UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

      For the quarterly period ended September 26, 1997.

                                       or

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

      For the transition period from ________________ to ________________.


                        Commission File Number 000-24124

                               FRESH AMERICA CORP.
             (Exact name of registrant as specified in its charter)

             Texas                                       76-0281274
(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                     Identification No.)

       ONE LINCOLN CENTRE, 5400 LBJ FREEWAY, SUITE 1025, DALLAS, TX 75240
            (Address of principal executive offices and Zip Code)

      Registrant's telephone number, including area code: (972) 774-0575

                               ----------------

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 [ ]

At November 6, 1997 the  Registrant  had 3,824,871  shares of its Common Stock
outstanding.

Total number of pages in this report, including the cover page is 13. Exhibit
index on page 12.
<PAGE>
PART I - FINANCIAL INFORMATION

ITEM I - FINANCIAL STATEMENTS

                      FRESH AMERICA CORP. AND SUBSIDIARIES

                      UNAUDITED CONSOLIDATED BALANCE SHEETS
                      (In thousands, except share amounts)

                                                       JANUARY 3,      SEPT. 27,
                                                          1997           1997
                                                       ----------     ----------
                                     ASSETS
Current assets:
  Cash and cash equivalents ......................     $    4,297     $      412
  Receivables:
    Trade accounts receivable ....................         20,912         25,486
    Other ........................................             39             73
                                                       ----------     ----------
      Total receivables ..........................         20,951         25,559
                                                       ----------     ----------
Inventories:
    Produce ......................................          1,680          2,297
    Supplies .....................................            260            368
                                                       ----------     ----------
      Total inventories ..........................          1,940          2,665
                                                       ----------     ----------
  Prepaid expenses ...............................            391          1,279
                                                       ----------     ----------
      Total current assets .......................         27,579         29,915
                                                       ----------     ----------
Property, plant and equipment, net ...............          5,920          9,695
Notes receivable from shareholders ...............            155            155
Other assets .....................................          1,553          5,258
                                                       ----------     ----------
                                                       $   35,207     $   45,023
                                                       ==========     ==========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt
    and capital leases ...........................     $      105     $      161
  Accounts payable ...............................         11,598         17,734
  Accrued salaries and wages .....................            311            542
  Other accrued expenses .........................          1,039            333
  Taxes payable ..................................            355            490
                                                       ----------     ----------
      Total current liabilities ..................         13,408         19,260
                                                       ----------     ----------
Long-term debt and capital leases,
  less current portion ...........................            547            755
                                                       ----------     ----------
Shareholders' equity:
  Common stock $.01 par value. Authorized
    10,000,000 shares: issued 3,711,795
    and 3,798,464 respectively ...................             37             38
  Additional paid-in capital .....................         14,693         14,891
  Retained earnings ..............................          6,522         10,079
                                                       ----------     ----------
      Total shareholders' equity .................         21,252         25,008
                                                       ----------     ----------
Commitments and contingencies
                                                       ----------     ----------
                                                       $   35,207     $   45,023
                                                       ==========     ==========

                 The notes to consolidated financial statements
                   are an integral part of these statements.

