | -------------

| | On
November 12, 2004, the Company declared a special cash dividend of $0.33 per share of
Class A Common Stock payable on December 1, 2004 to all shareholders of record at the
close of business on November 26, 2004. The $31.9 million dividend was paid from a
combination of proceeds from the September 2004 asset sale to Ocean Spray (see Note 4)
and borrowings under the loan agreements with Wells Fargo and Ableco.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11. | SUBSEQUENT
EVENTS
|--- | -----------------

| | On
February 28, 2005, the Company received notice from Ocean Spray that it had assigned to
four of its cranberry producing members its rights to receive title to nine of the
fourteen cranberry marshes subject to the option agreement the Company entered into with
Ocean Spray in September 2004 (see Note 4). Between March 18 and March 22, 2005, the
Company received executed Agricultural Asset Purchase Agreements from JJW Cranberries,
LLC, Wayne Gardner d/b/a Dawesville Cranberry Co., James Potter Cranberry Marsh, Inc. and
Acorn Acres Cranberry Co., Inc. relating to the purchase of an aggregate of nine marshes
(each a Marsh Sale, and collectively, the Marsh Sales). Between
March 23 and March 29, 2005, the Company countersigned those agreements, and those
agreements became effective. The Company expects the aggregate proceeds from the nine
Marsh Sales that it will receive on closing of all of the nine Marsh Sales will total
approximately $27.2 million. The Company currently intends to use the proceeds from the
nine Marsh Sales to (i) pay the expenses related to the Marsh Sales and (ii) repay a
portion of its outstanding debt as required by its lenders. The Company may also
distribute a dividend to its shareholders.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company maintains the Retirement Plan for Employees of Minot Food Packers, Inc., a frozen
defined benefit pension plan for the benefit of certain former eligible employees of the
Company. On March 14, 2005, the Companys Board of Directors authorized the
termination of the Pension Plan effective June 6, 2005.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

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ITEM 2.   MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

# DISPOSITION OF BRANDED
JUICE BUSINESS

On February 22, 2005 we entered into
an agreement with Apple & Eve pursuant to which we sold certain assets of our branded
juice business, including: (i) certain raw materials, work-in-process and finished goods
inventories; (ii) our interest in certain trade rights used or held for use in connection
with the business and operation of our branded juice business, including rights related to
the Northland trademark, certain trademarks held by our wholly owned subsidiary,
NCI Foods, and rights to the Seneca trademark licensed from Seneca Foods
Corporation; (iii) our trade accounts receivable related exclusively to the branded juice
business; (iv) a list of certain customers of the branded juice business and goodwill
associated therewith; and (v) our rights in, to and under certain contracts, purchase
orders and sales orders pertaining to the branded juice business. Apple & Eve also
assumed selected liabilities associated with the branded juice business. As consideration
for the purchased assets, Apple & Eve paid us, subject to a final working capital
adjustment, approximately $10.8 million in cash.

We also entered into a Concentrate
Purchase and Supply Agreement with Apple & Eve under which (i) during the period
February 22, 2005 to February 22, 2006 Apple & Eve can purchase our inventory of
cranberry concentrate for an aggregate price equal to approximately $6.7 million and (ii)
for the period beginning on October 1, 2005 and ending on the earlier of September 30,
2014 or the termination of our toll processing agreement with Ocean Spray, Apple & Eve
has the option in each year to purchase on a monthly basis up to the total amount of
cranberry juice concentrate available to us under our toll processing agreement with Ocean
Spray at a price that does not exceed the price at which we can sell cranberry juice
concentrate to Ocean Spray under the toll processing agreement.

# EXERCISE OF OCEAN SPRAY
OPTION

On September 23, 2004, we entered
into agreements with Ocean Spray pursuant to which: (i) we sold our processing plant,
storage facility and certain offices located in Wisconsin Rapids, Wisconsin to Ocean Spray
for approximately $28.0 million, subject to certain adjustments and including a $2.5
million escrow; (ii) Ocean Spray paid us a non-refundable (but creditable) $5.0 million
cash fee in exchange for the option to purchase up to 14 of our 17 cranberry marshes at
prices that aggregate to $47.5 million (before the option fee); (iii) we agreed to, for a
period of ten years, deliver all of the cranberries harvested from our currently-owned
marshes and our contract growers marshes to Ocean Spray, which Ocean Spray will
receive, clean, bin, store and process into juice concentrate for a fixed fee; (iv) Ocean
Spray agreed to, for a period of ten years, purchase cranberry concentrate not otherwise
used by us in our branded products; and (v) we agreed to dismiss with prejudice our
antitrust lawsuit against Ocean Spray (the Ocean Spray Transaction).

