UNITED STATESSTATESSECURITIES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 2054920549FORM FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~November~~ May 3031, ~~2004~~2005

\|_\|	TRANSITION REPORT PURSUANT TO SECTION 13 AND 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period ~~from~~ from ________to ________

Commission File Number 0-16130

NORTHLAND CRANBERRIES, INC.

(Exact name of registrant as specified in its charter)

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

2321 West Grand Avenue

P.O. Box 8020

Wisconsin Rapids, Wisconsin 54495-8020

(Address of Principal Executive Offices)

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

~~2930~~Not ~~Industrial~~Applicable ~~Street P.O. Box 8020 Wisconsin Rapids, Wisconsin 54495-8020~~ (Former name, former address and former fiscal year, if changed since last report)

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

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

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

Class A Common Stock ~~January~~July 1415, 2005 94,091,633

~~NORTHLAND~~1 ~~CRANBERRIES, INC. FORM 10-Q INDEX~~

PART I.	FINANCIAL INFORMATION	PAGE
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statement of Shareholders' Equity	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial
	Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About
	Market Risk	17
Item 4.	Controls and Procedures	18
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Submission of Matters to a Vote of Security Holders	18
Item 6.	Exhibits	18
	SIGNATURE	19
	Exhibit Index	20

NORTHLAND CRANBERRIES, INC.
FORM 10-Q INDEX

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

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

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

	November 30, 2004			August 31, 2004
	May 31, 2005			August 31, 2004
ASSETS
Current assets:
Cash and cash equivalents	$	345,~~011~~248		$	2,442
Accounts receivable - net		81,~~168~~135			4,418
Escrow receivable		2,532			0
Note receivable and accounts receivable - other		2,788			0
Inventories		2814,~~160~~093			23,035
Prepaid expenses and other current assets		~~835~~630			767
Deferred income taxes		3,175			6,194
Assets held for sale		1,532			0
Total current assets		76,881			36,856
Deferred income taxes		0			6,194
Property and equipment - net		47,019			54,527
Total current assets		25,426			36,856
Other assets		901			854
Property and equipment - net		22,893			54,527
Debt issuance cost - net		2,207			1,349
Other assets		809			854
Total assets	$	127,008		$	93,586
Debt issuance cost - net		0			1,349
Total assets	$	49,128		$	93,586
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Revolving line of credit facility	$	5,000		$	0
Accounts payable	$	3,653		$	5,091
Accounts payable		14,142			5,091
Accrued liabilities		2,181			3,221
Accrued liabilities		10,745			3,221
Accrued dividends		31,889			0
Current maturities of long-term debt:
Outstanding principal payments		~~8,910~~250			1,723
Future interest payments from debt restructuring		~~172~~0			270
Current maturities of long-term debt		~~9,082~~250			1,993
Total current liabilities		706,~~858~~084			10,305
Long-term debt:
Long-term debt, less current maturities:
Outstanding principal payments		~~18,459~~225			18,263
Future interest payments from debt restructuring		~~1,165~~0			1,109
Long-term debt		19,624			19,372
Long-term debt, less current maturities		225			19,372
Total liabilities		906,~~482~~309			29,677
Shareholders' equity:
Common stock - Class A, $.01 par value, 94,091,633 shares
issued and outstanding		941			941
Redeemable preferred stock - Series B, $.01 par value, 100 shares issued
and outstanding		0			0
Additional paid-in capital		154,902			154,902
Accumulated deficit		(~~119~~113,~~317~~024	)		(91,934	)
Total shareholders' equity		3642,~~530~~819			63,909
Total liabilities and shareholders' equity	$	~~127~~49,~~008~~128		$	93,586

See notes to condensed consolidated financial statements.

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

	For the Three Months Ended						For the Nine Months Ended
	November 30, 2004			November 30, 2003
	May 31, 2005			May 31, 2004			May 31, 2005			May 31, 2004
Net revenues	$	2310,~~100~~416		$	226,~~378~~617		$	28,126		$	19,820
Cost of sales		(168,~~808~~415	)		(154,~~393~~072	)		(20,070	)		(11,228	)
Gross profit		62,~~292~~001			62,~~985~~545			8,056			8,592
Selling, general and administrative expenses		(51,~~678~~305	)		(42,~~014~~434	)		(5,395	)		(7,426	)
Gain on transaction with Ocean Spray (Note 3)		7,699			0
Write down of long-lived assets and assets
Income from operations		8,313			2,971
held for sale		0			0			0			(558	)
Interest expense		(862	)		(634	)
Gain (loss) on disposal of property & equipment and
Interest income		79			12
other assets (Note 4)		6,189			(64	)		13,920			(390	)
Income before taxes		7,530			2,349
Other income		0			0			0			3,000
Income tax expense		(3,024	)		0
Income from operations		6,885			47			16,581			3,218
Net income	$	4,506		$	2,349
Interest expense		(539	)		(543	)		(2,349	)		(1,799	)
Gain (loss) on debt extinguishment		966			0			(764	)		5,339
Interest income		26			11			128			37
Income (loss) before income taxes		7,338			(485	)		13,596			6,795
Income tax expense		(3,281	)		(13	)		(6,414	)		(33	)
Net income (loss) from continuing operations		4,057			(498	)		7,182			6,762
Discontinued operations
Income (loss) from discontinued operations		0			1,247			(854	)		2,868
(Loss) gain on disposition of discontinued
operations		(641	)		0			4,471			0
Net income	$	3,416		$	749		$	10,799		$	9,630
Net income (loss) from continuing operations
per common share:
Basic:	$	0.04		$	(0.01	)	$	0.08		$	0.07
Diluted:	$	0.04		$	(0.00	)	$	0.07		$	0.07
Net income per common share:
Basic:	$	0.0504		$	0.0301		$	0.11		$	0.10
Diluted:	$	0.0403		$	0.0201		$	0.11		$	0.10
Shares used in computing net income per share:
Basic		94,091,633			9194,~~548~~091,~~580~~933			94,091,633			93,172,793
Diluted		~~101~~99,~~099~~073,~~100~~365			101,~~779~~131,~~566~~514			100,303,270			100,946,257

See notes to condensed consolidated financial statements.

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

	For the Three Months Ended
	For the Nine Months Ended
	November 30, 2004			November 30, 2003
	May 31, 2005			May 31, 2004
Operating activities:
Net income	$	410,~~506~~799		$	29,~~349~~630
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of property and equipment		~~831~~1,944			~~910~~2,559
Amortization of debt issuance costs and debt discount		~~530~~1,101			~~278~~837
Provision for deferred income taxes		36,~~019~~194			0
(Gain) on transaction with Ocean Spray		(7,699	)		0
Provision for write down of assets held for sale		0			558
(Gain) loss on disposal of property and equipment		(6,189	)		390
Gain on transaction with Ocean Spray		(7,731	)		0
Gain on disposal of business		(4,471	)		0
Loss (gain) on debt extinguishment		764			(5,339	)
Changes in assets and liabilities:
Receivables, prepaid expenses and other current assets		(41,~~900~~513	)		~~849~~3,385
Inventories		(52,~~334~~052	)		(9,~~860~~282	)
Accounts payable and accrued liabilities		~~16,534~~739			~~9,537~~(216	)
Net cash provided by operating activities		73,~~487~~689			42,~~063~~522
Investing activities:
Property and equipment purchases		(30	)		(375	)
Issuance of note receivable		0			(800	)
Proceeds from disposals of property and equipment		12,118			983
Property and equipment purchases		(146	)		(912	)
Net cash provided by investing activities		12,088			608
Proceeds from disposal of business		9,701			0
Proceeds from disposals of property and equipment		41,697			4,233
Net cash provided by investing activities		51,252			2,521
Financing activities:
Net borrowings under revolving line of credit facility		5,000			0
Net borrowing under revolving line of credit facility		0			1,437
Payments on long-term debt		(8,006	)		(2,077	)
Payments on long-term debt and other obligations		(35,246	)		(13,263	)
Proceeds from issuance of long-term debt		15,000			0
Net cash provided (used in) financing activities		11,994			(2,077	)
Dividends paid		(31,889	)		0
Net increase in cash and cash equivalents		31,569			2,594
Proceeds from issuance of common stock		0			26
Net cash used in financing activities		(52,135	)		(11,800	)
Net increase (decrease) in cash and cash equivalents		2,806			(6,757	)
Cash and cash equivalents, beginning of period		2,442			9,058
Cash and cash equivalents, end of period	$	345,~~011~~248		$	112,~~652~~301
SUPPLEMENTAL CASH FLOW INFORMATION-
Cash paid during the three months for:
Interest	$	~~320~~1,565		$	~~355~~1,802
Non-cash activity:
Declaration of dividend	$	31,889		$	0

