As filed with the Securities and Exchange Commission on May 14, 2004

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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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 March 31, 2004
| | ---------------------------------------------



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



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ROYSTER-CLARK, INC.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|DELAWARE                                                       |  | 76-0329525                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|1251 Avenue of the Americas  Suite 900 New York, New York     |  | 10020                               
|(Address of principal executive offices)                       |  | (Zip code)                          



(212) 332-2965

(Registrants telephone number, including area code)





(Former name, former address and former
fiscal year, if changed since last report)



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



Indicate by check mark whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Act). ̈



APPLICABLE ONLY TO ISSUERS INVLOVED IN BANKRUPTCY

PROCEEDS DURING THE PRECEDING FIVE YEAR:



Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes ̈No ̈Not applicable



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



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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 and Results of Operations and Cash Flows |  | 13  
|                               |  |                                                                                                     
|Item 3.                        |  | Quantitative and Qualitative Disclosures about Market Risk                                           |  | 18  
|                               |  |                                                                                                     
|Item 4.                        |  | Controls and Procedures                                                                              |  | 19  
|                               | 
|PART 2. OTHER INFORMATION:     |  |                                                                                                     
|                               |  |                                                                                                     
|Item 6.                        |  | Exhibits and Reports on Form 8-K                                                                     |  | 20  
|                               | 
|Signatures                     |  | 22                                                                                                  



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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, (vii) environmental regulations,
(viii) other important factors affecting the fertilizer industry, (ix) fluctuations in interest rates, (x) volatility in the bond markets and (xi) 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 unilateral 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



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PART 1. FINANCIAL INFORMATION



ITEM 1.Financial Statements.



ROYSTER-CLARK, INC. AND SUBSIDIARIES



CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2004 and December 31, 2003

(Dollars in thousands)



|                                                                                                                                             |  |                |         |   |                   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | - | ----------------- | ------- | -
|                                                                                                                                             |  | March 31, 2004 |         |   | December 31, 2003 |        
|Assets                                                                                                                                       |  |                |         |   |                   |         |  
|Current assets:                                                                                                                              |  |                |         |   |                   |         |  
|Cash                                                                                                                                         |  | $              | 340     |   |                   | 886     |  
|Trade accounts receivable, net of allowance for doubtful accounts of $6,401 and $5,938 at March 31, 2004 and December 31, 2003,
respectively |  |                | 114,669 |   |                   | 85,304  |  
|Other receivables                                                                                                                            |  |                | 7,874   |   |                   | 19,983  |  
|Inventories                                                                                                                                  |  |                | 361,073 |   |                   | 259,957 |  
|Prepaid expenses and other current assets                                                                                                    |  |                | 2,437   |   |                   | 2,876   |  
|                                                                                                                                             |  |                |         |   |                   |         |  
|Total current assets                                                                                                                         |  |                | 486,393 |   |                   | 369,006 |  
|Property, plant and equipment, net                                                                                                           |  |                | 160,959 |   |                   | 165,685 |  
|Goodwill                                                                                                                                     |  |                | 16,540  |   |                   | 16,540  |  
|Deferred financing costs, net                                                                                                                |  |                | 9,478   |   |                   | 9,904   |  
|Other assets, net                                                                                                                            |  |                | 4,785   |   |                   | 4,783   |  
|                                                                                                                                             |  |                |         |   |                   |         |  
|                                                                                                                                             |  | $              | 678,155 |   |                   | 565,918 |  
|                                                                                                                                             |  |                |         |   |                   |         |  
|Liabilities and Stockholders Equity                                                                                                         |  |                |         |   |                   |         |  
|Current liabilities:                                                                                                                         |  |                |         |   |                   |         |  
|Customer deposits                                                                                                                            |  | $              | 145,228 |   |                   | 65,004  |  
|Accounts payable                                                                                                                             |  |                | 139,041 |   |                   | 69,461  |  
|Accrued expenses and other current liabilities                                                                                               |  |                | 28,969  |   |                   | 25,234  |  
|                                                                                                                                             |  |                |         |   |                   |         |  
|Total current liabilities                                                                                                                    |  |                | 313,238 |   |                   | 159,699 |  
|Senior Secured Credit Facility                                                                                                               |  |                | 118,328 |   |                   | 142,979 |  
|101/4% First Mortgage Notes due 2009                                                                                                         |  |                | 200,000 |   |                   | 200,000 |  
|Other long-term liabilities                                                                                                                  |  |                | 8,341   |   |                   | 8,548   |  
|                                                                                                                                             |  |                |         |   |                   |         |  
|Total liabilities                                                                                                                            |  |                | 639,907 |   |                   | 511,226 |  
|                                                                                                                                             |  |                |         |   |                   |         |  
|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  |  
|Accumulated deficit                                                                                                                          |  |                | (49,602 | ) |                   | (33,158 | )
|Accumulated other comprehensive loss                                                                                                         |  |                | (749    | ) |                   | (749    | )
|                                                                                                                                             |  |                |         |   |                   |         |  
|Total stockholders equity                                                                                                                   |  |                | 38,248  |   |                   | 54,692  |  
|                                                                                                                                             |  |                |         |   |                   |         |  
|                                                                                                                                             |  | $              | 678,155 |   |                   | 565,918 |  
|                                                                                                                                             |  |                |         |   |                   |         |  



2



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ROYSTER-CLARK, INC. AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31, 2004 and 2003

(Dollars in thousands)



|                                                              |  |                              |         |   |      |         |  
|------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | ------- | -
|                                                              |  | Three Months ended March 31, |        
|                                                              |  | 2004                         |         |   | 2003 |        
|Net sales                                                     |  | $                            | 204,977 |   |      | 150,308 |  
|Cost of sales                                                 |  |                              | 176,592 |   |      | 127,413 |  
|                                                              |  |                              |         |   |      |         |  
|Gross profit                                                  |  |                              | 28,385  |   |      | 22,895  |  
|Selling, general and administrative expenses                  |  |                              | 38,266  |   |      | 39,442  |  
|Loss (gain) on disposal of property, plant and equipment, net |  |                              | (160    | ) |      | 326     |  
|                                                              |  |                              |         |   |      |         |  
|Operating loss                                                |  |                              | (9,721  | ) |      | (16,873 | )
|Interest expense                                              |  |                              | (6,708  | ) |      | (7,043  | )
|                                                              |  |                              |         |   |      |         |  
|Loss before income taxes                                      |  |                              | (16,429 | ) |      | (23,916 | )
|Income tax benefit                                            |  |                              |        |   |      | (9,198  | )
|                                                              |  |                              |         |   |      |         |  
|Net loss                                                      |  | $                            | (16,429 | ) |      | (14,718 | )
|                                                              |  |                              |         |   |      |         |  







See accompanying notes to condensed consolidated financial statements.



