SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ----------------------

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         (Mark One) 
            X    Annual report pursuant to Section 13 or 15(d) of the Securities
                 Exchange Act of 1934

                 For the fiscal year ended October 31, 1998

                                       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 0-24902

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
             (Exact Name of Registrant as Specified in Its Charter)

     Delaware                                      42-1425562
(State of incorporation)                     (I.R.S. Employer I.D. No.)

                              3915 Delaware Avenue
                           Des Moines, Iowa 50316-0330
                                 (515) 266-3101
                          (Address and telephone number
                         of principal executive offices)

        Securities registered pursuant to Section 12(b) of the Act: None

        Securities registered pursuant to Section 12(g) of the Act: None

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

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

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

         All of the  registrant's  stock (100 shares as of January 29,  1999) is
held by CT Holding, Inc. and is not publicly traded.

<PAGE>
<TABLE>
<CAPTION>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.

                                    INDEX TO

                           ANNUAL REPORT ON FORM 10-K

                         FOR YEAR ENDED OCTOBER 31, 1998


<S>                 <C>                                                                             <C>
                                                                                                     Page
PART I

Item 1.              Business......................................................................... 1
Item 2.              Properties....................................................................... 8
Item 3.              Legal Proceedings................................................................ 8
Item 4.              Submission of Matters to a Vote of Security-Holders.............................. 9

PART II

Item 5.              Market for Registrant's Common Equity and Related Stockholder Matters........... 10
Item 6.              Selected Financial Data......................................................... 10
Item 7.              Management's Discussion and Analysis of Financial Condition
                        and Results of Operations.................................................... 11
Item 7A.             Quantitative and Qualitative Disclosures About Market Risk.......................15
Item 8.              Financial Statements and Supplementary Data..................................... 16
Item 9.              Changes in and Disagreements With Accountants on Accounting and
                        Financial Disclosure......................................................... 16

PART III

Item 10.             Directors and Executive Officers of the Registrant.............................. 17
Item 11.             Executive Compensation.......................................................... 19
Item 12.             Security Ownership of Certain Beneficial Owners and Management.................. 21
Item 13.             Certain Relationships and Related Transactions.................................. 21

PART IV

Item 14.             Exhibits, Financial Statement Schedules and Reports on Form 8-K................. 22

</TABLE>

<PAGE>

     References  herein to "fiscal" years are references to Central Tractor Farm
& Country, Inc.'s 52- or 53-week fiscal year, which ends on the Saturday nearest
October 31 in that year.

ITEM 1.       BUSINESS

Overview

     Central Tractor Farm & Country,  Inc., a Delaware  corporation,  along with
its subsidiary Country General,  Inc.,  (collectively the "Company" or "CT"), is
an  agricultural  specialty  retailer  with 215 stores (as of December 31, 1998)
serving  the  agricultural,  hardware  and  related  needs of  rural  consumers,
especially  part-time and full-time  farmers,  hobby  gardeners,  skilled trades
persons and  do-it-yourself  ("DIY")  customers.  CT was founded in 1935 and has
established  itself as a market  leader in the  agricultural  specialty  market,
having strong name  recognition and a loyal customer base. The Company's  stores
offer a wide  selection  of  agricultural  products  such as  tractor  parts and
accessories,  feed,  fencing  materials  and animal health  supplies,  specialty
hardware  and  paint,  lawn  and  garden  items,   rural  automotive  parts  and
accessories,  workwear,  pet  supplies  and general  consumer  merchandise.  The
Company has also established  national  visibility for its products and services
through its catalog operation,  which has an annual circulation of approximately
675,000.

Acquisition of the Company by J.W. Childs

     On November 27, 1996, the Board of Directors of the Company  approved,  and
the Company entered into, a merger agreement (the "Merger  Agreement") with J.W.
Childs Equity Partners,  L.P. and two of its affiliates  (collectively "Childs")
that  provided  for the  acquisition  of the  Company  by Childs in a  two-stage
transaction (the  "Acquisition").  The Merger Agreement  provided that following
the  acquisition  by Childs of all of the Company  shares held by  affiliates of
Butler Capital Corporation  (collectively,  "BCC"), an affiliate of Childs would
merge with and into the Company  (the  "Merger")  and Childs  would  acquire the
remaining   shares  of  the  Company  held  by  public   shareholders   ("Merger
Consideration")  for $14.25 per share in cash. The Merger was completed on March
27,1997.

     Concurrent with the execution of the Merger Agreement,  Childs entered into
agreements  (the  "Securities  Purchase  Agreements")  with BCC and with certain
members of the Company's management (the "Management  Shareholders") pursuant to
which  Childs  agreed to  purchase  at a price of $14.00 per share 100% of BCC's
shares  and  36.4%  of  the   Management   Shareholders'   shares   representing
approximately  64.0%  and  1.4%  of  the  Company's  outstanding  common  stock,
respectively (collectively the "Securities Purchases").

     As of January 2, 1997, Childs had consummated the Securities  Purchases and
paid related expenses utilizing (i) $65.4 million of cash equity and, (ii) $35.1
million of  borrowings  under an interim  margin loan facility (the "Margin Loan
Facility").  In connection  with the Securities  Purchases,  the Company entered
into a term loan and a revolving  credit  facility (the "Credit  Facility")  and
used a portion of such  facilities  to refinance  existing  debt of the Company,
including a $16.0 million  convertible note held by BCC. The Credit Facility was
amended at the time of the Country  General  Acquisition  discussed  below.  See
"Item 7. Managements  Discussion and Analysis of Financial Condition and Results
of Operations - Liquidity and Capital Resources."

     On March 27,  1997,  the Company  consummated  a public  offering of $105.0
million  aggregate  principal  amount of Senior Notes. The net proceeds from the
offering were used to repay borrowings  under the Margin Loan Facility,  pay the
Merger  Consideration,  repay a portion of the outstanding  borrowings under the
Credit Facility and pay fees and expenses of the Acquisition.

                                        1
<PAGE>

     The Acquisition  was accounted for as a purchase.  The total purchase price
has been allocated to the tangible and intangible  assets and the liabilities of
the Company based upon their respective fair values. The cost of the Acquisition
over the  allocated  fair  value of the  underlying  tangible  net  assets is as
follows (in thousands):


Cost of acquiring the outstanding common stock of the Company
  from predecessor shareholders                                     $159,393
Fair value of underlying tangible net assets                          72,050
                                                                    --------
Excess of cost of acquisition over the allocated fair value
  of the underlying tangible net assets                             $ 87,343
                                                                    ========

     As a result of the Acquisition, the Company is a wholly-owned subsidiary of
CT  Holding,  Inc.  ("Holding"),  an  affiliate  of  Childs,  and a new basis of
accounting has been reflected in the Company's financial  statements  reflecting
the fair values for the Company's  assets and  liabilities as of March 27, 1997.
The financial statements of the Company for periods prior to March 27, 1997, are
presented on the historical cost basis of accounting.

Acquisitions

     Effective  June 26,  1997,  the  Company  acquired  all of the  outstanding
capital stock of Country General,  Inc.  ("Country  General") for  approximately
$138.6  million  (including  related  costs and  expenses) in cash (the "Country
General  Acquisition").  Country  General  operated a chain of 114  agricultural
specialty retail stores. The Company funded the acquisition price in part from a
$49.75  million cash equity  contribution  from Holding,  and the remainder from
funds  drawn  under the  amended  and  restated  Credit  Facility  (see "Item 7.
Managements  Discussion  and  Analysis  of  Financial  Condition  and Results of
Operations - Liquidity and Capital Resources").

     The Country  General  Acquisition  was  accounted  for as a  purchase.  The
purchase  price was  allocated  to the tangible  and  intangible  assets and the
liabilities based on fair values, as follows (in thousands):


         Total purchase price                                 $138,563
         Fair value of underlying tangible net assets           86,788
                                                              --------
         Excess of cost of acquisition over the allocated
            fair value of the underlying tangible net assets  $ 51,775
                                                              ========

     In May 1997, the Company acquired 4 retail stores and certain net operating
assets  from Donald A.  Walsh,  Inc.  ("Walsh"),  a  privately  owned  specialty
retailer for approximately $2.5 million.  The transaction was accounted for as a
purchase.

     The results of operations of Country  General and Walsh are included in the
accompanying  consolidated  statements  of income  from the  respective  date of
purchase.

     In addition,  in January 1999, the Company  acquired nine retail stores and
certain net  operating  assets from H.C. Shaw Co., a privately  owned  specialty
retailer for approximately  $7.0 million,  subject to post-closing  adjustments.
The transaction will be accounted for as a purchase.

Expansion Plan

     Since the beginning of fiscal 1996, the Company has increased the number of
its retail  stores from 66 to 215.  In fiscal  1996,  the Company  opened 14 new
stores and acquired 31 stores from Big Bear Farm Stores,  Inc. ("Big Bear").  In
fiscal 1997, the Company  opened 3 new stores and acquired 118 stores  primarily
through the Country General

                                        2
<PAGE>

Acquisition. Five stores were closed in 1997. In fiscal 1998, the Company opened
1 new store and closed 14 stores  (including  12 stores  acquired  from  Country
General, for which the closure was reserved in connection with the acquisition).
Currently  in fiscal  1999,  the  Company  has  opened 2 new stores and closed 1
store.

     The  integration of the Big Bear stores and the Country General stores into
the  Company's  systems  was  completed  during  fiscal  1997 and  fiscal  1998,
respectively. The Company plans to add an additional 25 stores in each of fiscal
1999 and  fiscal  2000  through  further  penetration  of the  Northeastern  and
Midwestern United States markets and through expansion into the Southeastern and
Western  United  States.  Management  intends to achieve this growth through new
store openings and selective  acquisitions.  On a preliminary basis, the Company
has  identified  potential  new markets  outside of its  existing  markets  that
management believes are attractive candidates for one or more new CT stores. The
number  of  actual  new CT  store  openings  in the next two  years  may  differ
materially  from the  projections  outlined  above if the Company  makes a major
acquisition  or is  unable  to  find  attractive  store  locations  to  rent  at
reasonable  prices,  negotiate  acceptable lease terms or acquire small regional
farm store chains at reasonable prices.

     The  Company  seeks to locate  stores in high  traffic  shopping  districts
whenever  possible in order to attract  customers who prefer to do much of their
shopping at one time and place. As with the majority of its existing stores, the
Company  intends to lease its new stores.  The estimated cash required to open a
new,  leased,  large  prototype  store  (approximately  22,000  square  feet) is
$850,000 and the estimated cash required to open a new, leased,  small prototype
store  (approximately  11,000  square  feet)  averages  $600,000  (in each case,
including  inventory  net of  accounts  payable  and  excluding  an  average  of
approximately  $100,000  in  pre-opening  expenses).  Of  these  estimated  cash
expenditures,  approximately half is used for initial inventory (net of accounts
payable),  and  the  balance  is  used  for  capital  expenditures,  principally
leasehold improvements, fixtures and equipment.

     The Company also intends to continue to opportunistically relocate existing
stores.  These relocations reflect, in most cases, the expiration of an existing
lease  coupled  with an  opportunity  to move to a more  demographically  and/or
physically attractive site.

Retail Stores

     CT stores focus on agricultural  and  agricultural  related  products.  The
Company  segments  its  merchandising  mix into  seven key  product  categories:
agricultural  products  (including  tractor  parts and  accessories),  specialty
hardware,  lawn and garden products,  workwear products,  rural automotive parts
and  accessories,   pet  supplies  and  general  consumer   products.   Sale  of
agricultural and related products represent  approximately 60% of CT's total net
sales.  The growth and  percentage of total store sales for each retail  product
category for fiscal 1998,  fiscal 1997,  and fiscal 1996,  and a description  of
each product category, are set forth below:
<TABLE>
<CAPTION>
                                                                     Fiscal Year
                                                       -----------------------------------------

                                                       1998             1997              1996
                                                       ----             ----              ----
       <S>                                            <C>              <C>               <C>  
        Agricultural (including tractor parts          26.6%            26.8%             24.0%
           and accessories)
        Specialty Hardware                             17.6%            17.7%             20.6%
        Lawn & Garden and Seasonal                     17.4%            18.4%             19.6%
        Workwear                                       10.2%             9.3%              8.4%
        Rural Automotive Parts & Accessories           14.3%            14.3%             14.8%
        Pet Supplies                                    7.0%             6.6%              6.3%
        General Consumer                                6.9%             6.9%              6.3%
                                                      ------           ------            ------
                                                      100.0%           100.0%            100.0%
                                                      ======           ======            ======
</TABLE>

     Agricultural  Products.  CT stores'  agricultural  product line consists of
     approximately 6,000 stock keeping units ("SKUs") supplying the needs of the
     part-time  and  full-time  farmer,  including  tractor  parts,  tillage and
     harvesting  parts,  fencing  materials  and animal  health  supplies.  This
     product line consists largely of consumable products and

                                        3
<PAGE>

     other items requiring  replacements  on a regular basis.  This product line
     accounted  for $156.3  million,  $110.5  million  and $67.3  million of the
     Company's total revenue in fiscal years 1998, 1997 and 1996,  respectively.
     CT  emphasizes   consumable   agricultural   supplies  that  are  purchased
     frequently  by its  customers  and does not sell  heavy  equipment  such as
     tractors or combines.

     Specialty Hardware. CT's speciality hardware line consists of approximately
     9,000 SKUs with an  emphasis on products  with  agricultural  applications.
     These  products  accounted  for $103.6  million,  $72.7  million  and $57.9
     million of the Company's total revenue in fiscal years 1998, 1997 and 1996,
     respectively.  CT stores carry a broad range of high-quality  hardware with
     an emphasis on recognized  branded  professional  products,  including hand
     tools,  power  tools,  mechanical  tools,  electrical  products,  including
     outdoor lighting,  security lighting and motors,  welders, air compressors,
     generators, paints (as well as a competitively-priced  private-label brand)
     and plumbing supplies.

     Lawn and  Garden  and  Seasonal  Products.  CT's lawn and  garden  products
     consist of  approximately  2,000  SKUs,  including  lawn and garden  tools,
     nursery stock,  fertilizers,  lawn fencing and weed killers. These products
     accounted  for  $102.1  million,  $75.8  million  and $54.8  million of the
     Company's total revenue in fiscal years 1998, 1997 and 1996,  respectively.
     To differentiate itself from other retailers, CT also stocks a selection of
     lawn mowers ranging from competitively priced items to full-featured riding
     lawn  mowers.  CT  assembles  and  tests the lawn  mowers  and sells a full
     assortment of parts for follow-up  service needs.  CT stores offer seasonal
     bedding plants,  trees and shrubs in their garden  centers.  CT stores also
     offer heating/energy equipment, including stoves, space heaters and fans.

     Workwear.  CT's  workwear  products,  including  products  sold  under  the
     Carhartt,  Walls and Iron Age brand names,  are targeted at the specialized
     needs of its outdoor-oriented customers who require high quality functional
     apparel.  This  product  category  consists  of  approximately  3,000 SKUs,
     including premium quality insulated outerwear, overalls, flannel shirts and
     work jeans. These products  accounted for $59.8 million,  $38.1 million and
     $23.5  million of the Company's  total revenue in fiscal years 1998,  1997,
     and 1996, respectively. The Company has been expanding its workwear line in
     its new stores to include  quality  non-insulated  workwear,  bib overalls,
     twill pants and hunting clothing.

     Rural  Automotive  Parts and  Accessories.  CT's rural automotive parts and
     accessories consist of approximately 4,000 SKUs, including a core selection
     of  automotive  parts,   batteries  and  accessories  for  rural  vehicles,
     primarily for pick-up trucks and tractors. The products accounted for $83.9
     million,  $58.6 million and $41.4 million of the Company's total revenue in
     fiscal  years  1998,  1997 and 1996,  respectively.  CT also stocks a small
     assortment of general  automotive  items as a convenience to its customers,
     including  oil and  lubrication  products and  anti-freeze.  In addition to
     brand name  products,  certain of the  Company's  automotive  products  are
     offered under CT's own private label.