See notes to condensed consolidated financial statements.

NORTHLAND CRANBERRIES, INC. CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY THREENINE MONTHS ENDED NOVEMBERMAY 3031, 2004 2005(DOLLARS IN THOUSANDS) (Unaudited)

	Common Stock - Class A		Additional Paid-in Capital		Accumulated Deficit			Total Shareholders'’ Equity
Balance, August 31, 2004	$	941	$	154,902	$	(91,934	)	$	63,909
Cash dividends declared ($.33 per share)						(31,889	)		(31,889	)
Cash dividend paid
Net income		0		0		4,506			4,506
($.33 per share)						(31,889	)		(31,889	)
Balance, November 30, 2004	$	941	$	154,902	$	(119,317	)	$	36,526
Net income		0		0		10,799			10,799
Balance, May 31, 2005	$	941	$	154,902	$	(113,024	)	$	42,819

See notes to condensed consolidated financial statements.

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

1.	BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements have been prepared by Northland Cranberries, Inc. (collectively with its subsidiaries, the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission and reflect normal and recurring adjustments, which are, in the opinion of the Company, considered necessary to present fairly the financial position of the Company as of ~~November~~May 3031, ~~2004~~2005 and August 31, 2004, its related results of operations for the three and nine months ended ~~November~~May 3031, ~~2004~~2005 and ~~2003,~~2004 ~~respectively,~~ and its cash flows for the ~~three~~nine months ended ~~November~~May 3031, ~~2004~~2005 and ~~2003, respectively~~2004. As permitted by these regulations, these condensed consolidated financial statements do not include all information required by accounting principles generally accepted in the United States of America to be included in an annual set of financial statements, however, the Company believes that the disclosures are adequate to make the information presented not misleading. The Company’s condensed consolidated balance sheet as of August 31, 2004 was derived from the Company’s latest audited consolidated financial statements. It is suggested that the accompanying condensed consolidated financial statements be read in conjunction with the latest audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2004.

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

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

The weighted average shares outstanding used in calculating net income per common share for the three and nine months ended ~~November~~May 3031, ~~2004~~2005 and ~~2003~~2004 consisted of the following:

	Three Months Ended
	For the Three Months Ended				For the Nine Months Ended
	November 30, 2004		November 30, 2003
	May 31, 2005		May 31, 2004		May 31, 2005		May 31, 2004
Basic shares outstanding		94,091,633		9194,~~548~~091,~~580~~633		94,091,633		91,548,580
Issuance of new shares		0		0		0		1,624,213
Total		94,091,633		94,091,633		94,091,633		93,172,793
Effect of dilution:
Warrants		2,~~507~~470,~~907~~712		42,~~996~~511,~~635~~018		2,492,609		3,339,649
Options		42,~~499~~511,~~560~~020		4,~~234~~528,~~351~~863		3,719,028		4,433,815
Diluted shares outstanding		~~101~~99,~~099~~073,~~100~~365		~~100~~101,~~779~~131,~~566~~514		100,303,270		100,946,257

The shares outstanding used to compute the diluted earnings per share for the three and nine months ended ~~November~~May 3031, ~~2004~~2005 and ~~2003~~2004 exclude outstanding options to purchase ~~547~~973,~~825~~125 and ~~612~~598,~~575~~825 shares of Class A Common Stock, respectively. Those options were excluded because their weighted average exercise prices were greater than the average market price of the common shares and their inclusion would have been antidilutive.

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

	For the Three Months Ended						For the Nine Months Ended
	(Dollars in thousands except per share amounts)
	November 30, 2004			November 30, 2003
	May 31, 2005			May 31, 2004			May 31, 2005			May 31, 2004
Net income	$	43,~~506~~416		$	~~2,349~~749		$	10,799		$	9,630
Deduct: Total stock-based employee compensation
Deduct: Total stock-based employee
expense determined under fair value based method
compensation expense determined under
for all awards, net of related tax effect		($ 280	)		($ 138	)
fair value based method for all
Pro forma net income	$	4,226		$	2,211
awards, net of related tax effect	$	( 22)		$	( 115	)	$	(66	)	$	( 346)
Historical and pro forma net income per common
Pro forma net income	$	3,394		$	634		$	10,733		$	9,284
share:
Historical and pro forma net income
per common share:
Basic:
Historical and pro forma	$	0.05		$	0.02
Pro forma	$	0.04		$	0.01		$	0.11		$	0.10
Historical	$	0.04		$	0.01		$	0.11		$	0.10
Diluted:
Historical and pro forma	$	0.04		$	0.02
Pro forma	$	0.03		$	0.01		$	0.11		$	0.09
Historical	$	0.03		$	0.01		$	0.11		$	0.10

New Accounting Pronouncements – On December 16, 2004, the Financial Accounting Standards Board (“FASB”) issued Statement No. 123R, “Share-Based Payment” (“SFAS 123R”), which requires compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of the compensation cost will be measured based on the grant-date fair value of the equity or liability instruments issued. In addition, liability awards will be remeasured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. SFAS 123R replaces FASB Statement No. 123, “Accounting for Stock Based Compensation” and supercedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” SFAS 123R is effective for all interim or annual periods beginning after ~~June~~August 1531, 2005. Early adoption is encouraged and retroactive application of the provisions of SFAS 123R to the beginning of the fiscal year that includes the effective date is permitted, but not required. The Company has not yet adopted this pronouncement and is currently evaluating the impact that the adoption of SFAS 123R will have on its consolidated financial position, results of operations and cash flows.

On November 24, 2004, the FASB issued Statement No. 151, “Inventory Costs”(“SFAS 151”), an amendment of ARB No. 43, Chapter 4. SFAS 151 clarifies the accounting for abnormal amounts of ~~the~~ idle facility expense, freight, handling costs and wasted material (spoilage). SFAS 151 is the result of a broader effort by the FASB and International Accounting Standards Board (“IASB”) to improve financial reporting by eliminating certain narrow differences between their existing accounting standards. One such difference was the accounting for abnormal inventory costs. Both the FASB and IASB agree that abnormal expenses should be recognized in the period in which they are incurred, however the wording of IAS 2, “Inventories” and ARB 43, Chapter 4, “Inventory Pricing,” led to inconsistent application of that principle. The FASB agreed that the wording in IAS 2 was less ambiguous and decided to incorporate portions of that language into ARB 43. As such, this statement requires that those items be recognized as current-period charges regardless of whether they meet the “so abnormal” criterion outlined in ARB 43. SFAS 151 also introduces the concept of “normal capacity” and requires the allocation of fixed production overhead to inventory based on the normal capacity of the production facility. Unallocated overhead must be recognized as an expense in the period in which it is incurred. SFAS 151 is effective for all interim or annual periods beginning after June 15, 2005. Early adoption is encouraged and retroactive application of the provisions of SFAS 151 to the beginning of the fiscal year that includes the effective date is permitted, but not required. The Company has not yet adopted this pronouncement and is currently evaluating the impact that the adoption of SFAS 151 will have on its consolidated financial position, results of operations and cash flows.

