<PAGE>

   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 13, 2001

================================================================================

                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549
                            ----------------------

                                   FORM 10-Q


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


               For the quarterly period ended September 30, 2001

                                      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 333-81235



                              ROYSTER-CLARK, INC.

            (Exact name of registrant as specified in its charter)

         DELAWARE                                        76-0329525
(State or other jurisdiction                          (I.R.S. Employer
of incorporation or organization)                    Identification No.)


                        600 FIFTH AVENUE -- 25TH FLOOR
                           NEW YORK, NEW YORK 10020
                                (212) 332-2965
         (Address, including zip code, and telephone number, including
            area code, of registrant's principal executive offices)


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 [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock as of the last practical date:

Not Applicable

================================================================================

<PAGE>

                              ROYSTER-CLARK, INC.
                                   FORM 10-Q
                               TABLE OF CONTENTS

                                                                         Page

                        PART 1. FINANCIAL INFORMATION:

Item 1. Financial Statements
         Condensed Consolidated Balance Sheets                             2
         Condensed Consolidated Statements of Operations                   3
         Condensed Consolidated Statements of Cash Flows                   4
         Notes to Condensed Consolidated Financial Statements              5

Item 2. Management's Discussion and Analysis of Financial Condition,
         Results of Operations and Cash flows                             12
Item 3. Quantitative and Qualitative Disclosures about Market Risk        18

PART 2. OTHER INFORMATION:

Item 6. Exhibits and Reports on Form 8-K
        Exhibit Index                                                     20

Signatures                                                                21


                          FORWARD-LOOKING STATEMENTS

This Form 10-Q contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this Report, the words
"estimate," "project," "anticipate," "expect," "intend," "believe," "hope,"
"may" and similar expressions, as well as "will," "shall" and other indications
of future tense, are intended to identify forward-looking statements. Similarly,
statements that describe the Company's future plans, objectives, targets or
goals are also forward-looking statements. The forward-looking statements are
based on our current expectations and speak only as of the date made. These
forward-looking statements involve known and unknown risks, uncertainties and
other factors that in some cases have affected our historical results and could
cause actual results in the future to differ significantly from the results
anticipated in forward-looking statements made in this Report. Important factors
that could cause a material effect include, but are not limited to, (i) changes
in matters which affect the global supply and demand of fertilizer products,
(ii) the volatility of the natural gas markets, (iii) a variety of conditions in
the agricultural industry such as grain prices, planted acreage, projected grain
stocks, U.S. government policies, weather and changes in agricultural production
methods, (iv) possible unscheduled plant outages and other operating
difficulties, (v) price competition and capacity expansions and reductions from
both domestic and international producers, (vi) the relative unpredictability of
national and local economic conditions within the markets we serve, specifically
in light of the September 11, 2001 terrorist attacks and their related
aftermath, (vii) environmental regulations, (viii) other important factors
affecting the fertilizer industry, (ix) fluctuations in interest rates and (x)
other factors referenced in the Company's Reports and registration statements
filed with the Securities and Exchange Commission. You are cautioned not to
place undue reliance on the forward-looking statements.

Few of the forward-looking statements in this Report deal with matters that are
within our control. Acquisition, financing and other agreements and arrangements
must be negotiated with independent third parties and, in some cases, must be
approved by governmental agencies. These third parties generally have interests
that do not coincide with ours and may conflict with our interests. Unless the
third parties and we are able to compromise their various objectives in a
mutually acceptable manner, agreements and arrangements will not be consummated.

                                       1
<PAGE>

                         PART 1. FINANCIAL INFORMATION

ITEM 1. Financial Statements

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   SEPTEMBER 30, 2001 AND DECEMBER 31, 2000
                            (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                          SEPTEMBER 30,      DECEMBER 31,
                         ASSETS                                              2001               2000
                                                                          -------------      ------------
                                                                           (UNAUDITED)
<S>                                                                      <C>                 <C>
Current assets:
  Cash                                                                    $         265      $        413
  Trade accounts receivable, net of allowance for doubtful
    accounts of $4,897 and $5,891 at September 30, 2001 and
    December 31, 2000, respectively                                             105,155            80,425
  Other receivables                                                              44,906            38,372
  Inventories                                                                   154,039           240,530
  Prepaid expenses                                                                1,997             4,478
  Refundable income taxes                                                           687               871
  Deferred income taxes                                                           7,290             9,329
                                                                          -------------      ------------
       Total current assets                                                     314,339           374,418
Property, plant and equipment, net                                              208,724           216,698
Goodwill, net                                                                    16,941            18,383
Deferred financing costs, net                                                    11,036            12,533
Other assets, net                                                                 5,372             1,324
                                                                          -------------      ------------
                                                                          $     556,412      $    623,356
                                                                          =============      =============
                 LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
  Current installments of long-term debt                                  $       5,072      $      2,617
  Customer deposits                                                              16,282            68,179
  Accounts payable                                                               73,604            87,637
  Accrued expenses                                                               26,385            24,549
                                                                          -------------      ------------
       Total current liabilities                                                121,343           182,982
Senior secured credit facility                                                  131,794           135,956
10 1/4% First Mortgage Notes due 2009                                           200,000           200,000
Long-term debt, excluding current installments                                    2,493             4,796
Other long-term liabilities                                                       5,972             5,608
Deferred income taxes                                                             2,743             3,552
                                                                          -------------      ------------
       Total liabilities                                                        464,345           532,894
                                                                          -------------      ------------
Stockholder's equity:
  Common stock, no par value. Authorized 350,000 shares; 1 share
    issued and outstanding                                                           --                --
  Additional paid-in capital                                                     88,599            88,599
  Retained earnings                                                               3,468             1,863
                                                                          -------------      ------------
       Total stockholder's equity                                                92,067            90,462
                                                                          -------------      ------------
                                                                          $     556,412      $    623,356
                                                                          =============      ============


</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
           THREE  AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                                  (UNAUDITED)
                            (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                     THREE MONTHS     THREE MONTHS       NINE MONTHS       NINE MONTHS
                                                        ENDED            ENDED             ENDED              ENDED
                                                     SEPTEMBER 30,    SEPTEMBER 30,      SEPTEMBER 30,     SEPTEMBER 30,
<S>                                                     <C>             <C>                 <C>              <C>
                                                         2001            2000              2001              2000
                                                       --------       ---------         ---------         ---------

Net sales                                              $120,437        $125,566          $820,325          $775,153
Cost of sales                                            97,781         100,220           658,442           619,402
                                                       --------        --------          --------          --------
         Gross profit                                    22,656          25,346           161,883           155,751
Selling, general and administrative expenses             39,092          40,640           131,371           122,688
                                                       --------        --------          --------          --------
         Operating income (loss)                        (16,436)        (15,294)           30,512            33,063
Interest expense                                         (8,497)         (9,748)          (27,083)          (27,361)
                                                       --------        --------          --------          --------
         Income (loss) before income taxes              (24,933)        (25,042)            3,429             5,702
Income tax expense (benefit)                             (9,275)         (9,961)            1,824             2,755
                                                       --------        --------          --------          --------
         Net income (loss)                             $(15,658)       $(15,081)         $  1,605          $  2,947
                                                       ========        ========          ========          ========