     Pet  Supplies.  CT's pet  supplies  consist of  approximately  1,000  SKUs,
     including dog and cat foods,  wild bird feed,  and rabbit  supplies.  These
     products  accounted for $40.9  million,  $27.2 million and $17.7 million of
     the  Company's  total  revenue  in  fiscal  years  1998,  1997,  and  1996,
     respectively. The pet supplies sold by CT include economically priced large
     sizes,  such as 50 pound bags of dog food.  Certain of these items are sold
     under CT's private label.  CT has been  expanding its pet supplies  product
     category.

     General Consumer Products.  CT's general consumer products line consists of
     approximately 2,000 SKUs,  including farm replicas and collectible toys and
     sporting goods, including guns and ammunition, hunting accessories, camping
     items and outdoor living needs. These products accounted for $40.6 million,
     $28.3 million and $17.8  million of the  Company's  total revenue in fiscal
     years 1998,  1997,  and 1996,  respectively.  CT stores also offer seasonal
     merchandise such as charcoal grills and coolers in the summer.


                                        4
<PAGE>

Store Operations

     The  Company  utilizes  large and small  store  formats  in order to enable
management to enhance CT's return on  investment in light of varying  population
density. The Company's small stores average 10,000 square feet of indoor selling
space and had average  store  sales of $1.6  million in fiscal  1998.  The large
stores  average 24,000 square feet of indoor selling space and had average store
sales of $3.9 million in fiscal 1998.  Small  stores  generally  carry a smaller
selection  of workwear and seasonal and other  general  consumer  products  than
large stores. In addition, the Company looks for store sites that have 15,000 to
20,000  square feet of outdoor  selling  space.  This outdoor  selling  space is
primarily  used  for  displaying  lawn and  garden  products,  fencing,  tractor
accessories and livestock watering and feeding equipment.

     Both CT  prototype  stores are designed to provide  customers  with ease in
locating  desired  products  and are clean and  colorful  in order to provide an
overall  enjoyable  shopping  environment.  The use of  informative  directional
signing adds to the ease of the customer's shopping experience. Plan-o-grams are
utilized to set merchandise  assortments in the seven core product categories to
ensure  uniformity  of  presentation,  ease of shopping  for the customer and to
facilitate inventory management, replenishment and restocking.

     The agricultural  products department is prominently featured in each store
and is identified by the parts desks. The parts desk is the focal point for CT's
new and used tractor parts  program.  In addition , the parts desk enables CT to
offer a high  level  of  customer  service,  ranging  from  answering  technical
questions  regarding  various  products to the special  ordering of hard to find
parts. Each parts desk is managed by the store's agricultural product specialist
who has access to the CT catalog and other  inventory  sources to quickly obtain
needed parts.

     Each store is managed by a store manager who is responsible for all aspects
of the store operations,  including the hiring and training of store associates,
work  scheduling,  inventory  control,  expense  control,  customer  service and
associate  morale.  Typically,  the store  manager is  supported by an assistant
manager and core department heads, along with an average of 15 sales associates.
Store operations are coordinated  through sixteen district managers each of whom
is currently  responsible for eleven to twenty retail stores.  In addition,  the
Company has developed and implemented consistent store standards,  processes and
best practices for the chain.

     The Company has established an internal store  management  training program
which focuses training on store operations,  systems,  financial matters,  human
resources  and  sales.  To  support  the  Company's  planned  expansion  and its
management training programs, the Company has implemented a long-range personnel
plan that provides for internal promotions,  coupled with recruitment of college
graduates and hiring of  individuals  with  previous  retail  experience.  Store
associates receive training which emphasizes  customer service,  sales,  product
knowledge and store procedures.  All CT store operations' management,  including
district  managers,  store managers and assistant managers are compensated based
on job performance,  and participate in an incentive program,  which is based on
the store/district exceeding a targeted level of profitability. The Company also
has  established an incentive  program for all store  associates that focuses on
sales and profitability.

Other Operations

     The CT catalog offers a broad  assortment of new, used and rebuilt  tractor
parts and  agricultural  componentry,  including  approximately  25,000 SKUs. In
fiscal 1998,  catalog sales were $8.2 million.  The catalog will be  distributed
nationally  to  approximately  675,000  households  in  rural  and  agricultural
communities  in fiscal  1999.  The  breadth of this  distribution  provides  the
Company with name recognition among  agricultural  consumers in areas outside of
its core geographical  markets.  As a consequence,  the Company anticipates some
customer familiarity with the Company when it expands into new areas.

     The Company also sells tractor parts and other items, on a wholesale basis,
to other agricultural  retailers and distributors.  In recent years, the Company
has been  reducing  the number of products  offered and the number of  customers
served by this unit. In fiscal 1998, the Company's  wholesale business generated
sales of $3.2 million.

                                        5
<PAGE>

Purchasing and Distribution

     The Company  maintains a staff of ten merchandise  buyers,  each of whom is
responsible for specific product categories,  at its headquarters in Des Moines,
Iowa. The purchasing and inventory  control  process is controlled  centrally by
the Company's point of sale ("POS") and automatic  replenishment systems. See "-
Corporate Offices and Management Information Systems." The Company purchases its
merchandise from approximately  1,500 vendors,  none of which accounted for more
than 10% of the Company's  purchases  during fiscal 1998. The Company  generally
maintains  multiple  sources of supply for its products in order to minimize the
risk of supply disruption and to improve its negotiating  position.  The Company
has no material long-term contractual commitments with any of its vendors.

     The  Company  operates  a 135,000  square-foot  distribution  center in Des
Moines, Iowa, a 175,000 square-foot distribution center in Youngstown, Ohio, and
a 300,000 square foot distribution  center in Grand Island,  Nebraska from which
it currently  supplies the majority of its retail stores'  inventory  needs. The
Des  Moines  facility  is used to handle  the small  part  items and to  receive
purchases sourced from vendors located in the Midwest.  The Youngstown and Grand
Island  facilities  serve  primarily  as  flow-through   distribution  stations.
Approximately 35% of total purchases, consisting mainly of high volume commodity
items,   are  shipped  by  vendors   directly  to  individual  store  locations.
Merchandise  from the  distribution  centers is  shipped  to each store  through
supply  orders  generated  by an  automated  replenishment  system.  The Company
transports  most  of  its  merchandise  to  each  store  once a  week  from  the
distribution  centers through a major contract carrier.  The contract  carrier's
truck fleet  delivers all  warehouse  shipments  and most of the  truckloads  of
merchandise which is shipped directly from vendors to store locations.

     The  Company  expects  that its  current  distribution  facilities  will be
sufficient to accommodate its planned expansion through fiscal 2000.

Corporate Offices and Management Information Systems

     To facilitate the Company's expansion plan and to maintain consistent store
operations,  CT has centralized specific functions of its operations,  including
accounting,  the development of policies and procedures,  store layouts,  visual
merchandise  presentation,  inventory  management,  merchandise  procurement and
allocations,  marketing and advertising,  human resources and real estate.  This
centralization   effectively  utilizes  the  experience  and  resources  of  the
Company's senior management and provides a high level of consistency  throughout
the chain.

     The  Company  has  invested   considerable   resources  in  its  management
information and control systems, which were developed beginning in 1981 and have
been  expanded  and  improved  yearly.  These  systems  provide  support for the
purchase and distribution of merchandise and help to improve the manner in which
CT stores, the corporate offices and distribution  centers are operated.  All CT
stores  (including all of the acquired Country General Stores) use the Company's
POS system to  capture  sales  information  at the SKU  level.  Through  the POS
system,  the Company can monitor  customer  purchases and inventory  levels with
respect to every  item of  merchandise  in each store  daily.  The  Company  has
implemented  scanning  capabilities in the receiving process of its distribution
centers and currently plans to expand this to the picking and shipping  process.
Electronic  Data  Interchange  ("EDI")  is used to send  purchase  orders to and
receive invoices from certain of its largest suppliers. CT intends to expand its
use of EDI to  communicate  invoicing,  shipments and sales activity to and from
most major suppliers.

     The Company also has an automated inventory replenishment system which uses
POS information, and facilitates the timely replenishment of both the stores and
the  warehouses.  The sales and  inventory  information  used in this  system is
updated on a daily basis.  This system also provides for minimum stocking levels
for lower volume items  enabling CT to carry a large number of SKUs at a minimum
of inventory carrying expense.


                                        6
<PAGE>

Competition

     The Company faces  competition  primarily from other chain and single-store
agricultural  specialty  retailers,   general  merchandise  retailers  and  home
centers.  Some of these  competitors have  substantially  greater  financial and
other resources than the Company.

     Currently,  most of the  Company's  stores do not  compete  directly in the
markets of other agricultural  specialty retail chains.  However,  the Company's
expansion  plans  will  likely  result in new  stores  being  located in markets
currently  served by one or more of these chains,  and there can be no assurance
that these chains,  certain of which have announced  expansion  plans,  will not
expand  into the  Company's  markets.  Expansion  by the  Company  into  markets
currently  served  by its  competitors  or  expansion  by  competitors  into the
Company's  markets  could  have a  material  adverse  effect  on  the  Company's
business, financial condition or results of operation.

     In  addition,  the Company  competes in over 90% of its markets  (which the
Company  defines as a 30 mile radius  around a store) with  general  merchandise
retailers  and/or home centers and expects these  retailers to be in many of the
markets  targeted for expansion.  The Company  believes that its merchandise mix
and  level  of  customer  service  successfully  differentiate  it from  general
merchandise  retailers and home centers, and as a result the Company has to date
been able to operate  profitably  despite  competition from general  merchandise
retailers and home centers.  However,  in the past certain  general  merchandise
retailers  and home  centers  have  modified  their  product  mix and  marketing
strategies in an apparent  effort to compete more  effectively  in the Company's
markets. There can be no assurances that these efforts will not continue or that
the Company will continue to be able to compete successfully against current and
future competition.

Advertising and Promotions

     The Company's primary advertising occurs through the bi-weekly distribution
of approximately 5.8 million color circulars  distributed as newspaper  inserts,
at retail stores and by direct mail. In order to focus its marketing on the many
farmers in the Company's markets,  the Company also advertises in geographically
zoned editions of leading farming industry magazines.  In addition,  the Company
runs periodic special events promoted through local flyers,  circulars and radio
advertising.

Seasonality

     Unlike many specialty  retailers,  the Company has  historically  generated
positive operating income in each of its four fiscal quarters.  However, because
the  Company  is an  agricultural  specialty  retailer,  its  sales  necessarily
fluctuate with the seasonal  needs of the  agricultural  community.  The Company
responds to this  seasonality by attempting to manage  inventory levels (and the
associated working capital requirements) to meet expected demand, and by varying
its use of part-time employees.  Historically, the Company's sales and operating
income  have been  highest in the third  quarter of each  fiscal year due to the
farming industry's  planting season and the sale of seasonal  products.  Working
capital needs are highest during the second  quarter.  The Company expects these
trends to continue for the foreseeable future.

Employees

     As of October 31, 1998, CT had approximately 4,500 employees (approximately
2,200 in full-time and approximately 2,300 in part-time positions).  The Company
believes its relations with its employees is good.


                                        7
<PAGE>


ITEM 2.       PROPERTIES

     As of December 31, 1998,  the Company had 215 retail  stores  located in 25
states as follows:

                          State                       Number of Stores

                          Nebraska                        47
                          Iowa                            27
                          New York                        23
                          Pennsylvania                    17
                          Colorado                        15
                          Minnesota                       12
                          South Dakota                    11
                          Kansas                           7
                          Virginia                         7
                          Kentucky                         6
                          Ohio                             6
                          North Dakota                     5
                          Wisconsin                        5
                          Indiana                          4
                          Maryland                         4
                          Wyoming                          4
                          New Jersey                       3
                          Missouri                         2
                          Montana                          2
                          Oklahoma                         2
                          Tennessee                        2
                          Delaware                         1
                          Illinois                         1
                          Massachusetts                    1
                          Vermont                          1
                                                         ---
                          Total                          215
                                                         ===

     The Company owns 53 of the stores and leases the remaining  162 stores.  In
addition the corporate  headquarters and three distribution  centers are leased.
The Company's  corporate  headquarters  are located adjacent to its distribution
center in Des Moines, Iowa. The Company generally negotiates retail store leases
with an initial term between  five and seven  years,  with two or three  renewal
periods of five years each, exercisable at the Company's option. In fiscal 1998,
the Company paid an average of $5.02 per square foot in retail  store  occupancy
expenses,  including rent, taxes, common area charges,  repairs and maintenance.
Rent expenses  generally do not vary based on sales, and generally  increase 10-
15% at the beginning of each option period.

ITEM 3.       LEGAL PROCEEDINGS

     The Company has been notified by the U.S.  Environmental  Protection Agency
that it may have  potential  liability  for cleanup  costs  associated  with the
cleanup of a dumpsite near  Owensburg,  Kentucky.  To date, the only articles of
waste  identified  as possibly  once  belonging to the Company are certain empty
battery acid  containers.  The Company believes that any liability it might have
as a result of this  action  would be as a de minimis  contributor  and will not
have a material effect on the Company's financial position, liquidity or results
of operations.

     The  Company  is not a party to any other  legal  proceedings,  other  than
routine  claims and  lawsuits  arising in the ordinary  course of business.  The
Company does not believe that such claims and lawsuits,  individually  or in the
aggregate,  will  have a  material  adverse  effect on the  Company's  business.
Compliance with federal, state and local laws

                                        8
<PAGE>

and regulations  pertaining to the discharge of materials into the  environment,
or otherwise relating to the protection of the environment,  has not had, and is
not  anticipated  to have,  a material  effect  upon the  capital  expenditures,
earnings or competitive position of the Company.

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

     None




                                        9

<PAGE>

                                     PART II


ITEM 5.       MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
              MATTERS

     Central  Tractor  Farm & Country,  Inc.  Common  Stock is held  entirely by
Holding. See "Item 1. Business - Acquisition of the Company by J.W. Childs."

     The Company has not paid any cash  dividends on its common stock.  Although
the Company may pay limited cash  dividends on its common  stock,  the Company's
ability to pay cash dividends is restricted by the Credit Facility.

ITEM 6.       SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
                                                    Successor             |                         Predecessor
                                         ------------------------------   |    --------------------------------------------------
                                                             Period of    |    Period of
                                                              seven       |      five                      
                                           Fiscal year        months      |     months                  Fiscal Year End      
                                              ended           ended       |      ended      --------------------------------------
                                             October        November 1,   |      March        November  October 28,    October 29,
                                             31, 1998          1997       |     26, 1997      2, 1996        1995         1994
                                           -----------     ------------   |    ---------    ----------  -----------    -----------
                                                                          |                       (In thousands of dollars)
<S>                                        <C>            <C>                 <C>          <C>          <C>           <C>      
Net sales                                   $ 587,195      $ 305,122      |    $ 106,048    $ 293,020    $ 251,703     $ 231,064
Income (loss) from continuing                                             |  
  operations                                    9,975          1,365      |       (1,247)       8,744        8,185         5,181
Ratio (deficiency) of earnings to                                         |  
  fixed charges (1)                              1.8x           1.3x      |       (1,881)        5.3x         5.8x          2.5x
Number of stores at end of period (2)             214            227      |          112          111           66            55
Comparable store sales per square                                         |  
  foot of indoor selling space (3)                180            191(6)   |                       222          224           240
Comparable store sales increases                                          |  
  (decreases)(4)                                 4.6%          (4.7%)(6)  |                      1.0%        (1.6%)        10.0%
Balance Sheet Data (at end of period):                                    |  
Working capital                             $  98,409      $  85,639      |                 $  63,803    $  62,496     $  50,442
Total assets                                  418,845        434,235      |                   159,238      149,977       139,416
Long-term debt, less current portion (5)      150,011        153,171      |                    17,341       16,862        16,959
Stockholders' equity                          129,757        119,547      |                    90,063       81,277        75,735
                                                
<FN>               
(1)  For purposes of computing this ratio, earnings consist of income before income taxes plus fixed charges.  Fixed charges consist
     of interest  expense,  amortization of deferred  financing costs and 20.0% of the rent expense from operating  leases which the
     Company  believes is a reasonable  approximation  of the interest factor included in the rent. For the five month period ended,
     March 26, 1997 earnings were insufficient to cover fixed charges by $1,881.
(2)  Net of three store closings in fiscal 1994, five store closings in fiscal 1997 and 14 store closings in fiscal 1998.
(3)  Comparable  sales per square foot of indoor selling space and calculated by dividing store sales by total indoor selling square
     footage for stores open and operated by CT at least twelve months in each fiscal year.
(4)  Percentage change in store sales as compared to sales for the same stores for the prior year for stores open and operated by CT
     for at least twelve months in each year.  The 1.0%  increase in  comparable  store sales in 1996 has been adjusted to reflect a
     comparable 52 week year. Comparable store sales grew 2.9% without such adjustment.  The 4.7% decrease in comparable store sales
     in 1997 has been  adjusted to reflect that fiscal year 1996 was a 53 week year.  Comparable  store sales  declined 6.5% without
     such adjustment.
(5)  Excluding, in fiscal 1995 and prior years, long-term debt from discontinued operations.
(6)  Calculations are for the fiscal year ended November 1, 1997.
</FN>
</TABLE>

                                                                 10
<PAGE>

ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

     The following discussion and analysis of financial condition and results of
operations  should  be  read  in  conjunction  with  the  selected  consolidated
financial  data and the  consolidated  financial  statements  of the Company and
related notes thereto.