2.	LEGAL PROCEEDINGS

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

3. ~~OCEAN~~DISPOSITION ~~SPRAY~~OF ~~TRANSACTION~~BRANDED JUICE BUSINESS

On ~~September~~February 2322, ~~2004,~~2005 the Company entered into ~~agreements~~an agreement with ~~Ocean~~Apple ~~Spray~~& Eve pursuant to which: ~~(i)~~ it sold ~~its~~certain ~~processing~~assets ~~plant,~~of ~~storage~~the ~~facility~~branded ~~and~~juice ~~certain~~business, ~~offices~~including: ~~located~~(a) incertain ~~Wisconsin~~raw ~~Rapids~~materials, ~~Wisconsin~~work-in-process toand ~~Ocean~~finished ~~Spray~~goods ~~for~~inventories, ~~approximately~~together ~~$28~~with ~~million~~certain related labels, ~~subject~~bottles toand ~~certain~~other ~~adjustments~~bottling and ~~including~~packaging amaterials ~~$2.5~~owned ~~million~~by ~~escrow;~~the ~~(ii)~~Company ~~Ocean~~on ~~Spray~~February ~~paid~~22, to2005; (b) all the Company’s ainterest ~~non-refundable~~in ~~(but~~certain ~~creditable)~~trade $5rights ~~million~~used ~~cash~~or ~~fee~~held for use in ~~exchange~~connection ~~for~~with the ~~option~~business toand ~~purchase~~operation upof the Company’s branded juice business, including without limitation rights related to 14the ofNorthlandtrademark, certain trademarks held by the Company’s 17wholly ~~cranberry~~owned ~~marshes~~subsidiary, atNCI ~~prices~~Foods, ~~that~~LLC ~~aggregate~~(“NCI Foods”), and the Seneca trademark pursuant to ~~$47.5~~the ~~million~~Trademark License Agreement by and between the Company and Seneca Foods Corporation, a New York corporation (~~before~~“Seneca”) dated December 29, 1998 (the ~~option~~“Seneca ~~fee~~License Agreement”); (~~iii~~c) all trade accounts receivable of the Company ~~agreed~~related exclusively to, ~~for~~the abranded ~~period~~juice ofbusiness; ~~ten~~(d) ~~years,~~a ~~deliver~~list ~~all~~of certain customers of the ~~cranberries~~branded ~~harvested~~juice ~~from~~business ~~its~~and ~~currently-owned~~all ~~marshes~~goodwill ~~and~~associated ~~its~~therewith; ~~contract~~(e) ~~growers~~all of the Company’s ~~marshes~~rights in, to ~~Ocean~~and ~~Spray~~under certain contracts, ~~which~~purchase ~~Ocean~~orders ~~Spray~~and ~~will~~sales ~~receive,~~orders ~~clean,~~of ~~bin,~~the ~~store~~Company ~~and~~pertaining ~~process~~to ~~into~~the branded juice ~~concentrate~~business; ~~for~~(f) acertain ~~fixed~~personal ~~fee~~property; (ivg) ~~Ocean~~all ~~Spray~~sales ~~agreed~~literature, topromotional literature, ~~for~~catalogs aand ~~period~~similar materials of ~~ten~~the ~~years,~~Company ~~purchase~~associated ~~cranberry~~exclusively ~~concentrate~~with the branded juice business, including but not ~~otherwise~~limited ~~used~~to bysigns, signage and product memorabilia relating to the branded juice business’ trade rights; (h) all transferable licenses, permits, approvals, certifications and listings of the Company inrelating ~~its~~exclusively to the branded ~~products~~juice business; and (vi) the records and files of the Company ~~agreed~~relating exclusively to ~~dismiss~~the ~~with~~above-referenced ~~prejudice~~assets ~~its~~of ~~antitrust~~the ~~lawsuit~~branded ~~against~~juice ~~Ocean~~business, ~~Spray~~including, without limitation, transferring invoices, customer and vendor lists and operating and marketing plans, and all other documents, tapes, discs, programs or other embodiments of information of the branded juice business. As aconsideration ~~result~~for ofthe ~~this~~purchased ~~transaction~~assets, Apple & Eve paid to the Company, ~~recognized~~subject to a ~~gain~~final working capital adjustment, approximately $10.8 million in cash, consisting of base consideration of approximately $79 million, $500,000 of which was placed in an escrow account, and a preliminary working capital adjustment of approximately $1.78 million.

4Pursuant to the Purchase Agreement, Apple & Eve also assumed approximately $3.5 ~~INVENTORIES~~million of selected current liabilities of the Company, including: (i) all liabilities and obligations associated with any open purchase orders and contracts with respect to sales of juice products related to the brands (excluding the cranberry juice concentrate, fresh cranberry and frozen cranberry inventories of the Company); (ii) all liabilities and obligations associated with any open purchase orders and contracts with vendors and suppliers of raw materials related to the brands; (iii) all liabilities and obligations associated with the Company’s rights in, to and under certain contracts, purchase orders and sales orders of the Company pertaining to the branded juice business and arising after February 22, 2005; (iv) all trade accounts payable; (v) all liabilities and obligations of the Company relating to coupons issued by the Company prior to February 22, 2005 and validly redeemed on or after April 26, 2005; (vi) all liabilities and obligations of the Company associated with any product liability, breach of warranty or similar claim for injury to person or property asserted after February 22, 2005 and related to the branded juice business, but only to the extent based on events occurring after February 22, 2005; (vii) except as otherwise provided in the Purchase Agreement, all liabilities and obligations associated with certain employees employed by Apple & Eve after February 22, 2005 that arise after February 22, 2005 and relate to Apple & Eve’s employment of such employees; (viii) all liabilities and obligations associated with the failure by Apple & Eve, the branded juice business or the purchased assets to comply with any law, regulation, statute, ordinance or treaty after the closing of the transaction, subject to the agreement of the parties set forth in the Purchase Agreement; and (ix) liens that are considered permitted liens.

~~Inventories~~The Company and Apple & Eve also entered into a Concentrate Purchase and Supply Agreement, under which Apple & Eve committed to purchase from the Company on a monthly basis, during the period from February 22, 2005 to February 22, 2006, all of the cranberry concentrate in the Company’s inventory of cranberry juice concentrate as of ~~November~~February 3022, ~~2004~~2005 (the “Existing Inventory”), for an aggregate purchase price equal to approximately $6.7 million. In addition, for the period beginning on October 1, 2005 and ~~August~~ending 31on the earlier of September 30, ~~2004~~2014 ~~consisted~~or the termination of the ~~following~~Company’s (toll processing agreement with Ocean Spray, Apple & Eve has the option in ~~thousands):~~each year to purchase on a monthly basis up to the total amount of cranberry juice concentrate available to the Company under its toll processing agreement with Ocean Spray at a price that does not exceed the price at which the Company can sell cranberry juice concentrate to Ocean Spray under the toll processing agreement.