On February 28, 2005, we received
notice from Ocean Spray that it had assigned to four of its cranberry producing members
its rights to receive title to ten of the fourteen cranberry marshes subject to the option
agreement entered into in the Ocean Spray Transaction. Between March 18 and March 22,
2005, we received executed Agricultural Asset Purchase Agreements from JJW Cranberries,
LLC, Wayne Gardner d/b/a Dawesville Cranberry Co., James Potter Cranberry Marsh, Inc. and
Acorn Acres Cranberry Co., Inc. relating to the purchase of an aggregate of nine marshes.
Between March 23 and March 29, 2005, we countersigned those agreements, and those
agreements became effective. We expect the aggregate proceeds from the marsh sales that we
will receive on closing of all of the marsh sales will total approximately $27.2 million.
We intend to use the proceeds from the marsh sales to (i) pay the expenses related to the
marsh sales and (ii) repay a portion of our outstanding debt as required by our lenders.
We may also distribute a dividend to our shareholders. We expect to consummate the marsh
sales in May 2005.

15

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Upon consummation of the marsh sales,
our business will consist primarily of (i) growing cranberries at our remaining eight
marshes and delivering those cranberries to Ocean Spray for processing into cranberry
juice concentrate pursuant to our toll processing agreement with Ocean Spray; (ii)
purchasing cranberries from our 44 contract growers and delivering those cranberries to
Ocean Spray for processing into cranberry juice concentrate pursuant to our toll
processing agreement with Ocean Spray; (iii) selling cranberry juice concentrate to Apple
& Eve pursuant to our supply agreement with Apple & Eve; (iv) selling to Ocean
Spray cranberry juice concentrate pursuant to our toll processing agreement with Ocean
Spray that we do not otherwise sell to Apple & Eve.

The cranberries we harvested in the
fall of 2004 (fiscal 2005) from the nine marshes to be sold to assignees of Ocean Spray
accounted for approximately 53% of the total fiscal 2005 harvest from our owned marshes
and approximately 27% of the total fiscal 2005 harvest from our owned and contracted
marshes on a combined basis. Since the cranberries harvested in the fall of 2004 from the
nine marshes to be sold to assignees of Ocean Spray have already been processed and either
sold or committed to be sold, the revenues and profits from the sale of those cranberries
will be recorded in fiscal 2005. As a result, assuming market prices for cranberry
concentrate remain stable, we do not expect our revenues and profits from the sale of
cranberry concentrate to materially change in fiscal 2005 as a result of the sale of the
nine marshes. However, commencing in fiscal 2006, and assuming aggregate harvest levels
remain relatively constant, we expect to harvest approximately 50% fewer cranberries from
our owned marshes (approximately 25% fewer cranberries when giving effect to cranberries
purchased from our contract growers) than we did in fiscal 2005. Assuming market prices for cranberry
concentrate remain stable, we believe this reduction in cranberries harvested will result
in a reduction in revenue from the sale of cranberry concentrate of approximately 25% for
fiscal 2006 compared to anticipated fiscal 2005 levels, and a comparable reduction in operating profits.

Consistent with our previously
announced exploration of strategic alternatives, we may also continue to seek the sale of
our remaining marshes and potentially the assignment of our toll processing agreement with
Ocean Spray, supply agreement with Apple & Eve and agreements with our contract
growers. We may sell or assign these assets to one or more buyers, from time to time,
through one or more transactions. Potential buyers of our assets may include certain
affiliates, including potentially members of our management. However, there can be no
assurance that we will be able to successfully identify potential buyers for our remaining
assets on terms favorable to us or at all.

If we are successful in selling or
assigning these remaining assets, we may subsequently liquidate Northland. Upon any such
liquidation, we would intend to distribute the cash proceeds received in liquidation to
our shareholders, following satisfaction of remaining liabilities and appropriate
provision for contingent liabilities, in accordance with Wisconsin law and our articles of
incorporation.