Results of Operations

     The following table sets forth, for the periods indicated, certain items in
the Company's  Statements of Income  expressed as a percentage of net sales. All
amounts and  percentages  for the fiscal year ended November 1, 1997 include the
activity  for the  periods of the  seven-months  ended  November 1, 1997 and the
five-months ended March 26, 1997 on a combined basis.
<TABLE>
<CAPTION>

                                             Fiscal Year Ended            
                               ----------------------------------------------
                               October 31,       November 1,      November 2,
                                  1998              1997             1996      
                               ----------        -----------      -----------

<S>                              <C>              <C>              <C>    
Net sales                         100.0%           100.0%           100.0% 
Gross profit                       30.1             29.1             29.3
Selling, general and                                               
  administrative expenses          22.9             24.6             23.3
Amortization of intangibles          .6               .6               .3
                                  -----            -----            -----
Operating income                    6.6              3.9              5.7
Interest expense                    3.5              3.5               .6
                                  -----            -----            -----
Income before income taxes          3.1               .4              5.1
Income taxes                        1.4               .4              2.1
                                  -----            -----            -----
Income from continuing                                             
  operations                        1.7%             0.0%             3.0%
                                  =====            =====            =====
</TABLE>

Fiscal 1998 Compared to Fiscal 1997

           Net sales for the fiscal  year ended  October  31,  1998 were  $587.2
million,  an increase of $176.0 million,  or 42.8%, as compared to net sales for
the fiscal year ended November 1, 1997 of $411.2  million.  The increase was due
principally to the fact that the Country General stores had a full year of sales
in fiscal 1998 compared to four months in fiscal 1997. Net sales includes $257.3
million  and $99.4  million of Country  General  sales in fiscal 1998 and fiscal
1997, respectively. In addition, the Company had an increase in comparable store
sales  of $13.2  million  or 4.6% and had a full  year of  operations  for the 4
stores  acquired  from Walsh and the 3 stores  opened in 1997.  The  increase in
comparable  store sales was due  primarily to the fact that fiscal year 1998 had
warm early spring  weather  conditions  while fiscal year 1997 had a mild winter
followed  by a cool  spring  and dry summer in the  Northeast  where most of the
comparable stores are located.

         Gross profit for fiscal 1998 was $177.0  million,  an increase of $57.5
million, or 48.1%, as compared to $119.5 million for fiscal 1997, principally as
a result of the increase in net sales.  Gross  profit as a  percentage  of sales
increased  to 30.1% for fiscal 1998,  as compared to 29.1% for fiscal 1997.  The
increase in gross  profit  percentage  is a result of the  increased  purchasing
power obtained as a result of the Country General Acquisition.

         Selling,  general,  and  administrative  expenses  for fiscal 1998 were
$134.6 million,  an increase of $33.4 million,  or 33.0%, over fiscal 1997. This
increase  was due  primarily  to costs  related to the  operation of the Country
General  stores and new stores  opened in fiscal  1997 for a full year in fiscal
1998. Selling, general, and administrative expenses

                                       11
<PAGE>

as a percentage of sales  decreased to 22.9% in fiscal 1998 as compared to 24.6%
in fiscal 1997.  This decrease is  attributable to completion of the integration
of the Country General stores and increased sales volume.

         Amortization  of intangibles  was $3.6 million for fiscal 1998 and $2.2
million in fiscal 1997.  The increase is due to a full year of  amortization  of
the additional  goodwill  incurred in the  Acquisition  and the Country  General
Acquisition.

         Operating  income for fiscal 1998,  was $38.8  million,  an increase of
$22.6  million,  or 139.9%,  as compared to fiscal 1997.  Operating  income as a
percentage  of sales  increased to 6.6% in fiscal 1998 from 3.9% in fiscal 1997.
The  increase  resulted  from the factors  affecting  net sales,  gross  profit,
selling,  general and  administrative  expenses and  amortization of intangibles
discussed above.

         Interest expense for fiscal 1998 was $20.5 million, an increase of $5.8
million,  as  compared to $14.7  million  for fiscal  1997.  This  increase  was
primarily due to a full year of interest expense on the additional debt incurred
to fund the Acquisition and the Country General Acquisition.

         Income tax expense for fiscal 1998,  was $8.4  million,  an increase of
$7.0  million,  or 490.3% as compared to $1.4  million for fiscal  1997.  Income
taxes as a percentage  of pretax  earnings were 45.7% in fiscal 1998 as compared
to 92.3% in fiscal  1997.  The  decrease is due  primarily  to  amortization  of
goodwill  related to the  Acquisition,  which is not  deductible  for income tax
purposes, being spread over a larger income base in fiscal 1998.


Fiscal 1997 Compared to Fiscal 1996

     Net sales for the fiscal year ended  November 1, 1997 were $411.2  million,
an increase of $118.2 million, or 40.3%, as compared to net sales for the fiscal
year ended November 2, 1996 of $293.0 million.  The increase was due principally
to  the  acquisition  of 118  stores,  primarily  through  the  Country  General
Acquisition. Net sales includes $99.4 million of Country General sales since the
date of the  acquisition.  In addition,  the Company opened 3 new stores in 1997
and had a full year of  operations  for 45 stores  opened or purchased in fiscal
1996. This increase was offset by a decrease in comparable  store sales of $16.7
million or 6.5%. The decrease in comparable store sales was due primarily to the
fact  that  fiscal  year  1997  consisted  of 52 weeks  while  fiscal  year 1996
consisted of 53 weeks and a mild winter followed by a cool spring and dry summer
in the Northeast where most of the comparable stores are located.

     Gross  profit for fiscal  1997 was $119.5  million,  an  increase  of $33.7
million, or 39.3%, as compared to $85.8 million for fiscal 1996. Gross profit as
a percentage of sales remained  relatively constant at 29.1% for fiscal 1997, as
compared to 29.3% for fiscal 1996.

     Selling,  general, and administrative  expenses for fiscal 1997 were $101.2
million, an increase of $33.0 million, or 48.4%, over fiscal 1996. This increase
was due  primarily  to costs  related to the  acquisition  and  operation of the
Country  General  stores  and  costs  related  to new store  openings.  Selling,
general, and administrative expenses as a percentage of sales increased to 24.6%
in  fiscal  1997  as  compared  to  23.3%  in  fiscal  1996.  This  increase  is
attributable  to  higher  selling,  general  and  administrative  expenses  as a
percentage of sales at the Country General stores.  CT stores percentage in 1997
was 23.9%  versus  26.9%  for  Country  General.  The  percentage  for CT stores
increased  over the  prior  year  primarily  due to  decreased  sales  volume in
comparable stores.

     Amortization  of  intangibles  was $2.2  million  for  fiscal  1997 and $.9
million in fiscal 1996. The increase is due to the additional  goodwill incurred
in the Acquisition and the Country General Acquisition.

     Operating  income for fiscal  1997,  was $16.2  million,  a decrease of $.5
million,  or 3.0%, as compared to fiscal 1996.  Operating income as a percentage
of sales decreased to 3.9% in fiscal 1997 from 5.7% in fiscal 1996. The decrease
resulted from the factors affecting net sales,  gross profit,  selling,  general
and administrative expenses and amortization of intangibles discussed above.

                                       12
<PAGE>

     Interest  expense for fiscal 1997 was $14.7  million,  an increase of $13.0
million,  as  compared  to $1.7  million  for fiscal  1996.  This  increase  was
primarily due to the additional  debt incurred to fund the  Acquisition  and the
Country General Acquisition and the additional short term borrowing needs of the
consolidated entity.

     Income tax expense  related to continuing  operations  for fiscal 1997, was
$1.4 million,  a decrease of $4.8 million,  or 77.4% as compared to $6.2 million
for fiscal 1996.  Income taxes as a percentage of pretax  earnings were 92.3% in
fiscal 1997 as compared to 41.7% in fiscal 1996.  The increase is due  primarily
to amortization of goodwill related to the Acquisition,  which is not deductible
for income tax purposes.


Liquidity and Capital Resources

     In  addition  to  cash to  fund  operations,  CT's  primary  on-going  cash
requirements  are those  necessary  for the Company's  expansion and  relocation
programs,  including  inventory  purchases  and capital  expenditures,  and debt
service.  The Company's  primary  sources of liquidity  have been funds provided
from operations,  borrowings pursuant to the Company's revolving and term credit
facilities, short term trade credit and additional equity investments.

     On October 31, 1998, the Company had working  capital of $98.4 million,  an
increase of $12.8  million,  as compared to working  capital of $85.6 million on
November 1, 1997.  This increase  resulted  primarily from a decrease in accrued
expenses, and borrowings under the Company's revolving credit facility partially
offset by an increase in accounts payable and decreases in accounts  receivable,
inventory  and  deferred  income  taxes.  On October  31,  1998,  the  Company's
inventories  were $217.1  million,  a decrease of $5.0  million,  as compared to
$222.1  million at November 1, 1997.  This decrease is primarily a result of the
store  closings in fiscal 1998.  On October 31,  1998,  the  Company's  accounts
payable were $78.3 million,  an increase of $10.3 million,  as compared to $68.0
million at November 1, 1997.  This increase is primarily a result of the Company
negotiating improved terms with its vendors.

     Continuing operations of the Company generated $37.2 million of net cash in
fiscal 1998,  used $0.5 million of net cash in fiscal 1997,  and generated  $5.0
million of net cash in fiscal 1996. The increase in net cash generated in fiscal
1998,  as compared to fiscal 1997,  resulted  primarily  from an increase in net
income from continuing operations,  a larger increase in accounts payable, and a
net  decrease in inventory  compared to a net increase in 1997.  The decrease in
net cash  generated  in  fiscal  1997,  as  compared  to fiscal  1996,  resulted
primarily  from a decrease in net income from  continuing  operations,  a larger
increase in inventory,  and an increase in recoverable  income taxes,  partially
offset by an increase in accounts payable and accrued expenses, as compared to a
decrease in fiscal 1996,  an increase in  depreciation  and  amortization  and a
larger increase in deferred income taxes.

     The Company's  capital  expenditures were $4.8 million and $6.2 million for
fiscal 1998 and 1997,  respectively.  The majority of capital  expenditures were
for store fixtures,  equipment and leasehold  improvements  for new and existing
stores.  The Company  presently  expects its capital  expenditures for new store
openings  and  for  renewal  and  replacement   costs  at  existing  stores  and
distribution centers in fiscal 1999 to be approximately $19.5 million.

     During fiscal 1997, the Company was acquired by an affiliate of J.W. Childs
Equity  Partners,  L.P.  and  thereafter  became a wholly  owned  subsidiary  of
Holding.  See "Item 1. Business - Acquisition of the Company by J.W. Childs" and
Notes to Consolidated Financial Statements.  In connection with the Acquisition,
on March 27, 1997, the Company  consummated a public  offering of $105.0 million
aggregate principal amount of 10 5/8% Senior Notes (the "Senior Notes"). The net
proceeds of the offering  were used to repay  borrowings  of $35.9 million under
the Margin Loan Facility,  pay the Merger  Consideration  of $51.8 million,  pay
fees  and  expenses  of  the  Acquisition,  and  reduce  outstanding  short-term
borrowings.  The  Senior  Notes  mature on April 1, 2007 with  interest  payable
semiannually  in  arrears  on April 1 and  October  1. The  Senior  Notes may be
redeemed beginning April 1, 2002 at a price of 105.3125% of the principal amount
decreasing  approximately 1.77% annually thereafter until April 1, 2005 at which
time  they  are  redeemable  at face  value.  Furthermore,  notwithstanding  the
foregoing the Company may redeem up to 35% of the original  aggregate  principal
amount of the Senior Notes at a price of 110% of the  principal  amount with the
net cash  proceeds of a public  equity  offering  within 60 days of closing such
offering.

                                       13
<PAGE>

     In  addition,  effective  June 26,  1997,  the Company  acquired all of the
outstanding capital stock of Country General.  The acquisition was accounted for
as a purchase and the Company has elected to treat the purchase as a purchase of
all of the assets of Country General for Federal income tax purposes.  See "Item
1. Business - Acquisitions" and Notes to the Consolidated  Financial Statements.
In connection with the Country General Acquisition, on July 3, 1997, the Company
entered into an amended and restated  credit  facility  (the "Credit  Facility")
which  consists of a $50.0  million,  six-year term loan  facility,  under which
$47.0  million of  borrowings  were  outstanding  as of October 31, 1998,  and a
$100.0 million revolving credit facility under which borrowings of $32.1 million
and letters of credit  totaling $6.7 million were  outstanding as of October 31,
1998.  The term  loan  must be repaid in  semiannual  installments  plus  annual
prepayments  based on the Company's  excess cash flow,  as defined.  The minimum
annual  installments  are as follows:  fiscal years 1999 - $3.0 million;  2000 -
$6.0  million;  2001 - $8.0  million;  2002 - $12.0  million;  and  2003 - $18.0
million. The Credit Facility will mature on June 30, 2003.  Borrowings under the
Credit  Facility will bear interest at rates based upon prime or the  Eurodollar
Rate plus a margin.  At October 31, 1998, the interest rate on the term loan was
8.1% and the interest rate on the revolving credit facility was 8.2%. The Credit
Facility  agreement  contains  covenants which require the Company to maintain a
minimum  consolidated  net worth, a minimum  earnings  before  interest,  taxes,
depreciation  and  amortization  (EBITDA),  a  minimum  ratio of  EBITDA to cash
interest  payable,  and a maximum ratio of debt to EBITDA.  The  covenants  also
restrict, among other things, the payment of dividends,  incurrence of debt, and
disposition of assets.  The Credit Facility is secured by  substantially  all of
the assets of the Company.

     In March of 1998, the Company  entered into an interest rate swap agreement
(the "Swap  Agreement")  with a bank to reduce the impact of changes in interest
rates on its floating term loan  facility.  Accordingly,  the Swap Agreement was
entered into for purposes other than trading.  The Swap Agreement had an initial
notional  amount of $48,500.  The notional  amount  decreases in tandem with the
outstanding  balance  on  the  Company's  term  loan  facility  until  the  Swap
Agreement's  maturity on March 30, 2001 and was $47,000 at October 31, 1998. The
Swap  Agreement  fixes the interest  rate on the term loan  facility at 5.8525%,
plus the applicable  margin,  resulting in an effective rate of 8.23% at October
31,  1998.  The  Company  is  exposed  to  interest  rate  risk in the  event of
nonperformance by the counter party to the Swap Agreement.  However, the Company
does not anticipate nonperformance by the bank.

     The Company  anticipates that its principal uses of cash in the foreseeable
future will be working  capital  requirements,  debt  service  requirements  and
capital expenditures,  as well as expenditures  relating to acquisitions.  Based
upon current and anticipated levels of operations, the Company believes that its
cash flow from  operations,  together  with amounts  available  under the Credit
Facility,  will  be  adequate  to  meet  its  anticipated  requirements  in  the
foreseeable  future for  working  capital,  capital  expenditures  and  interest
payments.  The  Company  expects  that  if  it  were  to  pursue  a  significant
acquisition,  it would arrange prior to the  acquisition  any additional debt or
equity financing required to fund the acquisition.