                                       2
<PAGE>
                      FRESH AMERICA CORP. AND SUBSIDIARIES

                   UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                        QUARTER ENDED              NINE MONTHS ENDED
                                                   ------------------------    ------------------------
                                                    SEPT 27,      SEPT 26,      SEPT 27,      SEPT 26,
                                                      1996          1997          1996          1997
                                                   ----------    ----------    ----------    ----------
<S>                                                <C>           <C>           <C>           <C>       
Net sales ......................................   $   59,726    $   90,800    $  170,642    $  249,200
Cost of goods sold, excluding
  depreciation and amortization ................       54,427        82,198       154,780       224,050
                                                   ----------    ----------    ----------    ----------
     Gross profit ..............................        5,299         8,602        15,862        25,150
                                                   ----------    ----------    ----------    ----------
Selling, general and administrative expenses:
  Salaries and related costs ...................        2,332         3,899         6,865        11,531
  Rent, maintenance and related costs ..........          883         1,637         2,482         3,905
  Insurance expense ............................          186           127           563           733
  Automobile, travel and related costs .........          123           206           382           667
  Communication expense ........................          117           297           392           713
  Depreciation and amortization ................          327           436           931         1,186
  Other ........................................          180           409           541         1,020
                                                   ----------    ----------    ----------    ----------
                                                        4,148         7,011        12,156        19,755
                                                   ----------    ----------    ----------    ----------
     Operating income ..........................        1,151         1,591         3,706         5,395
                                                   ----------    ----------    ----------    ----------
Other income (expense):
  Interest expense .............................          (20)          (25)          (65)         (118)
  Interest income ..............................           73           104           162           208
  Other, net ...................................          107            62           222           218
                                                   ----------    ----------    ----------    ----------
                                                          160           141           319           308
                                                   ----------    ----------    ----------    ----------
Income before income taxes .....................        1,311         1,732         4,025         5,703
Provision for income taxes .....................          500           651         1,460         2,146
                                                   ----------    ----------    ----------    ----------
     Net income ................................   $      811    $    1,081    $    2,565    $    3,557
                                                   ==========    ==========    ==========    ==========
Earnings per share .............................   $     0.21    $     0.27    $     0.65    $     0.90
                                                   ==========    ==========    ==========    ==========
Weighted average common and common
  equivalent shares outstanding ................        3,937         3,975         3,918         3,971
                                                   ==========    ==========    ==========    ==========
</TABLE>
                 The notes to consolidated financial statements
                   are an integral part of these statements.

                                       3
<PAGE>
                      FRESH AMERICA CORP. AND SUBSIDIARIES

                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

                                                             NINE MONTHS ENDED
                                                           --------------------
                                                           SEPT. 27,   SEPT. 26,
                                                             1996        1997
                                                           --------    --------
Cash flows from operating activities:
  Net income ...........................................   $  2,565    $  3,557
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Depreciation and amortization ....................        931       1,186
      Other ............................................          4          80
      Change in assets and liabilities:
        Accounts receivable ............................        663      (2,578)
        Inventories ....................................       (665)       (203)
        Prepaid expenses ...............................       (109)       (828)
        Other assets ...................................         25        (247)
        Accounts payable ...............................     (1,246)      3,476
        Accrued expenses and other current
          liabililties .................................         34        (725)
                                                           --------    --------
            Total adjustments ..........................       (353)        161
                                                           --------    --------
            Net cash provided by operating activities ..      2,212       3,718
                                                           --------    --------
Cash flows from investing activities:
  Additions to property, plant and equipment, net ......     (1,414)     (4,343)
  Proceeds from sale of equipment ......................          6        --
  Cost of acquisitions, exclusive of cash acquired .....       --        (3,280)
                                                           --------    --------
            Net cash used in investing activities ......     (1,408)     (7,623)
                                                           --------    --------
Cash flows from financing activities:
  Proceeds from revolving line of credit ...............       --         4,305
  Repayments of  revolving line of credit ..............     (1,000)     (4,305)
  Additions to long term indebtedness ..................       --           112
  Repayments of long-term indebtedness .................        (38)       (291)
  Net proceeds from exercise of employee stock options .        446         199
                                                           --------    --------
          Net cash (used in) financing activities ......       (592)         20 
                                                           --------    --------
          Net increase (decrease) in cash and
            cash equivalents ...........................        212      (3,885)

Cash and cash equivalents at beginning of period .......      1,851       4,297
                                                           --------    --------
Cash and cash equivalents at end of period .............   $  2,063    $    412
                                                           ========    ========

Supplemental disclosures of cash flow information:
  Cash paid for interest ...............................   $     31    $    116
  Cash paid for income taxes ...........................   $  1,532    $  2,163

                 The notes to consolidated financial statements
                   are an integral part of these statements.