# CRITICAL ACCOUNTING
POLICIES

The preparation of consolidated
financial statements in conformity with generally accepted accounting principles (GAAP) in
the United States of America requires management to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses and related
disclosures. On an on-going basis, we evaluate our estimates, including those related to
inventories, long-lived assets and income taxes. We base these estimates on historical
experience and various other assumptions that we believe to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying
value of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or conditions.

16

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Specifically, we believe that the
following accounting policies and estimates are most important to the portrayal of our
financial condition and operating results and require managements most difficult
judgments:

Revenue Recognition

We recognize revenue when persuasive
evidence of an arrangement exists, product is delivered, collectibility is reasonably
assured and title passes to the customer.

Inventory

We have stated our inventory carrying
value at the lower of cost (using the first-in, first-out costing method) or estimated
market values, based upon managements best estimates of future product selling costs
for the periods during which the cranberries are grown and the cranberries and
cranberry-related products are expected to be sold. The market estimates are dependent
upon several factors including, but not limited to, price, product mix, demand, costs and
the period of time it takes to sell the inventory.

Recoverability of
Long-Lived Assets

We state the value of our long-lived
assets (property and equipment) at cost less depreciation and amortization. We
periodically evaluate this carrying value. Our estimates of the expected future
undiscounted cash flows related to the recoverability of these assets may change from
actual cash flows due to, among other things, changes in technology and economic
conditions.

Realization of Deferred
Tax Assets

We have recorded a valuation allowance
to reduce our deferred tax assets to the amount that we believe is more likely than not to
be realized. We considered our recent history of profitable operations adjusting for
nonrecurring items, the sale of certain assets to Ocean Spray and projected future
operations in reaching our conclusion.

# OFF-BALANCE SHEET
ARRANGEMENTS

We do not typically engage in
off-balance sheet transactions, arrangements, obligations (including contingent
obligations), and other relationships with unconsolidated entities or other persons that
may have a material current or future effect on our financial condition, changes in
financial condition, results of operations, liquidity, capital expenditures, capital
resources, or significant components of revenues or expenses. We do not materially rely on
off-balance sheet arrangements for liquidity, capital resources, market risk support,
credit risk support or other benefits.

We have outstanding 100 shares of our
Series B Preferred Stock. The Series B Preferred Stock is subject to mandatory redemption
upon (i) the consummation of a transaction following which neither Sun Northland, LLC nor
its affiliates owns or controls securities possessing at least 10% of the voting power of
the Company, or (ii) the distribution of assets to holders of our capital stock upon the
sale of substantially all our assets. The redemption price in such a circumstance varies
depending upon the number of shares of Series B Preferred Stock then outstanding and the
internal rate of return (as defined in our Articles of Incorporation) recognized by Sun
Northland, LLC in connection with the event triggering such redemption. We cannot be
certain if or when the Series B Preferred Stock may be redeemed, nor can we be certain of
the redemption price in the event of such a redemption.

17

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# RESULTS OF OPERATIONS

The Consolidated Financial Statements
and related notes have been restated for the three and six months ended February 28, 2005
and February 29, 2004, where applicable to reflect the branded juice business as a
discontinued operation (See Note 3).

Total net revenues for the three
months ended February 28, 2005 were $7.8 million, an increase of 110.8% from net revenues
of $3.7 million in the prior years second quarter. This increase was primarily due
to an increase in the quantity of cranberry concentrate sold as a result of our toll
processing agreement with Ocean Spray. Total net revenues for the six months ended
February 28, 2005 were $17.7 million, an increase of 34.1% from net revenues of $13.2
million in the six months ended February 29, 2004. This increase was primarily due to a
$3.4 million sale of cranberries to Ocean Spray in connection with the Ocean Spray
Transaction, as well as an increase in the quantity of cranberry concentrate sold as a
result of our toll processing agreement with Ocean Spray. Commencing in fiscal 2006, we
expect revenues from the sale of cranberry concentrate to decline as a result of the sale
of nine of our 17 cranberry marshes as described under Exercise of Ocean Spray
Option.