     There  can be no  assurance,  however,  that the  Company's  business  will
continue  to  generate  sufficient  cash flow from  operations  in the future to
service its debt,  and the Company may be required to refinance all or a portion
of its existing debt or to obtain additional  financing or to reduce its capital
spending.  There can be no assurance that any such refinancing would be possible
or that any  additional  financing  could be obtained.  The  inability to obtain
additional financing could have a material adverse effect on the Company.

Seasonality

     Unlike many specialty  retailers,  the Company has  historically  generated
positive operating income in each of its four fiscal quarters.  However, because
the  Company  is an  agricultural  specialty  retailer,  its  sales  necessarily
fluctuate with the seasonal  needs of the  agricultural  community.  The Company
responds to this  seasonality by attempting to manage  inventory levels (and the
associated working capital requirements) to meet expected demand, and by varying
its use of part-time employees.  Historically, the Company's sales and operating
income  have been  highest in the third  quarter of each  fiscal year due to the
farming industry's  planting season and the sale of seasonal  products.  Working
capital needs are highest during the second  quarter.  The Company expects these
trends to continue for the foreseeable future.

                                       14
<PAGE>

Inflation

Management  does not believe its  operations  have been  materially  affected by
inflation.

Year 2000

     The Year 2000 issue,  common to most  companies,  concerns the inability of
information and noninformation  systems to recognize and process  date-sensitive
information  after 1999 due to the use of only the last two digits to refer to a
year. This problem could affect both information systems (software and hardware)
and other equipment that relies on  microprocessors.  Management has completed a
company-wide evaluation of this impact on its computer systems, applications and
other  date-sensitive  equipment.  Systems and equipment  that are not Year 2000
compliant  have  been  identified  and  remediation   efforts  are  in  process.
Management  estimates  that  nearly  90  percent  of  remediation  efforts  were
completed  as of  December  31,  1998.  All  remediation  efforts and testing of
product/equipment are expected to be completed by May 1, 1999.

     The Company is also in the process of  monitoring  the progress of material
third  parties  (vendors  and  suppliers)  in their  efforts to become Year 2000
compliant.  Those  third  parties  include,  but are  not  limited  to:  product
suppliers,  third party benefit administrators,  third party logistic providers,
insurance  institutions,   mainframe  computer  services  suppliers,   financial
institutions  and  utilities.  The Company has requested  confirmation  from all
material  third  parties  as to when they will be Year 2000  compliant.  Through
December 31, 1998, the Company had received confirmations from approximately 50%
of the third parties that were sent these requests.

     Through December 31, 1998, the Company has spent approximately $1.4 million
to  address  Year 2000  issues.  Total  costs to  address  Year 2000  issues are
currently  estimated  not to exceed $2.0 million and consist  primarily of costs
for the remediation of internal systems,  including  internal  programming time.
Funds for these costs are expected to be provided by the operating cash flows of
the Company.  The majority of the internal system remediation  efforts relate to
the  staff  costs  of  on-staff  systems  engineers  and,  therefore,   are  not
necessarily incremental costs.

     The Company could be faced with severe consequences if Year 2000 issues are
not identified and resolved in a timely manner by the Company and material third
parties. A worst-case  scenario would result in the short-term  inability of the
Company to sell products in its stores due to unresolved Year 2000 issues.  This
would  result in lost  revenues;  however,  the amount would be dependent on the
length and nature of the disruption,  which cannot be predicted or estimated. In
light of the possible consequences, the Company is devoting the resources needed
to address  Year 2000 issues in a timely  manner.  Management  receives  monthly
updates as to project status.  While management expects a successful  resolution
of these issues, there can be no guarantee that material third parties, on which
the Company relies,  will address all Year 2000 issues on a timely basis or that
their  failure to timely and  successfully  address all issues would not have an
adverse effect on the Company.

     The  Company  is in the  process  of  updating  its  business  interruption
contingency  plans to take into account  potential  Year  2000-related  business
interruptions.  Management  expects  these  revisions to be completed by June 1,
1999.

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

     The market risk inherent in the Company's financial  instruments subject to
such risks,  is the potential  market value loss arising from adverse changes in
interest rates. The Company's  financial  instruments subject to market risk are
held for purposes other than trading.


                                       15
<PAGE>

Interest Rate Swap Agreements

     The  Company  uses  interest  rate swap  agreements  to reduce  exposure to
interest rate  fluctuations  on its term debt. At October 31, 1998,  the Company
had  an  interest  rate  swap  agreement  that  effectively  converted  all  its
outstanding bank term debt from floating interest rates to a fixed interest rate
of 5.8525  percent  plus the  applicable  margin.  This  agreement  covers $47.0
million notional amount of debt. At October 31, 1998, $47.0 million of term debt
was outstanding. Since interest rates on the debt are effectively fixed, changes
in interest  rates would have no impact on future  interest  expense  related to
this debt. Therefore, there is no earnings or liquidity risk associated with the
interest rate swap agreement. The fair market value of the interest rate swap is
the estimated  amount,  based on discounted cash flows, the Company would pay or
receive to terminate the swap  agreement.  At October 31, 1998,  the fair market
value of the swap  agreement was immaterial to the Company.  Adverse  changes in
interest rates, however, would result in an increased cost to terminate the swap
agreement.


ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Included at pages F-1 through F-25.

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

     None.


                                       16

<PAGE>

                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  following  table sets forth the name,  age and position of each of the
Company's directors,  executive officers and other significant employees. All of
the Company's  officers are elected  annually and serve at the discretion of the
Board of Directors.
<TABLE>
<CAPTION>
     Name                      Age                   Positions
    <S>                       <C>                   <C>
     James T. McKitrick        53                    President, Chief Executive Officer, Director
     Dean Longnecker           50                    Executive Vice President, COO, Secretary, Director
     John W. Childs            57                    Director
     Jerry D. Horn             60                    Director
     Steven G. Segal           38                    Director
     Adam L. Suttin            31                    Director
     Jeffrey B. Swartz         37                    Director
     William E. Watts          44                    Director
     Habib Y. Gorgi            42                    Director
     Peter Lamm                47                    Director
     Richard C. Dresdale       42                    Director
     John R. Pearson           50                    Executive Vice President, Sales
     Denny Starr               45                    Senior Vice President, Finance, CFO
     Jeffrey A. Stanton        48                    Senior Vice President, Operations
     David E. Enos             39                    Senior Vice President, Information Systems/Logistics
</TABLE>

     James T.  McKitrick,  President  and Chief  Executive  Officer,  joined the
Company in July 1992. He has over 30 years experience in retailing, including 20
years at Kmart Corporation. Prior to joining CT, Mr. McKitrick was President and
Chief  Executive  Officer  of  Builder's  Emporium,   a  California-based   home
improvement  center chain.  Previously,  he was with Ames Department Stores from
1987 through  1990,  were he held the  positions of  Executive  Vice  President,
Chairman of Zayre Discount  Store  Division,  and President and Chief  Executive
Officer of G.C.  Murphy  Division,  a $900  million  variety  store  chain.  Mr.
McKitrick  also served as  President  and Chief  Executive  Officer of Warehouse
Club, Inc. from 1986 through 1987 and Executive Vice President of  Merchandising
for T.G.&Y.  Stores Company from 1984 through 1986.  From 1963 through 1984, Mr.
McKitrick was with the Kmart Corporation.

     Dean Longnecker,  Executive Vice President,  Chief Operating  Officer,  has
held his current position since 1997. He joined CT in 1980 as Controller and was
promoted to Executive  Vice  President of Finance in 1985.  Mr.  Longnecker  was
employed at Payless  Cashways from 1973 until 1980,  most recently as Treasurer.
He received a B.S. from Iowa State University in 1970 and C.P.A. in 1972.

     John W. Childs has been  President  of J.W.  Childs  Associates  since July
1995.  Prior to that time, he was an executive at Thomas H. Lee Company from May
1987, most recently  holding the position of Senior Managing  Director.  He is a
director of Big V Supermarkets,  Inc., The Edison Project,  Inc., Chevys,  Inc.,
DESA International,  Inc., Pan Am International Flight Academy, Inc. and Beltone
Electronics, Inc.

     Jerry  D.  Horn  has  been  Chairman  of the  Board  of  General  Nutrition
Companies,  Inc., a 3,000 store vitamin and nutritional  supplement retail chain
operating  under  the GNC  name,  since  October  1991  and,  prior  to that was
President and Chief  Executive  Officer since 1985.  Mr. Horn is Chairman of the
Board  of  Cinnabon,  Inc.  and has  been a  Managing  Director  of J.W.  Childs
Associates since July 1995.

     Steven G. Segal is Senior Managing  Director of J.W. Childs  Associates and
has been an executive of J.W. Childs  Associates  since July 1995. Prior to that
time, he was an executive at Thomas H. Lee Company from August 1987, most

                                       17

<PAGE>

recently  holding  the  position  of  Managing  Director.  He is a  director  of
Universal  Hospital  Services,  Inc.,  National  Nephrology  Associates,   Inc.,
International   DiverseFoods,   Inc.,  Big  V  Supermarkets,   Inc.,   Jillian's
Entertainment Holdings,  Inc., Fitz and Floyd, Inc. and is Chairman of the Board
of Empire Kosher Poultry Inc.

     Adam L. Suttin is a Managing  Director of J.W.  Childs  Associates  and has
been an executive of J.W. Childs Associates since July 1995. Prior to that time,
he was an executive at Thomas H. Lee Company  from August  1989,  most  recently
holding the position of Associate.  He is a director of Empire  Kosher  Poultry,
Inc. and DESA International, Inc.

     Jeffrey B. Swartz has been Chief  Executive  Officer of  Timberland  Co., a
manufacturer and marketer of branded  footwear and apparel,  since 1998, and has
worked for that company in various positions since June 1986.

     William E. Watts has been President, Chief Executive Officer and a Director
of General Nutrition Companies, Inc. since October 1991 and, prior to that, held
various positions with its predecessor since 1984.

     Habib  Y.  Gorgi is  President  of the  general  partners  of Fleet  Equity
Partners VII, L.P. and the general partner of Silverado III, L.P.,  which is the
general  partner of Chisholm  Partners and has worked at Fleet  Equity  Partners
since 1986. He is a director of Skyline Chili, Roadrunner Freight Systems, Dines
Industrial  Group,  Rosina Food  Products,  Savage Sports  Corporation,  Simonds
Industries  and FTD  Corporation.  Mr. Gorgi  received a bachelor's  degree from
Brown University and a master's degree from Columbia University.

     Peter Lamm,  is  President of Fenway  Partners,  a New  York-based  private
investment  firm with $527 million  under  management.  Mr. Lamm was  previously
Managing  Director of Butler Capital  Corporation (BCC) and a general partner of
each of the BCC funds. Mr. Lamm currently serves as a director on Van de Kamp's,
Aurora Foods, Iron Age Corporation, Delimex, Blue Capital and Beckley-Cardy.

     Richard C.  Dresdale,  is a  founding  partner  of Fenway  Partners,  a New
York-based  private  investment  firm with $527 million  under  management.  Mr.
Dresdale was previously a principal at Clayton,  Dubilier & Rice,  Inc.  (CD&R).
Mr. Dresdale is a director of Aurora Foods,  Delimex,  Blue Capital,  MW Windows
and Bear Archery.

     John R. Pearson, Executive Vice President, Sales, joined Central Tractor in
October 1997.  Previously he was with Tractor  Supply Center for 27 years,  with
the last 10 years in senior  management and the most recent  position being held
as Senior Vice President, Merchandising.

     Denny Starr,  Senior Vice  President,  Finance,  Chief  Financial  Officer,
joined the Company in October 1989 as Assistant Controller. He previously served
as Assistant  Controller of The Witten Group, a holding  company with operations
in  manufacturing,  real estate and finance,  from 1986 through  1989. He was an
Audit Manager with  McGladrey & Pullen from 1982 until 1986.  Mr. Starr received
his B.A. from the University of Iowa in 1982 and C.P.A.
in 1982.

     Jeffery A. Stanton, Senior Vice President,  Operations,  joined the Company
in  June  1992.  Previously,  he was  employed  by  R.R.  Donnelly  &  Sons  and
Meredith/Burda  Corporation from 1985 through 1992, as well as Reichardt's Inc.,
a specialty  retailer,  from 1972 through 1985.  Mr.  Stanton  received a B.B.A.
degree from the University of Iowa in 1972.

     David E. Enos, Senior Vice President,  Information  Systems/Logistics,  has
held his current position since 1990. Mr. Enos joined CT in 1981. Previously, he
was employed at  Meredith/Burda  Corporation from 1979 through 1981. He received
an A.A.S. degree in Data Processing from DMACC in 1979.


                                       18

<PAGE>
 ITEM 11.     EXECUTIVE COMPENSATION

         Summary Compensation Table

     The  following  table  sets  forth  compensation  earned  for all  services
rendered to the Company  during  fiscal 1998,  fiscal 1997,  and fiscal 1996, as
applicable,  by the Company's chief  executive  officer and five other executive
officers  who  were   employed  by  the  Company  as  such  during  fiscal  1998
(collectively, the "Named Executives").
<TABLE>
<CAPTION>
                                                        Annual Compensation
                                        ----------------------------------------------
                                                                                                  All Other
Name and Principal                      Fiscal           Salary(1)             Bonus             Compensation
Position During 1998                     Year               ($)                 ($)                  ($)
--------------------                    ------          ----------          ----------           ------------
<S>                                     <C>             <C>                  <C>                   <C>   
James T. McKitrick                       1998            435,000              224,743               5,000 (2)
  President, Chief                       1997            399,423                 --                 9,586 (2)
   Executive Officer                     1996            365,000               91,250               9,863 (2)

Dean Longnecker                          1998            265,000              136,912               4,587 (2)
  Executive Vice                         1997            254,327                 --                 2,043 (2)
   President, Chief Operating Officer    1996            234,000               58,500               5,131 (2)

John R. Pearson (3)                      1998            207,000              106,947                 --
  Executive Vice President, Sales        1997             15,923                 --               158,856 (4)
                                         1996               --                   --                   --

Denny Starr                              1998            148,077               62,954               5,000 (2)
  Senior Vice President, Finance,        1997            123,558                 --                 6,438 (2)
    Chief Financial Officer              1996             89,167               23,000               5,942 (2)

Jeffrey A. Stanton                       1998            145,385               61,998               5,000 (2)
  Senior Vice President, Operations      1997            108,692                 --                 9,465 (2)
                                         1996            100,860               20,300               9,507 (2)

David E. Enos                            1998            147,692               61,998               5,000 (2)
  Senior Vice President, Information     1997            106,731                 --                 8,276 (2)
    Systems/Logistics                    1996             87,115               17,500               8,942 (2)

<FN>
(1)  Includes compensation deferred at the Named Executive's election under the Company's Profit Sharing Plan.

(2)  Represents  amounts  contributed by the Company during each fiscal year, as  applicable,  to the Named  Executive's
     Profit Sharing Plan account.

(3)  Mr. Pearson joined the Company effective October 6, 1997.

(4)  Represents payments associated with the hiring of Mr. Pearson.
</FN>
</TABLE>

Employment Arrangements with Executive Officers

     As part of the  Acquisition,  on January 2, 1997, James T. McKitrick and G.
Dean Longnecker  sold to Childs for $14.00 per share,  81,810 and 64,489 shares,
respectively,  of the Company's outstanding common stock, in accordance with the
terms of the Securities Purchase Agreements entered into at the same time as the
Merger Agreement. Additionally, the Securities Purchase Agreements provided that
at the closing of the Merger, Mr. McKitrick would exchange  outstanding  options
to purchase 183,935 shares of Company common stock having an aggregate  exercise
price of $0.6  million for  options to acquire  shares of Holding  common  stock
valued at $2.6 million and that Mr.  Longnecker  would exchange 71,429 shares of
Company  common stock for shares of Holding common stock valued at $1.0 million.
The  Securities  Purchase  Agreements  also  contain  provisions  regarding  the
continued  employment  of Messrs.  McKitrick  and  Longnecker  in their  current
capacities after the Merger (the "Employment Agreements").