                                       4
<PAGE>
                      FRESH AMERICA CORP. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

      Fresh America Corp. (the "Company") is an integrated food distribution
management company engaged in the procurement, processing, warehousing and
delivery of fresh produce and other refrigerated perishable products. The
Company was founded in 1989 and operates in 39 states through sixteen
distribution and processing facilities.

      UNAUDITED INTERIM FINANCIAL INFORMATION - The consolidated balance sheet
as of September 26, 1997 and the related consolidated statements of income and
cash flows for the quarters and nine month periods ended September 26, 1997 and
September 27, 1996 and related notes have been prepared by the Company and are
unaudited. In the opinion of the Company, the interim financial information
includes all adjustments consisting of only normal recurring adjustments
necessary for a fair statement of the results of the interim periods.

      Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted from the interim financial
information. The interim financial information should be read in conjunction
with the Company's audited consolidated financial statements included in the
Annual Report on Form 10-K for the fiscal year ended January 3, 1997. The
results for the quarters and nine-month periods ended September 26, 1997 and
September 27, 1996 may not be indicative of operating results for the full year.

      The following are the significant accounting policies followed by the
Company in the preparation of the consolidated financial statements.

      PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of Fresh America Corp. and its wholly-owned subsidiaries.
All significant intercompany balances and transactions have been eliminated in
consolidation.

      EARNINGS PER SHARE - Earnings per share have been calculated based upon
the weighted average number of common and common equivalent shares outstanding
during the period. Common stock equivalents consisting of stock options and
warrants are included in the computation of weighted average shares when their
effect is dilutive. Earnings per share are presented on a fully-diluted basis.

      Effective December 1997, the Company will be required to adopt ("SFAS")
No. 128, "Earnings Per Share". SFAS No. 128 introduces the concept of basic
earnings per share, which represents net income divided by the weighted average
common shares outstanding - without the dilutive effects of common stock
equivalents (option, warrants, etc.). Diluted earnings per share will continue
to be reported when SFAS No. 128 is adopted.

                                       5
<PAGE>
                      FRESH AMERICA CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 (Unaudited)

      USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

      FISCAL YEAR - The Company's fiscal year is a 52 week or 53 week period
ending on the first Friday in January.

NOTE 2.  AGREEMENT WITH SAM'S CLUB.

      In August 1995, the Company entered into a five-year distribution
agreement (the "Agreement") with Sam's Club. The Agreement, which began on
December 1, 1995, replaced the Company's previously existing license agreement
with Sam's Club which expired on November 30, 1995. Under terms of the
Agreement, the Company expanded its distribution arrangement with Sam's into
specified exclusive new territories approximately doubling the number of Sam's
clubs serviced by Fresh America. As a result of this expansion, the Company
commenced operations from two new distribution centers in Chicago, Illinois and
Cincinnati, Ohio on January 2, 1996. For further information, see Note 2 to the
financial statements included in the Company's Annual Report on Form 10-K for
the fiscal year ended January 3, 1997.

      The Agreement provides Sam's the option to reduce the number of clubs
within the Company's exclusive territory by forty per year under certain
circumstances and to discontinue service for clubs in which Sam's elects not to
offer produce, if any. In February 1997, the Company was advised by Sam's that
it was exercising the existing option under the Agreement and would begin to
distribute directly to forty clubs currently serviced by the Company's Atlanta
distribution center. Such transition began in late March 1997. As it relates to
the distribution to specific clubs being transitioned to Sam's, the impact of
such transition is expected to result in approximately $15.0 to $20.0 million
less revenue in fiscal 1997 as compared to fiscal 1996. The Company does not
believe this action will have a material adverse effect on its consolidated
financial condition. As of November 6, 1997 distribution services have been
transitioned on 27 of the forty clubs. The remaining 13 clubs are expected to be
transitioned during the fourth quarter of 1997.