3



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ROYSTER-CLARK, INC. AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 2004 and 2003

(Dollars in thousands)



|                                                                            |  |                             |          |   |      |          |  
|--------------------------------------------------------------------------- |  | --------------------------- | -------- | - | ---- | -------- | -
|                                                                            |  | Three Months endedMarch 31, |         
|                                                                            |  | 2004                        |          |   | 2003 |         
|Cash flows from operating activities:                                       |  |                             |          |   |      |          |  
|Net loss                                                                    |  | $                           | (16,429  | ) |      | (14,718  | )
|                                                                            |  |                             |          |   |      |          |  
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                             |          |   |      |          |  
|Provision for doubtful accounts                                             |  |                             | 646      |   |      | 432      |  
|Depreciation and amortization                                               |  |                             | 6,332    |   |      | 6,816    |  
|(Gain) loss on disposal of property, plant and equipment                    |  |                             | (160     | ) |      | 326      |  
|Write-off of deferred financing costs                                       |  |                             |         |   |      | 227      |  
|Amortization of imputed interest                                            |  |                             |         |   |      | 243      |  
|Deferred income taxes                                                       |  |                             |         |   |      | (9,200   | )
|Changes in operating assets and liabilities increasing (decreasing) cash:   |  |                             |          |   |      |          |  
|Trade accounts receivable                                                   |  |                             | (30,011  | ) |      | 7,027    |  
|Other receivables                                                           |  |                             | 12,109   |   |      | 29,204   |  
|Inventories                                                                 |  |                             | (101,116 | ) |      | (114,085 | )
|Prepaid expenses and other current assets                                   |  |                             | 439      |   |      | 371      |  
|Other assets                                                                |  |                             | (264     | ) |      | (159     | )
|Accounts payable                                                            |  |                             | 69,580   |   |      | 52,539   |  
|Accrued expenses and other current liabilities                              |  |                             | 3,887    |   |      | 1,967    |  
|Other long-term liabilities                                                 |  |                             | (126     | ) |      | (190     | )
|                                                                            |  |                             |          |   |      |          |  
|Total adjustments                                                           |  |                             | (38,684  | ) |      | (24,482  | )
|                                                                            |  |                             |          |   |      |          |  
|Net cash used in operating activities                                       |  |                             | (55,113  | ) |      | (39,200  | )
|                                                                            |  |                             |          |   |      |          |  
|Cash flows from investing activities:                                       |  |                             |          |   |      |          |  
|Proceeds from sale of property, plant and equipment                         |  |                             | 1,783    |   |      | 736      |  
|Purchases of property, plant and equipment                                  |  |                             | (2,400   | ) |      | (3,542   | )
|                                                                            |  |                             |          |   |      |          |  
|Net cash used in investing activities                                       |  |                             | (617     | ) |      | (2,806   | )
|                                                                            |  |                             |          |   |      |          |  
|Cash flows from financing activities:                                       |  |                             |          |   |      |          |  
|Proceeds from Senior Secured Credit Facility                                |  |                             | 81,352   |   |      | 85,497   |  
|Payments on Senior Secured Credit Facility                                  |  |                             | (106,003 | ) |      | (126,100 | )
|Principal payments on long-term debt                                        |  |                             | (233     | ) |      | (5       | )
|Dividend paid to Royster-Clark Group, Inc.                                  |  |                             | (15      | ) |      | (100     | )
|Net increase in customer deposits                                           |  |                             | 80,224   |   |      | 82,771   |  
|Payment of deferred financing costs                                         |  |                             | (141     | ) |      | (513     | )
|                                                                            |  |                             |          |   |      |          |  
|Net cash provided by financing activities                                   |  |                             | 55,184   |   |      | 41,550   |  
|                                                                            |  |                             |          |   |      |          |  
|Net decrease in cash                                                        |  |                             | (546     | ) |      | (456     | )
|Cash at beginning of period                                                 |  |                             | 886      |   |      | 982      |  
|                                                                            |  |                             |          |   |      |          |  
|Cash at end of period                                                       |  | $                           | 340      |   |      | 526      |  
|                                                                            |  |                             |          |   |      |          |  
|Supplemental disclosure of cash flow information:                           |  |                             |          |   |      |          |  
|Cash paid during the period for interest                                    |  | $                           | 1,398    |   |      | 1,657    |  
|                                                                            |  |                             |          |   |      |          |  
|Cash paid during the period for income taxes                                |  | $                           | 1        |   |      | 315      |  
|                                                                            |  |                             |          |   |      |          |  



4



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ROYSTER-CLARK, INC. AND SUBSIDIARIES



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2004

(Dollars in thousands)



(1) Description of Business, Basis of Presentation and Rebate Accounting Policy



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 Southeast and Midwest of the United States. The Companys operations consist of retail farm centers
(Farmarkets), granulation, blending and seed processing plants, and a network of storage and distribution terminals and warehouses. In addition, the Company operates two nitrogen-manufacturing plants that supply its wholesale and
industrial customers with nitrogen products.



The information
presented as of March 31, 2004 and for the three month periods ended March 31, 2004 and 2003 is unaudited, and reflects 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 March 31, 2004 and the results of its operations and its cash flows for the three month periods ended March 31, 2004 and 2003. The December 31, 2003 balance sheet information was derived from the
audited consolidated financial statements for the year ended December 31, 2003.



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, 2003, which are included as part of the Companys Annual
Report on Form 10-K.



The Companys business is highly
seasonal with a high concentration of sales generated between March and July. Since 1999, sales occurring between March and July have varied from approximately 68% to 73% of annual sales based upon planting, growing and harvesting cycles. In 2003,
approximately 69% of sales occurred between March and July. The Company is not aware of any factors that currently exist that would make this sales concentration either more or less than historical percentages. Results for the interim periods
presented are not necessarily indicative of results that may be expected for the entire year.



Other receivables primarily consist of vendor rebates. Vendor rebates represent amounts due from suppliers on crop protection, seed, and fertilizer products. The Company earns rebates based on the actual sales of a
vendors product. Rebates receivable are accrued in accordance with Emerging Issues Task Force (EITF) Issue 02-16 when rebate programs result from binding arrangements in which payments are probable and the amounts are reasonably
estimable. The Company does have programs that do not meet the above criteria, thus earnings are recorded when payment is received, which will typically be during the fourth quarter.



(2) Inventories



Inventories at March 31, 2004 and December 31, 2003 consist of the following:



|                         |  |                |         |                   |        
|------------------------ |  | -------------- | ------- | ----------------- | -------
|                         |  | March 31, 2004 |         | December 31, 2003
|Crop protection products |  | $              | 124,670 |                   | 79,792 
|Fertilizers              |  |                | 35,851  |                   | 34,431 
|Raw materials            |  |                | 140,087 |                   | 92,056 
|Seeds                    |  |                | 41,661  |                   | 33,745 
|Sundries and other       |  |                | 18,804  |                   | 19,933 
|                         |  |                |         |                   |        
|                         |  | $              | 361,073 |                   | 259,957
|                         |  |                |         |                   |        



5



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ROYSTER-CLARK, INC. AND SUBSIDIARIES



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

March 31, 2004



(3) Goodwill and Other Assets



There were no changes in the carrying amount of goodwill for the three months ended March 31, 2004.