	November 30, 2004		August 31, 2004
Raw materials	$	24,908	$	12,069
Finished goods		3,252		3,390
Deferred crop costs		0		7,576
Total inventories	$	28,160	$	23,035

As a result of this transaction, the Company recognized a gain of approximately $4.5 million in the second quarter of fiscal 2005. ~~DEBT~~The Company used the net proceeds resulting from the sale of the branded juice business to pay down outstanding principal balances on its Revolver A, Revolver B and term loan credit facilities, and to pay related expenses due to the administrative agent.

~~Debt~~The asConsolidated ofFinancial ~~November~~Statements ~~30,~~and ~~2004~~related notes have been restated for the three and ~~August~~nine months ended May 31, 2005 and 2004, ~~consisted~~where ofapplicable to reflect the ~~following~~branded ~~(in~~juice ~~thousands):~~business as a discontinued operation.

	November 30, 2004		August 31, 2004
Revolving credit facility	$	5,000	$	0
Term loans payable		15,000		0
Fee note payable		2,187		4,298
Restructured insurance company note		9,632		15,000
Other obligations		550		688
Subtotal principal obligations		27,369		19,986
Future interest payments from debt restructuring		1,337		1,379
Total long-term debt		28,706		21,365
Less current maturities of long-term debt		9,082		1,993
Long-term debt, net	$	19,624	$	19,372

Operating results of the discontinued operations were as follows:

On November 16, 2004, the Company entered into an Amended and Restated Loan and Security Agreement with two of its lenders, Wells Fargo Foothill, Inc. (“Wells Fargo”) and Ableco Finance LLC (“Ableco”) pursuant to which, among other things, the commitment under the existing revolving credit facility was reduced to an aggregate principal amount of $11.0 million and an additional term loan facility in the aggregate principal amount of $15.0 million was provided.

	For the Three Months Ended						For the Nine Months Ended
	(Dollars in thousands except per share amounts)
	May 31, 2005			May 31, 2004			May 31, 2005			May 31, 2004
Revenue	$	0		$	11,763		$	22,385		$	37,641
Cost of sales		(0	)		(8,461	)		(18,273	)		(27,604	)

Gross profit		0			3,302			4,112			10,037
Selling, general and administrative
expense		(0	)		(2,055	)		(4,966	)		(7,169	)
Net income (loss) from discontinued
operations	$	0		$	1,247		$	(854	)	$	2,868

Diluted income (loss) per share from
discontinued operations	$	0.00		$	0.01		$	(0.01	)	$	0.03

As4. ofOCEAN ~~November~~SPRAY ~~30, 2004 and August 31, 2004, the Company was in compliance with financial covenants contained in its agreements covering its long-term debt obligations.~~TRANSACTION

10On September 23, 2004, the Company entered into agreements with Ocean Spray pursuant to which: (i) it sold its processing plant, storage facility and certain offices located in Wisconsin Rapids, Wisconsin to Ocean Spray for approximately $28 million, subject to certain adjustments and including a $2.5 million escrow; (ii) Ocean Spray paid to the Company a non-refundable (but creditable) $5.0 million cash fee in exchange for the option to purchase up to 14 of the Company’s 17 cranberry marshes at prices that aggregate to $47.5 million (before the option fee); (iii) the Company agreed to, for a period of ten years, deliver all of the cranberries harvested from its currently-owned marshes and its contract growers’ marshes to Ocean Spray, which Ocean Spray will receive, clean, bin, store and process into juice concentrate for a fixed fee(which increases annually); (iv) Ocean Spray agreed to, for a period of ten years, purchase cranberry concentrate not otherwise used in the Northland branded juice business; and (v) the Company agreed to dismiss with prejudice its antitrust lawsuit against Ocean Spray. As a result of this transaction, the Company recognized a gain of $7.7 million in the first quarter of fiscal 2005.

6.11 ~~INCOME TAXES~~

~~The~~On ~~Company~~February ~~accounts~~28, ~~for~~2005, ~~income~~the ~~taxes~~Company ~~using~~received annotice ~~asset~~from ~~and~~Ocean ~~liability~~Spray ~~approach~~ that ~~generally~~it ~~requires~~had ~~the~~assigned ~~recognition~~to four of ~~deferred~~its ~~income~~cranberry ~~tax~~producing ~~assets~~members ~~and~~its ~~liabilities~~rights ~~based~~to onreceive title to 10 of the ~~expected~~14 ~~future~~cranberry ~~income~~marshes ~~tax~~subject ~~consequences~~to ofthe ~~events~~Option ~~that~~Agreement. ~~have~~Between ~~previously~~March ~~been~~18 ~~recognized~~and inMarch 22, 2005, the Company’s ~~financial~~received ~~statements~~executed orPurchase ~~tax~~Agreements ~~returns~~from Wayne Gardner d/b/a Dawesville Cranberry Co. In(with ~~addition~~respect to which the rights to receive title to the cranberry marshes were subsequently assigned to Dandy Creek Cranberries, aLLC ~~valuation~~and ~~allowance~~Gardner isCranberry, ~~recognized~~LLC), ifJJW itCranberries, isLLC, ~~more~~Acorn ~~likely~~Acres ~~than~~Cranberry ~~not~~Co., ~~that~~Inc. ~~some~~(with orrespect ~~all~~to which the right to receive title to the cranberry marsh was subsequently assigned to Nekoosa Marsh, LLC), and James Potter Cranberry Marsh, Inc., relating to the purchase of an aggregate of nine marshes. Between March 23 and March 29, 2005, the ~~deferred~~Company ~~income~~countersigned ~~tax~~the ~~assets~~Purchase ~~will~~Agreements, ~~not~~and bethose ~~realized~~agreements became effective. The Company publicly announced its entry into these agreements in a Current Report on Form 8-K, which was filed with the SEC on March 29, 2005.

~~The~~Between ~~effective~~May ~~income~~20 ~~tax~~and ~~rate~~May 24, 2005, the Company consummated the sale of ~~40%~~eight isof ~~higher~~the ~~than~~nine marshes for which executed Purchase Agreements were received. In each case, the ~~statutory~~Company ~~rate~~sold (and the purchaser purchased), generally speaking, (i) the real estate representing the applicable marsh and (ii) the personal property used exclusively in connection with the operation of ~~34%~~the ~~due~~applicable marsh. As a result of these transactions, the Company recognized a gain of $6.2 million. The sale of the ninth and final marsh for which an executed Purchase Agreement was received (the Warrens marsh) occurred on June 10, 2005. We expect to ~~state~~recognize ~~income~~a ~~taxes~~gain of less than $0.1 million related to the sale of the Warrens marsh during the fourth quarter of fiscal 2005.

75. ~~NOTE RECEIVABLE~~INVENTORIES

OnInventories ~~January~~as ~~28, 2004, the Company made a loan~~ of ~~$800~~May 31,~~000~~ to2005 anand ~~independent~~August ~~cranberry grower who is a former officer of the Company~~31, ~~which~~2004 isconsisted ~~secured by a subordinated mortgage~~ of the ~~grower’s~~following ~~cranberry marsh~~ (~~the “Loan”). The Loan, which is recorded within Other Assets on the accompanying consolidated balance sheet, was made~~ in connection with the restructuring of certain debt obligations of the grower, $1.0 million of which were previously guaranteed by the Company. The proceeds of the Loan were used to pay off the indebtedness of the grower to its bank, enabling the Company to obtain from the bank a release of its obligations under the guarantee.thousands):

8. COMMITMENTS

	May 31, 2005		August 31, 2004
Raw materials	$	11,714	$	12,069
Finished goods		0		3,390
Deferred crop costs		2,379		7,576

Total inventories	$	14,093	$	23,035

The ~~Company~~company’s ~~has~~inventory ~~multiple-year crop purchase contracts with 44 independent cranberry growers pursuant to which the Company has contracted to purchase all~~ of ~~the~~raw ~~cranberries~~materials ~~harvested~~and ~~from~~finished upgoods tois ~~1,738~~stored ~~contracted~~at ~~acres~~locations not owned by ~~these growers, subject to federal marketing order limitations. These contracts generally last for five years, and pay~~ the ~~growers at a market rate, as defined, for all raw cranberries delivered (plus $3 per barrel in certain circumstances) and certain incentives for premium cranberries~~company.