Cost of sales for the three months
ended February 28, 2005 was $5.8 million compared to $2.0 million for the second quarter
of fiscal 2004, resulting in gross margins of 25.7% and 46.7% in each respective period.
The increase in cost of sales was primarily due to an increase in the quantity of
cranberry concentrate sold. The decrease in gross margin percentage was primarily the
result of lower selling prices and higher costs for cranberry concentrate over the same
period in fiscal 2004.

Cost of sales for the six months
ended February 28, 2005 was $11.7 million compared to $7.2 million for the first six
months of fiscal 2004, resulting in gross margins of 34.2% and 45.8% in each respective
period. The increase in cost of sales was primarily due to an increase in the quantity of
cranberry concentrate sold. The decrease in gross margin percentage was primarily the
result of lower selling prices for cranberry concentrate and frozen processed cranberries
over the same periods in fiscal 2004 and higher costs for cranberry concentrate.

18

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Selling, general and administrative
expenses were $1.2 million, or 15.2% of net revenues, for the three months ended February
28, 2005 compared to $3.0 million, or 80.8% of net revenues, for the second quarter of
fiscal 2004. The decrease was primarily the result of a reduction in expenses related to
(i) the closure of our former bottling facility in Jackson, Wisconsin, (ii) legal and
consulting services and (iii) wages and benefits. Selling, general and administrative
expenses were $4.1 million, or 23.1 % of net revenues, for the six months ended February
28, 2005 compared to $5.0 million, or 37.8% of net revenues, for the first six months of
fiscal 2004. The decrease was primarily the result of a reduction in expenses related to
(i) the closure of our former bottling facility in Jackson, Wisconsin and (ii) legal and
consulting services. This reduction in expenses was partially offset by an increase in
wages during the first six months of fiscal 2004 as a result of bonuses paid to senior
management. We expect to further decrease our selling, general and administrative expenses
following the sale of nine or our 17 cranberry marshes as described under Exercise
of Ocean Spray Option.

As a result of the Ocean Spray
Transaction, we recognized a gain of $7.7 million in the six months ended February 28,
2005 (see Note 4).

Other income in the second quarter of
fiscal 2004 included a $3.0 million payment received from Cliffstar Corporation
(Cliffstar) as the result of the settlement of a dispute related to the
calculation of earn-out payments due us in connection with the sale of our private label
juice business to Cliffstar in fiscal 2000.

Interest expense was $0.9 million for
the three months ended February 28, 2005 compared to $0.6 million in the prior years
second quarter. The increase was due to higher interest rates and additional loan costs
incurred as a result of the restructuring of our debt arrangements with Wells Fargo and
Ableco in the first quarter of 2005. Interest expense was $1.8 million for the six months
ended February 28, 2005 compared to $1.3 million in the first six months of the prior
year. The increase in interest expense resulted from increased debt levels during the
first quarter, as well as higher interest rates and additional loan costs incurred in
connection with the restructuring of our debt arrangements with Wells Fargo and Ableco in
the first quarter of 2005.

We incurred a loss of $1.7 million on
debt extinguishment during the three months ended February 28, 2005 as we paid down our
debt to Wells Fargo and Ableco. This compared to a gain on debt extinguishment of $5.3
million in the second quarter of fiscal 2004 as a result of the payoff of our term note
with U.S. Bank National Association (US Bank). The gain was the recognition of
the future interest payments, as previously established in accordance with SFAS No. 15,
Accounting for Debtors and Creditors for Troubled Debt Restructurings, from
the restructuring of our debt with US Bank in November 2001.

We recognized a gain in the second
quarter of fiscal 2005 in the amount of $5.1 million as a result of the sale of our
branded juice business to Apple & Eve (see Note 3).

Net income for the three months ended
February 28, 2005, was $3.4 million, or $0.03 per diluted share, compared to net income of
$6.5 million, or $0.06 per diluted share, for the three months ended February 29, 2004.
Net income for the six months ended February 28, 2005, was $7.4 million, or $0.07 per
diluted share, compared to net income of $8.9 million, or $0.09 per diluted share, for the
six months ended February 29, 2004.