The gross carrying value and accumulated amortization of major classes of
intangible assets as of March 31, 2004 and December 31, 2003 are as follows:



|                              |  |                     |       |                         |       |     |      
|----------------------------- |  | ------------------- | ----- | ----------------------- | ----- | --- | -----
|                              |  | March 31, 2004     
|                              |  | Grosscarryingamount |       | Accumulatedamortization |       | Net
|Amortizing intangible assets: |  |                     |       |                         |       |     |      
|Technology and patent license |  | $                   | 4,102 |                         | 1,238 |     | 2,864
|Noncompete agreements         |  |                     | 1,718 |                         | 1,441 |     | 277  
|Other                         |  |                     | 315   |                         | 107   |     | 208  
|                              |  |                     |       |                         |       |     |      
|Total                         |  | $                   | 6,135 |                         | 2,786 |     | 3,349
|                              |  |                     |       |                         |       |     |      
|                              | 
|                              |  | December 31, 2003  
|                              |  | Grosscarryingamount |       | Accumulatedamortization |       | Net
|Amortizing intangible assets: |  |                     |       |                         |       |     |      
|Technology and patent license |  | $                   | 4,102 |                         | 1,111 |     | 2,991
|Noncompete agreements         |  |                     | 1,703 |                         | 1,317 |     | 386  
|Other                         |  |                     | 315   |                         | 96    |     | 219  
|                              |  |                     |       |                         |       |     |      
|Total                         |  | $                   | 6,120 |                         | 2,524 |     | 3,596
|                              |  |                     |       |                         |       |     |      



Amortization expense
of intangible assets amounted to $262 and $295 for the three months ended March 31, 2004 and 2003, respectively. During the three months ended March 31, 2004, amortizing intangible assets of $15 were added for noncompete agreements.



These intangible assets are included in other assets in the
accompanying condensed consolidated balance sheets. Estimated annual amortization expense for the next five years and thereafter follows: $856 in 2004, $625 in 2005, $541 in 2006, $537 in 2007, $537 in 2008, and $515 thereafter.



(4) 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 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 39 sites.



In connection with the 1999 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, may not exceed 10% of
the purchase



6



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ROYSTER-CLARK, INC. AND SUBSIDIARIES



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

March 31, 2004



price, or a total of $30,000, and are subject to certain time limitations. Indemnities related to claims arising out of environmental representations and
warranties and claims associated with, arising from or relating to conditions existing prior to April 1999 associated with the real estate owned by AgriBusiness and transferred to the Company at closing expire in April 2004. Indemnities covering
other environmental claims associated with, arising from or relating to conditions existing prior to April 1999 on real estate (other than real estate subject to the April 2004 indemnity expiration) formerly owned, leased, or operated by the
AgriBusiness or offsite disposition of contaminants survive indefinitely. The environmental indemnities related to Royster-Clark, Inc. (predecessor company) are subject to a deductible of $2,000, an overall cap of $5,000 on all indemnities which
expire in April 2004. In addition, Royster-Clark, Inc. (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 has a claim pending under the indemnities from LCC. Other than that claim, the indemnity has expired. The Company also obtained indemnities from the former stockholder of Alliance for environmental conditions identified as of the
date of acquisition. The indemnification remains in effect until notice is received requiring no further actions or after a two-year period of testing with no reportable results in deterioration of water quality.



The Company has recorded environmental liabilities at March 31, 2004 and
December 31, 2003 for the estimated cost of cleanup efforts of identified contamination or site characterization, which total $3,037 and $3,105, respectively, and are included in other long-term liabilities in the accompanying condensed consolidated
balance sheets. Actual cash expenditures during the three months ended March 31, 2004 and 2003 were $68 and $55, 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.



(5) Senior Secured Credit Facility



On December 22, 2003, the Company completed the refinancing of its Senior Secured Credit Facility with an amended and restated Senior Secured Credit
Facility (credit facility) from a consortium of lenders. In connection with the establishment of the credit facility, the Company incurred $3,605 of deferred financing costs. As of December 31, 2003, there were unamortized deferred
financing costs of $419 associated with the Senior Secured Credit Facility in effect prior to the Replacement Credit Facility. During the quarter, additional deferred financing costs of $141 were incurred. Total deferred financing costs of $4,165
are being amortized on a straight-line basis over the three-year life of the credit facility.



(6) 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.



7



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ROYSTER-CLARK, INC. AND SUBSIDIARIES



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

March 31, 2004



Royster-Clark AgriBusiness Realty LLC



Royster-Clark Nitrogen, Inc.



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



The following tables present the condensed financial data of Royster-Clark and its guarantor subsidiaries as of March 31, 2004 and December 31, 2003 and for the three month periods ended March 31, 2004 and 2003.



8



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ROYSTER-CLARK, INC. AND SUBSIDIARIES



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

March 31, 2004



Balance Sheet Data as of March 31, 2004:



|                                               |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|---------------------------------------------- |  | ------------------ | ------- | - | ---------------------- | ------- | - | ------------ | -------- | - | ------------ | ------- | -
|                                               |  | Royster-Clark,Inc. |         |   | Guarantor Subsidiaries |         |   | Eliminations |          |   | Consolidated |        
|Current assets:                                |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|Cash                                           |  | $                  | 42      |   |                        | 298     |   |              |         |   |              | 340     |  
|Trade accounts receivable, net                 |  |                    |        |   |                        | 117,536 |   |              | (2,867   | ) |              | 114,669 |  
|Other receivables                              |  |                    | 819     |   |                        | 11,310  |   |              | (4,255   | ) |              | 7,874   |  
|Inventories                                    |  |                    |        |   |                        | 361,213 |   |              | (140     | ) |              | 361,073 |  
|Prepaid expenses and other current assets      |  |                    | 90      |   |                        | 2,347   |   |              |         |   |              | 2,437   |  
|                                               |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|Total current assets                           |  |                    | 951     |   |                        | 492,704 |   |              | (7,262   | ) |              | 486,393 |  
|Property, plant and equipment, net             |  |                    | 9,115   |   |                        | 151,844 |   |              |         |   |              | 160,959 |  
|Goodwill                                       |  |                    | 12,012  |   |                        | 4,528   |   |              |         |   |              | 16,540  |  
|Deferred financing costs, net                  |  |                    | 9,478   |   |                        |        |   |              |         |   |              | 9,478   |  
|Other assets, net                              |  |                    | 15      |   |                        | 4,770   |   |              |         |   |              | 4,785   |  
|Investment in subsidiaries                     |  |                    | 376,341 |   |                        |        |   |              | (376,341 | ) |              |        |  
|                                               |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|Total assets                                   |  | $                  | 407,912 |   |                        | 653,846 |   |              | (383,603 | ) |              | 678,155 |  
|                                               |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|                                               |  |                    |         |  
|Current liabilities:                           |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|Customer deposits                              |  |                    |        |   |                        | 145,228 |   |              |         |   |              | 145,228 |  
|Accounts payable                               |  |                    |        |   |                        | 146,163 |   |              | (7,122   | ) |              | 139,041 |  
|Accrued expenses and other current liabilities |  |                    | 10,649  |   |                        | 18,320  |   |              |         |   |              | 28,969  |  
|                                               |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|Total current liabilities                      |  |                    | 10,649  |   |                        | 309,711 |   |              | (7,122   | ) |              | 313,238 |  
|Senior Secured Credit Facility                 |  |                    | 118,328 |   |                        |        |   |              |         |   |              | 118,328 |  
|101/4% First Mortgage Notes                    |  |                    | 200,000 |   |                        |        |   |              |         |   |              | 200,000 |  
|Other long-term liabilities                    |  |                    | 434     |   |                        | 7,907   |   |              |         |   |              | 8,341   |  
|                                               |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|Total liabilities                              |  |                    | 329,411 |   |                        | 317,618 |   |              | (7,122   | ) |              | 639,907 |  
|                                               |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|                                               |  |                    |         |  
|Stockholders equity:                          |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|Common stock                                   |  |                    |        |   |                        |        |   |              |         |   |              |        |  
|Additional paid-in capital                     |  |                    | 78,599  |   |                        | 386,341 |   |              | (376,341 | ) |              | 88,599  |  
|Accumulated deficit                            |  |                    | (98     | ) |                        | (49,364 | ) |              | (140     | ) |              | (49,602 | )
|Accumulated other comprehensive loss           |  |                    |        |   |                        | (749    | ) |              |         |   |              | (749    | )
|                                               |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|Total stockholders equity                     |  |                    | 78,501  |   |                        | 336,228 |   |              | (376,481 | ) |              | 38,248  |  
|                                               |  |                    |         |   |                        |         |   |              |          |   |              |         |  
|Total liabilities and stockholders equity     |  | $                  | 407,912 |   |                        | 653,846 |   |              | (383,603 | ) |              | 678,155 |  
|                                               |  |                    |         |   |                        |         |   |              |          |   |              |         |  