~~The~~12 Company and Ocean Spray entered into an agreement for a period of ten years pursuant to which Ocean Spray will receive, clean, store and process into concentrate all cranberries harvested from the Company’s and its contract growers’ cranberry properties for a fixed fee.

96. ~~DIVIDEND DECLARED~~DEBT

OnDebt ~~November~~as ~~12, 2004, the Company declared a special cash dividend~~ of ~~$0.33~~May ~~per share of Class A Common Stock payable on December 1~~31, ~~2004~~2005 toand ~~all~~August ~~shareholders of record at the close of business on November 26~~31, 2004. ~~The~~consisted ~~$31.9 million dividend was paid from a combination~~ of ~~proceeds from~~ the ~~September~~following ~~2004 asset sale to Ocean Spray and new borrowings discussed~~ (in ~~Note 5.~~thousands):

	May 31, 2005		August 31, 2004
Fee note payable	$	0	$	4,298
Restructured insurance company note		0		15,000
Other obligations		475		688

Subtotal principal obligations		475		19,986
Future interest payments from debt restructuring		0		1,379

Total long-term debt		475		21,365
Less current maturities of long-term debt		250		1,993

Long-term debt, net	$	225	$	19,372

~~ITEM~~As ~~2. MANAGEMENT’S DISCUSSION~~of ~~AND~~May ~~ANALYSIS~~31, OF2005 ~~FINANCIAL~~and ~~CONDITION~~August ~~AND~~31, ~~RESULTS~~2004, OFthe ~~OPERATIONS.~~Company was in compliance with financial covenants contained in its debt agreements.

~~OCEAN~~7. ~~SPRAY~~INCOME ~~TRANSACTION~~TAXES

OnThe ~~September~~Company ~~23,~~accounts ~~2004,~~for weincome ~~entered into~~taxes ~~agreements~~using ~~with~~an ~~Ocean~~asset ~~Spray pursuant to which: (i) we sold our processing plant, storage facility~~ and ~~certain~~liability ~~offices~~approach ~~located~~that ingenerally ~~Wisconsin~~requires ~~Rapids,~~the ~~Wisconsin~~recognition toof ~~Ocean~~deferred ~~Spray for~~income ~~approximately~~tax ~~$28~~assets ~~million, subject to certain adjustments~~ and ~~including~~liabilities abased ~~$2.5~~on ~~million escrow; (ii) Ocean Spray paid us a non-refundable (but creditable) $5 million cash fee in exchange for~~ the ~~option~~expected tofuture ~~purchase~~income uptax toconsequences 14 of ~~our~~events ~~17 cranberry marshes at prices~~ that ~~aggregate~~ tohave ~~$47.5~~previously ~~million~~been ~~(before~~recognized ~~the~~in ~~option fee); (iii) we agreed to, for a period of ten years, deliver all of~~ the ~~cranberries harvested from our currently-owned marshes and our contract growers~~Company’s ~~marshes~~financial tostatements ~~Ocean~~or ~~Spray,~~tax ~~which~~returns. ~~Ocean~~In ~~Spray will receive~~addition, ~~clean, bin, store and process into juice concentrate for~~ a ~~fixed~~valuation ~~fee;~~allowance ~~(iv)~~is ~~Ocean~~recognized ~~Spray~~if ~~agreed~~it ~~to, for~~is amore ~~period~~likely ofthan ~~ten years, purchase cranberry concentrate~~ not ~~otherwise~~that ~~used~~some byor usall inof ~~our branded~~the ~~products;~~deferred ~~and~~income ~~(v)~~tax weassets ~~agreed~~will tonot ~~dismiss~~be ~~with prejudice our antitrust lawsuit against Ocean Spray (the “Ocean Spray Transaction”)~~realized.

~~GENERAL~~8. NOTE RECEIVABLE

~~Total~~On ~~net~~January ~~revenues~~28, ~~increased~~2004, the Company made a loan of $800,000 to an independent cranberry grower who is a former officer of the Company, which is secured by ~~3.3% during~~a subordinated mortgage of the ~~three~~grower’s ~~months~~cranberry ~~ended~~marsh ~~November~~(the 30“Loan”). The Loan, ~~2004~~which ~~compared~~is torecorded within Other Assets on the ~~three~~accompanying ~~months~~consolidated ~~ended November~~balance 30sheet, ~~2003~~was made in connection with the restructuring of certain debt obligations of the grower, $1.0 ~~This~~million ~~increase~~of ~~resulted~~which ~~primarily~~were ~~from~~previously anguaranteed ~~increase~~by inthe ~~sales~~Company. The proceeds of ~~cranberry concentrate~~the ~~pursuant~~Loan were used to ~~our~~pay ~~new~~off ~~agreement~~the toindebtedness ~~sell~~of ~~cranberry~~the ~~concentrate~~grower to ~~Ocean~~its ~~Spray. This~~bank, ~~increase~~enabling ~~was~~the ~~partly~~Company ~~offset~~to byobtain afrom ~~decrease~~the inbank ~~sales~~a release of ~~branded~~its ~~products~~obligations ~~which~~under ~~we believe~~the isguarantee.Principal ~~attributable~~payments todue anunder ~~overall~~the ~~increase~~terms inof ~~trade~~the ~~spending~~loan bywere ~~competitors~~received induring the ~~cranberry~~ ~~beverage~~nine ~~category~~months inended ~~specific~~May ~~markets~~31, as2005. ~~well~~The asoutstanding ~~our~~principal ~~decreased~~balance ~~trade~~of ~~spending during~~ the ~~first~~Loan ~~quarter~~as of ~~fiscal~~May 31, 2005. was $708,300.

~~During~~13 the three months ended November 30, 2004, we realized net income of $4.5 million, which was an increase of $2.2 million compared to the three months ended November 30, 2003. In the month of November, we entered into an Amended and Restated Loan and Security Agreement with two of our lenders pursuant to which, among other things, the commitment under the existing revolving credit facility was reduced to an aggregate principal amount of $11.0 million and an additional term loan facility in the aggregate principal amount of $15.0 million was provided. We used the proceeds from our refinancing arrangements to (i) reduce our long-term debt with another lender by $5.0 million during the first quarter of fiscal 2005 and (ii) also, with proceeds from the Ocean Spray Transaction, to pay a special dividend during the second quarter of fiscal 2005.

During the first quarter of fiscal 2005, we declared a $0.33 per share special dividend payable on December 1, 2004 to shareholders of record as of November 26, 2004. As a result, we recorded a dividend payable on our November 30, 2004 balance sheet in the amount of $31.9 ~~million~~. ~~This dividend was paid on December 1, 2004 and reduced shareholders equity from approximately $63.9 million as of August 31, 2004 to approximately $36.5 million as of November 30, 2004.~~ COMMITMENTS

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

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

10.

DIVIDEND PAID

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

11.