</TABLE>





    See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                                  (UNAUDITED)
                            (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                          NINE MONTHS          NINE MONTHS
                                                                                             ENDED                ENDED
                                                                                          SEPTEMBER 30,        SEPTEMBER 30,
                                                                                              2001                 2000
                                                                                        ----------------     ----------------
<S>                                                                                           <C>                 <C>
Cash flows from operating activities:
    Net income                                                                            $    1,605            $   2,947
                                                                                          ----------            ---------
    Adjustments to reconcile net income to net cash
       provided by (used in) operating activities:
         Provision for doubtful accounts                                                       2,603                2,040
         Depreciation and amortization                                                        20,053               18,612
         Loss (gain) on sale of property, plant and equipment                                  1,089                 (325)
         Deferred income taxes                                                                 1,230                  512
         Changes in operating assets and liabilities increasing
           (decreasing) cash:
              Trade accounts receivable                                                      (27,333)             (40,096)
              Other receivables                                                               (6,534)               4,871
              Inventories                                                                     86,491              (23,466)
              Prepaid expenses                                                                 2,481                 (688)
              Refundable income taxs                                                             184                1,267
              Other assets                                                                    (1,116)                  73
              Accounts payable                                                               (14,033)              (1,772)
              Accrued expenses                                                                 2,335                3,109
              Other long-term liabilities                                                        364                  220
                                                                                          ----------            ---------
                 Total adjustments                                                            67,814              (35,643)
                                                                                          ----------            ---------
                 Net cash provided by (used in) operating activities                          69,419              (32,696)
                                                                                          ----------            ---------
Cash flows from investing activities:
    Proceeds from sale of property, plant and equipment                                        1,018                1,396
    Purchases of property, plant and equipment                                               (11,373)             (14,579)
    Costs associated with Agro acquisition                                                    (3,305)                  --
    Acquisitions, net of cash acquired of $22                                                     --              (27,221)
                                                                                          ----------            ---------
                 Net cash used in investing activities                                       (13,660)             (40,404)
                                                                                          ----------            ---------
Cash flows from financing activities:
    Proceeds from senior secured credit facility                                             265,750              354,250
    Payments on senior secured credit facility                                              (269,912)            (252,355)
    Proceeds from long-term debt                                                                 256                   --
    Principal payments on long-term debt                                                        (104)              (4,124)
    Net decrease in customer deposits                                                        (51,897)             (29,168)
                                                                                          ----------            ---------
                 Net cash provided by (used in) financing activities                         (55,907)              68,603
                                                                                          ----------            ---------
Net decrease in cash                                                                            (148)              (4,497)
Cash at beginning of period                                                                      413                4,670
                                                                                          ----------            ---------
Cash at end of period                                                                     $     265             $     173
                                                                                          ----------            ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during the period for interest                                              $   22,147            $  22,383
                                                                                          ----------            ---------
    Cash paid during the period for income taxes                                          $      412            $     978
                                                                                          ----------            ---------

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
    In the first quarter of 2000, the Company completed a series of small acquisitions.  In conjunction
       with these transactions, the Company assumed various accrued liabilities and accounts payable of
       $8,092 and debt of $4,092.  The transactions were financed with proceeds from the Company's
       senior secured credit facility.

</TABLE>


    See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES
            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
                              SEPTEMBER 30, 2001
                            (Dollars in thousands)


(1) Description of Business and Basis of Presentation

Royster-Clark, Inc. (herein referred to as Royster-Clark or the Company) is a
retail and wholesale distributor of mixed fertilizer, fertilizer materials,
seed, crop protection products and agronomic services to farmers, primarily in
the East, South and Midwest. The Company's operations consist of retail farm
centers, granulation, blending and seed processing plants, and an integrated
network of storage and distribution terminals and warehouses. In addition, the
Company operates two nitrogen-manufacturing plants that supply the retail and
wholesale distribution businesses with nitrogen fertilizer products.

The information presented as of September 30, 2001 and for the three and nine
month periods ended September 30, 2001 and 2000 is unaudited. In the opinion of
the Company's management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (consisting only of normal
recurring adjustments) which the Company considers necessary for the fair
presentation of the Company's financial position as of September 30, 2001 and
the results of their operations and their cash flows for the three and nine
month periods ended September 30, 2001 and 2000. The condensed consolidated
financial statements included herein have been prepared in accordance with
accounting principles generally accepted in the United States of America and the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. These condensed
consolidated financial statements should be read in conjunction with the
Company's audited consolidated financial statements for the year ended December
31, 2000, which are included as part of the Company's Annual Report on
Form 10-K.

The Company's business is highly seasonal with approximately 70% of sales
generated between March and July. Results for the interim periods presented are
not necessarily indicative of results that may be expected for the entire year.

(2) Inventories

Inventories at September 30, 2001 and December 31, 2000 consist of the
following:


                                    September 30,     December 31,
                                        2001             2000
                                    -------------     ------------
Crop protection products            $   65,283         $  99,580
Fertilizers                             14,181            30,378
Raw materials                           57,361            86,009
Seeds                                    5,492            10,095
Sundries and other                      11,722            14,468
                                     =========         =========
                                     $ 154,039         $ 240,530

(3) Environmental Matters

The Company is subject to a wide variety of federal, state and local
environmental laws and regulations. The Company has been identified as a
potentially responsible party concerning the release of certain hazardous
substances at five locations. While the current law potentially imposes joint
and several liability upon each party named as a potentially responsible party,
the Company's contribution to clean up these sites is expected to be limited,
given the number of other companies which have also been named as

                                       5
<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           (UNAUDITED) - (Continued)


potentially responsible parties and the nature and amount of cleanup involved. A
number of the Company's facilities have been evaluated as having excess
nitrates, phosphorous and pesticides in the surrounding soil or groundwater. In
addition, several underground storage tanks have been removed or closed at some
facilities and these sites have been evaluated for possible contamination. In
total, cleanup of hazardous or potentially hazardous substances has been planned
or is being performed at approximately 49 sites.

In connection with the acquisitions of AgriBusiness and Royster-Clark, the
Company obtained indemnities for certain claims related to environmental matters
that existed or arose prior to the acquisitions. The indemnities related to
AgriBusiness are subject to a $4,500 deductible, an overall cap on all
indemnities, and certain time limitations. The indemnities related to Royster-
Clark (predecessor company) are subject to a deductible of $2,000, certain time
limitations and an overall cap of $5,000 on all indemnities. In addition,
Royster-Clark (predecessor company) had obtained indemnities from Lebanon
Chemical Corporation (LCC) for certain claims related to environmental matters
that existed at sites acquired from LCC in December 1998. The Company also
obtained indemnities from the former stockholder of Alliance Agronomics, Inc., a
company acquired in 2000 for environmental conditions identified as of the date
of acquisition.

The Company has recorded environmental liabilities at September 30, 2001 and
December 31, 2000 for the estimated cost of cleanup efforts of identified
contamination or site characterization totaling $3,544 and $3,661, respectively,
which are included in other long-term liabilities in the accompanying condensed
consolidated balance sheet. Actual cash expenditures during the nine months
ended September 30, 2001 and 2000 were $117 and $52, respectively. These
liabilities do not take into account any claims for recoveries from insurance or
third parties and are not discounted. Actual costs to be incurred at identified
sites in future periods may vary from the estimates, given inherent uncertainty
in evaluating environmental exposures. While the Company's potential exposure
cannot be estimated, in the opinion of management the final disposition of such
matters will not have a material adverse effect on the financial position or
results of operations of the Company.