     Mr.  McKitrick's  Employment  Agreement  provides  for  a  base  salary  of
$435,000,  and Mr. Longnecker's provides for a base salary of $265,000,  subject
in each case to annual increases as determined by the Board of Directors (which

                                       19
<PAGE>

increases  must  at  least  equal   increases  in  the  consumer  price  index).
Additionally,  Messrs.  McKitrick  and  Longnecker  are eligible for annual cash
bonuses if the Company  achieves  certain  operation  cash flow  targets,  which
bonuses are not subject to any ceilings contained in the Employment Agreements.

     Mr. McKitrick's  Employment Agreement provides for severance payments equal
to his base salary for 18 months if his employment is terminated  (other than in
the  case of  death,  disability  or for  cause)  or if he is not  reelected  as
President and Chief  Executive  Officer,  reduced by any  compensation he should
earn  during  such  18-month  period  from other  businesses.  Mr.  Longnecker's
Employment  Agreement  provides for severance  payments equal to his base salary
for 12 months if his employment is terminated  (other than in the case of death,
disability or for cause) or if he is not reelected as Executive Vice  President,
Chief Operating Officer,  not subject however, to reduction for any compensation
earned from other businesses.

     The Employment  Agreements  also  contemplated  that Messrs.  McKitrick and
Longnecker will participate  along with other management  personnel in two stock
option plans of Holding involving 4.5% and 3.2% of Holding's  outstanding common
stock and common  stock  equivalents  on a fully  diluted  basis,  respectively.
Allocations  of options among the  management  group are to be made in the first
instance by the Chief Executive Officer of the Company,  subject to ratification
by Holding's Board of Directors.  A portion of such allocations were made during
fiscal year 1998.  The  management  stock  options  are  subject to  accelerated
vesting  based on the  Company's  achievement  of  certain  operating  cash flow
targets. The following table provides certain information  concerning options to
purchase Holding common stock during fiscal 1998 to each Named Executive Officer
of the Company.
<TABLE>
<CAPTION>
                       Options Granted in Last Fiscal Year                                    
                                                                                             
                                                   Individual Grants                         
                            ----------------------------------------------------------------     Potential Realizable Value At  
                            Number of                                                               Assumed Annual Rates Of     
                             Shares         Percent Of                                           Stock Price Appreciation For  
                           Underlying     Total Options                                                  Option Term           
                             Options        Granted to      Exercise or                         ------------------------------ 
                             Granted       Employees In     Base Price                       
        Name                   (#)         Fiscal Year       ($/share)      Expiration Date          5% ($)         10% ($)
------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>             <C>              <C>           <C>                     <C>           <C>       
James T. McKitrick            25,550          24.5%            $60.00        June 1, 2008            $964,000      $2,443,000
Dean Longnecker               15,400          14.7%            $60.00        June 1, 2008            $581,000      $1,473,000
John R. Pearson               15,400          14.7%            $60.00        June 1, 2008            $581,000      $1,473,000
Denny Starr                    3,900           3.7%            $60.00        June 1, 2008            $147,000      $  373,000
Jeffrey A. Stanton             3,900           3.7%            $60.00        June 1, 2008            $147,000      $  373,000
David E. Enos                  3,900           3.7%            $60.00        June 1, 2008            $147,000      $  373,000
                           
</TABLE>
                                            
     Additionally,  the Employment Agreements contemplate that Messrs. McKitrick
and Longnecker will receive  additional  stock options which vest if the Company
is sold within six years after the effective time of the Merger and the realized
value of the common equity of the original  investment  group in Holding  should
equal or  exceed  ten times the value  thereof  at the time of the  Merger.  Mr.
McKitrick's  and Mr.  Longnecker's  options under this program are to acquire an
aggregate  number of shares of common stock of Holding equal to 1.25% and 0.75%,
respectively, of the total outstanding common stock and common stock equivalents
of Holding on a fully diluted basis.

     In  addition  various  other  executives  of the  Company  have  employment
agreements that contain,  among other items, one year severance provisions under
certain circumstances as well as various bonus provisions.


                                       20

<PAGE>

ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of October 31, 1998,  Holding holds 100% of the outstanding stock of the
Company.  All  outstanding  options  were  repurchased  in  connection  with the
Acquisition or exchanged for options to acquire shares of Holding common stock.

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Two of the Company's suppliers,  Iron Age Corporation ("Iron Age") and DESA
International, Inc. ("DESA"), are controlled by certain stockholders of Holding.
Iron  Age is a  manufacturer  and  distributor  of  work  boots  and  protective
footwear.  DESA is a  manufacturer  and  marketer of zone  heating/home  comfort
products  and  specialty  tools.  The  Company  believes  that the  terms of its
purchases  from Iron Age and DESA are at least as  favorable  to the  Company as
could be obtained from other suppliers.  In fiscal 1998, the Company's purchases
from Iron Age and DESA totaled $5.0 million.

     For fiscal  1998 and the period of seven  months  ended  November  1, 1997,
Childs  was paid a  management  and  consulting  services  fee of  approximately
$240,000  and  $140,000  respectively,  under a  five-year  agreement,  annually
renewable  thereafter,   requiring  annual  payments  of  $240,000,  subject  to
limitations of the Company's debt  agreements.  In addition,  during fiscal 1998
Fenway  Partners,  a  stockholder  of  Holding,  was  paid a  management  fee of
$120,000.

     In connection  with the  consummation  of the  Acquisition  and  subsequent
employee stock  purchases,  Holding  loaned amounts to certain  employees of the
Company to partially fund their  investment in Holding common stock.  The loans,
which  totaled  $748,000  at  October  31,  1998,  are due in ten years and bear
interest at an interest rate of 8.5%.

     Additionally,   Messrs.   McKitrick  and   Longnecker   are  parties  to  a
Stockholders Agreement dated as of December 23, 1996 applicable to all shares of
Holding  common stock or vested options to acquire such common stock held now or
hereafter  acquired by them.  The  Stockholders  Agreement,  among other  terms,
permits  Holding to "call" their shares and vested options on their  termination
of  employment  for any reason.  Additionally,  if either Mr.  McKitrick  of Mr.
Longnecker  is  terminated  for any reason  other than for cause or without good
reason (as those terms are defined in the  Stockholders  Agreement),  he has the
right to "put"  his  shares or  vested  options  to  Holding.  Depending  on the
circumstances,  the price for  shares  of  Holding  common  stock  purchased  in
connection with a call or put under the  Stockholders  Agreement will range from
cost to seven  times  EBITDA.  The put and  call  features  of the  Stockholders
Agreement  terminate on completion of a public  offering of Holding common stock
with aggregate net proceeds of $50.0 million or more.

                                       21

<PAGE>

                                     PART IV

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

     (a) Documents filed as part of this Report:

         1.  Financial  Statements.   See  the  Index  to  Financial  Statements
appearing at page F-1.

         2. Financial Statement Schedules.  The following Consolidated Financial
Statement Schedule is included at page F-25:

     Schedule II - Valuation and Qualifying Accounts

     No other  Financial  Statement  Schedules  have  been  presented  since the
required  information  is not  present or not present in amounts  sufficient  to
require  submission  of the  schedule,  or because the  information  required is
included in the consolidated financial statements or the notes thereto.


         3.   Exhibits.


     The  following  exhibits are filed with this Annual  Report on Form 10-K or
incorporated herein by reference.


Exhibit
  No.                 Description

3(i).1   --   Restated Certificate of Incorporation,  filed as exhibit 3(i).1
              to  the  Company's   Registration  Statement  on  Form  S-1  (File
              #33-82620)  originally  filed on August  9, 1994 and  incorporated
              herein by reference.

3(i).2   --   Certificate  of Merger dated October 5, 1994,  filed as exhibit
              3(i).2 to the Company's  Registration  Statement on Form S-1 (File
              #33-82620)  originally  filed on August  9, 1994 and  incorporated
              herein by reference.

3(ii)    --   By-Laws of the Company, filed as exhibit 3(ii) to the Company's
              Registration  Statement  on Form S-1 (File  #33-82620)  originally
              filed on August 9, 1994 and incorporated herein by reference.

4.1      --   Form of Common Stock Certificate of the Company, filed as exhibit
              4.1 to the  Company's  Registration  Statement  on Form S-1 (File
              #33-82620)  originally  filed on August 9, 1994 and  incorporated
              herein by reference.

4.2      --   Indenture  relating  to the Senior  Notes,  the form of which was
              filed  as  exhibit  4.4  to  Amendment  No.  3 to  the  Company's
              Registration   Statement   on  Form  S-1  (File  No.   333-19613)
              originally  filed on March 19,  1997 and  incorporated  herein by
              reference.

10.1     --   Employment  Agreement  between the Company and James T. McKitrick
              dated as of  September  16,  1994,  filed as exhibit  10.5 to the
              Company's  Registration  Statement  on Form S-1 (File  #33-82620)
              originally  filed on August 9,  1994 and  incorporated  herein by
              reference.

10.2     --   Employment  Agreement  between the  Company  and Dean  Longnecker
              dated as of  September  16,  1994,  filed as exhibit  10.6 to the
              Company's  Registration  Statement  on Form S-1 (File  #33-82620)
              originally  filed on August 9,  1994 and  incorporated  herein by
              reference.

                                       22
<PAGE>

10.3     --   Asset Purchase  Agreement By and Between  Central  Tractor Farm &
              Country,  Inc., (the "Buyer") and Big Bear Farm Stores, Inc. (the
              "Seller")  dated  May 22,  1996,  filed as  exhibit  10.15 to the
              Company's  10-Q  originally   filed  on  September  9,  1996  and
              incorporated herein by reference.

10.4     --   Agreement  Plan of Merger  dated  November  27, 1996 by and among
              Central  Tractor  Farm  &  Country,   Inc.,  J.W.  Childs  Equity
              Partners,  L.P.,  JWC Holdings I, Inc.,  and JWC  Acquisition  I,
              Inc.,  filed as an exhibit to the Company's 8-K originally  filed
              on December 3, 1996 and incorporated herein by reference.

10.5     --   Securities  Purchase  Agreement  dated as of November 27, 1996 by
              and among  Central  Tractor  Farm & Country,  Inc.,  J.W.  Childs
              Equity Partners,  L.P., JWC Holdings I, Inc., and JWC Acquisition
              I,  Inc.,  filed as an exhibit to the  Company's  8-K  originally
              filed on December 3, 1996 and incorporated herein by reference.

10.6     --   Securities Purchase  Agreement,  dated as of November 6, 1996, by
              and among Mezzanine Lending Associates I, L.P., Mezzanine Lending
              Associates  II, L.P.,  Mezzanine  Lending  Associates  III, L.P.,
              Senior Lending Associates I, L.P., BCC Industrial  Services,  JWC
              Acquisition I, Inc., J.W. Childs Equity Partners,  L.P.,  Central
              Tractor  Farm &  Country,  Inc.  filed as an  exhibit  to JWCAC's
              Schedule   13D   originally   filed  on   December  9,  1996  and
              incorporated herein by reference.

10.7     --   Letter  Agreement,  dated as of  November  27,  1996  between JWC
              Acquisition  I,  Inc.  and Mr.  James T.  McKitrick,  filed as an
              exhibit to JWCAC's  Schedule 13D originally  filed on December 9,
              1996 and incorporated herein by reference.

10.8     --   Letter  Agreement,  dated as of  November  27,  1996  between JWC
              Acquisition  I,  Inc.  and Mr. G.  Dean  Longnecker,  filed as an
              exhibit to JWCAC's  Schedule 13D originally  filed on December 9,
              1996 and incorporated herein by reference.

10.9     --   Credit Agreement dated as of December 23, 1996 among the Company,
              Holding,  JWCAC, certain banks,  financial institutions and other
              institutional  lenders listed therein,  Fleet, as  administrative
              agent,  and NationsBank,  as co-agent,  filed as exhibit 10.22 to
              the  Company's  10-K  originally  filed on January  31,  1997 and
              incorporated herein by reference.

10.10    --   Stock Purchase Agreement,  dated June 26, 1997 by and between the
              Company and ConAgra,  Inc.  and the Amended and  Restated  Credit
              Agreement,  dated as of July 3, 1997,  filed as  exhibits  to the
              Company's  8-K filed on July 3, 1997 and  incorporated  herein by
              reference.

10.11    --   Letter Amendment,  dated as of February 18, 1998, to Amended and
              Restated Credit Agreement,  filed as exhibit 10.1 to the Company's
              10-Q  originally  filed on  September  15,  1998 and  incorporated
              herein by reference.

12       --   Statement Regarding Computation of Ratio of Earnings to Fixed 
              Charges

21       --   Subsidiaries of the Company

27       --   Financial Data Schedule

99       --   Important Factors Regarding Forward-Looking Statements


                                       23

<PAGE>

     (b) Reports on Form 8-K Filed During the Last Quarter of Fiscal 1998

         None

     (c) See Item 14(a)(3) of this report.

     (d) See Item 14(a)(2) of this report.

                                       24

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

                              FINANCIAL STATEMENTS

                Year ended October 31, 1998 and periods of seven-
                  months ended November 1, 1997 and five-months
              ended March 26, 1997, and year ended November 2, 1996




<TABLE>
<CAPTION>

                          Index to Financial Statements
<S>                                                                                   <C>

Report of Ernst & Young LLP.............................................................F-2
Consolidated Balance Sheets as of October 31, 1998 and November 1, 1997.................F-3
Consolidated Statements of Income for year ended October 31, 1998
   and periods of seven-months ended November 1, 1997 and
   five-months ended March 26, 1997, and year ended November 2, 1996....................F-5
Consolidated Statements of Changes in Stockholders' Equity for year
   ended October 31, 1998 and periods of seven-months ended
   November 1, 1997 and five-months ended March 26, 1997, and
   year ended November 2, 1996..........................................................F-6
Consolidated  Statements  of Cash  Flows for year  ended  October  31,  1998 and
   periods of seven-months ended November 1, 1997 and
   five-months ended March 26, 1997, and year ended November 2, 1996....................F-7
Notes to Consolidated Financial Statements..............................................F-9
</TABLE>



                                       F-1

<PAGE>


                         REPORT OF INDEPENDENT AUDITORS






The Board of Directors
Central Tractor Farm & Country, Inc.


We have audited the accompanying  consolidated balance sheets of Central Tractor
Farm & Country,  Inc.  ("Successor"),  a wholly-owned  subsidiary of CT Holding,
Inc., as of October 31, 1998 and November 1, 1997, and the related  consolidated
statements of income,  changes in  stockholders'  equity,  and cash flows of the
Successor for the year ended October 31, 1998 and the  seven-month  period ended
November 1, 1997 and its "Predecessor" for the five-month period ended March 26,
1997 and for the year ended  November  2, 1996.  Our audits  also  included  the
financial  statement schedule listed in Item 14(a).  These financial  statements
and  schedule  are  the   responsibility  of  the  Company's   management.   Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial position of Central Tractor
Farm &  Country,  Inc.  at  October  31,  1998 and  November  1,  1997,  and the
consolidated  results of operations and cash flows of the Successor for the year
ended October 31, 1998 and the seven-month period ended November 1, 1997 and the
Predecessor  for the  five-month  period  ended  March 26, 1997 and for the year
ended  November  2, 1996,  in  conformity  with  generally  accepted  accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.


                                                         ERNST & YOUNG LLP


Des Moines, Iowa
December 7, 1998



                                       F-2

<PAGE>
<TABLE>
<CAPTION>
                                       CENTRAL TRACTOR FARM & COUNTRY, INC.