SUBSEQUENT EVENTS

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

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

DISPOSITION OF BRANDED JUICE BUSINESS

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

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

EXERCISE OF OCEAN SPRAY OPTION

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

On February 28, 2005, we received notice from Ocean Spray that it had assigned to four of its cranberry producing members its rights to receive title to ten of the fourteen cranberry marshes subject to the option agreement entered into in the Ocean Spray Transaction. Between March 18 and March 22, 2005, we received executed Agricultural Asset Purchase Agreements from JJW Cranberries, LLC, Wayne Gardner d/b/a Dawesville Cranberry Co., James Potter Cranberry Marsh, Inc. and Acorn Acres Cranberry Co., Inc. relating to the purchase of an aggregate of nine marshes. Between March 23 and March 29, 2005, we countersigned those agreements, and those agreements became effective.

Between May 20 and May 24, 2005, the Company consummated the sale of eight of the nine marshes for which executed Purchase agreements were received. In each case, the Company sold (and the purchaser purchased), generally speaking, (i) the real estate representing the applicable marsh and the personal property used exclusively in connection with the operation of the applicable marsh. The aggregate proceeds from the sale of the marshes was approximately $23.6 million (excluding the $5.0 million option fee paid to the Company by Ocean Spray during the first quarter of fiscal 2005). The sale of the ninth and final marsh for which an executed Purchase Agreement was received (the Warrens marsh) occurred on June 10, 2005.

The proceeds from the marsh sales were used to (i) pay off our long-term note with Ableco of $12.0 million and satisfy our revolving line of credit facility; (ii) pay off our long-term note with The Equitable Life Assurance Society of the United States (“Equitable”) of $9.0 million; and (ii) pay the expenses related to the marsh sales.

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

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

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

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

CRITICAL ACCOUNTING POLICIES

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

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

Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists, product is delivered, collectibility is reasonably assured and title passes to the customer. Estimated reserves for discounts, coupons, product returns and trade allowances are established based on an analysis of historical trends and experience, as well as the trade allowances offered by us at the time products are delivered. The estimated reserves are charged against revenues in the same period that corresponding sales are recorded. We periodically evaluate such reserves and make necessary adjustments when actual participation in these programs differs from historical experience. There have been no significant changes in estimates for such reserves during the three months ended November 30, 2004.

Inventory

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

Allowance for Doubtful Accounts

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We determine the level of our allowance based on historical experience, the aging of our accounts receivable and the creditworthiness of individual customers. If the financial condition of our customers were to deteriorate, resulting in impairment of their ability to make payments, additional allowances may be required. Our accounts receivable balance was $8.2 million, net of doubtful accounts of $0.3 million, and $4.4 million, net of doubtful accounts of $0.3 million as of November 30, 2004 and August 31, 2004, respectively.

Recoverability of Long-Lived Assets

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

Realization of Deferred Tax Assets

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

OFF-BALANCE SHEET ARRANGEMENTS

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

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

RESULTS OF OPERATIONS

~~Total net revenues for the three months ended November 30, 2004 were $23.1 million, an increase of 3.3% from net revenues of $22.4 million in the prior year’s first quarter.~~ The ~~increase~~Consolidated ~~resulted~~Financial ~~primarily~~Statements ~~from~~and anrelated ~~increase~~notes inhave ~~sales~~been ofrestated ~~cranberry concentrate pursuant to our agreement to sell cranberry concentrate to Ocean Spray. Trade industry data~~ for ~~our Northland brand 100% juice products for~~ the ~~12-week~~three ~~period~~and ~~ended~~nine ~~November~~months ~~28, 2004 showed that we achieved a 5.2% market share of the supermarket shelf-stable cranberry beverage category on a national basis, down from a 5.8% market share for the 12-week period~~ ended ~~November~~May 3031, ~~2003.~~ ~~We believe the reduction in market share is primarily attributable to a reduction in trade spending programs with customers during the first quarter of fiscal~~ 2005. ~~As of~~and ~~November 28,~~ 2004, ~~our~~where ~~Northland~~applicable 100% juice cranberry products were available in supermarkets nationwide that account for approximately 71.3% of total grocery sales, down from approximately 73.9% as of November 30, 2003. We believe this loss in distribution is primarily attributable to ~~trade~~reflect ~~accounts~~the ~~allocating~~branded ~~shelf~~juice ~~space~~business ~~to popular new low calorie products,~~ as ~~well~~a asdiscontinued ~~our reduced level of trade spending during the quarter~~operation.

~~Cost~~Total ofnet ~~sales~~revenues for the three ~~months~~ months ended ~~November~~May 3031, ~~2004~~2005 ~~was~~were $1610.84 million, ~~compared~~an toincrease ~~$15~~of 57.4% from net revenues of $6.6 million ~~for~~in the ~~first~~prior year’s third quarter. This increase was primarily due to an increase in the quantity of ~~fiscal~~cranberry ~~2004,~~concentrate ~~resulting~~sold inas ~~gross~~a ~~margins~~result of 27our toll processing agreement with Ocean Spray.2% ~~and~~Total net revenues for the nine months ended May 31, 2005 were $28.2%1 inmillion, ~~each~~an ~~respective~~increase ~~period~~of 41.9% ~~The~~from ~~increase~~net revenues of $19.8 million in ~~cost~~the corresponding ofperiod ~~sales~~for the prior year. This increase was primarily due to ana ~~increase~~$3.4 million sale of cranberries to Ocean Spray in ~~cranberry~~connection ~~concentrate~~with ~~sales.~~the Ocean Spray Transaction, as well ~~The~~as ~~decrease~~an increase in ~~gross~~the ~~margin~~quantity ~~percentage~~of ~~was~~cranberry ~~primarily~~concentrate ~~the~~sold as a result of ~~lower~~our ~~selling~~toll processing ~~prices~~agreement with Ocean Spray. Commencing in fiscal 2006, we expect revenues from ~~for~~the sale of cranberry concentrate ~~and~~to ~~frozen~~decline ~~processed~~as ~~cranberries~~a ~~over~~result of the ~~same~~sale ~~periods~~of innine ~~fiscal~~of our 17 ~~2004~~cranberry marshes as described under “Exercise of Ocean Spray Option.”

14Cost of sales for the three months ended May 31, 2005 was $8.4 million compared to $4.1 million for the third quarter of fiscal 2004, resulting in gross margins of 19.2% and 38.5% in each respective period. The increase in cost of sales was primarily due to an increase in the quantity of cranberry concentrate sold. The decrease in gross margin percentage was primarily the result of lower selling prices and higher costs for cranberries used to produce cranberry concentrate over the same period in fiscal 2004.