9



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ROYSTER-CLARK, INC. AND SUBSIDIARIES



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

March 31, 2004



Balance Sheet Data as of December 31, 2003:



|                                               |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|---------------------------------------------- |  | ------------------- | ------- | - | ---------------------- | ------- | - | ------------ | -------- | - | ------------ | ------- | -
|                                               |  | Royster-Clark, Inc. |         |   | Guarantor Subsidiaries |         |   | Eliminations |          |   | Consolidated |        
|Current assets:                                |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Cash                                           |  | $                   | 42      |   |                        | 844     |   |              |         |   |              | 886     |  
|Trade accounts receivable, net                 |  |                     |        |   |                        | 87,135  |   |              | (1,831   | ) |              | 85,304  |  
|Other receivables                              |  |                     | 3,671   |   |                        | 35,775  |   |              | (19,463  | ) |              | 19,983  |  
|Inventories                                    |  |                     |        |   |                        | 260,465 |   |              | (508     | ) |              | 259,957 |  
|Prepaid expenses and other current assets      |  |                     | 161     |   |                        | 2,715   |   |              |         |   |              | 2,876   |  
|                                               |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Total current assets                           |  |                     | 3,874   |   |                        | 386,934 |   |              | (21,802  | ) |              | 369,006 |  
|Property, plant and equipment, net             |  |                     | 9,474   |   |                        | 156,211 |   |              |         |   |              | 165,685 |  
|Goodwill                                       |  |                     | 12,012  |   |                        | 4,528   |   |              |         |   |              | 16,540  |  
|Deferred financing costs, net                  |  |                     | 9,904   |   |                        |        |   |              |         |   |              | 9,904   |  
|Other assets, net                              |  |                     | 15      |   |                        | 4,768   |   |              |         |   |              | 4,783   |  
|Investment in subsidiaries                     |  |                     | 391,945 |   |                        |        |   |              | (391,945 | ) |              |        |  
|                                               |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Total assets                                   |  | $                   | 427,224 |   |                        | 552,441 |   |              | (413,747 | ) |              | 565,918 |  
|                                               |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Current liabilities:                           |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Customer deposits                              |  |                     |        |   |                        | 65,004  |   |              |         |   |              | 65,004  |  
|Accounts payable                               |  |                     |        |   |                        | 90,755  |   |              | (21,294  | ) |              | 69,461  |  
|Accrued expenses and other current liabilities |  |                     | 5,281   |   |                        | 19,953  |   |              |         |   |              | 25,234  |  
|                                               |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Total current liabilities                      |  |                     | 5,281   |   |                        | 175,712 |   |              | (21,294  | ) |              | 159,699 |  
|Senior Secured Credit Facility                 |  |                     | 142,979 |   |                        |        |   |              |         |   |              | 142,979 |  
|101/4First Mortgage Notes                      |  |                     | 200,000 |   |                        |        |   |              |         |   |              | 200,000 |  
|Other long-term liabilities                    |  |                     | 450     |   |                        | 8,098   |   |              |         |   |              | 8,548   |  
|                                               |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Total liabilities                              |  |                     | 348,710 |   |                        | 183,810 |   |              | (21,294  | ) |              | 511,226 |  
|                                               |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Stockholders equity:                          |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Common stock                                   |  |                     |        |   |                        |        |   |              |         |   |              |        |  
|Additional paid-in capital                     |  |                     | 78,599  |   |                        | 401,945 |   |              | (391,945 | ) |              | 88,599  |  
|Accumulated deficit                            |  |                     | (85     | ) |                        | (32,565 | ) |              | (508     | ) |              | (33,158 | )
|Accumulated other comprehensive loss           |  |                     |        |   |                        | (749    | ) |              |         |   |              | (749    | )
|                                               |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Total stockholders equity                     |  |                     | 78,514  |   |                        | 368,631 |   |              | (392,453 | ) |              | 54,692  |  
|                                               |  |                     |         |   |                        |         |   |              |          |   |              |         |  
|Total liabilities and stockholders equity     |  | $                   | 427,224 |   |                        | 552,441 |   |              | (413,747 | ) |              | 565,918 |  
|                                               |  |                     |         |   |                        |         |   |              |          |   |              |         |  



10



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ROYSTER-CLARK, INC. AND SUBSIDIARIES



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

March 31, 2004



Statement of Operations Data for the three months ended March 31, 2004 and 2003:



|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|------------------------------------------------------------- |  | ------------------- | ---- | - | ---------------------- | ------- | - | ------------ | ------- | - | ------------ | ------- | -
|                                                              |  | Royster-Clark, Inc. |      |   | Guarantor Subsidiaries |         |   | Eliminations |         |   | Consolidated |        
|Three Months ended March 31, 2004                             |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|Net sales                                                     |  | $                   | 819  |   |                        | 216,339 |   |              | (12,181 | ) |              | 204,977 |  
|Cost of sales                                                 |  |                     | 102  |   |                        | 184,784 |   |              | (8,294  | ) |              | 176,592 |  
|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|Gross profit                                                  |  |                     | 717  |   |                        | 31,555  |   |              | (3,887  | ) |              | 28,385  |  
|Selling, general and administrative expenses                  |  |                     | 247  |   |                        | 42,274  |   |              | (4,255  | ) |              | 38,266  |  
|Loss (gain) on disposal of property, plant and equipment, net |  |                     | 10   |   |                        | (170    | ) |              |        |   |              | (160    | )
|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|Operating income (loss)                                       |  |                     | 460  |   |                        | (10,549 | ) |              | 368     |   |              | (9,721  | )
|Interest expense                                              |  |                     | (458 | ) |                        | (6,250  | ) |              |        |   |              | (6,708  | )
|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|Income (loss) before income taxes                             |  |                     | 2    |   |                        | (16,799 | ) |              | 368     |   |              | (16,429 | )
|Income tax expense                                            |  |                     |     |   |                        |        |   |              |        |   |              |        |  
|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|Net income (loss)                                             |  | $                   | 2    |   |                        | (16,799 | ) |              | 368     |   |              | (16,429 | )
|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|                                                              |  |                     |      |  
|Three Months ended March 31, 2003                             |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|                                                              |  |                     |      |  
|Net sales                                                     |  | $                   | 894  |   |                        | 158,582 |   |              | (9,168  | ) |              | 150,308 |  
|Cost of sales                                                 |  |                     | 104  |   |                        | 131,869 |   |              | (4,560  | ) |              | 127,413 |  
|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|Gross profit                                                  |  |                     | 790  |   |                        | 26,713  |   |              | (4,608  | ) |              | 22,895  |  
|Selling, general and administrative expenses                  |  |                     | 265  |   |                        | 43,785  |   |              | (4,608  | ) |              | 39,442  |  
|Loss (gain) on disposal of property, plant                    |  |                     | 39   |   |                        | 287     |   |              |        |   |              | 326     |  
|and equipment, net                                            |  |                     |     |   |                        |        |   |              |        |   |              |         |  
|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|Operating income (loss)                                       |  |                     | 486  |   |                        | (17,359 | ) |              |        |   |              | (16,873 | )
|Interest expense                                              |  |                     | (484 | ) |                        | (6,559  | ) |              |        |   |              | (7,043  | )
|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|                                                              |  |                     |      |  
|Income (loss) before income taxes                             |  |                     | 2    |   |                        | (23,918 | ) |              |        |   |              | (23,916 | )
|Income tax expense (benefit)                                  |  |                     | 1    |   |                        | (9,199  | ) |              |        |   |              | (9,198  | )
|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  
|Net income (loss)                                             |  | $                   | 1    |   |                        | (14,719 | ) |              |        |   |              | (14,718 | )
|                                                              |  |                     |      |   |                        |         |   |              |         |   |              |         |  