                                            CONSOLIDATED BALANCE SHEETS

                                       (In thousands, except per share data)





                                                                       October 31     November 1
                                                                           1998          1997
                                                                      ---------------------------
<S>                                                                  <C>              <C>

Assets (Note 4)
Current assets:
  Cash and cash equivalents                                           $  6,971         $  7,378 
  Recoverable income taxes                                               3,134            2,513
  Trade and other receivables, less allowances of $386 in 1998                         
    and 1997                                                             4,648            7,264
  Inventory                                                            217,064          222,117
  Deferred income taxes (Note 7)                                          --              4,000
  Other                                                                  3,010            3,136
                                                                      -------------------------
Total current assets                                                   234,827          246,408
                                                                                       
Property, improvements and equipment:                                                  
  Land                                                                   1,821            1,963
  Buildings and improvements                                             5,210            4,934
  Leasehold improvements                                                13,384           12,788
  Furniture and fixtures                                                27,590           24,731
  Capitalized property rights (Note 5)                                     867              867
  Automobiles and trucks                                                   703              628
                                                                      -------------------------
                                                                        49,575           45,911
  Less allowances for depreciation and amortization                      7,948            2,716
                                                                      -------------------------
                                                                        41,627           43,195
                                                                                       
Goodwill, net of amortization of $5,080 in 1998 and $1,753 in 1997     134,037          135,612
Other assets, principally deferred financing costs                       8,354            9,020
                                                                      -------------------------
Total assets                                                          $418,845         $434,235
                                                                      =========================
                                                                                 


                                                        F-3
<PAGE>

<CAPTION>


                                                                      October 31      November 1
                                                                          1998           1997
                                                                      --------------------------
<S>                                                                  <C>              <C>
Liabilities and stockholder's equity 
Current liabilities:
  Bank line of credit (Note 4)                                        $ 32,075         $ 60,750
  Accounts payable                                                      78,322           68,015
  Accrued payroll and bonuses                                            8,272            5,847
  Accrued income taxes                                                    --                508
  Other accrued expenses                                                14,084           22,479
  Deferred income taxes (Note 7)                                           506             --
  Current portion of long-term debt and capital lease obligations        3,159            3,170
                                                                      -------------------------
Total current liabilities                                              136,418          160,769
                                                                                       
Long-term debt, less current portion (Note 4)                          149,000          152,000
Capital lease obligations, less current portion (Note 5)                 1,011            1,171
Deferred income taxes (Note 7)                                           2,659              748
                                                                      -------------------------
Total liabilities                                                      289,088          314,688
                                                                                       
Stockholder's equity (Notes 3 and 6):                                                  
  Common stock, $.01 par value: 3,000 authorized shares; 100 shares                    
    issued and outstanding (wholly-owned by CT Holding, Inc.)             --               --
  Additional paid-in capital                                           119,155          118,920
  Retained earnings                                                     10,602              627
                                                                      -------------------------
Total stockholder's equity                                             129,757          119,547
                                                                                       
Commitments (Notes 5 and 8)                                               --               --
                                                                      -------------------------
Total liabilities and stockholder's equity                            $418,845         $434,235
                                                                      =========================
                                                                                 


See accompanying notes.
</TABLE>


                                                        F-4

<PAGE>
<TABLE>
<CAPTION>
                                             CENTRAL TRACTOR FARM & COUNTRY, INC.
                                                       AND PREDECESSOR

                                              CONSOLIDATED STATEMENTS OF INCOME

                                                        (In thousands)


                                                                 Successor               |                Predecessor
                                                      -------------------------------    |    ------------------------------
                                                       Fiscal year   Period of seven     |    Period of five     Fiscal year
                                                          ended        months ended      |     months ended         ended
                                                       October 31       November 1       |        March 26       November 2
                                                          1998             1997          |         1997             1996
                                                      ------------     -------------     |     -----------       -----------
                                                                                         |
<S>                                                   <C>              <C>                    <C>               <C>      
Net sales                                              $ 587,195        $ 305,122        |     $ 106,048         $ 293,020
Cost of sales                                            410,179          216,342        |        75,281           207,228
                                                       ---------        ---------              ---------         ---------
Gross profit                                             177,016           88,780        |        30,767            85,792
                                                                                         |                      
Selling, general and administrative expenses,                                            |                      
  including amounts with related parties (Note                                           |                      
  10)                                                    134,623           72,142        |        29,045            68,197
Amortization of intangibles                                3,552            1,753        |           415               938
                                                       ---------        ---------        |     ---------         ---------
Operating income                                          38,841           14,885        |         1,307            16,657
                                                                                         |                      
Interest expense, including amounts with                                                 |                      
  related parties (Note 10)                               20,466           11,463        |         3,188             1,663
                                                       ---------        ---------        |     ---------         ---------
Income (loss) before income taxes                         18,375            3,422        |        (1,881)           14,994
                                                                                         |                      
Income taxes (credits) (Note 7)                            8,400            2,057        |          (634)            6,250
                                                       ---------        ---------        |     ---------         ---------
Net income (loss)                                      $   9,975        $   1,365        |     $  (1,247)        $   8,744
                                                       =========        =========        |     =========         =========
                                                                                         |                      
Ratio (deficiency) of earnings to fixed charges             1.8x             1.3x        |     $  (1,881)             5.3x
                                                       =========        =========        |     =========         =========
                                                                                                     

See accompanying notes.
</TABLE>


                                                        F-5

<PAGE>
<TABLE>
<CAPTION>

                                             CENTRAL TRACTOR FARM & COUNTRY, INC.
                                                       AND PREDECESSOR

                                  CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                                                        (In thousands)

                                       Fiscal year ended October 31, 1998, and periods
                                            of seven-months ended November 1, 1997
                                          and five-months ended March 26, 1997, and
                                                 year ended November 2, 1996



                                                                  Stock          Additional        Retained          Total
                                                 Common          Warrant          Paid-In          Earnings      Stockholders'
                                                  Stock        Outstanding        Capital          (Deficit)         Equity
                                              --------------------------------------------------------------------------------
<S>                                          <C>              <C>              <C>               <C>             <C>   
Predecessor
Stockholders' equity at October 28, 1995      $     106        $     665        $  69,667         $  10,839       $  81,277 
  Exercise of common stock options                 --               --                 42              --                42
  Net income                                       --               --               --               8,744           8,744
                                              -----------------------------------------------------------------------------
Stockholders' equity at November 2, 1996            106              665           69,709            19,583          90,063
  Exercise of common stock options                 --               --                252              --               252
  Net loss                                         --               --               --              (1,247)         (1,247)
                                              -----------------------------------------------------------------------------
Stockholders' equity at March 26, 1997        $     106        $     665        $  69,961         $  18,336       $  89,068
                                              =============================================================================
                                                                                                                  
Successor                                                                                                         
Initial capitalization of the Company after                                                                       
  merger of JWC Acquisition I on                                                                                    
  March 27, 1997                              $    --                           $  69,170         $    (738)      $  68,432       
  Capital contribution from parent                                                                                               
  (Note 3)                                         --                              49,750              --            49,750       
  Net income                                       --                                --               1,365           1,365       
                                              ---------                         -------------------------------------------
Stockholder's equity at November 1, 1997           --                             118,920               627         119,547       
  Net income                                       --                                --               9,975           9,975       
  Capital contribution from parent                 --                                 235              --               235       
                                              ---------                         -------------------------------------------
Stockholder's equity at October 31, 1998      $    --                           $ 119,155         $  10,602       $ 129,757       
                                              =========                         ===========================================
                                                                                                             


See accompanying notes.
</TABLE>

                                                        F-6

<PAGE>
<TABLE>
<CAPTION>

                                                CENTRAL TRACTOR FARM & COUNTRY, INC.
                                                           AND PREDECESSOR

                                                CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                           (In thousands)



                                                                  Successor                 |                Predecessor
                                                     ----------------------------------     |     --------------------------------
                                                      Fiscal year       Period of seven     |     Period of five      Fiscal year
                                                         ended           months ended       |      months ended          ended
                                                      October 31          November 1        |        March 26          November 2
                                                         1998                1997           |          1997               1996
                                                     -----------        ---------------     |     --------------     -------------
<S>                                                 <C>                <C>                       <C>                <C>
Operating activities                                                                        |
Net income (loss) from continuing operations         $   9,975          $   1,365           |     $  (1,247)         $   8,744 
Adjustments to reconcile net income (loss) from                                             |                       
   continuing operations to net cash provided by                                                                    
   (used in) continuing operations:                                                         |                       
    Depreciation and amortization of property,                                              |                       
      improvements and equipment                         5,221              2,716           |         1,490              3,056
    Amortization of intangibles and other deferred                                          |                       
      assets                                             4,604              2,253           |           414                998
    Loss on sale of assets                                --                 --             |          --                   20
    Deferred income taxes                                6,417              1,871           |         1,328              1,100
    Changes in operating assets and liabilities:                                            |                       
      Recoverable income taxes                            (621)            (1,119)          |        (1,885)              --
      Trade and other receivables                        2,616               (871)          |           144                 83
      Inventory                                          5,053              1,957           |       (11,894)            (4,549)
      Other current assets                                 126                946           |          (924)              (972)
      Accounts payable                                  10,307              1,895           |         1,468             (3,806)
      Accrued expenses                                  (6,478)             1,139           |        (1,524)               287
                                                     ---------          ---------           |     ---------          ---------
                                                        37,220             12,152           |       (12,630)             4,961
                                                                                            |                       
Adjustments for net cash provided by                                                        |                       
  discontinued operations:                                                                  |                       
  Deferred income taxes                                   --                 --             |          --                 (367)
  Changes in operating assets and liabilities             --                 --             |          --               13,520
                                                     ---------          ---------           |     ---------          ---------
                                                          --                 --             |          --               13,153
                                                     ---------          ---------           |     ---------          ---------
Net cash provided by (used in) operating                                                    |                       
  activities                                            37,220             12,152           |       (12,630)            18,114
                                                                                            |                       
Investing activities                                                                        |                       
Purchases of property, improvements and                                                     |                       
  equipment                                             (4,842)            (3,816)          |        (2,419)            (8,789)
Acquisition of Central Tractor Farm & Country,                                              |                       
  Inc. (Predecessor)                                      --             (155,963)          |          --                 --
Acquisition of Big Bear Farm Stores, Inc. in 1996                                                                   
  and Country General, Inc. in 1997 (Note 11)           (1,568)          (136,995)          |          --               (5,650)
Other                                                      394                206           |        (1,348)               255
                                                     ---------          ---------           |     ---------          ---------
Net cash used in investing activities                   (6,016)          (296,568)          |        (3,767)           (14,184)
                                                                                                       

                                                                                            
                                                                 F-7
                                                                                            
<PAGE>                                                                                      
                                                                                            
                                                                                            
                                                                                            
                                                CENTRAL TRACTOR FARM & COUNTRY, INC.
                                                           AND PREDECESSOR
                                                                                            
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                                                                            
                                                           (In thousands)
                                                                                            


                                                                  Successor                 |                Predecessor
                                                     ----------------------------------     |     --------------------------------
                                                      Fiscal year       Period of seven     |     Period of five      Fiscal year
                                                         ended           months ended       |      months ended          ended
                                                      October 31          November 1        |        March 26          November 2
                                                         1998                1997           |          1997               1996
                                                     -----------        ---------------     |     --------------     -------------
<S>                                                 <C>                <C>                       <C>                <C>
Financing activities                                                                        |
Borrowings under line of credit                      $ 273,645          $ 206,106           |     $ 113,119          $  86,782 
Repayments on line of credit                          (302,320)          (170,650)          |       (91,494)           (89,902)
Proceeds from issuance of long-term debt                  --              155,000           |         8,000               --
Payments on long-term debt                              (3,000)            (8,000)          |       (16,000)               (17)
Payments on capitalized lease obligations                 (171)              (101)          |           (69)              (120)
Proceeds from issuance of common stock and                                                  |                       
  capital contributions                                    235            115,489           |           252                 42
Cash of Central Tractor at date of acquisition            --                1,220           |          --                 --
Financing costs relating to new line of credit,                                             |                       
  term loan and Senior Notes                              --               (8,764)          |          --                 --
Other                                                     --                1,494           |          --                 --
                                                     ---------          ---------           |     ---------          ---------
Net cash (used in) provided by financing                                                    |                       
  activities                                           (31,611)           291,794           |        13,808             (3,215)
                                                     ---------          ---------           |     ---------          ---------
Net (decrease) increase in cash and cash                                                    |                       
  equivalents                                             (407)             7,378           |        (2,589)               715
                                                                                            |                       
Cash and cash equivalents at beginning of period         7,378               --             |         3,809              3,094
                                                     ---------          ---------           |     ---------          ---------
Cash and cash equivalents at end of period           $   6,971          $   7,378           |     $   1,220          $   3,809
                                                     =========          =========           |     =========          =========
                                                                                            |                       
Supplemental disclosures of cash flow                                                       |                       
  information                                                                                 |                       
Cash paid during the period for interest             $  19,838          $  10,294           |     $   1,746          $   1,991
Cash paid during the period for income taxes               355                327           |           412              5,675
                                                                                                               
                                                                                            
                                                                                            
See accompanying notes.
</TABLE>


                                                                 F-8

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    Year ended October 31, 1998, and periods
                     of seven-months ended November 1, 1997
                      and five-months ended March 26, 1997,
                         and year ended November 2, 1996

                (In thousands of dollars, except where indicated)




1. Basis of Presentation and Acquisition of the Company

Central  Tractor  Farm  &  Country,  Inc.  ("the  Company")  is  a  wholly-owned
subsidiary  of CT Holding,  Inc.  ("CT  Holding"),  an affiliate of J. W. Childs
Equity Partners, L.P. ("Childs").

As a result of the acquisition of the Company  discussed below,  effective March
27,  1997,  a new  basis of  accounting  has  been  reflected  in the  Company's
financial  statements  reflecting  the fair values for the Company's  assets and
liabilities at that date ("Successor").  The financial statements of the Company
for periods prior to March 27, 1997 are presented on the  historical  cost basis
of  accounting  ("Predecessor").  A  line  has  been  placed  in  the  financial
statements to distinguish between Predecessor and Successor activity.

On November 27, 1996,  the Board of Directors of the Company  approved,  and the
Company entered into, a merger  agreement (the "Merger  Agreement") with Childs,
CT Holding and its  subsidiary,  JWC  Acquisition I, Inc., that provided for the
acquisition of the Company by CT Holding in a two-stage transaction.  The Merger
Agreement provided that following the acquisition of all of the Company's common
stock held by affiliates of Butler Capital Corporation  (collectively "BCC"), CT
Holding's subsidiary would merge with and into the Company (the "Merger") and CT
Holding would  acquire the remaining  shares of common stock of the Company held
by public shareholders. The Merger was completed on March 27, 1997.

On March 27, 1997, the Company  consummated a public  offering of $105.0 million
aggregate  principal  amount of Senior Notes. The net proceeds from the offering
were used to pay the Merger consideration, repay certain outstanding borrowings,
and pay fees and expenses of the acquisition.

The  acquisition  of the Company was accounted  for as a purchase.  The purchase
price for the common stock was approximately  $159.4 million,  including related
costs and expenses, of which $156.0 million was paid in cash and $3.4 million in
common stock and stock  options of CT Holding.  The cash portion was funded from
the  proceeds  of  capital  stock  issued by CT  Holding,  and the  Senior  Note
borrowings  by the  Company.  The  final  purchase  price was  allocated  to the
tangible and intangible  assets and the liabilities of the Company based on fair
values, as follows:


                                       F-9

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)




1. Basis of Presentation and Acquisition of the Company (continued)


     Inventory                                                  $124,284
     Property, improvements and equipment                         25,387
     Accounts receivable and other assets                          9,990
     Goodwill                                                     87,343
     Bank line of credit                                         (23,554)
     Accounts payable and accrued expenses                       (51,809)
     Long-term debt and capitalized lease obligations             (9,442)
     Deferred income taxes                                        (2,806)
                                                                --------
                                                                $159,393
                                                                ========

2. Summary of Accounting Policies and Other Matters

Business and Principles of Consolidation

The consolidated  financial  statements include the Company and its wholly-owned
subsidiary, Country General, Inc. (hereinafter collectively "the Company").

The  Company  operates  agricultural  specialty  retail  stores  located  in the
Midwest,  Northeast,  and  Southeast  United  States.  The  Company  also  sells
merchandise on a wholesale basis under various distributor agreements throughout
the United  States.  During fiscal 1996,  the Company  completed the sale of its
wholly-owned  subsidiary,  Herschel Corporation  (Herschel),  a manufacturer and
wholesale  distributor of equipment parts for use in the farming industry.  With
this sale,  continuing operations of the Company constitute one business segment
for financial reporting purposes.