(4) Condensed Financial Data of Guarantor Subsidiaries

The Company issued $200,000 of 10 1/4% First Mortgage Notes due April 2009
(herein referred to as the First Mortgage Notes) on April 22, 1999 to partially
finance an acquisition. The First Mortgage Notes mature on April 22, 2009 and
bear interest at 10 1/4% payable semi-annually in arrears. The First Mortgage
Notes are secured by 17 principal properties, related fixtures and equipment and
other related assets and a pledge of equity of certain subsidiaries. The First
Mortgage Notes are guaranteed on a full, unconditional and joint and several
basis, by each of the following subsidiaries of Royster-Clark:

Royster-Clark Realty LLC
Royster-Clark Resources LLC
Royster-Clark AgriBusiness, Inc.
Royster-Clark AgriBusiness Realty LLC
Royster-Clark Nitrogen, Inc.
Alliance Agronomics, Inc (and its subsidiaries)

There are currently no restrictions on the ability of Royster-Clark to obtain
funds from its guarantor subsidiaries through dividends or loans.

The following table presents the condensed financial data of Royster-Clark and
its guarantor subsidiaries as of September 30, 2001 and December 31, 2000 and
for the three and nine month periods ended September 30, 2001 and 2000.

                                       6
<PAGE>
                      ROYSTER-CLARK, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            (UNAUDITED) - (Continued)

<TABLE>
<CAPTION>
BALANCE SHEET DATA:
                                                               Royster-Clark,     Guarantor
SEPTEMBER 30, 2001 (UNAUDITED)                                      Inc.         Subsidiaries     Eliminations     Consolidated
                                                               --------------    ------------     ------------     ------------
<S>                                                            <C>               <C>              <C>              <C>
Current assets:
   Cash                                                        $        42       $        223     $         --     $        265
   Trade accounts receivable, net                                       --            107,185           (2,030)         105,155
   Other receivables                                                 3,256             57,336          (15,686)          44,906
   Inventories                                                          --            154,039               --          154,039
   Prepaid expenses                                                     --              1,997               --            1,997
   Refundable income taxes                                             687                 --               --              687
   Deferred income taxes                                             7,290                 --               --            7,290
                                                               -----------       ------------     ------------    -------------
       Total current assets                                         11,275            320,780          (17,716)         314,339
Property, plant and equipment, net                                  13,732            194,992               --          208,724
Goodwill, net                                                       12,373              4,568               --           16,941
Deferred financing costs, net                                       11,036                 --               --           11,036
Other assets, net                                                       83              5,289               --            5,372
Investment in subsidiaries                                         376,122                 --         (376,122)              --
                                                               -----------       ------------     ------------    -------------
       Total assets                                            $   424,621       $    525,629     $   (393,838)   $     556,412
                                                               ===========       ============     ============    =============

Current liabilities:
   Current installments of long-term debt                      $        16       $      5,056     $         --    $       5,072
   Customer deposits                                                    --             16,282               --           16,282
   Accounts payable                                                     --             91,320          (17,716)          73,604
   Accrued expenses                                                 10,872             15,513               --           26,385
                                                               -----------       ------------     ------------    -------------
       Total current liabilities                                    10,888            128,171          (17,716)         121,343
Senior secured credit facility                                     131,794                 --               --          131,794
10 1/4 % First Mortgage Notes                                      200,000                 --               --          200,000
Long-term debt, excluding current installments                          --              2,493               --            2,493
Other long-term liabilities                                            490              5,482               --            5,972
Deferred income taxes                                                2,743                 --               --            2,743
                                                               -----------       ------------     ------------    -------------
       Total liabilities                                           345,915            136,146          (17,716)         464,345
                                                               -----------       ------------     ------------    -------------

Stockholder's equity:
   Common stock                                                         --                 --               --               --
   Additional paid-in capital                                       78,599            386,122         (376,122)          88,599
   Retained earnings                                                   107              3,361               --            3,468
                                                               -----------       ------------     ------------    -------------
       Total stockholder's equity                                   78,706            389,483         (376,122)          92,067
                                                               -----------       ------------     ------------    -------------
       Total liabilities and stockholder's equity              $   424,621       $    525,629     $   (393,838)   $     556,412
                                                               ===========       ============     ============    =============

</TABLE>

                                       7
<PAGE>
                     ROYSTER-CLARK, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           (UNAUDITED) - (Continued)
<TABLE>
<CAPTION>
BALANCE SHEET DATA:

                                                              Royster-Clark,      Guarantor
DECEMBER 31, 2000                                                 Inc.          Subsidiaries      Eliminations       Consolidated
                                                            -----------------  ---------------   ---------------    ---------------
<S>                                                               <C>                <C>               <C>                <C>
Current assets:
    Cash                                                      $      42          $     371       $       --            $      413
    Trade accounts receivable, net                                   --             81,599           (1,174)               80,425
    Other receivables                                             4,107             55,815          (21,550)               38,372
    Inventories                                                      --            240,762             (232)              240,530
    Prepaid expenses                                                 --              4,478               --                 4,478
    Refundable income taxes                                         871                 --               --                   871
    Deferred income taxes                                         9,329                 --               --                 9,329
                                                              ---------          ---------       ----------            ----------
        Total current assets                                     14,349            383,025          (22,956)              374,418
Property, plant and equipment, net                               15,626            201,072               --               216,698
Goodwill, net                                                    13,509              4,874               --                18,383
Deferred financing costs, net                                    12,533                 --               --                12,533
Other assets, net                                                   118              1,206               --                 1,324
Investment in subsidiaries                                      370,460                 --         (370,460)                   --
                                                              ---------          ---------       ----------            ----------
        Total assets                                          $ 426,595          $ 590,177       $ (393,416)           $  623,356
                                                              =========          =========       ==========            ==========
Current liabilities:
    Current installments of long-term debt                    $      47          $   2,570       $       --            $    2,617
    Customer deposits                                                --             68,179               --                68,179
    Accounts payable                                                 --            110,361          (22,724)               87,637
    Accrued expenses                                              7,844             16,705               --                24,549
                                                              ---------          ---------       ----------            ----------
        Total current liabilities                                 7,891            197,815          (22,724)              182,982
Senior secured credit facility                                  135,956                 --               --               135,956
10 1/4 % First Mortgage Notes                                   200,000                 --               --               200,000
Long-term debt, excluding current installments                        4              4,792               --                 4,796
Other long-term liabilities                                         490              5,118               --                 5,608
Deferred income taxes                                             3,552                 --               --                 3,552
                                                              ---------          ---------       ----------            ----------
        Total liabilities                                       347,893            207,725          (22,724)              532,894
                                                              ---------          ---------       ----------            ----------
Stockholder's equity:
    Common stock                                                     --                 --               --                    --
    Additional paid-in capital                                   78,599            380,460         (370,460)               88,599
    Retained earnings (deficit)                                     103              1,992             (232)                1,863
                                                              ---------          ---------       ----------            ----------
        Total stockholder's equity                               78,702            382,452         (370,692)               90,462
                                                              ---------          ---------       ----------            ----------
        Total liabilities and stockholder's equity            $ 426,595          $ 590,177       $ (393,416)           $  623,356
                                                              =========          =========       ==========            ==========
</TABLE>

                                       8
<PAGE>

                     ROYSTER-CLARK, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           (UNAUDITED) - (Continued)
<TABLE>
<CAPTION>


UNAUDITED STATEMENT OF OPERATIONS DATA:

THREE MONTHS ENDED SEPTEMBER 30, 2001                    Royster-Clark,        Guarantor
                                                              Inc.           Subsidiaries     Eliminations     Consolidated
                                                         --------------      ------------     ------------     ------------
<S>                                                      <C>                 <C>              <C>             <C>
Net sales                                                   $   976            $139,884          $(20,423)         $120,437
Cost of sales                                                   106             113,588           (15,913)           97,781
                                                            -------            --------          --------          --------
      Gross profit                                              870              26,296            (4,510)           22,656
Selling, general and administrative expenses                    281              43,378            (4,567)           39,092
                                                            -------            --------          --------          --------
      Operating income (loss)                                   589             (17,082)               57           (16,436)
Interest expense                                               (588)             (7,909)               --            (8,497)
                                                            -------            --------          --------          --------
      Income (loss) before income taxes                           1             (24,991)               57           (24,933)
Income tax benefit                                               --              (9,275)               --            (9,275)
                                                            -------            --------          --------          --------
      Net income (loss)                                     $     1            $(15,716)         $     57          $(15,658)
                                                            =======            ========          ========          ========
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 2000                    Royster-Clark,        Guarantor
                                                              Inc.           Subsidiaries     Eliminations     Consolidated
                                                         --------------      ------------     ------------     ------------
<S>                                                      <C>                 <C>              <C>             <C>
Net sales                                                   $ 3,576    $        147,880    $     $(25,890)         $125,566
Cost of sales                                                   148             112,130           (12,058)          100,220
                                                            -------            --------          --------          --------
      Gross profit                                            3,428              35,750           (13,832)           25,346
Selling, general and administrative expenses                  2,958              51,514           (13,832)           40,640
                                                            -------            --------          --------          --------
      Operating income (loss)                                   470             (15,764)               --           (15,294)
Interest expense                                               (463)             (9,285)               --            (9,748)
                                                            -------            --------          --------          --------
      Income (loss) before income taxes                           7             (25,049)               --           (25,042)
Income tax expense (benefit)                                      4              (9,965)               --            (9,961)
                                                            -------            --------          --------          --------
      Net income (loss)                                     $     3            $(15,084)         $     --          $(15,081)
                                                            =======            ========          ========          ========
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 2001                     Royster-Clark,        Guarantor
                                                              Inc.           Subsidiaries     Eliminations     Consolidated
                                                         --------------      ------------     ------------     ------------
<S>                                                      <C>                 <C>              <C>             <C>
Net sales                                                   $ 2,853             869,379          $(51,907)         $820,325
Cost of sales                                                   316             694,579           (36,453)          658,442
                                                            -------            --------          --------          --------
      Gross profit                                            2,537             174,800           (15,454)          161,883
Selling, general and administrative expenses                    649             146,408           (15,686)          131,371
                                                            -------            --------          --------          --------
      Operating income                                        1,888              28,392               232            30,512
Interest expense                                             (1,882)            (25,201)               --           (27,083)
                                                            -------            --------          --------          --------
      Income before income taxes                                  6               3,191               232             3,429
Income tax expense                                                2               1,822                --             1,824
                                                            -------            --------          --------          --------
      Net income                                            $     4            $  1,369          $    232          $  1,605
                                                            =======            ========          ========          ========
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 2000                     Royster-Clark,        Guarantor
                                                              Inc.           Subsidiaries     Eliminations     Consolidated
                                                         --------------      ------------     ------------     ------------
<S>                                                      <C>                 <C>              <C>             <C>
Net sales                                                   $ 7,098            $826,804          $(58,749)         $775,153
Cost of sales                                                   148             655,358           (36,104)          619,402
                                                            -------            --------          --------          --------
      Gross profit                                            6,950             171,446           (22,645)          155,751
Selling, general and administrative expenses                  5,227             140,106           (22,645)          122,688
                                                            -------            --------          --------          --------
      Operating income                                        1,723              31,340                --            33,063
Interest expense                                             (1,709)            (25,652)               --           (27,361)
                                                            -------            --------          --------          --------
      Income before income taxes                                 14               5,688                --             5,702
Income tax expense                                                7               2,748                --             2,755
                                                            -------            --------          --------          --------
      Net income                                            $     7            $  2,940          $     --          $  2,947
                                                            =======            ========          ========          ========
</TABLE>

                                       9
<PAGE>


                      ROYSTER-CLARK, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            (UNAUDITED) - (Continued)

<TABLE>
<CAPTION>
UNAUDITED CASH FLOW DATA:

NINE MONTHS ENDED SEPTEMBER 30, 2001                           Royster-Clark,     Guarantor
                                                                    Inc.         Subsidiaries     Eliminations     Consolidated
                                                               --------------    ------------     ------------     ------------
<S>                                                            <C>               <C>              <C>              <C>
Net cash provided by operating activities                      $        4,038    $     65,381     $         --     $     69,419
                                                               --------------    ------------     ------------     ------------
Cash flows from investing activities:
    Proceeds from sale of property, plant and equipment                   159             859               --            1,018
    Purchases of property, plant and equipment                             --         (11,373)              --          (11,373)
    Costs associated with Agro acquisition                                 --          (3,305)              --           (3,305)
                                                               --------------    ------------     ------------     ------------
        Net cash provided by (used in) investing activities               159         (13,819)              --          (13,660)
                                                               --------------    ------------     ------------     ------------

Cash flows from financing activities:
    Proceeds from senior secured credit facility                      265,750              --               --          265,750
    Payments on senior secured credit facility                       (269,912)             --               --         (269,912)
    Proceeds from long-term debt                                           --             256               --              256
    Principal payments on long-term debt                                  (35)            (69)              --             (104)
    Net decrease in customer deposits                                      --         (51,897)              --          (51,897)
                                                               --------------    ------------     ------------     ------------
        Net cash used in financing activities                          (4,197)        (51,710)              --          (55,907)
                                                               --------------    ------------     ------------     ------------

Net decrease in cash                                                       --            (148)              --             (148)
Cash at beginning of period                                                42             371               --              413
                                                               --------------    ------------     ------------     ------------
Cash at end of period                                          $           42    $        223     $         --     $        265
                                                               ==============    ============     ============     ============


NINE MONTHS ENDED SEPTEMBER 30, 2000                           Royster-Clark,     Guarantor
                                                                    Inc.         Subsidiaries     Eliminations     Consolidated
                                                               --------------    ------------     ------------     ------------
Net cash provided by (used in) operating activities            $     (102,214)   $     69,518     $         --     $    (32,696)
                                                               --------------    ------------     ------------     ------------
Cash flows from investing activities:
    Proceeds from sale of property, plant and equipment                    85           1,311               --            1,396
    Purchases of property, plant and equipment                             --         (14,579)              --          (14,579)
    Acquisitions, net of cash acquired                                     --         (27,221)              --          (27,221)
                                                               --------------    ------------     ------------     ------------
        Net cash provided by (used in) investing activities                85         (40,489)              --          (40,404)
                                                               --------------    ------------     ------------     ------------

Cash flows from financing activities:
    Proceeds from senior secured credit facility                      354,250              --               --          354,250
    Payments on senior secured credit facility                       (252,355)             --               --         (252,355)
    Principal payments on long-term debt                                  (68)         (4,056)              --           (4,124)
    Net decrease in customer deposits                                      --         (29,168)              --          (29,168)
                                                               --------------    ------------     ------------     ------------
        Net cash provided by (used in) financing activities           101,827         (33,224)              --           68,603
                                                               --------------    ------------     ------------     ------------
Net decrease in cash                                                     (302)         (4,195)              --           (4,497)
Cash at beginning of period                                               344           4,326               --            4,670
                                                               --------------    ------------     ------------     ------------
Cash at end of period                                          $           42    $        131     $         --     $        173
                                                               ==============    ============     ============     ============
</TABLE>