NOTE 3.  ACQUISITIONS AND AGREEMENTS.

      On November 4, 1996, the Company acquired substantially all of the
business and net assets of Produce Plus, Inc. ("Produce Plus"), a privately
owned specialty food service distribution company based in Houston, Texas.
Consideration for the net assets received consisted of $829,000 in cash, 14,118
shares of Company stock valued at $18.88 per share and a contingent convertible
promissory note to be valued at an amount no greater than $600,000. During the
third quarter, the Company settled the contingent payment at a value of $500,000
and such amount was recognized as additional cost of acquiring Produce Plus and
was allocated to goodwill.

                                       6
<PAGE>
                      FRESH AMERICA CORP. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

      On January 22, 1997, the Company acquired substantially all of the net
assets and the business of CPT Enterprises, Inc. d/b/a/ Chef's Produce Team
("CPT"), a Los Angeles-based food service company providing specialty produce to
upscale restaurants and hotels throughout California and Nevada. As
consideration for the assets received, the Company assumed liabilities of
approximately $1.5 million, with future additional consideration depending on
the achievement of certain levels of pretax earnings over three years through
fiscal 1999.

      On March 7, 1997, the Company acquired the business and substantially all
of the operating assets of One More Tomato, Inc. ("OMT") for $573,000 in cash
and the assumption of certain liabilities. OMT is a value-added tomato
repackaging and distribution company located in Houston, Texas.

      On May 22, 1997, the Company acquired the business and substantially all
of the operating assets of Pitman Produce of Orlando, Inc., a privately owned
specialty food service distribution company based in Orlando, Florida. The
Company paid $243,000 in cash as consideration for the assets received.

      On August 27, 1997, the Company acquired all of the capital stock of
privately owned Kalil Fruit and Vegetable, Inc. ("Kalil") for $1,955,000 in
cash. Kalil is a produce distribution and value-added processing company based
in Houston, Texas.

      These acquisitions were each accounted for as purchase transactions, and
accordingly, have been included in the Company's financial results since their
respective dates of acquisition. The purchase price recorded to date in these
and a previous transaction exceeded the fair market value of the assets
acquired; hence total goodwill of $1,074,000 and $4,590,000 is included in the
consolidated balance sheet at January 3, 1997 and September 26, 1997,
respectively, less the amortization of such goodwill over a 15 year period. The
pro forma effect of these acquisitions, as if they were acquired on January 5,
1996 has not been presented as these transactions are not considered material to
the consolidated results of operations individually or in the aggregate.

      On February 28, 1997, the Company entered into a five-year agreement with
Fast Food Merchandiser's, Inc. ("FFM"), a wholly-owned subsidiary of Hardee's
Food Systems, Inc. to source and distribute produce products to all FFM
distribution centers nationwide. Coinciding with the distribution agreement, the
Company acquired the value-added produce processing center in Richmond, Indiana
from FFM for approximately $2.9 million.

NOTE 4.  DEBT.

      On February 28, 1997, the Company borrowed $2.5 million under its $5.0
million revolving line of credit agreement which was repaid on June 12, 1997. In
July 1997, the Company entered into an agreement with a bank to provide a
revolving credit line of up to $10 

                                       7
<PAGE>
million and a term loan of up to $4 million. The agreement expires December 31,
1999. No amounts were outstanding as of September 26, 1997.


NOTE 5. SUBSEQUENT EVENTS.

      On September 29, 1997, the Company acquired substantially all of the
business and net assets of Bano Quality Produce, Inc. ("Bano"), a privately
owned produce distribution and value-added processing company based in Baton
Rouge, Louisiana. Consideration for the net assets received consisted of
$850,000 in cash, 12,107 shares of Company stock valued at $20.65 per share and
a contingent convertible promissory note to be valued at an amount no greater
than $180,000, such future value being determined by certain agreed upon levels
of pretax earnings of Bano for the three years ended January 6, 2001.