The Company  operates on a 52-53 week fiscal year ending on the Saturday nearest
to October 31.

All  significant  intercompany   transactions  have  been  eliminated  from  the
consolidated financial statements.

Cash and Cash Equivalents

For purposes of the statements of cash flows,  the Company  considers all highly
liquid  investments with a maturity of three months or less when purchased to be
cash equivalents.  Investments,  including repurchase  agreements and commercial
paper, are carried at cost, which approximates market.



                                      F-10

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)




2. Summary of Accounting Policies and Other Matters (continued)

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 amounts reported in the financial  statements and accompanying notes.
Actual results could differ from those estimates.

Trade Receivables

Most of the  Company's  retail  sales  are  cash or  credit  card  sales,  while
wholesale sales and some retail sales are on account. The Company generally does
not require collateral for sales on account.  Concentrations of credit risk with
respect to trade  receivables  are limited due to the number of customers of the
Company and their geographic dispersion.  The allowance for doubtful accounts is
based on a current  analysis of receivable  delinquencies  and  historical  loss
experience.

Inventory

Inventory  is  recorded  at  cost,  including  warehousing  and  freight  costs,
determined principally by the last-in,  first-out (LIFO) method, which is not in
excess of market. The Company reviews its inventory for slow-moving, obsolete or
otherwise  unsalable items on a regular basis throughout the year,  including at
the time of physical  inventory  counts.  Write downs are made for any estimated
losses to be  incurred  with  respect  to  slow-moving,  obsolete  or  otherwise
unsalable  inventory as such inventory is identified.  Inventories  valued using
the LIFO method were  approximately $0 and $134 at October 31, 1998 and November
1,  1997,  respectively,  less than the  amounts of such  inventories  valued at
current cost.

Property, Improvements and Equipment

Property,  improvements  and equipment are carried at cost less  allowances  for
depreciation and amortization. Depreciation and amortization expense is computed
primarily on a basis of the straight-line method over the estimated useful lives
of the assets as follows:


Buildings and improvements                                        10 to 39 years
Leasehold improvements (not in excess of underlying lease terms)   5 to 20 years
Furniture and fixtures                                             5 to 15 years
Automobiles and trucks                                             3 to 10 years


                                      F-11

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)




2. Summary of Accounting Policies and Other Matters (continued)

Certain long-term lease  transactions have been accounted for as capital leases.
The property  rights recorded under direct  financing  leases are amortized on a
straight-line  basis over the lesser of the useful life or the respective  terms
of the leases.

Goodwill

Goodwill is being amortized  utilizing the straight-line  method over periods of
40 years.  The carrying  value of goodwill is reviewed  continually to determine
whether any impairment has occurred.  This review takes into  consideration  the
recoverability  of the unamortized  amounts based on the estimated  undiscounted
cash flows of the related  businesses to the  respective  carrying  value of the
goodwill.  To the extent that the estimated  undiscounted  future cash flows are
less than the carrying value of the assets,  an impairment  loss can be measured
based upon various methods,  including undiscounted cash flows,  discounted cash
flows and fair value.  Based upon  undiscounted  cash flows,  no  impairment  of
goodwill was determined to exist and, accordingly, no measurement was required.

Deferred Financing Costs

Deferred financing costs are amortized over the term of the related debt.

Deferred Income Taxes

The Company uses the liability method of accounting for income taxes. Under this
method,  deferred income tax assets and liabilities are determined  based on the
difference  between  financial  reporting  and  income  tax bases of assets  and
liabilities  using the enacted marginal tax rates.  Deferred income tax expenses
or credits  are based on the  changes in the asset or  liability  from period to
period.

Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating the
fair value of its financial instruments:

     Cash  equivalents  and accounts  receivable and payable:  Carrying  amounts
     reported in the Company's  consolidated  balance sheets based on historical
     cost approximate  estimated fair value for these instruments,  due to their
     short-term nature.

     The fair value of the bank line of credit, bank term loan, and Senior Notes
     is estimated to approximate their carrying value as of October 31, 1998.


                                      F-12

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)




2. Summary of Accounting Policies and Other Matters (continued)

Interest Rate Swap Agreements

The  differential  to be paid or received in connection  with interest rate swap
agreements is accrued as interest  rates change and is recognized  over the life
of the agreements.

Returns and Warranties

Costs  relating to  merchandise  returns from sales at retail stores and through
distributors are not significant and generally are accounted for as they occur.

Catalogs, Sale Flyers and Advertising Costs

The direct cost of printing and mailing the Company's  annual mail order catalog
is deferred and amortized  against mail order revenues over the year the catalog
is in use. The direct cost of printing and distributing  sale flyers is deferred
and  amortized  over the life of the flyer which is generally two weeks or less.
Other advertising costs are expensed as incurred.  Unamortized  amounts relating
to the costs of the annual  catalog and periodic  sale flyers  amounted to $394,
$923 and $950 at  October  31,  1998,  November  1,  1997 and  March  26,  1997,
respectively.  Advertising expenses were approximately  $15,127,  $7,755, $3,286
and $8,841 for fiscal 1998, the seven-month  and five-month  periods of 1997 and
for fiscal 1996, respectively.

Store Pre-Opening Costs

Prior to  fiscal  1998,  direct  costs,  which  consisted  principally  of rent,
employee  compensation  and travel costs for  merchandise  set-up and  supplies,
incurred in setting up new stores for opening were deferred and  amortized  over
the first  twenty-six weeks of store  operations.  Beginning in fiscal 1998, all
such costs are  currently  expensed.  The effect of this change in accounting on
fiscal 1998 results of  operations  was  immaterial.  The amount of  unamortized
store  pre-opening  costs at October 31, 1998,  November 1, 1997,  and March 26,
1997 amounted to $0, $104 and $1,203, respectively.

Emerging Accounting Issues

The Company is not aware of any accounting  standards which have been issued and
which will  require  the Company to change its  current  accounting  policies or
adopt new  policies,  the effect of which  would be  material  to the  Company's
financial statements.


                                      F-13
<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


3. Acquisitions

Effective June 26, 1997,  the Company  acquired all of the  outstanding  capital
stock of Country  General,  Inc.  (Country  General)  for  approximately  $138.6
million (including  related costs and expenses) in cash,  including $1.6 million
related to post  closing  adjustments  finalized  during  fiscal  1998.  Country
General  operated  a chain of 114  agricultural  specialty  retail  stores.  The
Company  funded  the  acquisition  price  in part  from a  $49,750  cash  equity
contribution  from its parent,  CT Holding,  and the remainder  from funds drawn
under the Company's amended and restated Credit Facility.

The  acquisition  was accounted for as a purchase.  The final purchase price was
allocated to the tangible and  intangible  assets and the  liabilities  based on
fair values, as follows:


     Inventory                                                  $  99,790
     Accounts receivables and other assets                          5,824
     Property, improvements and equipment                          17,174
     Goodwill                                                      51,775
     Deferred income taxes                                          9,229
     Accounts payable and accrued expenses                        (45,229)
                                                                 --------
                                                                 $138,563
                                                                 ========

In initially  allocating the purchase price to the assets and liabilities  based
on fair values,  a $3,358  reserve was recorded in 1997 for the estimated  cost,
principally  lease  liabilities,  to close nine  acquired  stores;  and a $2,866
reserve was  recorded in 1997 for the cost of severance  payments to  identified
employees  in  connection  with  the  closing  of  Country  General's  corporate
headquarters.  During March of 1998,  the  decision  was made to actually  close
twelve of the acquired stores. As of October 31, 1998, the inventory liquidation
and store closing process and the termination of employees at Country  General's
closed  corporate  headquarters  has been  completed.  During  fiscal  1998,  in
connection  with the final  purchase  price  adjustments,  the reserve for store
closings was increased by $1,522 as a result of the  additional  closed  stores,
and the reserve for severance  payments was decreased by $704; these adjustments
resulted  in a net  increase  in  goodwill  of $818.  As of October 31, 1998 and
November  1,  1997,  the  reserve  for closed  stores  was  $3,435  and  $3,358,
respectively,  consisting  primarily  of  remaining  lease  costs for the closed
stores.  As of October 31, 1998 and November 1, 1997,  the reserve for severance
had been  reduced to $224 and $2,722,  respectively,  as a result of payments to
terminated employees and the final purchase price adjustments.

On May 31,  1996,  the  Predecessor  acquired  31 retail  stores and related net
operating  assets from Big Bear Farm Stores,  Inc. (Big Bear),  an  agricultural
specialty  retailer,  for  approximately  $5,650 in cash.  The  acquisition  was
accounted  for as a purchase.  The purchase  price was allocated to the tangible
and intangible assets and the liabilities based on fair values as follows:


                                      F-14
<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


3. Acquisitions (continued)


     Inventory                                                    $8,780
     Accounts receivable and other assets                            206
     Leaseholds and equipment                                        517
     Deferred income taxes                                           135
     Goodwill                                                      2,666
     Accounts payable and accrued expenses                        (6,654)
                                                                  ------
                                                                  $5,650
                                                                  ======

The results of  operations  of Country  General and Big Bear are included in the
accompanying  consolidated  statements  of income  from the  respective  date of
purchase.

Pro Forma Results of Operations

Pro forma results of operations (in thousands)  presented below are based on the
historical  results  of  operations  of  the  Company,  as  Successor,  and  its
Predecessor,  adjusted  to give  effect to: (i) the  acquisition  of the Company
described  in Note 1; (ii) the  acquisitions  of  Country  General  and Big Bear
described  above;  and (iii) the debt  financing  arrangements  relating  to the
acquisitions,  as though these  transactions  had  occurred at the  beginning of
fiscal 1996.  Pro forma  results of  operations  for 1997 and 1996 have not been
adjusted for the effect of the twelve acquired Country General stores which were
closed during fiscal 1998.


                                                     Year ended
                                           November 1         November 2
                                              1997               1996
                                           -----------------------------

     Net sales                              $600,157           $613,538
     Operating income                         28,828             28,897
     Net income                                3,418              4,147


4. Line of Credit and Long-Term Debt

On July 3, 1997,  the  Company  entered  into an  amended  and  restated  Credit
Facility  with a bank which  consists  of a $50.0  million,  six-year  term loan
facility, which was fully funded, and a $100.0 million revolving credit facility
under which  borrowings  of $32,075 and letters of credit  totaling  $6,710 were
outstanding as of October 31, 1998. The Credit  Facility will mature on June 30,
2003.  Borrowings  under the Credit  Facility  will bear interest at rates based
upon prime or the  Eurodollar  Rate plus a margin.  At  October  31,  1998,  the
interest  rate on the Term Loan was 8.1% and the interest  rate on the Revolving
Credit Facility was 8.2%.


                                      F-15

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


4. Line of Credit and Long-Term Debt (continued)

The Credit Facility  agreement  contains  covenants which require the Company to
maintain a minimum:  consolidated  net worth;  earnings before taxes,  interest,
depreciation  and  amortization  (EBITDA);  ratio  of  EBITDA  to cash  interest
payable;  and ratio of debt to EBITDA. The covenants also restrict,  among other
things, the payment of dividends, incurrence of debt, and disposition of assets.

The  Credit  Facility  is  secured  by  substantially  all of the  assets of the
Company.

Long-term debt consisted of the following:


                                             October 31      November 1
                                                1998            1997
                                            ---------------------------

     10-5/8% Senior Notes due 2007            $105,000        $105,000
     Bank term loan                             47,000          50,000
                                            --------------------------
                                               152,000         155,000
     Less current portion                        3,000           3,000
                                            --------------------------
                                              $149,000        $152,000
                                            ==========================

The Senior Notes mature on April 1, 2007 with interest  payable  semiannually in
arrears on April 1 and  October 1. The Senior  Notes may be  redeemed  beginning
April  1,  2002 at a price  of  105.3125%  of the  principal  amount  decreasing
approximately  1.77% annually  thereafter until April 1, 2005 at which time they
are  redeemable at face value.  Furthermore,  notwithstanding  the foregoing the
Company may redeem up to 35% of the original  aggregate  principal amount of the
Senior  Notes  at a price  of 110% of the  principal  amount  with  the net cash
proceeds of a public equity offering within 60 days of closing such offering.

In March of 1998, the Company  entered into an interest rate swap agreement (the
"Swap  Agreement") with a bank to reduce the impact of changes in interest rates
on its floating term loan facility.  Accordingly, the Swap Agreement was entered
into for purposes other than trading. The Swap Agreement has an initial notional
amount of $48,500.  The notional amount decreases in tandem with the outstanding
balance on the Company's term loan facility until the Swap Agreement's  maturity
on March 30, 2001 and was $47,000 at October 31, 1998. The Swap Agreement  fixes
the  interest  rate on the term loan  facility at 5.8525%,  plus the  applicable
margin, resulting in an effective rate of 8.23% at October 31, 1998. The Company
is exposed to interest rate risk in the event of  nonperformance  by the counter
party  to  the  Swap  Agreement.   However,  the  Company  does  not  anticipate
nonperformance by the bank.

                                      F-16
<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)




4. Line of Credit and Long-Term Debt (continued)

The bank  term  loan must be repaid  in  semiannual  installments,  plus  annual
prepayments  based on the Company's  excess cash flow,  as defined.  The minimum
annual  installments are as follows:  fiscal years 1999 - $3,000; 2000 - $6,000;
2001 - $8,000; 2002 - $12,000; and 2003 - $18,000.


5. Lease Obligations

The Company has entered into certain  long-term lease  agreements for the use of
warehouses, certain retail store facilities and computer equipment. These leases
have been  accounted  for as  purchases  of property  rights and  designated  as
capitalized leases.

Amortization expense relating to such property rights recorded under capitalized
leases  was  $145,  $86,  $59 and $125 for  fiscal  1998,  the  seven-month  and
five-month periods of 1997 and for fiscal 1996, respectively. The net book value
of property  rights  recorded  under capital leases was $636 and $781 at October
31, 1998 and November 1, 1997, respectively.

As of October 31, 1998, the debt associated with the capitalized property rights
is represented by the present value of the minimum lease payments as follows:


     Fiscal year ended in:
       1999                                        $   293
       2000                                            293
       2001                                            293
       2002                                            293
       2003                                            257
       After 2003                                      185
                                                   -------
     Total minimum lease payments                    1,614
     Less amount representing interest                 444
                                                   -------
     Present value of minimum lease payments         1,170
     Less current installments                         159
                                                   -------
                                                    $1,011
                                                   =======

The Company also has entered into certain noncancelable operating leases for the
use of real estate,  automobiles  and trucks,  and office  equipment.  Aggregate
rental expense for operating leases was approximately  $14,602,  $9,299,  $4,069
and $9,294 for fiscal 1998 and the  seven-month  and five-month  periods of 1997
and for fiscal 1996, respectively.



                                      F-17

<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)




5. Lease Obligations (continued)

The following is a summary of minimum rental commitments as of October 31, 1998,
for operating leases:
<TABLE>
<CAPTION>
                                                     Automobile            Office
       Fiscal Year-End          Real Estate          and Trucks          Equipment             Total
-------------------------------------------------------------------------------------------------------
<S>                             <C>                    <C>                  <C>             <C>
1999                             $14,637                $457                 $46             $15,140
2000                              11,691                   -                  17              11,708
2001                               8,553                   -                   2               8,555
2002                               6,440                   -                   -               6,440
2003                               4,369                   -                   -               4,369
After 2003                         6,022                   -                   -               6,022
                              ----------------------------------------------------------------------
                                 $51,712                $457                 $65             $52,234
                              ======================================================================
</TABLE>


6. Stock Options

CT Holding has stock option arrangements with various officers and other members
of management  of the Company which it accounts for under the  provisions of APB
Opinion No. 25 and related  interpretations.  No  compensation  expense has been
recognized  by CT Holding or the Company in  connection  with such stock  option
arrangements.