                                       10
<PAGE>

                      ROYSTER-CLARK, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            (UNAUDITED) - (Continued)

(5) Subsequent Event

The Company entered into a purchase agreement to acquire certain assets of Agro
Distribution, LLC ("Agro") on June 14, 2001. The Company and Agro could not
reach agreement on certain key elements of the proposed transaction and
terminated the purchase agreement on October 17, 2001. During the negotiation
period, the Company incurred costs associated with the acquisition. At September
30, 2001, these costs totaled $3.4 million of which $3.3 million represent
legal, accounting and other direct costs of the acquisition which are included
in "Other assets" and $0.1 million represent costs incurred associated with
capitalized software costs related to the acquisition which are included in
"Property, plant and equipment" in the accompanying condensed consolidated
balance sheets. With the termination of the transaction, these costs yield no
future benefit and will be written off during the fourth quarter along with
other transaction costs incurred through October 17, 2001.

                                       11
<PAGE>

ITEM 2. Management's Discussion and Analysis of Financial Condition, Results of
        Operations and Cash Flows

THE FOLLOWING INFORMATION CONTAINS FORWARD-LOOKING STATEMENTS. SEE "FORWARD-
LOOKING STATEMENTS" ABOVE.

General

Royster-Clark, Inc. together with its subsidiaries, (the "Company" or "Royster-
Clark") is a retail and wholesale distributor of mixed fertilizer, fertilizer
materials, seed, crop protection products and agronomic services to farmers,
primarily in the East, South and Midwest. The Company's operations consist of
retail farm centers, granulation, blending and seed processing plants, and an
integrated network of storage and distribution terminals and warehouses. In
addition, the Company operates two nitrogen-manufacturing plants that supply the
retail and wholesale distribution businesses with nitrogen fertilizer products.
Our business is affected by a number of factors, including weather conditions
and prevailing prices for fertilizer and other crop production inputs.

Weather conditions can significantly impact our results of operations. Adverse
weather conditions during the planting season may force farmers to either delay
or abandon their planting, which may lead to lower use of fertilizer, seed and
crop protection products.

Another factor affecting our business is the price for fertilizers. We purchase
nitrogen materials, phosphates, and potash and resell these nutrients in either
their original form or in the form of multi-nutrient fertilizers. Prices for
phosphates have experienced some price volatility while potash has been
relatively stable over the past several years. The major raw material in the
manufacture of nitrogen products is natural gas. During 2000 and 2001, natural
gas prices experienced significant price volatility. During 2000, prices
increased from approximately $2.60 per MMBTU to $9.98 per MMBTU in December of
2000 resulting in large price increases of nitrogen products. Natural gas prices
have declined during 2001 to below $2.00 per MMBTU at the end of the third
quarter. The lower prices have resulted in the decline in nitrogen product
prices, resulting in lower Mid-Cornbelt prices for ammonia and nitrogen solution
of 15-25% lower than last year as of the end of the quarter. The level of
nitrogen prices directly impacts the profitability of our two nitrogen-
manufacturing plants.

Acquisitions

The Company entered into a purchase agreement to acquire certain assets of Agro
Distribution, LLC ("Agro") on June 14, 2001. The Company and Agro could not
reach agreement on certain key elements of the proposed transaction and
terminated the purchase agreement on October 17, 2001. During the negotiation
period, the Company incurred costs associated with the acquisition. At September
30, 2001, these costs totaled $3.4 million of which $3.3 million represent
legal, accounting and other direct costs of the acquisition which are included
in "Other assets" and $0.1 million represent costs incurred associated with
capitalized software costs related to the acquisition which are included in
"Property, plant and equipment" in the accompanying condensed consolidated
balance sheets. With the termination of the transaction, these costs yield no
future benefit and will be written off during the fourth quarter along with
other transaction costs incurred through October 17, 2001. We estimate that
transaction costs incurred subsequent to September 30, 2001 through October 17,
2001 will be approximately $0.8 million.

Results of Operations

Three months ended September 30, 2001 compared to three months ended
September 30, 2000

The following table and discussion provides information regarding Royster-
Clark's statement of operations as a percentage of net sales.

                                       12
<PAGE>

                                            Three Months Ended
                                               September 30,
                                            -------------------
                                               2001        2000
                                            ---------     -------
                Net sales..................   100.0 %     100.0 %
                Costs of sales.............    81.2        79.8
                                             ------      ------
                Gross profit...............    18.8        20.2
                Selling, general and.......
                 administrative expenses...    32.5        32.4
                                             ------      ------
                Operating loss.............   (13.7)      (12.2)
                Interest expense...........    (7.1)       (7.8)
                                             ------      ------
                Loss before income taxes...   (20.8)      (20.0)
                Income tax benefit.........    (7.7)       (7.9)
                                             ------      ------
                Net loss...................   (13.1)%     (12.1)%
                                             ======      ======

Net sales. Royster-Clark's net sales were $120.4 million for the third quarter
of 2001 compared to $125.6 million for the same period in 2000, a decrease of
$5.2 million, or 4.1%. The decrease in sales resulted from the following
factors:

 . Sales of ammonia and nitrogen solution products were $4.8 million lower due to
  market related price depreciation and volume declines due to dealer customers
  delaying purchases in light of price declines. The price decline resulted from
  the significant decrease in natural gas prices discussed above.

 . Sales of crop protection products were $4.7 million lower due to the timing of
  application of crop protection products in 2001 compared to 2000; price
  depreciation of major crop protection products; and minimal insect pressures
  throughout most of the market areas. Favorable weather conditions permitted
  farmers to apply crop protection products on their crops earlier than what
  would normally be expected.

The decrease in net sales was partially offset by higher sales from fertilizer
of $1.9 million, grain products of $1.4 million and other revenues of $0.9
million. Fertilizer net sales were higher primarily due to a slightly earlier
start to fall fill programs in the some of the southeast market areas. Grain
product sales were higher primarily due to improved yields of crops in the
Tennessee market being delivered to the Company's grain storage.

Gross profit. Gross profit was $22.7 million for the third quarter of 2001
compared to $25.3 million for the same period in 2000, a decrease of $2.6
million, or 10.3%. The decrease in gross profit resulted from the following
factors:

 . Decreased gross profit in ammonia and nitrogen solution products of $4.2
  million compared to the comparable period in 2000. The decrease resulted from
  approximately $0.9 million in volume declines and approximately $3.3 million
  in sales price depreciation.

 . Decreased gross profit in crop protection products of $2.9 million compared to
  the comparable period in 2000 resulted from sales declines discussed above.

The decreases in gross profit were partially offset by higher gross profit in
seed products of $2.4 million in 2001 compared to the same period in 2000. These
higher gross profit resulted from improved purchasing, improved sales mix due to
sales of our proprietary seed products and more rebates and fees earned. Gross
margin was 18.8% for the third quarter of 2001 compared to 20.2% for the same
period in 2000. Lower gross margin percentage resulted primarily from sales
price declines in nitrogen products.