~~Selling,~~Cost ~~general and administrative expenses were $5.7 million, or 24.6%~~ of ~~net~~sales ~~revenues,~~ for the ~~three~~nine months ended ~~November 30~~May 31, ~~2004~~2005 ~~compared~~was to $420.01 million, orcompared 17to $11.9%2 ofmillion ~~net revenues,~~ for the first ~~quarter~~nine ofmonths of fiscal 2004., ~~The~~resulting ~~increase~~in ~~was~~gross ~~primarily~~margins ~~the result~~ of ~~recording~~28.6% aand $143.23% ~~million~~in ~~charge~~each ~~for~~respective period. ~~management~~The ~~bonuses~~increase ~~paid~~in ~~following~~cost ~~the~~of ~~Ocean~~sales ~~Spray~~was ~~Transaction~~primarily ~~and~~due ato ~~$0.7~~an ~~million~~ increase in ~~media~~the ~~advertising~~quantity ~~spending,~~of cranberry ~~from~~concentrate $0sold.8 ~~million~~The decrease in ~~the~~gross ~~first~~margin ~~quarter~~percentage was primarily the result of ~~fiscal~~lower ~~2004~~selling ~~to $1.5~~prices ~~million~~for incranberry concentrate and frozen processed cranberries over the ~~first~~same ~~quarter~~periods ofin fiscal ~~2005.~~2004 ~~Other~~and ~~administrative~~higher ~~expenses~~costs ~~decreased~~for cranberries used to produce bycranberry $0concentrate.1 ~~million.~~

~~The~~18 ~~effective income tax rate of 40% is higher than the statutory rate of 34% due to state income taxes.~~

WeSelling, ~~recognized~~general aand ~~net~~administrative expenses ~~gain~~were $1.3 million, or 12.5% of net revenues, for the three months ended May 31, 2005 compared to $72.7 4 million, or 36.8% of net revenues, for the third quarter of fiscal 2004. The decrease was primarily the result of a reduction in expenses related to (i) the closure ~~three~~of our former bottling facility in Jackson, Wisconsin, (ii) legal and consulting services and (iii) wages and benefits. Selling, general and administrative expenses were $5.4 million, or 19.2% of net revenues, for the nine months ended ~~November~~May 3031, 2005 compared to $7.4 million, or 37.5% of net revenues, for the first nine months of fiscal 2004. asThe decrease awas primarily the result of a reduction in expenses related to (i) the ~~Ocean~~closure ~~Spray~~of ~~Transaction~~our former bottling facility in Jackson, Wisconsin and (~~see~~ii) ~~Note~~legal 3and consulting services.) This reduction in expenses was partially offset by an increase in wages during the first six months of fiscal 2004 as a result of bonuses paid to senior management. We expect to further decrease our general and administrative expenses following the sale of nine or our 17 cranberry marshes as described under “Exercise of Ocean Spray Option.”

~~Interest~~As ~~expense~~a ~~was~~result of the sale of the cranberry marshes, we recognized a gain of $06.92 million ~~for~~ in the three months ended ~~November~~May 3031, 2005. ~~2004~~As ~~compared~~a toresult of the Ocean Spray Transaction, we recognized a gain of $07.67 million in the ~~prior~~nine ~~year’s first~~months ~~quarter.~~ended ~~Interest~~May ~~expense~~31, ~~has~~2005 ~~increased~~(see asNote ~~result~~4) for a total gain of ~~increased~~disposal ~~debt~~of ~~levels~~property, equipment and other assets of $13.9 million in the nine months ended May 31, 2005.

~~Net~~The ~~income~~third ~~for~~quarter ~~the~~of ~~three~~fiscal ~~months ended~~2004 ~~November~~included ~~30,~~other ~~2004,~~income ~~was~~of $43.50 million, orfrom ~~$0.04~~a ~~per~~payment ~~diluted~~received ~~share,~~from ~~compared~~Cliffstar toCorporation (“Cliffstar”) ~~net~~as ~~income~~the result of the settlement of a dispute related to the ~~$2.3~~calculation ~~million,~~of orearn-out ~~$0.02~~payments ~~per~~due ~~diluted~~us ~~share,~~in ~~for~~connection with the ~~three~~sale ~~months~~of ~~ended~~our ~~November~~private ~~30,~~label juice ~~2003~~business to Cliffstar in fiscal 2000.

Interest expense was $0.5 million for the three months ended May 31, 2005 compared to $0.5 million in the prior year’s third quarter. Interest expense was $2.3 million for the nine months ended May 31, 2005 compared to $1.8 million in the first nine months of the prior year. The increase in interest expense resulted from increased debt levels during the first quarter, as well as higher interest rates and additional loan costs incurred in connection with the restructuring of our debt arrangements with Wells Fargo and Ableco in the first quarter of 2005.

We incurred a net gain of $1.0 million on debt extinguishment during the three months ended May 31, 2005 as a result of the payoff of our debt to Equitable and Ableco. We incurred a net loss of $0.8 million on debt extinguishment during the nine months ended May 31, 2005 as we paid off our debt to Equitable, Wells Fargo and Ableco. This compared to a gain on debt extinguishment of $5.3 million in the third quarter of fiscal 2004 as a result of the payoff of our term note with U.S. Bank National Association (“US Bank”). The gain was the recognition of the future interest payments, as previously established in accordance with SFAS No. 15, “Accounting for Debtors and Creditors for Troubled Debt Restructurings,” from the restructuring of our debt with US Bank in November 2001.

As a result of the sale of our branded juice business to Apple & Eve (see Note 3), we recognized a gain of $4.5 million in the nine months ended May 31, 2005. In the three months ended May 31, 2005 we recognized a loss of $0.6 million as a result of a working capital adjustment related to the sale of our branded juice business to Apple & Eve.

Net income for the three months ended May 31, 2005 was $3.4 million, or $0.04 per diluted share, compared to net income of $0.7 million, or $0.01 per diluted share, for the third quarter of fiscal 2004. Net income for the nine months ended May 31, 2005, was $10.8 million, or $0.11 per diluted share, compared to net income of $9.6 million, or $0.10 per diluted share, for the nine months of fiscal 2004.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $73.57 million in the first ~~three~~nine months of fiscal 2005 compared to $42.15 million in the same period of fiscal 2004. Receivables, prepaid expenses and other current assets increased $41.95 million in the first ~~three~~nine months of fiscal 2005 compared to a decrease of $03.84 million for the same period in fiscal 2004. This increase was primarily due to ~~increased~~the ~~cranberry~~establishment ~~concentrate~~of ~~sales~~$3.0 tomillion ~~Ocean~~in ~~Spray~~escrow ~~pursuant~~funds toin ~~our~~connection ~~agreement~~with tothe sale of ~~sell~~our tobranded ~~Ocean~~juice ~~Spray~~business ~~cranberry~~to ~~concentrate~~Apple ~~not~~& ~~otherwise~~Eve ~~used~~and bythe usOcean inSpray ~~our~~Transaction. ~~branded~~This ~~products.~~increase ~~Inventories~~was ~~increased~~partly ~~$5.3~~offset ~~million~~by ina ~~the~~reduction ~~first~~in ~~three~~accounts ~~months~~receivable of ~~fiscal~~$1.2 ~~2005~~million. This compared to ~~$9.9~~a ~~million~~decrease in ~~the~~receivables ~~first~~during ~~three~~the ~~months~~same ofperiod in fiscal 2004. ~~The increase in inventories was~~ due primarily ~~as a result of the fall 2004 cranberry harvest and the~~ ~~purchase~~to oflower ~~cranberries from our contract growers~~sales. ~~Accounts~~Inventories ~~payable~~decreased ~~and accrued liabilities increased by~~ $162.50 million in the first ~~three~~nine months of fiscal 2005 ~~compared~~ compared to an increase of $9.53 million in the first ~~three~~nine months of fiscal 2004. Inventories ~~The~~decreased ~~increase~~ in ~~accounts~~ ~~payable~~fiscal ~~was~~2005 ~~attributable~~due ~~primarily~~ to ~~installment~~the ~~payments~~sale ~~due~~of our ~~contract~~deferred crop attributable to ~~growers~~the ~~for~~eight ~~fruit~~marshes ~~received~~sold ~~during~~in connection with the ~~quarter.~~exercise ~~The~~of ~~increase~~the inOcean ~~accruals~~Spray ~~was~~option. Inventories ~~primarily~~increased in fiscal 2004 due to ~~the~~a ~~recording~~larger ofharvest. aAccounts payable and accrued liabilities increased by $5.0.8 million ~~deposit~~in ~~related to~~ the ~~fee~~first ~~Ocean~~nine ~~Spray~~months ~~paid~~of usfiscal ~~for~~2005 ~~the option~~compared to a ~~purchase~~decrease ~~certain~~ of ~~our~~$0.2 ~~cranberry~~million ~~marshes,~~in ~~which~~the isfirst ~~creditable~~nine ~~against~~months ~~the purchase~~of ~~price~~fiscal to2004. beThe ~~paid~~increase byin ~~Ocean~~2005 was ~~Spray~~primarily indue to the ~~event~~seasonal itincreases ~~exercises~~in ~~its~~grower ~~option~~crop payables.