Under FASB Statement No. 123, certain pro forma information is required as if CT
Holding had accounted for stock options under the alternative  fair value method
of Statement 123 with the resultant  compensation  expense  "pushed-down" to the
Company.  CT Holding used a Minimum  Valuation  model to determine  the per unit
fair value of the options at the grant date. The following assumptions were used
in the valuation:


   Risk-free interest rate                                 5.65%
   Expected dividend yield                                 None
   Expected volatility                                     None
   Expected life of option                                 7 years



                                      F-18

<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)




6. Stock Options (continued)

For purposes of pro forma  disclosures,  the estimated fair value of the options
at the  grant  date is  amortized  to  expense  over the  vesting  period of the
options.  Pro forma stock option compensation expense for the year ended October
31,  1998 is not  indicative  of what  annual  pro forma  expense  may be in the
future.  Pro forma net income of the Company  for fiscal  1998 is  approximately
$9,729.  Pro forma results for the period of seven months ended November 1, 1997
would not differ from  amounts as reported  since no stock  option  compensation
expense would be recognized during that period.

The Company had no capital shares  reserved for issuance  under any  outstanding
stock option or other agreements at October 31, 1998.


    7. Income Taxes

The  Company's   consolidated   results  of  operations   are  included  in  the
consolidated  tax  returns  of its  parent,  CT  Holding.  The  entities  in the
consolidated tax returns have adopted a policy of allocating  income tax expense
or  benefit  based on a  separate  return  concept.  This  generally  results in
profitable companies recognizing income tax expense as if the individual company
filed a separate return and loss companies  recognizing an income tax benefit to
the extent their losses contribute to reduce consolidated income taxes currently
or in the future.

Deferred  income  taxes  reflect  the net tax  effect of  temporary  differences
between the amount of assets and  liabilities for financial  reporting  purposes
and the amounts  used for income tax  purposes.  Significant  components  of the
Company's deferred tax liabilities and assets are as follows:
<TABLE>
<CAPTION>

                                                                       October 31       November 1
                                                                          1998             1997
                                                                       ---------------------------
    <S>                                                                 <C>             <C>
     Deferred tax liabilities:
       Differences in depreciation and cost basis of property,
       improvements and equipment                                        $ 3,392          $  2,428
       Differences in cost basis of inventories due to LIFO and
       uniform capitalization                                              5,623             5,423
       Prepaid advertising                                                   158               369
       Store pre-opening costs                                                --                42
       Differences in amortization and cost basis of intangibles             584                --
                                                                       ---------------------------
     Total deferred tax liabilities                                        9,757             8,262

</TABLE>


                                                       F-19

<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)


<TABLE>
<CAPTION>

    7. Income Taxes (continued)

                                                                          October 31     November 1
                                                                             1998           1997
                                                                         ---------------------------
       <S>                                                              <C>             <C>
        Deferred tax assets:
          Net operating loss carryforward                                $  1,105        $  1,369 
          Capital loss carryforward                                           920             920
          Allowance for doubtful accounts                                     154             214
          Excess and obsolete inventory reserves                            2,120           5,355
          Compensation and employee benefit accruals                        1,319           2,509
          Operating leases                                                    308             368
          Accrued store closing costs                                       1,374           1,362
          Capitalized property rights and lease obligations treated as                  
            operating leases for income tax purposes                          212             223
          Other                                                              --               114
                                                                         ------------------------
                                                                            7,512          12,434
          Less valuation allowance for capital loss carryforward             (920)           (920)
                                                                         ------------------------
        Total deferred tax assets                                           6,592          11,514
                                                                         ------------------------
        Net deferred tax (liabilities) assets                            $ (3,165)       $  3,252
                                                                         ========================
                                                                              
</TABLE>
      
The Company has a net operating loss carryforward of approximately  $2.8 million
which will expire in the year 2012. A capital loss carryforward of approximately
$2.3 million which relates to the sale of Herschel will expire in the year 2001.
<TABLE>
<CAPTION>

Components of income tax expense (benefit) are as follows:


                                                Successor                |                Predecessor
                                   ------------------------------------  |   ---------------------------------
                                                                         |
                                     Fiscal year     Period of seven     |   Period of five      Fiscal year
                                        ended          months ended      |     months ended          ended
                                      October 31         November 1      |        March 26         November 2
                                         1998              1997          |         1997              1996
                                   ------------------------------------  |   ---------------------------------
    <S>                             <C>                 <C>                    <C>                <C>
     Continuing operations:                                              |
       Current:                                                          |
         Federal                      $      --           $   148        |       $(1,541)           $3,951
         State                              200                38        |          (421)            1,199
                                   ------------------------------        |   -----------------------------
                                            200               186        |        (1,962)            5,150
       Deferred                           8,200             1,871        |         1,328             1,100
                                   ------------------------------        |   -----------------------------
                                          8,400             2,057        |          (634)            6,250
     Discontinued operations:                                            |
       Current                               --                --        |            --               367
       Deferred                              --                --        |            --              (367)
                                   ------------------------------        |   -----------------------------
                                             --                --        |            --                --
                                   ------------------------------        |   -----------------------------
     Total                               $8,400            $2,057        |      $   (634)           $6,250
                                   ==============================        |   =============================
                                                                         
</TABLE>                                                                 

                                                       F-20

<PAGE>


                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

               (In thousands of dollars, except where indicated)


    7. Income Taxes (continued)

Total reported  income tax expense differs from the tax that would have resulted
by applying the  statutory  expected  federal  income tax rate to income  before
taxes. The reasons for these differences are as follows:

<TABLE>
<CAPTION>
                                                     Successor                |                Predecessor
                                        ------------------------------------  |   ---------------------------------
                                                                              |
                                          Fiscal year     Period of seven     |   Period of five      Fiscal year
                                             ended          months ended      |     months ended          ended
                                           October 31         November 1      |        March 26         November 2
                                              1998              1997          |         1997              1996
                                        ------------------------------------  |   ---------------------------------
   <S>                                    <C>                 <C>                    <C>               <C>
   Income tax at federal statutory                                            |
     rate                                  $6,248              $1,163         |         $(639)           $5,098
   Increases in taxes resulting from:                                         |
     State income taxes, net of                                               |
       federal income tax effect            1,214                 306         |           (79)              833
     Goodwill amortization                    766                 391         |            72               178
     Other, net                               172                 197         |            12               141
                                          ----------------------------------  |        -----------------------------
                                           $8,400              $2,057         |         $(634)           $6,250
                                          ==================================  |        =============================
                                                                              
</TABLE>

8. Employment Commitments

The Company has  employment  agreements  with two officers of the Company  which
provide for annual salaries amounting to approximately $700. Upon termination of
employment without cause or for certain other circumstances, compensation may be
continued for a period not to exceed eighteen months.


  9. Profit Sharing Plan

The Company has a profit  sharing plan  covering all  employees who meet certain
eligibility   requirements.   The  plan  provides  for  discretionary   employer
contributions   and  allows   voluntary   participant   contributions.   Company
contributions  are  determined  by its Board of Directors.  The Company  accrued
expense in connection with the profit sharing plan of $0, $729, $85 and $881 for
fiscal 1998 and the  seven-month  and five-month  periods of 1997 and for fiscal
1996, respectively.


                                      F-21

<PAGE>



                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)




10. Transactions with Related Parties

Certain investment funds managed by Butler Capital  Corporation  ("BCC") owned a
majority of the  outstanding  common  stock of the Company (see Note 1 regarding
acquisition  by  Childs  and  CT  Holding).  The  BCC  Funds  also  held  the 7%
convertible  notes which were retired in connection with the purchase of the BCC
common stock.  Interest paid on such notes was approximately $171 and $1,425 for
the  period  of  five  months   ended  March  26,  1997  and  for  fiscal  1996,
respectively.

Included in costs  associated  with  acquiring the Company and related  deferred
financing  costs is an advisory and financing fee of $1.7 million paid to Childs
in consideration of services regarding the planning, structuring and negotiating
of the acquisition and related financings.

For fiscal 1998 and the period of seven  months ended  November 1, 1997,  Childs
was paid a management  and  consulting  services fee of  approximately  $240 and
$140, respectively,  under a five-year agreement, annually renewable thereafter,
requiring  annual  payments  of $240.  In  addition,  during  fiscal 1998 Fenway
Partners, a stockholder of CT Holding, was paid a management fee of $120.

The  Company  purchases  inventory  from two  suppliers  who are  controlled  by
stockholders  of  CT  Holding.   Purchases  from  these   suppliers   aggregated
approximately  $4,999 and $6,092 for fiscal 1998 and fiscal 1997,  respectively.
The Company  purchased  inventory from two suppliers who were  controlled by the
BCC Funds.  Purchases from these suppliers  aggregated  approximately $1,605 and
$6,228 for the period of five months  ended March 26, 1997 and for fiscal  1996,
respectively.


11. Guarantee of Senior Notes

The Senior Notes described in Note 4 are guaranteed jointly and severally, fully
and unconditionally by Country General, the Company's wholly-owned subsidiary.

As a result of the acquisition of Country General by the Company as discussed in
Note 3, a new  basis of  accounting  has been  reflected  in  Country  General's
financial statements reflecting the fair values for Country General's assets and
liabilities at that date.



                                      F-22

<PAGE>
                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                                 AND PREDECESSOR

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                (In thousands of dollars, except where indicated)




11. Guarantee of Senior Notes (continued)
<TABLE>
<CAPTION>
Summarized financial information for Country General is as follows:


                                                                              October 31          November 1
                                                                                1998                 1997
                                                                            -------------        -----------
<S>                                                                          <C>                 <C>
Balance sheet data 
Current assets:
  Accounts receivable                                                         $   3,437           $   6,049 
  Inventory                                                                     104,777             102,571
  Other                                                                           3,569               7,702
                                                                              -----------------------------
                                                                                111,783             116,322
Property and equipment, net of allowances for depreciation                       15,598              16,673
Other noncurrent assets, principally goodwill and deferred                                       
  financing costs                                                                52,170              53,109
                                                                              -----------------------------
                                                                              $ 179,551           $ 186,104
                                                                              =============================
                                                                                                 
Current liabilities, principally accounts payable and accrued                                    
  expenses                                                                    $  28,159           $  38,696
Noncurrent liabilities, principally amounts due to related                        5,262              11,434
  parties                                                                                          
Stockholder's equity                                                            146,130             135,974
                                                                              -----------------------------
                                                                              $ 179,551           $ 186,104
                                                                              =============================
<CAPTION>
                                                                                              Period of four
                                                                               Fiscal year     months ended
                                                                                  ended       November 1 1997
                                                                               October 31      (from date of
                                                                                  1998          acquisition)
                                                                              -------------------------------
<S>                                                                          <C>                 <C>
Income statement data                                                                            
Net sales                                                                     $ 257,342           $  99,381
Cost of sales                                                                   178,918              71,095
                                                                              -----------------------------
Gross profit                                                                     78,424              28,286
                                                                                                 
Selling, general and administrative and other expenses                           53,151              26,719
                                                                              -----------------------------
Operating income                                                                 25,273               1,567
Interest expense to related party                                                 9,167               3,201
                                                                              -----------------------------
Income (loss) before income taxes                                                16,106              (1,634)
Income taxes (credits)                                                            6,488                (613)
                                                                              -----------------------------
Net income (loss)                                                             $   9,618           $  (1,021)
                                                                              =============================


                                                       F-23

<PAGE>

<CAPTION>


                                     CENTRAL TRACTOR FARM & COUNTRY, INC.
                                                AND PREDECESSOR

                            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                               (In thousands of dollars, except where indicated)



11. Guarantee of Senior Notes (continued)
                                                                                              Period of four
                                                                               Fiscal year     months ended
                                                                                  ended       November 1 1997
                                                                               October 31      (from date of
                                                                                  1998          acquisition)
                                                                              -------------------------------
<S>                                                                          <C>                 <C>
                                                                          
Cash flow data                                                                                   
Net cash flows provided by (used in):                                                            
  Operating activities                                                        $   2,586           $  (1,736)
  Investing activities, principally capital expenditures                         (3,575)               (415)
  Financing  activities,  principally  change  in  amounts  due to  related                      
    parties, less payment of deferred financing costs                                              
    of $2,340 in 1997                                                            (5,192)              5,548
                                                                                          
</TABLE>

12. Quarterly Results of Operations (Unaudited)
<TABLE>
<CAPTION>

The following is a tabulation of the unaudited  quarterly  results of operations
for the years ended October 31, 1998 and November 1, 1997:


                                                                              Successor
                                                       ------------------------------------------------------

                                                           First          Second         Third        Fourth
                                                          Quarter        Quarter        Quarter      Quarter
                                                       ------------------------------------------------------
    <S>                                                 <C>             <C>            <C>             <C>
     Fiscal year ended October 31, 1998:
       Net sales                                         $144,393        $143,717       $167,859     $131,226
       Gross profit                                        41,619          42,501         51,146       41,750
       Operating income                                     6,659           8,168         15,696        8,318
       Net income                                             590           1,375          6,597        1,413
       Ratio of earnings to fixed charges                     1.2x            1.4x           3.1x         1.6x

<CAPTION>

                                                     Predecessor               |                  Successor
                                             ----------------------------      |   ----------------------------------------
                                                                               |
                                                            February 2,        |      March 27,
                                                              1997 to          |       1997 to
                                                First        March 26,         |        May 3,        Third         Fourth
                                               Quarter          1997           |         1997        Quarter        Quarter
                                             ----------------------------      |   -----------------------------------------
    <S>                                        <C>           <C>                    <C>            <C>           <C>          
     Fiscal year ended November 1, 1997:                                       |
       Net sales                                $71,479       $34,569          |      $35,168       $129,216      $140,738
       Gross profit                              20,409        10,358          |       10,634         36,649        41,497
       Operating income (loss)                    2,538        (1,231)         |        2,832          9,519         2,534
       Net income (loss)                            601        (1,848)         |          732          2,709        (2,076)
       Ratio (deficiency) of earnings                                          |
         to fixed charges                           1.6x         (910)         |          1.8x           1.9x       (2,871)
                                                                               |
</TABLE>                                                                       

                                                       F-24

<PAGE>

                      CENTRAL TRACTOR FARM & COUNTRY, INC.

                        Valuation and Qualifying Accounts

                                   Schedule II


                                                             Allowance for
                                                           Trade Receivables
                                                           -----------------

            Balance at October 28, 1995                        $ (72,000)
              Credited to expense                                 20,500
              Write-off of uncollectible accounts                  1,500
                                                               ---------
            Balance at November 2, 1996                          (50,000)
              Credited to expense                                  4,700
                                                               ---------
            Balance at March 26, 1997                            (45,300)
              Debited to expense                                 (54,436)
              Write-off of uncollectible accounts                 49,736
              Acquired from Country General, Inc.               (336,000)
                                                               ---------
            Balance at November 1, 1997                         (386,000)
              Debited to expense                                (174,279)
              Write-off of uncollectible accounts                174,279 
                                                               ---------
            Balance at October 31, 1998                        $(386,000)
                                                               =========

                                      F-25

<PAGE>

                                    SIGNATURE

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                         CENTRAL TRACTOR FARM & COUNTRY, INC.




DATED: January 29, 1999                  By: /s/ James T. McKitrick
                                             James T. McKitrick, President
                                             and Chief Executive Officer

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

DATED: January 29, 1999


/s/ James T. McKitrick         President and Chief Executive Officer, Director
James T. McKitrick             (Principal Executive Officer)


/s/ Dean Longnecker            Executive Vice President and Chief Operating
Dean Longnecker                Officer, Director


/s/ Denny L. Starr             Senior Vice President, Finance and Chief 
Denny L. Starr                 Financial Officer (Principal Financial and 
                               Accounting Officer)

____________________           Director
John W. Childs

/s/ Jerry D. Horn              Director
Jerry D. Horn

/s/ Steven G. Segal            Director
Steven G. Segal

/s/ Adam L. Suttin             Director
Adam L. Suttin

/s/ Jeffrey B. Swartz          Director
Jeffrey B. Swartz

/s/ William E. Watts           Director
William E. Watts

/s/ Habib Y. Gorgi             Director
Habib Y. Gorgi

 /s/ Peter Lamm                Director
Peter Lamm

/s/ Richard C. Dresdale        Director
Richard C. Dresdale