Selling, general and administrative expenses. Selling, general and
administrative expenses were $39.1 million for the third quarter of 2001
compared to $40.6 million for the same period in 2000, a decrease of $1.5
million, or 3.7%. The decrease in selling, general and administrative expenses
resulted from the following factors:

 . Expenses were approximately $2.0 million lower compared to 2000 due to less
  expense supporting

                                       13
<PAGE>

  sales volume decreases including seasonal labor and
  overtime, commissioned agent fees, fuel, power, repairs and supplies.

 . Expenses associated with the integration of the Old Royster-Clark and
  Agribusiness computer systems were approximately $1.0 million less compared to
  last year.

 . Cost control measures implemented lowered operating costs in travel by $0.3
  million, advertising by $0.2 million and communication costs by $0.1 million.

The decrease in selling, general and administrative expenses was partially
offset by increases in medical and worker's compensation costs of $1.5 million
and property and general liability insurance of $0.7 million. Selling, general
and administrative expense as a percentage of net sales was 32.5% for the third
quarter of 2001 compared to 32.4% for the same period in 2000. Quarterly
selling, general and administrative expense as a percent of net sales fluctuates
widely within the fiscal year due to the seasonal nature of sales volumes with
selling, general and administrative expense exhibiting less seasonal
fluctuations.

Operating loss. Operating loss was $16.4 million for the third quarter of 2001
compared to $15.3 million for the same period in 2000, an increase of $1.1
million, or 7.2%. This increase was the result of factors discussed above.
Operating loss as a percentage of net sales was 13.7% for the third quarter in
2001 compared to 12.2% for the same period in 2000.

Interest expense. Interest expense was $8.5 million for the third quarter in
2001 compared to $9.7 million for the same period in 2000, a decrease of $1.2
million, or 12.4%. The decrease in interest expense was primarily due to lower
interest rates with average interest rates declining from an average of 10.3% in
the third quarter of 2000 to 7.8% for the comparable period in 2001. Lower
interest also resulted from lower average daily borrowings for the quarter
against our senior secured credit facility of $10.7 million to fund decreased
working capital levels in 2001 as compared to 2000.

Income tax benefit. Income tax benefit was $9.3 million for the third quarter of
2001 compared to $10.0 million for the same period in 2000. This decrease is
attributable to a lower effective tax rate. The effective tax rate was 37.2% for
the third quarter of 2001 compared to 39.8% for the same period in 2000. The
lower effective tax rate in 2001 compared to 2000 resulted from the impact of
permanent differences on our increased loss.

Net loss. Net loss was $15.7 million for the third quarter of 2001 compared to
$15.1 million for the same period in 2000, a decrease of $0.6 million, resulting
from the fluctuations noted above.

Nine months ended September 30, 2001 compared to nine months ended September 30,
2000

The following table and discussion provides information regarding Royster-
Clark's statement of operations as a percentage of net sales.


                                                     Nine Months Ended
                                                       September 30,
                                                    -------------------
                                                       2001        2000
                                                    ---------     -------
                Net sales....................         100.0 %     100.0 %
                Costs of sales...............          80.3        79.9
                                                     ------      ------
                Gross profit.................          19.7        20.1
                Selling, general and.........
                 administrative expenses.....          16.0        15.8
                                                     ------      ------
                Operating income.............           3.7         4.3
                Interest expense.............          (3.3)       (3.5)
                                                     ------      ------
                Income before income taxes...           0.4         0.8
                Income tax expense...........           0.2         0.4
                                                     ------      ------
                Net income...................           0.2 %       0.4 %
                                                     ======      ======

                                       14
<PAGE>

Net sales. Royster-Clark's net sales were $820.3 million for the first nine
months of 2001 compared to $775.2 million for the same period in 2000, an
increase of $45.1 million, or 5.8%. The increase in sales resulted from the
following factors:

 . Excluding sales increases from acquisitions noted below, sales of ammonia and
  nitrogen solution products were higher by a net $20.5 million, primarily due
  to price appreciation during the first six months. Included in this net $20.5
  million increase was lower wholesale sales of ammonia and nitrogen solution
  in the Midwest during the first quarter of 2001 of $4.2 million and market
  related price depreciation and volume declines of $4.8 million during the
  third quarter when compared to the same period last year. Lower wholesale
  sales during the first quarter resulted from lower ammonia production at the
  Company's East Dubuque plant during its planned shutdown during the quarter.
  The plant resumed full production by the end of March. Price depreciation and
  volume declines during the third quarter resulted from dropping natural gas
  prices (a raw material for the production of many nitrogen-based products) and
  dealer customers delaying purchases in light of declining prices.

 . Sales increased $11.0 million as a result of the acquisitions made in 2000.

 . Sales increased approximately $4.9 million for the first nine months of 2001
  compared to the same period last year from locations acquired in 2000
  regaining some of their previous market share as customers could see a stable
  and reliable supply for their crop input needs and grain storage requirements.
  These locations were purchased out of bankruptcy.

 . The remainder of the sales increase was distributed through several product
  categories compared to the same period last year due to both price
  appreciation and volume increases.

The sales increase for the first nine months of 2001 compared to the same period
last year was partially offset by the following:

 . Sales of crop protection products were $4.7 million lower due to price
  depreciation of major crop protection products and minimal insect pressures
  throughout most of the market areas during the third quarter.

 . Sales of ammoniated and blended fertilizer products were $2.4 million lower
  due primarily to adverse weather conditions resulting in approximately $1.7
  million of lower sales. The balance of the lower sales resulted from various
  other factors.

Gross profit. Gross profit was $161.9 million for the first nine months of 2001
compared to $155.8 million for the same period in 2000, an increase of $6.1
million, or 3.9%. This increase resulted from the sales increases discussed
above and improved purchase costs for fertilizer materials and seed product
categories. This increase was partially offset by the unabsorbed cost due to the
lost sales of East Dubuque during the first quarter of 2001 while the plant was
shutdown and sales price depreciation combined with lower sales volumes in
ammonia and nitrogen solution products during the third quarter. Gross margin
was 19.7% for the first nine months of 2001 compared to 20.1% for the same
period in 2000. Lower gross margin resulted primarily from the unabsorbed cost
due to the lost sales of East Dubuque during the first quarter while the plant
was shutdown and sales price depreciation on nitrogen and crop protection
products.

Selling, general and administrative expenses. Selling, general and
administrative expenses were $131.4 million for the first nine months of 2001
compared to $122.7 million for the same period in 2000, an increase of $8.7
million, or 7.1%. The increase in selling, general and administrative expenses
resulted from the following factors:

 . Expenses increased by $3.6 million due to acquisitions made during 2000.

 . Absorption of warehousing, blending and distribution costs capitalized into
  inventory decreased by $2.7 million.

 . Medical, worker's compensation costs, and liability insurance costs increased
  by $5.0 million.

The increase in selling, general and administrative expenses was partially
offset by decreases in depreciation of $0.3 million, conversion related
expenses of $0.8 million, communications of $0.5 million, travel of $0.6 million
and other expense of $0.7 million.

Selling, general and administrative expenses as a percentage of net sales was
16.0% for the first nine

                                       15
<PAGE>

months of 2001 compared to 15.8% for the same period in 2000. Higher selling,
general and administrative expenses as a percent of net sales resulted from
higher medical and workman's compensation costs and lower absorption of
warehousing, blending and distribution costs capitalized into inventory,
predominantly from the first quarter. Quarterly selling, general and
administrative expense as a percent of net sales fluctuates widely within the
fiscal year due to the seasonal nature of sales volumes with selling, general
and administrative expense exhibiting less seasonal fluctuations.