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

RESULTS OF OPERATIONS

      The following table sets forth, for the periods indicated, the components
of the consolidated statements of income as a percentage of net sales.

                                          QUARTER ENDED       NINE MONTHS ENDED
                                      ---------------------  -------------------
                                       Sept. 27,  Sept. 26,  Sept. 27  Sept. 26,
                                         1996       1997       1996       1997
                                      ----------  ---------  --------  ---------
Net sales ..........................     100.0%     100.0%     100.0%     100.0%
Cost of goods sold .................      91.1       90.5       90.7       89.9
                                         -----      -----      -----      -----
Gross profit .......................       8.9        9.5        9.3       10.1
Selling, general and
   administrative expenses .........       7.0        7.7        7.1        7.9
                                         -----      -----      -----      -----
Operating income ...................       1.9        1.8        2.2        2.2
Other income (expense) .............       0.3        0.1        0.2        0.1
                                         -----      -----      -----      -----
Income before income taxes .........       2.2        1.9        2.4        2.3
Provision for income taxes .........       0.8        0.7        0.9        0.9
                                         -----      -----      -----      -----
Net income .........................       1.4%       1.2%       1.5%       1.4%
                                         =====      =====      =====      =====

COMPARISON OF QUARTER ENDED  SEPTEMBER 26, 1997 TO QUARTER ENDED SEPTEMBER 27,
1996

      SEE NOTES TO THE PRECEDING FINANCIAL STATEMENTS FOR A GENERAL BUSINESS
DESCRIPTION AND DISCUSSION OF ACQUISITIONS. THE QUARTERS ENDED SEPTEMBER 26,
1997 AND SEPTEMBER 27, 1996 BOTH CONSIST OF THIRTEEN WEEKS.

      NET SALES. Net sales increased $31.1 million, or 52.0%, from $59.7 million
in the third quarter of 1996 to $90.8 million in the third quarter of 1997. The
increase was primarily due to: a) acquisitions made subsequent to the third
quarter of 1996 ($13.5 million); b) expansion and

                                       8
<PAGE>
increase in sales of several distribution programs amounting to $10.6 million
and c) a $5.7 million increase in Sam's revenues between the comparable
quarters. As a percentage of total net sales, Sam's consisted of 65.2% in the
third quarter of 1997 compared with 89.6% in the third quarter of 1996.

      COST OF GOODS SOLD. Cost of goods sold increased by $27.8 million, or
51.0%, from $54.4 million in the third quarter of 1996 to $82.2 million in the
third quarter of 1997, primarily reflecting the increase in net sales explained
above. As a percentage of net sales, cost of goods sold decreased from 91.1% to
90.5% due primarily to an increase in revenue from specialty food service and
value-added businesses, which generally have higher gross margins than the
margins derived from the Sam's Club agreement. Revenues from these businesses
were 18.5% of total revenue in the third quarter of 1997 compared to 4.0% in the
same quarter in the previous year.

      SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses increased by $2.9 million or 69.0%, from $4.1
million in the third quarter of 1996 to $7.0 million in the third quarter of
1997. As a percentage of net sales, SG&A expenses increased from 7.0% to 7.7%.
The increase in SG&A is due primarily to the SG&A expenses related to businesses
acquired subsequent to the third quarter of 1996.

      OPERATING INCOME. As a result of the foregoing factors, operating income
increased by $0.4 million from $1.2 million in the third quarter of 1996 to $1.6
million in the third quarter of 1997. As a percentage of net sales, operating
income decreased from 1.9% in the third quarter of 1996 to 1.8% in the third
quarter of 1997.