11



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ROYSTER-CLARK, INC. AND SUBSIDIARIES



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

March 31, 2004



Statement of Cash Flow Data for the three months ended March 31, 2004 and 2003:



|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|--------------------------------------------------- |  | ------------------ | -------- | - | --------------------- | ------- | - | ------------ | - | ------------ | -------- | -
|Three Months Ended March 31, 2004                   |  | Royster-Clark,Inc. |          |   | GuarantorSubsidiaries |         |   | Eliminations |   | Consolidated |         
|Net cash provided by (used in) operating activities |  | $                  | 24,807   |   |                       | (79,920 | ) |              |  |              | (55,113  | )
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|                                                    |  |                    |          |  
|Cash flows from investing activities:               |  |                    |          |   |                       |         |   |              |   |              |          |  
|                                                    |  |                    |          |  
|Proceeds from sale of property, plant and equipment |  |                    |         |   |                       | 1,783   |   |              |  |              | 1,783    |  
|Purchases of property, plant and equipment          |  |                    |         |   |                       | (2,400  | ) |              |  |              | (2,400   | )
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|Net cash used in investing activities               |  |                    |         |   |                       | (617    | ) |              |  |              | (617     | )
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|                                                    |  |                    |          |  
|Cash flows from financing activities:               |  |                    |          |   |                       |         |   |              |   |              |          |  
|Proceeds from Senior Secured Credit Facility        |  |                    | 81,352   |   |                       |        |   |              |  |              | 81,352   |  
|Payments on Senior Secured Credit Facility          |  |                    | (106,003 | ) |                       |        |   |              |  |              | (106,003 | )
|Principal payments on long-term debt                |  |                    |         |   |                       | (233    | ) |              |  |              | (233     | )
|Dividend paid to Royster-Clark Group, Inc.          |  |                    | (15      | ) |                       |        |   |              |  |              | (15      | )
|Net increase in customer deposits                   |  |                    |         |   |                       | 80,224  |   |              |  |              | 80,224   |  
|Payment of deferred financing costs                 |  |                    | (141     | ) |                       |        |   |              |  |              | (141     | )
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|Net cash provided by (used in) financing activities |  |                    | (24,807  | ) |                       | 79,991  |   |              |  |              | 55,184   |  
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|                                                    |  |                    |          |  
|Net decrease in cash                                |  |                    |         |   |                       | (546    | ) |              |  |              | (546     | )
|Cash at beginning of period                         |  |                    | 42       |   |                       | 844     |   |              |  |              | 886      |  
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|Cash at end of period                               |  | $                  | 42       |   |                       | 298     |   |              |  |              | 340      |  
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|                                                    |  |                    |          |  
|Three Months Ended March 31, 2003                   |  |                    |          |   |                       |         |   |              |   |              |          |  
|                                                    |  |                    |          |  
|Net cash provided by (used in) operating activities |  | $                  | 41,178   |   |                       | (80,378 | ) |              |  |              | (39,200  | )
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|                                                    |  |                    |          |  
|Cash flows from investing activities:               |  |                    |          |   |                       |         |   |              |   |              |          |  
|Proceeds from sale of property, plant and equipment |  |                    | 38       |   |                       | 698     |   |              |  |              | 736      |  
|Purchases of property, plant and equipment          |  |                    |         |   |                       | (3,542  | ) |              |  |              | (3,542   | )
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|Net cash provided by (used in) investing activities |  |                    | 38       |   |                       | (2,844  | ) |              |  |              | (2,806   | )
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|                                                    |  |                    |          |  
|Cash flows from financing activities:               |  |                    |          |   |                       |         |   |              |   |              |          |  
|Proceeds from Senior Secured Credit Facility        |  |                    | 85,497   |   |                       |        |   |              |  |              | 85,497   |  
|Payments on Senior Secured Credit Facility          |  |                    | (126,100 | ) |                       |        |   |              |  |              | (126,100 | )
|Principal payments on long-term debt                |  |                    |         |   |                       | (5      | ) |              |  |              | (5       | )
|Dividend paid to Royster-Clark Group, Inc.          |  |                    | (100     | ) |                       |        |   |              |  |              | (100     | )
|Net increase in customer deposits                   |  |                    |         |   |                       | 82,771  |   |              |  |              | 82,771   |  
|Payment of deferred financing costs                 |  |                    | (513     | ) |                       |        |   |              |  |              | (513     | )
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|Net cash provided by (used in) financing activities |  |                    | (41,216  | ) |                       | 82,766  |   |              |  |              | 41,550   |  
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|                                                    |  |                    |          |  
|Net decrease in cash                                |  |                    |         |   |                       | (456    | ) |              |  |              | (456     | )
|Cash at beginning of period                         |  |                    | 42       |   |                       | 940     |   |              |  |              | 982      |  
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  
|Cash at end of period                               |  | $                  | 42       |   |                       | 484     |   |              |  |              | 526      |  
|                                                    |  |                    |          |   |                       |         |   |              |   |              |          |  



12



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|ITEM 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations and Cash Flows.
|------- | -----------------------------------------------------------------------------------------------------



THE FOLLOWING INFORMATION CONTAINS FORWARD-LOOKING STATEMENTS. SEE
FORWARD-LOOKING STATEMENTS ABOVE. YOU SHOULD NOT PLACE UNDUE RELIANCE ON ANY SUCH FORWARD-LOOKING STATEMENTS AS SUCH STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE, AND WE MIGHT NOT UPDATE THEM TO REFLECT CHANGES THAT OCCUR
AFTER THE DATE THEY ARE MADE.



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 Southeast and Midwest regions
of the United States. The Companys operations include retail farm centers (Farmarkets), granulation, blending and seed processing plants, and a network of storage and distribution terminals and warehouses. In addition, the Company
operates two nitrogen-manufacturing plants that supply its wholesale and industrial customers with nitrogen products. Our business is affected by a number of factors, including weather conditions and the availability and prevailing prices for
fertilizer, natural gas used in the production of various fertilizers and other crop production inputs.



Weather conditions can significantly affect our results of operations, both for quarterly reporting and on an annual basis. Adverse weather conditions
during the planting season may force farmers to either delay or abandon their planting, or change to another crop, which may lead to lower use of fertilizer, seed and crop protection products. Favorable weather conditions, especially early in the
planting season, may not lead to increased plantings with a potential increased use of various crop production inputs. Favorable weather, however, will allow the farmer to plant to the full extent of their planting intentions. During the first
quarter, the Companys market areas in the Southeast and Midwest regions have experienced favorable weather conditions for planting of most crops compared to the comparable period in 2003. This weather has allowed farmers to make good progress
in planting and fertilizing for the spring planting season in many market areas of the Company. Portions of the Companys Southeast markets have experienced a six-month dry spell. Continued dry conditions could affect the planting of cotton or
affect the development of other crops already planted. Drought severity has affected the application of various crop inputs in the past. The Company anticipates that there is sufficient opportunity for remaining planting intentions to be realized
and we believe that rains that have moved through the Southeast during April will be sufficient to allow normal crop input consumption by farmers.