Operating income. Operating income was $30.5 million for the first nine months
of 2001 compared to $33.1 million for the same period in 2000, a decrease of
$2.6 million or 7.9%. This decrease was the result of factors discussed above.
Operating income as a percentage of net sales was 3.7% for the first nine months
in 2001 compared to 4.3% for the same period in 2000.

Interest expense. Interest expense was $27.1 million for the first nine months
in 2001 compared to $27.4 million for the same period in 2000, a decrease of
$0.3 million, or 1.1%. The decrease in interest expense was due to lower average
annualized interest rates of approximately 0.7% during the first nine months of
2001. This decrease was partially offset by higher customer deposits of $11.8
million and $20.2 million higher average daily borrowings against our senior
secured credit facility to fund increased working capital levels in the first
nine months of 2001 as compared to 2000.

Income tax expense. Income tax expense was $1.8 million for the first nine
months of 2001 compared to $2.8 million for the same period in 2000. This
decrease is primarily attributable to the decrease in our income before taxes in
the first nine months of 2001 described above. The effective tax rate was 53.2%
for the nine months of 2001 compared to 48.3% for the same period in 2000. The
higher effective tax rate in 2001 compared to 2000 resulted from the impact of
permanent differences relating to nondeductible goodwill against lower taxable
income, net of the favorable impact of lower estimates of state income tax
expense.

Net income. Net income was $1.6 million for the first nine months of 2001
compared to $2.9 million for the same period in 2000, a decrease of $1.3
million. This decrease resulted from the fluctuations noted above.

Liquidity and Capital Resources

Our primary capital requirements are for working capital, debt service, capital
expenditures and possible acquisitions. For day-to-day liquidity requirements,
we operate with a $245.0 million senior secured credit facility with a
consortium of banks. At September 30, 2001, the collateral in hand under this
facility supported a borrowing availability of $160.1 million, from which we had
drawn $131.8 million. This facility includes up to $10.0 million for letters of
credit. This facility contains financial and operational covenants and other
restrictions with which we must comply, including a requirement to maintain
financial ratios and limitations on our ability to incur additional
indebtedness.

Cash provided by operating activities for the nine months ended September 30,
2001 was $69.4 million as compared to $32.7 million used in operating activities
for corresponding period in 2000. The most significant component of cash flows
from operating activities for each period was movement in operating assets and
liabilities. The primary reason for the increase in cash provided was a decrease
in inventory purchases in the nine months ended September 30, 20001 compared to
the same period in 2000. In 2001, management instituted an initiative to reduce
inventory levels.

Cash flows used in investing activities were $13.7 million for the nine months
ended September 30, 2001 as compared to $40.4 million for the corresponding
period in 2000. This fluctuation was attributable to the $27.2 million in cash
paid for a series of small acquisitions in 2000. Capital expenditures were $11.4
million for the nine months ended September 30, 2001 compared with $14.6 million
for the corresponding period in 2000. These capital expenditures were primarily
for facility and equipment improvements. We estimate that total capital
expenditures, excluding acquisitions, for 2001 will amount to approximately
$15.4 million. Included in net cash used for the first nine months of 2001 was
$3.3

                                       16
<PAGE>

million for acquisition costs associated with the planned Agro Distribution, LLC
acquisition, which was terminated on October 17, 2001.

Net cash used in financing activities totaled $55.9 million for the first nine
months of 2001 as compared to $68.6 million provided by financing activities for
the corresponding period in 2000. The decrease in cash provided by financing
activities resulted from lower net borrowings of $106.1 million on our senior
secured credit facility resulting from lower working capital funding
requirements in 2001 compared to 2000. Lower borrowings resulted from lower
inventory levels in 2001 and lower principal payments on long-term debt offset
by an increase in cash used in financing activities from customer deposits of
$22.7 million.

Net working capital, excluding the senior secured credit facility and current
installments of long-term debt at September 30, 2001 totaled $198.1 million
versus $194.1 million at December 31, 2000, an increase of $4.0 million, or
2.1%. This increase resulted primarily from lower customer deposits of $51.9
million due to the seasonal fluctuations. Typically, December is moving towards
the seasonal high for customer deposits while September is around the seasonal
low point. Higher working capital also resulted from the seasonal activity of
increases of $24.7 million in accounts receivable and lower accounts payable of
$14.0 million. These working capital increases were partially offset by lower
inventory of $86.5 million, resulting from efforts to lower our investment in
inventory.

Effect of Unadopted Accounting Standards

In July 2001, the Financial Accounting Standards Board ("FASB") issued Financial
Accounting Standards ("SFAS") No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets. SFAS No. 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001 as well as all purchase method business combinations completed after
June 30, 2001. SFAS No. 141 also specifies criteria, which must be met, for
intangible assets acquired in a purchase method business combination to be
recognized and reported apart from goodwill. SFAS No. 142 will require that
goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead tested for impairment at least annually in accordance
with the provisions of SFAS No. 142. SFAS No. 142 will also require that
intangible assets with definite useful lives be amortized over their respective
estimated useful lives to their estimated residual values, and reviewed for
impairment in accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which was issued in August of 2001.

The Company is required to adopt the provisions of SFAS No. 141 immediately and
SFAS No. 142 effective January 1, 2002. Furthermore, any goodwill and any
intangible asset determined to have an indefinite useful life that are acquired
in a purchase business combination completed after June 30, 2001 will not be
amortized, but will continue to be evaluated for impairment in accordance with
the appropriate pre-SFAS No. 142 accounting literature. Goodwill and intangible
assets acquired in business combinations completed before July 1, 2001 will
continue to be amortized prior to the adoption of SFAS No. 142.

SFAS No. 141 will require, upon adoption of SFAS No. 142, that the Company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary reclassifications
in order to conform with the new criteria in SFAS No. 141 for recognition apart
from goodwill. Upon adoption of SFAS No. 142, the Company will be required to
reassess the useful lives and residual values of all intangible assets acquired
in purchase business combinations, and make any necessary amortization period
adjustments by the end of the first interim period after adoption. In addition,
to the extent an intangible asset is identified as having an indefinite useful
life, the Company will be required to test the intangible asset for impairment
in accordance with the provisions of SFAS No. 142 within the first interim
period. Any impairment loss will be measured as of the date of adoption and
recognized as the cumulative effect of a change in accounting principle in the
first interim period.

In connection with the transitional goodwill impairment evaluation, SFAS No. 142
will require the Company to perform an assessment of whether there is an
indication that goodwill is impaired as of the date of adoption. To accomplish
this the Company must identify its reporting units and determine the carrying
value of each

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<PAGE>

reporting unit by assigning the assets and liabilities, including the existing
goodwill and intangible assets, to those reporting units as of the date of
adoption. The Company will then have up to six months from the date of adoption
to determine the fair value of each reporting unit and compare it to the
reporting unit's carrying amount. To the extent a reporting unit's carrying
amount exceeds its fair value, an indication exists that the reporting unit's
goodwill may be impaired and the Company must perform the second step of the
transitional impairment test. In the second step, the Company must compare the
implied fair value of the reporting unit's goodwill, determined by allocating
the reporting unit's fair value to all of it assets (recognized and
unrecognized) and liabilities in a manner similar to a purchase price allocation
in accordance with SFAS No. 141, to its carrying amount, both of which would be
measured as of the date of adoption. This second step is required to be
completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the Company's statement of
operations.