      NET INCOME. As a result of the foregoing factors, net income increased by
$0.3 million from $0.8 million in the third quarter of 1996 to $1.1 million in
the third quarter of 1997. As a percentage of net sales, net income decreased
from 1.4% in the third quarter of 1996 to 1.2% in the third quarter of 1997.

COMPARISON  OF NINE MONTHS  ENDED  SEPTEMBER  26,  1997 TO NINE  MONTHS  ENDED
SEPTEMBER 27, 1996.

      SEE NOTES TO THE PRECEDING FINANCIAL STATEMENTS FOR A GENERAL BUSINESS
DESCRIPTION AND DISCUSSION OF ACQUISITIONS. THE NINE MONTH PERIODS ENDED
SEPTEMBER 26, 1997 AND SEPTEMBER 27, 1996 BOTH CONSIST OF 38 WEEKS.

      NET SALES. Net sales increased $78.6 million, or 46.0%, from $170.6
million in the first nine months of 1996 to $249.2 million in the first nine
months of 1997. The increase was primarily due to: a) acquisitions made
subsequent to September 27, 1996 ($29.4 million), b) expansion and increase in
sales of several distribution programs amounting to $25.2 million, and c) a
$20.4 million increase in Sam's revenues between the two comparable periods. As
a percentage of total net sales, Sam's consisted of 70.8% in the first nine
months of 1997 compared with 91.5% in the same period in 1996.

      COST OF GOODS SOLD. Cost of goods sold increased by $69.3 million, or
44.8%, from $154.8 million in the first nine months of 1996 to $224.1 million in
the first nine months of 1997, primarily reflecting the increase in net sales
explained above. As a percentage of net sales, cost of goods sold decreased from
90.7% to 89.9% due primarily to an increase in revenue from specialty food
service and value added businesses, which generally have higher gross margins

                                        9
<PAGE>
than the margins derived from the Sam's Club agreement. Revenues from these
businesses were 15.4% of total revenue in the first nine months of 1997 compared
to 4.1% in the comparable period in 1996.

      SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses increased by $7.6 million or 62.5%, from $12.2
million in the first nine months of 1996 to $19.8 million in the first nine
months of 1997. As a percentage of net sales, SG&A expenses increased from 7.1%
to 7.9 %. The increase is due primarily to the SG&A expenses related to
businesses acquired subsequent to September 27, 1996.

      OPERATING INCOME. As a result of the foregoing factors, operating income
increased by $1.7 from $3.7 million in the first nine months of 1996 to $5.4
million in the first nine months of 1997. As a percentage of net sales,
operating income was 2.2% in both comparable periods.

      PROVISION FOR INCOME TAXES. The increase in the effective tax rate from
36.3% in the first nine months of 1996 to 37.6% in the first nine months of 1997
is due to 1996 including a benefit from the elimination of a valuation allowance
related to a net operating loss carryforward.

      NET INCOME. As a result of the foregoing factors, net income increased by
$1.0 million from $2.6 million in the first nine months of 1996 to $3.6 in the
first nine months of 1997. As a percentage of net sales, net income decreased
from 1.5% in the first nine months of 1996 to 1.4% in the first nine months of
1997.

LIQUIDITY AND CAPITAL RESOURCES

      Cash provided by operating activities was $3.7 million for the nine months
ended September 26, 1997 compared to $2.2 million in the nine months ended
September 27, 1996. The difference is primarily due to increased profitability
in the nine months ended September 26, 1997 and the timing of usage of working
capital.

      Cash used in investing activities increased $6.2 million from $1.4 million
in the nine months ended September 27, 1996 to $7.6 million in the nine months
ended September 26, 1997. The increase is primarily due to the purchase of a
processing and distribution center in Richmond, Indiana and the acquisition of
other businesses.

      Cash provided by financing activities was $20,000 in the first nine months
of 1997 compared to cash used in financing activities of $592,000 in the first
nine months of 1996. In the first nine months of 1997, borrowings of $4.3
million during the period were repaid. In the corresponding period in 1996, cash
of $1.0 million was used to repay the revolving line of credit.