The crop production inputs distribution business is highly seasonal with a high concentration of sales generated between March and July. Since 1999, sales
occurring between March and July have varied from approximately 68% to 73% of annual sales based upon planting, growing and harvesting cycles of our customers. In 2003, approximately 69% of sales occurred between March and July. The Company is not
aware of any factors that currently exist that would make this sales concentration either more or less than historical percentages. Inventories are accumulated to be available for seasonal sales, requiring significant storage capacity. The
accumulation of inventory is financed by suppliers, by customer prepayments and by the Company through its credit facility. Depending on weather and field conditions in the Companys widely diverse geographic marketing areas, the period of
heavy product shipments to customers can vary by several weeks, which may have a material impact on which quarter sales are recorded.



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. Price volatility varies for major nitrogen, phosphate and potash products. The table below provides quarter end prices for the products indicated by Mid-Cornbelt or Midwest per
ton price quote listing published by Green Markets (a



13



---

publication reporting on fertilizer industry developments). Ammonia (anhydrous ammonia) is being illustrated as a proxy for nitrogen products, while DAP
(diammonium phosphate) and potash (coarse muriate potash) are being used as proxies for phosphate and potash products.



|          |  |      |  |                   |  |             |  |     |  |     |  |         |  |      |  |    
|--------- |  | ---- |  | ----------------- |  | ----------- |  | --- |  | --- |  | ------- |  | ---- |  | ---
|          |  |      |  | Quarter end price |  | 1st Quarter
|$ per ton |  |      |  | 1st               |  | 2nd         |  | 3rd |  | 4th |  | Average |  | High |  | Low
|Ammonia   |  | 2004 |  | 328               |  |            |  |    |  |    |  | 339     |  | 340  |  | 328
|          |  | 2003 |  | 350               |  | 290         |  | 295 |  | 330 |  | 305     |  | 360  |  | 260
|          |  | 2002 |  | 190               |  | 190         |  | 195 |  | 245 |  | 188     |  | 195  |  | 180
|          |  |      |  |                   |  |             |  |    
|DAP       |  | 2004 |  | 232               |  |            |  |    |  |    |  | 232     |  | 235  |  | 230
|          |  | 2003 |  | 215               |  | 200         |  | 200 |  | 222 |  | 193     |  | 220  |  | 180
|          |  | 2002 |  | 178               |  | 180         |  | 184 |  | 175 |  | 176     |  | 178  |  | 170
|          |  |      |  |                   |  |             |  |    
|Potash    |  | 2004 |  | 135               |  |            |  |    |  |    |  | 133     |  | 139  |  | 129
|          |  | 2003 |  | 116               |  | 116         |  | 124 |  | 130 |  | 115     |  | 116  |  | 115
|          |  | 2002 |  | 115               |  | 115         |  | 116 |  | 115 |  | 115     |  | 115  |  | 115



While the level of
nitrogen prices affects the profitability of our entire business, the level of nitrogen prices affects the profitability of our two nitrogen-manufacturing plants more directly. The level of phosphate and potash prices affects the profitability of
our business since gross profit generated by our processing and distribution activities with these materials is typically a function of the underlying cost.



The major raw material in the manufacture of nitrogen-based products is natural gas. For the first quarter of 2004, we purchased natural gas on the open
market and through the use of fixed priced strip contracts for use in our nitrogen-production plant in East Dubuque, IL. The use of fixed-priced strips permits the Company to elect to lock in our gas costs for quantities of MMBTUs that the
Company elects to purchase on that basis. The table below illustrates some of the volatility of natural gas pricing quoted at the Henry Hub obtained from a listing published by Energy Intelligence Group, Inc. on its website, www.energyintel.com.



|            |  |                   |  |             |  |      |  |      |  |         |  |       |  |     
|----------- |  | ----------------- |  | ----------- |  | ---- |  | ---- |  | ------- |  | ----- |  | ----
|            |  | Quarter end price |  | 1st Quarter
|$ per MMBTU |  | 1st               |  | 2nd         |  | 3rd  |  | 4th  |  | Average |  | High  |  | Low 
|2004        |  | 5.64              |  |            |  |     |  |     |  | 5.63    |  | 7.06  |  | 5.08
|2003        |  | 5.00              |  | 5.31        |  | 4.66 |  | 5.79 |  | 6.27    |  | 19.07 |  | 4.87
|2002        |  | 3.26              |  | 3.17        |  | 4.09 |  | 4.75 |  | 2.80    |  | 3.72  |  | 1.97



The level of natural
gas prices directly affects profitability of our nitrogen-based products.



14



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Results of Operations



Three months ended March 31, 2004 compared to three months ended March 31, 2003



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



|                                                              |  |                              |    |  |       |  
|------------------------------------------------------------- |  | ---------------------------- | -- |  | ----- | -
|                                                              |  | Three Months ended March 31, |   
|                                                              |  | 2004                         |    |  | 2003  |  
|Net sales                                                     |  | 100.0                        | %  |  | 100.0 |  
|Cost of sales                                                 |  | 86.2                         |    |  | 84.8  |  
|                                                              |  |                              |    |  |       |  
|Gross profit                                                  |  | 13.8                         |    |  | 15.2  |  
|Selling, general and administrative expenses                  |  | 18.6                         |    |  | 26.2  |  
|(Gain) loss on disposal of property, plant and equipment, net |  | (0.1                         | )  |  | 0.2   |  
|                                                              |  |                              |    |  |       |  
|Operating loss                                                |  | (4.7                         | )  |  | (11.2 | )
|Interest expense                                              |  | (3.3                         | )  |  | (4.7  | )
|                                                              |  |                              |    |  |       |  
|Loss before income taxes                                      |  | (8.0                         | )  |  | (15.9 | )
|Income tax benefit                                            |  |                             |    |  | (6.1  | )
|                                                              |  |                              |    |  |       |  
|Net loss                                                      |  | (8.0                         | )% |  | (9.8  | )
|                                                              |  |                              |    |  |       |  



Net sales.Royster-Clarks net sales were $205.0 million for the first quarter of 2004 compared to $150.3 million for the same period in 2003, an increase of $54.7 million, or 36.4%. The increase in net sales resulted from approximately $33.4 million
in sales volume increases and $21.3 million in market related price increases. Moderate weather conditions allowed for increased sales volume for the quarter through most of the Companys market area. Sales volumes increases were experienced
across all product groups. Higher natural gas cost was the prime driver in the price appreciation. Sales price appreciation of fertilizer and nitrogen products accounted for approximately $15.1 million of the $21.3 million total price appreciation.
Nitrogen products are used in both liquid and dry blended and granulated fertilizers. Sales prices also increased in granulated and blended fertilizers and various fertilizer materials.