As of the date of adoption, the Company expects to have unamortized goodwill in
the amount of $16.6 million, unamortized identifiable intangible assets in the
amount of $11.9 million. All goodwill and $0.1 million of unamortized
identifiable intangible assets will be subject to the transition provisions of
SFAS Nos. 141 and 142. Amortization expense related to goodwill was $1.2 million
and $0.9 million for the year ended December 31, 2000 and the nine months ended
September 30, 2001, respectively. Because of the extensive effort needed to
comply with adopting SFAS Nos. 141 and 142, it is not practicable to reasonably
estimate the impact of adopting these Statements on the Company's financial
statements at the date of this report, including whether any transitional
impairment losses will be required to be recognized as the cumulative effect of
a change in accounting principle.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. SFAS No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. The Company is required to adopt SFAS No. 143
effective January 1, 2003. Management does not believe the adoption of
SFAS No. 144 will have a material effect, if any, on the Company's financial
condition and results of operations.

On August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-lived Assets, which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets supersedes SFAS
No. 121, Accounting for the Impairment of Long-lived Assets and for Long-lived
Assets to be Disposed of. SFAS No. 144 also supersedes the accounting and
reporting provisions of APB Opinion No. 30, Reporting the Results of Operations-
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions, for the disposal of
a segment of a business. However, SFAS No. 144 retains the requirement in
Opinion No. 30 to report separately discontinued operations and extends that
reporting to a include a "component of an entity" that either has been disposed
of or is classified for sale. Statement 144 is effective for financial
statements issued for fiscal years beginning after December 15, 2001 and early
adoption is permitted. The adoption of SFAS No. 144 is not expected to have a
material impact on the Company's financial statements.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Our market risks relating to our current operations result primarily from
changes in interest rates. The interest rates that we pay for borrowings under
our credit facility are based on the LIBOR rate of interest charged by the agent
bank under our senior secured credit facility. Our operating results will be
impacted by changes in interest rates. We estimate that based on an estimated
annual average balance on our credit facility that each 1% change in market
interest rate will impact before tax earnings by approximately $1.6 million. Our
First Mortgage Notes bear interest at a fixed rate of 10 1/4%. Some of our
customer deposits also bear interest at a fixed rate, which is established on an
annual basis at the beginning of each farming season based on prevailing market
rates for similar programs in each of the regions in which we operate.

The Company is also exposed to market risk due to changes in natural gas prices.
Natural gas is a raw material used in the production of various nitrogen-based
products that the Company either manufactures at its East Dubuque plant or
purchases from vendors. Market prices of nitrogen-based products are

                                       18
<PAGE>

affected by changes in natural gas prices as well as supply and demand and other
factors. As a normal course of business nitrogen-based products are purchased
during the winter and early spring to supply its needs during the high sales
volume spring season. Nitrogen-based inventory remaining at the end of the
spring season will be subject to market risk due to changes in natural gas
prices. Currently, the Company enters into indexed price commitments to purchase
natural gas for use in its East Dubuque facility and as such is not exposed to
significant market risk in supplying natural gas for production purposes. The
Company does not believe that any exposures from this risk will materially
affect the Company's financial position.

The Company engages in certain commodity hedging activities with respect to its
grain and seed purchases. Given the current economic climate, we believe that
the rates in force approximate market rates. We do not hold or issue derivative
financial instruments for trading purposes.

At September 30, 2001, the Company's exposure to market risk factors had not
materially changed from December 31, 2000.

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<PAGE>

PART 2. OTHER INFORMATION

ITEM 6.  Exhibits and Reports on Form 8-K

(a) Exhibits:

Exhibit
Number                          Title of Document
-------                         ------------------
   3.01      Restated Certificate of Incorporation of the Company. +
   3.02      Certificate of Amendment of Restated Certificate of Incorporation
             of the Company. +
   3.03      Amended and Restated Bylaws of the Company. +
   4.01      Indenture dated as of April 22, 1999 by and among the Company, the
             Guarantors, and the United States Trust Company of New York, as
             Trustee. +
   4.02      Form of 101/4% First Mortgage Note Due 2009 (Included in Exhibit
             4.01) +
  10.01      Credit Agreement dated as of April 22, 1999 by and among the
             Company, the Guarantors, various lenders, DLJ Capital Funding, as
             arranger and syndication agent, J.P. Morgan Securities Inc., as
             documentation agent and U.S. Bancorp Ag Credit, Inc., as
             administrative agent. +
  10.03      Supply Agreement dated as of April 22, 1999 among IMC Kalium Ltd.,
             IMC-Agrico Company and the Company. Portions of this exhibit have
             been omitted pursuant to a request for confidential treatment. +
  10.04      Company Employee Savings and Investment Plan. +

  10.05      Royster-Clark Group, Inc. 1999 Restricted Stock Purchase and Option
             Plan. +
  10.06      Employment Agreement dated as of April 22, 1999 by and among
             Francis P. Jenkins, Jr., Royster-Clark Group, Inc. and Royster-
             Clark, Inc. +
  10.07      Master Conveyance Agreement dated as of April 22, 1999 by and among
             IMC Global Inc., the Vigoro Corporation, the Company and the United
             States Trust Company of New York. +
  10.14      Amendment Agreement dated August 18, 2000 amending Credit
             Agreement. ++
  10.15      Second Amendment to Revolving Credit Agreement among Royster-Clark,
             Inc., various financial institutions, DLJ Capital Funding., J.P.
             Morgan Securities, Inc., and U.S. Bancorp, Ag Credit, Inc. +++
  10.16      Employment Agreement dated as of December 1, 1999 between Royster-
             Clark, Inc. and G. Kenneth Moshenek. ++++
  10.17      Employment Agreement dated as of December 1, 1999 between Royster-
             Clark, Inc. and Walter Vance. ++++
  10.18      Asset Sale and Purchase Agreement dated June 14, 2001 by and among
             Agro Distribution, LLC, Royster-Clark Resources LLC and Royster-
             Clark Agriculture, Inc. *
  10.19      Interim Operating Agreement date as of June 14, 2001 by and between
             Agro Distribution, LLC and Royster-Clark Resources LLC. *
______________
+    Incorporated by reference to Registration Statement on Form S-4 (Reg.
     No.: 333-81235) where it has been filed as an Exhibit.

++   Incorporated by reference to Exhibit No. 10.14 to Form 10Q for the
     quarterly period ended June 30, 2000 (Reg. No.: 333-81235) filed on August
     21, 2000.

+++  Incorporated by reference to Exhibit No 10.15 to Form 10Q for the quarterly
     period ended September 30, 2000 (Reg. No.: 333-81235) filed on November 14,
     2000.

++++ Incorporated by reference to identically numbered exhibit to Form 10K for
     the annual period ended December 31, 2000 (Reg. No.:333-81235) filed on
     April 2, 2001.

*    Incorporated by reference to identically numbered exhibit to Form 10Q for
     the quarterly period ended June 30, 2001 (Reg. No.: 333-81235) filed on
     August 10, 2001.

(b) Reports on Form 8-K  None

                                       20
<PAGE>

SIGNATURES

Pursuant to the requirements 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.


                                       ROYSTER-CLARK, INC.


                                       /s/ WALTER R. VANCE
                                       --------------------
                                       Walter R. Vance
                                       Chief Accounting Officer


DATE: November 13, 2001

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