19

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# LIQUIDITY AND CAPITAL
RESOURCES

Net cash provided by operating
activities was $7.5 million in the first six months of fiscal 2005 compared to $3.2
million in the same period of fiscal 2004. Receivables, prepaid expenses and other current
assets increased $1.8 million in the first six months of fiscal 2005 compared to a
decrease of $3.9 million for the same period in fiscal 2004. This increase was primarily
due to the establishment of $3.0 million in escrow funds in connection with the sale of
our branded juice business to Apple & Eve and the Ocean Spray Transaction. This
increase was partly offset by a reduction in accounts receivable of $1.2 million. This
compared to a decrease in receivables during the same period in fiscal 2004 due primarily
to lower sales. Inventories increased $2.6 million in the first six months of fiscal 2005
compared to $10.0 million in the first six months of fiscal 2004. The increase in
inventories was less in the first six months of fiscal 2005 primarily due to a larger
inventory held by us at the commencement of the fall 2005 cranberry harvest. Accounts
payable and accrued liabilities increased by $10.3 million in the first six months of
fiscal 2005 compared to an increase of $2.6 million in the first six months of fiscal
2004. Accounts payable assumed by Apple & Eve in connection with its purchase of our
branded juice business provided cash of $6.3 million. The increase in accruals was
primarily due to the recording of a $5.0 million liability related to the fee Ocean Spray
paid us for the option to purchase certain of our cranberry marshes, approximately $3.0
million of which is creditable on a pro rata basis against the purchase price to be
paid by Ocean Sprays assignees in connection with the sale of nine of our cranberry
marshes as described under Exercise of Ocean Spray Option. Since the $5.0
million option fee paid to us by Ocean Spray is not refundable, we expect to recognize the
remaining balance of approximately $2.0 million as income during the third quarter of
fiscal 2005.

Working capital was $1.0 million at
February 28, 2005 compared to $26.6 million at August 31, 2004. Current assets decreased
by $6.8 million and current liabilities increased by $18.7 million. The increase in
current liabilities was primarily due to the amendment of our debt obligations with Wells
Fargo and Ableco (see Note 6). Our current ratio decreased to 1.0 to 1.0 at February 28,
2005, compared to 3.6 to 1.0 at August 31, 2004.

Net cash provided by investing
activities in the first six months of fiscal 2005 was $21.8 million due in part to the
$9.7 million in proceeds received from the sale of our branded juice business to Apple
& Eve (see Note 3). Net cash provided by investing activities also included $12.1
million from the sale of our receiving, freezing and concentrate-processing plant and an
adjacent office in Wisconsin Rapids to Ocean Spray in September 2004. Net cash provided by
investing activities in first six months of fiscal 2004 was $2.5 million, which primarily
resulted from the $4.0 million received from the sale of equipment at our former bottling
facility in Jackson, Wisconsin, as well as the sale of our former facilities located in
Bridgeton, New Jersey and Eau Claire, Michigan. Purchases of equipment amounted to $30,000
in the first six months of fiscal 2005 compared to $733,000 in the first six months of
fiscal 2004. Also, in the first six months of fiscal 2004, we made a loan of $0.8 million
to one of our contract growers (see Note 8).

Our net cash used by financing
activities was $30.8 million in the first six months of fiscal 2005 compared to net cash
used of $12.1 million in the same period of the prior year. In the first six months of
fiscal 2005, we made principal payments on long-term debt and other obligations of $13.9
million as required under our restructured debt agreements compared to $12.2 million in
the same period of fiscal 2004. Also, in the first six months of fiscal 2005, we had
borrowings of $15.0 million under our term loan facility. We used the proceeds from these
borrowings to reduce other long-term debt by $5.0 million during the first quarter of
fiscal 2005 and, with proceeds from the Ocean Spray Transaction, to pay a special
dividend of $0.33 per share (or an aggregate of $31.9 million) on our class A common stock
during the second quarter of fiscal 2005. In both fiscal 2005 and fiscal 2004, monthly
principal payments were made on other obligations and additional payments were made as
required under our restructured and restated debt agreements.