      At September 26, 1997, the Company had working capital of $10.7 million
compared to $14.2 million at January 3, 1997. The decrease is primarily due to
cash used for acquisitions made during 1997. The Company has a new $14 million
revolving line of credit and term loan bank facility available which can be used
for general corporate purposes and for acquisitions. The term loan portion can
be drawn down through December 31, 1997. As of November 6, 1997, there was an
outstanding balance of $2.8 million under such facility.

      Management believes that the combination of cash generated from operating
activities, availability under its new bank line of credit and the use of
operating leases where appropriate is

                                       10
<PAGE>
sufficient to meet its operating requirements, normal capital expenditure needs,
and a portion of its acquisition and expansion funding requirements. The Company
intends to continue its expansion activities and will require additional capital
to meet such requirements. The Company believes it has access to the capital
markets and can also obtain additional credit from financial institutions in
order to raise the capital necessary to fund such expansion activities.

QUARTERLY RESULTS AND SEASONALITY

      The Company's business is seasonal, with its greatest quarterly sales
volume historically occurring in the fourth quarter. A substantial portion of
the Company's produce sales consists of staple items such as apples, oranges,
grapefruit, potatoes and onions, which are strongest during the fall, winter and
spring. The supply and quality of these items declines during the summer,
although lost sales are replaced to some extent by more seasonal products such
as peaches, plums, nectarines, strawberries and melons. Sales of refrigerated,
pre-packaged products, such as vegetable trays, are strongest during the fourth
quarter holiday season. Because the Company's results of operations depend
significantly on sales generated during the fourth quarter, any adverse
development affecting the Company's operations during this period, such as the
unavailability of high quality produce, harsh weather conditions, or product
costs, could have a disproportionate impact on the Company's results of
operations for the full year.

INFLATION

      Although the Company cannot determine the precise effects of inflation,
management does not believe inflation has had a material effect on the Company's
sales or results of operations. However, independent of normal inflationary
pressures, the Company's produce products are subject to fluctuating product
costs as discussed in "Quarterly Results and Seasonality" above.

OUTLOOK AND UNCERTAINTIES

      Certain information in this Quarterly Report on Form 10-Q may contain
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. All statements other than statements of
historical fact are "forward-looking statements" for purposes of these
provisions, including any projections of earnings, revenues or other financial
items, any statements of the plans and objectives of management for future
operations, any statements concerning proposed new products or services, any
statements regarding future economic conditions or performance, and any
statement of assumptions underlying any of the foregoing. Although the Company
believes that the expectations reflected in its forward-looking statements are
reasonable, it can give no assurance that such expectations or any of its
forward-looking statements will prove to be correct, and actual results could
differ materially from those projected or assumed in the Company's
forward-looking statements. The Company's future financial condition and
results, as well as any forward-looking statements, are subject to inherent
risks and uncertainties, including, without limitation, potential limitations on
the Company's ability to pursue its acquisition strategy and successfully
integrate acquired operations, dependence on it primary customer, significant
competition, limitations arising from the Company's indebtedness, government
regulation, seasonality and dependence on key management. Additional information
concerning these and other risk factors is contained in the Company's Annual
Report on Form 10-K for the fiscal year ended January 3, 1997, a copy of which
may be obtained from the Company upon request.

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<PAGE>
                         PART II - OTHER INFORMATION


ITEM 6.                 EXHIBITS AND REPORTS ON FORM 8-K

   (a) Exhibits.

            Exhibit 11.1 -    Computation of Earnings Per Common Share.

   (b) Reports on Form 8-K

            None

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.

FRESH AMERICA CORP.
  (Registrant)


/s/ ROBERT C. KIEHNLE                              Date: NOVEMBER 6, 1997
    Robert C. Kiehnle
    Executive Vice President and
    Chief Financial Officer

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