Gross profit.Gross profit was $28.4 million for the first quarter of 2004 compared to $22.9 million for the same
period in 2003, an increase of $5.5 million, or 24.0%. Gross profit increased approximately $6.1 million resulting from sales volume increases described above. Gross profit was partially offset by $0.6 million due primarily to increased costs
related to the purchase of seed and grain during the quarter. Gross margin was 13.8% for the first quarter of 2004 compared to 15.2% for the same period in 2003. The decrease in gross margin of 1.4% was predominantly due to the diluting effects of
sales and cost price increases discussed above.



Selling,
general and administrative expenses.Selling, general and administrative expenses were $38.3 million for the first quarter of 2004 compared to $39.4 million for the same period in 2003, a decrease of $1.1 million, or 3.0%. The decrease in
selling, general and administrative expenses resulted from the following major factors:



| |  | Expenses were approximately $0.8 million lower compared to 2003 due to cost savings measures.
| | - | ---------------------------------------------------------------------------------------------



| |  | Liability insurance costs were $0.5 million lower compared to 2003. Liability insurance costs were lower due to better negotiated rates on the Companys new policy year
beginning July 1, 2003.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Depreciation expense was approximately $0.5 million lower due to fully depreciated assets offsetting the impact of depreciation on capital spending over the past year.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Amortization expense was approximately $0.2 million lower due primarily to deferred financing costs written off during the first quarter of 2003 associated with the Third Amendment
to the Companys credit facility.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



15



---

The decrease in selling, general and administrative expenses was partially offset by the following major
factors:



| |  | Volume related expenses including seasonal labor and benefits, overtime, repairs, supplies, doubtful account provision and other expenses supporting sales were approximately $0.9
million higher than the comparable period last year.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Quarterly selling, general and administrative expenses as a percent of net sales fluctuate widely within the fiscal year due to the seasonal nature of sales volumes with selling, general and administrative expenses exhibiting less seasonal
fluctuations.



Operating loss.Operating loss was $9.7
million for the first quarter of 2004 compared to $16.9 million for the same period in 2003, a decrease in the operating loss of $7.2 million, or 42.6%. Operating loss as a percentage of net sales was 4.7% for the first quarter in 2004 compared to
11.2% for the same period in 2003 due to sales price and cost increases and selling, general and administrative expense changes described above.



Interest expense.Interest expense was $6.7 million for the first quarter in 2004 compared to $7.0 million for the same period in 2003. Decreased
interest rates lowered interest expense by $0.3 million. Average borrowings on the credit facility of $87.4 million during the first quarter of 2004 compared to $76.0 million for the comparable period in 2003. Lower note payable balances in 2004
offset the impact of higher borrowings on the credit facility. Higher average daily borrowings on the credit facility were used to finance higher cost inventory resulting predominantly from higher natural gas prices.



Income tax benefit.The Company recognized no income tax benefit for
the first quarter of 2004 compared to an income tax benefit of $9.2 million for the same period in 2003. The effective tax rate for the first quarter of 2003 was 38.5%. The Company has not recorded income tax expense or benefit subsequent to the
second quarter of 2003 when the Company recorded a valuation allowance for the full amount of net deferred tax assets. The Company continues to maintain a valuation allowance for the full amount of net deferred tax assets in accordance with
provisions of SFAS No. 109, Accounting for Income Taxes as of March 31, 2004. The Company will not record a net income tax expense or benefit until GAAP requirements for unrestricted recognition of deferred tax assets have been
satisfied.



Net loss.Net loss was $16.4 million for the
first quarter of 2004 compared to $14.7 million for the same period in 2003, an increase of $1.7 million, resulting 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 $225 million senior secured credit facility (credit facility) with a consortium of lenders. At March 31, 2004, the borrowing base provisions under the credit facility supported a gross borrowing
availability of $209.7 million, from which we had drawn $118.3 million. This facility includes up to $20.0 million for letters of credit of which there were letters of credit totaling $9.3 million outstanding as of March 31, 2004. This facility
contains financial and operational covenants and other restrictions with which we must comply, including a requirement to maintain certain financial ratios and limitations on our ability to incur additional indebtedness. In connection with the
establishment of the credit facility, the Company incurred $3,605 of deferred financing costs during 2003. As of December 31, 2003, there were unamortized deferred financing costs of $419 associated with the credit facility in effect prior to the
current credit facility. During the quarter ended March 31, 2004, additional deferred financing fees of $141 were incurred.



From time to time, we review our financing needs and capital structure. As a result of our review, we may periodically explore alternatives to our current
financing, including the issuance of additional long-term debt, refinancing our credit facility and other restructuring or financings. In addition, we may from time to time seek to



16



---

retire our outstanding First Mortgage Notes in open market purchases, privately negotiated transactions or otherwise. These repurchases, if any, will depend
on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amount of repurchases of our First Mortgage Notes may be material and may involve significant amounts of our cash and debt availability.



Net cash used in operating activities for the three months
ended March 31, 2004 was $55.1 million compared to $39.2 million for the comparable period in 2003, an increase in net cash used of $15.9 million. The most significant component of higher cash flows used in operating activities was movement in
operating assets and liabilities of $22.2 million. Trade accounts receivable and other receivables were the largest components using $54.1 million more of cash with inventories, accounts payable and accrued liabilities partially offsetting cash used
with $31.9 million in cash provided in the first quarter of 2004 compared to the comparable period in 2003. Changes in accrued expenses, prepaid expenses and other working capital items making up the balance of the change in operating assets and
liabilities. Changes in deferred income taxes of $9.2 million, net loss of $1.7 million and changes in non-cash adjustments to net loss of $1.2 million make up the balance of changes that partially offset the movement in operating assets and
liabilities.



Net cash used in investing activities amounted to
$0.6 million in 2004 compared to $2.8 million in 2003, a decrease of $2.2 million. The decrease in net cash used in investing activities resulted from decreased capital expenditures of $1.1 million in 2004 and increased proceeds from the sale of
property, plant and equipment of $1.1 million in 2004 compared to 2003.



Capital expenditures were $2.4 million for the three months ended March 31, 2004 compared with $3.5 million for the three months ended March 31, 2003. These capital expenditures were primarily for facility improvements and machinery and
equipment replacement projects. We estimate total capital expenditures, excluding potential acquisitions, for all of 2004 will be approximately $12.0 million.



Net cash provided by financing activities totaled $55.2 million compared to $41.6 million in 2003, an increase of $13.6 million. Increased cash
provided by financing activities in 2004 compared to 2003 resulted primarily from net lower payments to the credit facility of $16.0 million and $0.4 million lower payment of deferred financing costs compared to 2003. These increases in cash
provided were partially offset by $2.6 million less cash from customer deposits in 2004 compared to 2003 and increased payments on long-term debt of $0.2 million.



17



---

Net working capital, excluding current installments of long-term debt at March 31, 2004 totaled $173.2
million versus $209.5 million at December 31, 2003, a decrease of $36.3 million. This decrease resulted primarily from normal seasonal movement of operating assets and liabilities highlighted by increases in inventory, trade accounts receivable,
customer deposits, accounts payable, and accrued expenses and decreases in other receivables and prepaid and other current assets. Working capital changes are summarized in the table below.



|                                |  |   |      
|------------------------------- |  | - | -----
|Working capital decreases:      |  |   |      
|Customer deposits               |  | $ | 80.2 
|Accounts payable                |  |   | 69.6 
|Other receivables               |  |   | 12.1 
|Other working capital decreases |  |   | 4.9  
|                                |  |   |      
|Total decreases                 |  |   | 166.8
|                                |  |   |      
|Working capital increases:      |  |   |      
|Inventories                     |  |   | 101.1
|Trade accounts receivable       |  |   | 29.4 
|                                |  |   |      
|Total increases                 |  |   | 130.5
|                                |  |   |      
|Net decreases                   |  | $ | 36.3 
|                                |  |   |      



Recently Adopted
Accounting Standards



Rebate income is recorded when
the criteria of EITF Issue 02-16 are met. We expect higher income during the fourth quarter for rebate programs that do not meet the requirements of EITF Issue 02-16 resulting from lower income being recorded during the first three fiscal
quarters.