The following schedule sets forth our
contractual obligations as of February 28, 2005 (in thousands):

20

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# Payments Due by Period

|Contractual Obligations    | Total |  | Less than 1 year |        | 1-3years |   | 3-5years |  | More than 5 years |      
|-------------------------- | ----- |  | ---------------- | ------ | -------- | - | -------- |  | ----------------- | -----
|Principal debt obligations |       |  | $                | 21,776 |          | $ | 13,723   |  | $                 | 3,208
|Purchase obligations (1)   |       |  |                  | 8,162  |          |   | 8,162    |  |                   | 0    
|Interest on debt (2)       |       |  |                  | 2,356  |          |   | 1,377    |  |                   | 586  
|                           |       |  |                  |        |          |   |          |  |                   |      
|Total                      |       |  | $                | 32,294 |          | $ | 23,262   |  | $                 | 3,794
|                           |       |  |                  |        |          |   |          |  |                   |      

|(1) | Purchase
obligations include estimated payments of $4.6 million due to contract           growers
for cranberries purchased by us during the first quarter for fiscal           2005. Under
our crop purchase contracts, which generally last for five years, we           pay the
growers at a market rate, as defined, for all raw cranberries delivered           (plus
$3 per barrel in certain circumstances). Purchase obligations also include           toll
processing fees of $3.5 million due Ocean Spray for processing our           cranberries
into cranberry concentrate. Our obligations under the crop purchase           agreements
and the toll processing agreement with Ocean Spray are subject to           variability
and generally not fixed or subject to reasonable estimation until           the fourth
quarter of each year.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Interest on floating
rate debt is calculated using interest rates in effect as of February 28, 2005.
|--- | ----------------------------------------------------------------------------------------------------

As of February 28, 2005, we had $2.5
million of unused borrowing availability under our revolving credit facility with Ableco.
We believe we will be able to fund our ongoing operational needs for fiscal 2005 through
(i) cash generated from operations and (ii) financing available under our revolving credit
facility with Ableco. We do not have any significant capital expenditure commitments and
continue to review our capital requirements in an effort to match expenditures with
revenues.

As of February 28, 2005, we were in
compliance with all of our debt arrangements.

21

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SPECIAL NOTE
REGARDING FORWARD-LOOKING STATEMENTS

We make certain forward-looking
statements in this Form 10-Q, such as statements about our future plans, goals and
other events which have not yet occurred. We intend that these statements will qualify for
the safe harbors from liability provided by the Private Securities Litigation Reform Act
of 1995. You can generally identify these forward-looking statements because we use words
such as we believe, anticipate, expect or similar
words when we make them. Forward-looking statements include, among others, statements
about actions by our competitors, sufficiency of our working capital, potential
operational improvements and our efforts to improve profitability, sales strategies,
anticipated harvest levels and sales of our cranberry concentrates, potential future strategic transactions
and the effects of recent transactions. These forward-looking statements involve risks and
uncertainties and the actual results could differ materially from those discussed in the
forward-looking statements. These risks and uncertainties include, without limitation,
risks associated with (i) the level of cranberry inventory held by industry
participants; (ii) agricultural factors affecting our crop and the crop of other
North American growers; (iii) our ability to comply with the terms and conditions of, and
to satisfy our responsibilities under, our credit facilities and other debt agreements;
(iv) our ability to identify, evaluate and successfully execute any strategic
alternatives; (v) prevailing market prices for cranberry concentrate; and (vi) factors relating to the sale of our marshes pursuant to the option
agreement with Ocean Spray, including diversion of management attention from the
operations of the business as a result of preparations for the consummation of one or more
marsh sales, transaction related expenses that are expected to be incurred in connection
with the consummation of one or more marsh sales and a limitation on our ability to
implement our current or future business strategies resulting from one or more of the
marsh sales not being consummated. You should consider these risks and factors and the
impact they may have when you evaluate our forward-looking statements. We make these
statements based only on our knowledge and expectations on the date of this Form 10-Q. We
disclaim any duty to update these statements or other information in this Form 10-Q based
on future events or circumstances. Please read this entire Form 10-Q to better understand
our business and the risks associated with our operations. Specifically, please see
Managements Discussion and Analysis of Financial Condition and Results of
Operations for a discussion of our current financial condition, including our
revised debt structure.

ITEM 3.   QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We do not enter into any material
futures, forwards, swaps, options or other derivative financial instruments for trading or
other purposes. Our primary exposure to market risk is related to changes in interest
rates and the effects those changes may have on our earnings as a result of our long-term
financing arrangements. We manage our exposure to this market risk by monitoring interest
rates and possible alternative means of financing. Our earnings may be affected by changes
in short-term interest rates under our revolving credit facility and certain term loans,
pursuant to which our borrowings bear interest at a variable rate, subject to minimum
interest rates payable on certain loans. Based upon the debt outstanding under our
revolving credit facility and certain term loans as of February 28, 2005, an increase of
1.0% in market interest rates would increase our annual interest expense by approximately
$124,000.