ITEM 3.Quantitative and Qualitative Disclosures about Market Risk



The Company is exposed to various market risks, including commodity price risk and interest rate risk. The Company has entered into limited commodity
hedging activities with respect to its grain and seed purchases. The Company intends to use hedging transactions to minimize exposures to fluctuations in grain prices that may occur during the production cycle of seed products. The majority of these
contracts settle in cash. Historically, such settlements have not had a significant effect on liquidity, nor are they expected to be significant to the Companys liquidity in the future. In the past, the provisions of the credit facility have
not provided the Company the flexibility to perform any significant hedging activities. While we do not anticipate initiating any significant hedging activities, we believe our current credit facility will provide the Company with more flexibility
with which to consider hedging activities in natural gas, interest rates or expanded use in seed and grain. We continue to evaluate the possibilities for hedging to manage the volatility associated with various aspects of our business.



Commodity Price Risk



The Company is 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 affected by changes in
natural gas prices as well as supply and demand and other factors. As a normal course of business, the Company purchases nitrogen-based products 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 and supply and demand. During the first quarter of 2004, the Company purchased natural gas for use in its East
Dubuque facility on the spot market, but has also used short-term, fixed supply, fixed price purchase contracts which will lock in pricing for a portion of its natural gas



18



---

requirements through the first quarter. Currently, the Company purchases natural gas for use in its East Dubuque facility on the spot market. Notwithstanding
use of these purchase contracts, the Company is exposed to significant, although not excessive market risk. Changes in levels of natural gas prices and market prices of nitrogen-based products can materially affect the Companys financial
position and results of operations. The Company has experienced no difficulties in securing supplies of natural gas, however, natural gas is purchased at market prices and such purchases are subject to price volatility.



The Company engages in limited commodity hedging activities with respect to
its grain and seed purchases. The Company attempts to use these hedging transactions to minimize exposures to fluctuations in grain prices that may occur during the production cycle of seed products. Grain and seed hedging activities are marked to
market every month and price fluctuations are reflected in the consolidated statements of operations. Increases in commodity grain prices can expose the Company to increased cost associated with its commodity seed purchases to the extent that
strategies in place do not perform as intended.



Interest
Rate Risk



The Company is also exposed to changes in
interest rates. The interest rates that we pay for borrowings under our credit facility are based primarily on the LIBOR rate of interest charged by the agent bank under our credit facility. Our operating results will be impacted by changes in
interest rates. We estimate that based on an annual average balance on our credit facility that each 1% change in market interest rate will impact before tax earnings by approximately $1.4 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.



At March 31, 2004, the Companys exposure to
market risk factors had not materially changed from December 31, 2003.



ITEM 4.Controls and Procedures



(a) Evaluation of disclosure controls and procedures.



We maintain a system of controls and procedures designed to provide reasonable assurance on the reliability of our financial statements and other disclosures included in this report, as well as to safeguard assets
from unauthorized use or disposition. The system is supported by formal policies and procedures. Appropriate actions are taken to address significant control deficiencies and other opportunities for improving the system as they are identified.
However, no cost-effective internal control system will preclude all errors and irregularities, and management is necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.



Based on their evaluation as of the end of the period covered by this
Quarterly Report on Form 10-Q, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the
Exchange Act) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms.



(b)
Changes in internal controls.



There were no significant
changes in the Companys internal controls or in other factors over financial reporting or in other factors during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.



19



---

PART 2. OTHER INFORMATION



ITEM 6.Exhibits and Reports on Form 8-K



(a)(1) Financial Statements:



The following condensed consolidated financial statements are included in Part 1, Item 1, of this Form 10-Q:



| |  |                                                                                                                                                                                                                                                                                       
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 
| |  | Condensed Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003 Condensed Consolidated Statements of Operations for the Three months ended March 31, 2004 and 2003 Condensed Consolidated
Statements of Cash Flows for the Three months ended March 31, 2004 and 2003



(2) Financial
Statement Schedules: None.



(3) Exhibits:



|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|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)                                                                                                                                                                                                                                                                                                                                                                                               
|      | 
|10.03 |  | 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.                                                                                                                                                                                                                                                                                                                              
|      | 
|10.16 |  | Employment Agreement dated as of December 1, 1999 between Royster-Clark, Inc. and G. Kenneth Moshenek.                                                                                                                                                                                                                                                                                                                                                              
|      | 
|10.20 |  | Employment Agreement dated as of December 1, 1999 between Royster-Clark, Inc. and Paul M. Murphy.                                                                                                                                                                                                                                                                                                                                                                  
|      | 
|10.21 |  | Amendment and Restatement of the April 22, 1999 Revolving Credit Agreement, dated as of December 22, 2003, among the Company, certain subsidiaries of the Company as the co-borrowers, various
financial institutions as lenders, U.S. Bank National Association, as the administrative agent, a collateral agent and a lead arranger, The CIT Group/Business Credit, Inc., as a collateral agent and a lead arranger, and Bank of America, N.A. as a
lead arranger. 
|      | 
|10.22 |  | First Amendment to Amended and Restated Revolving Credit Agreement Among Royster-Clark, Inc., various financial institutions, U.S. Bank National Association, the CIT Group/Business Credit,
Inc., and Supplement Amending the Borrower Pledge and Security Agreement and Subsidiary Pledge and Security Agreement dated March 26, 2004. *                                                                                                                            
|      | 
|31.01 |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Royster-Clark, Inc. *                                                                                                                                                                                                                                                                                                                                                                            
|      | 
|31.02 |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Royster-Clark, Inc. *                                                                                                                                                                                                                                                                                                                                                                            
|      | 
|32.01 |  | Section 1350 Certifications. *                                                                                                                                                                                                                                                                                                                                                                                                                                        



20



---

---

| | 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 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 10K for the annual period ended December 31, 2002 (Reg. No.: 333-81235) filed on March 31, 2003.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Incorporated by reference to identically numbered exhibit to Form 10K for the annual period ended December 31, 2003 (Reg. No.: 333-81235) filed on March 30, 2004.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|* | Filed herein.
|- | -------------



(b) Reports on Form 8-K



On March 18, 2004, we filed a report on Form 8-K which reported under Item 5 that the state of Illinois has awarded Royster-Clark, Inc a
grant of $500,000 for an economic and development study to convert Royster-Clarks natural gas fed ammonia plant in East Dubuque, Illinois to coal feedstock using Advanced Clean Coal Technology in cooperation with Rentech, Inc. and furnished a
copy of the press release to the Commission.



On April 2, 2004 we filed a report on Form 8-K which reported under Item 9 and item 12, the issuance of a press release which reported fourth fiscal quarter and fiscal year ended December 31, 2003 operating and financial results for
Royster-Clark, Inc. and furnished a copy of the earnings release to the Commission.



21



---

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/    JOEL F. DUNBARJoel F. DunbarVice President, Assistant Secretary and Controller(on behalf of the Registrant and as Chief Accounting Officer)




DATE: May 14, 2004



22