ITEM 4.   CONTROLS AND
PROCEDURES.

Our Chief Executive Officer and our
Vice President  Finance, as of the end of the period covered by this Quarterly
Report on Form 10-Q, evaluated the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e). Based on
that evaluation, the Chief Executive Officer and Vice President  Finance concluded
that our disclosure controls and procedures are effective to ensure that information
required to be disclosed in our Exchange Act reports is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commissions rules and forms, and that such information is accumulated and
communicated to the Chief Executive Officer and Vice President  Finance to allow
timely decisions regarding required disclosure.

There have been no changes in our
internal controls over financial reporting that occurred during the last fiscal quarter
that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

22

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# PART II  OTHER
INFORMATION

ITEM 1.   LEGAL
PROCEEDINGS.

None.

ITEM 2.   UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.   DEFAULTS
UPON SENIOR SECURITIES.

None.

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

At our annual meeting of
shareholders held on January 28, 2005, the following nine individuals, who constitute our
entire board of directors, were elected to serve as directors of the Company to hold
office until the next annual meeting of our shareholders and until their successors are
duly qualified and elected:

|                    | Total Votes
Voted "For" | Total Votes
Withholding Authority
|------------------- | ----------------------- | ---------------------------------
|John Swendrowski    | 83,555,263              | 313,712                          
|Marc J. Leder       | 83,575,454              | 293,521                          
|Rodger R. Krouse    | 83,503,712              | 365,263                          
|Clarence E. Terry   | 83,503,108              | 365,867                          
|Kevin J. Calhoun    | 83,583,150              | 285,825                          
|T. Scott King       | 83,582,400              | 286,575                          
|George R. Rea       | 83,751,809              | 117,166                          
|Patrick J. Sullivan | 83,751,588              | 117,387                          
|C. Daryl Hollis     | 83,743,729              | 125,575                          

ITEM 6.   EXHIBITS.

Exhibits filed with this Form 10-Q
report are incorporated herein by reference to the Exhibit Index accompanying this report.

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---

# SIGNATURE

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

|                      | NORTHLAND CRANBERRIES, INC.
|--------------------- | ---------------------------
|Date:  April 14, 2005 | By:                        
|                      |                            

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---

# EXHIBIT INDEX

|EXHIBITNO. | DESCRIPTION
|---------- | -----------

|4.1 | Second
Amendment to Amended and Restated Loan and Security Agreement, Waiver, Consent and
Release dated as of February 22, 2005, between and among, on the one hand, Wells Fargo
Foothill, Inc. and Ableco Finance, LLC, and the other lenders identified on the signature
pages thereto, Wells Fargo Foothill, Inc., as administrative agent for the lenders,
Ableco Finance, LLC, as the collateral agent for the lenders, and, on the other hand, the
Company and the guarantors party thereto from time to time. [Incorporated by reference to
Exhibit 4.1 to the Companys Form 8-K dated February 22, 2005.]
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.1 | Asset
Purchase Agreement dated as of February 22, 2005 by and between the Company, NCI Foods,
LLC and Apple & Eve, LLC. [Incorporated by reference to Exhibit 10.1 to the Companys
Form 8-K dated February 22, 2005.]
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 | Concentrate
Purchase and Supply Agreement dated as of February 22, 2005 by and between the Company
and Apple & Eve, LLC. [Incorporated by reference to Exhibit 10.2 to the Companys
Form 8-K dated February 22, 2005.]
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|31.1 | Certification
of John Swendrowski, Chairman and Chief Executive Officer of Northland Cranberries, Inc.,
pursuant to Title 17 of the Code of Federal Regulations, Section 240.13a-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|31.2 | Certification
of Nigel Cooper, Vice President  Finance of Northland Cranberries, Inc., pursuant
to Title 17 of the Code of Federal Regulations, Section 240.13a-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|32 | Certification
of John Swendrowski, Chairman and Chief Executive Officer, and Nigel J.
Cooper, Vice President  Finance, of Northland Cranberries, Inc., pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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