Working capital was $619.03 million at ~~November~~May 3031, ~~2004~~2005 compared to $26.6 million at August 31, 2004. Current assets at May 31, 2005 decreased by $11.4 million and current liabilities decreased by $4.2 million. The decrease in current assets was primarily attributable to the sale of our branded juice business to Apple & Eve. The decrease in current liabilities was primarily due to the satisfaction of our debt obligations. Our current ratio ~~decreased~~ increased to 14.12 to 1.0 at ~~November~~May 3031, ~~2004~~2005, compared to 3.6 to 1.0 at August 31, 2004.

Net cash provided by investing activities in the first ~~three~~nine months of fiscal 2005 was $1251.13 million due in part to the $9.7 million in proceeds received from the sale of our branded juice business to Apple & Eve (see Note 3). Net cash provided by investing activities also included $41.7 million from the sale of our receiving, freezing and concentrate-processing plant and an adjacent office in Wisconsin Rapids to Ocean Spray in September 2004 and the sale of cranberry marshes in May 2005. Net cash provided by investing activities in first ~~quarter~~nine months of fiscal 2004 was $02.65 million, which primarily resulted from the $4.0 million received from the sale of equipment at our former bottling facility in Jackson, Wisconsin, as well as the sale of our former facilities located in Bridgeton, New Jersey and Eau Claire, Michigan. Purchases of equipment amounted to $146,000 in the first nine months of fiscal 2005 compared to $912,000 in the first nine months of fiscal 2004. Also, in the first nine months of fiscal 2004, we made a loan of $0.8 million to one of our contract growers (see Note 8).

Our net cash used by financing activities was $52.1 million in the first nine months of fiscal 2005 compared to net cash used of $11.8 million in the same period of the prior year. In the first nine months of fiscal 2005, we made principal payments on long-term debt and other obligations of $35.2 million as required under our restructured debt agreements compared to $13.3 million in the same period of fiscal 2004. Also, in the first nine months of fiscal 2005, we had borrowings of $15.0 million under our term loan facility. We used the proceeds from these borrowings to reduce other long-term debt by $5.0 million during the first quarter of fiscal 2005 and, with proceeds from the Ocean Spray Transaction, to pay a special dividend of $0.33 per share (or an aggregate of $31.9 million) on our class A common stock during the second quarter of fiscal 2005. In both fiscal 2005 and fiscal 2004, monthly principal payments were made on other obligations and additional payments were made as required under our restructured and restated debt agreements.

~~Our~~20 net cash provided by financing activities was $12.0 million in the first three months of fiscal 2005 compared to net cash used of $2.1 million in the same period of the prior year. In the first three months of fiscal 2005, we made principal payments on long-term debt and other obligations of $8.0 million as required under our restructured debt agreements compared to $2.1 million in the same period of fiscal 2004. Net borrowing under the revolving line of credit facility amounted to $5.0 million in the first three months of fiscal 2005. Also, in the first three months of fiscal 2005, we had additional borrowings of $15.0 million under our term loan facility. We used the proceeds from these borrowings to reduce other long-term debt by $5.0 million during the first quarter of fiscal 2005 and, with proceeds from the Ocean Spray Transaction, to pay a special dividend during the second quarter of fiscal 2005. In both fiscal 2005 and fiscal 2004, monthly principal payments were made on other obligations and additional payments were made as required under our restructured and restated debt agreements.

The following schedule sets forth our contractual obligations as of ~~November~~May 3031, ~~2004~~2005 (in thousands):

Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Principal debt obligations	$	32,369	$	13,910	$	11,246	$	7,213	$	0
Purchase obligations (1)		13,859		13,859		0		0		0
Future interest payments from
debt restructuring		1,337		172		453		712		0
Total	$	47,565	$	27,941	$	11,699	$	7,925	$	0

Payments Due by Period

(1) Purchase obligations include estimated payments of $8.3 million due to contract growers for cranberries purchased by us during the first quarter for fiscal 2005. Under our crop purchase contracts, which generally last for five years, we pay the growers at a market rate, as defined, for all raw cranberries delivered (plus $3 per barrel in certain circumstances). Purchase obligations also include toll processing fees of $5.5 million due Ocean Spray for processing our cranberries into cranberry concentrate. Our obligations under the crop purchase agreements and the toll processing agreement with Ocean Spray are subject to variability and generally not fixed or subject to reasonable estimation until the fourth quarter of each year.

Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Principal debt obligations	$	475	$	250	$	225	$	0	$	0
Purchase obligations (1)		4,041		4,041		0		0		0
Total	$	4,516	$	4,291	$	225	$	0	$	0

As(1) Purchase obligations include estimated payments of ~~November~~$2.0 30million due to contract growers for cranberries purchased by us during the first quarter for fiscal 2005. Under our crop purchase contracts, ~~2004~~which generally last for five years, we ~~had outstanding~~pay ~~borrowings~~the growers at a market rate, as defined, for all raw cranberries delivered (plus $3 per barrel in certain circumstances). Purchase obligations also include toll processing fees of $52.0 million ~~under~~due Ocean Spray for processing our ~~$11~~cranberries into cranberry concentrate.0 ~~million~~Our ~~revolving~~obligations ~~credit~~under ~~facility~~ the crop purchase agreements and the toll processing agreement with ~~Wells~~Ocean ~~Fargo~~Spray are subject to variability and ~~Ableco.~~generally Wenot ~~had~~fixed ~~$3.5~~or ~~million~~subject ofto ~~unused~~reasonable ~~borrowing~~estimation ~~availability~~until ~~under~~ the ~~facility.~~fourth quarter of each year.

We ~~believe~~used wethe ~~will~~proceeds befrom ~~able~~the tosale ~~fund~~of our ~~ongoing~~marshes ~~operational~~during ~~needs~~the ~~for~~quarter ~~fiscal~~to ~~2005 through~~ (i) ~~cash~~pay ~~generated~~off ~~from~~our ~~operations~~long-term note with Ableco of $12.0 ~~and~~million, (ii) ~~financing~~satisfy ~~available under~~ our revolving line of credit facility with ~~Wells Fargo and~~ Ableco., ~~We do not have any significant capital expenditure commitments~~ and ~~continue~~(iii) ~~to review~~pay off our ~~capital~~long-term ~~requirements~~note inwith anEquitable ~~effort~~of to$9.0 ~~match expenditures with revenues~~million.

AsWe ofbelieve ~~November~~we ~~30,~~will ~~2004,~~be weable ~~were~~to infund ~~compliance~~our ~~with~~ongoing ~~all~~operational ofneeds for fiscal 2005 from cash on hand and cash generated from operations. We do not have any significant capital expenditure commitments and continue to review our ~~debt~~capital ~~arrangements~~requirements in an effort to match expenditures with revenues.

16As of May 31, 2005, we were in compliance with all of our debt arrangements.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We make certain “forward-looking statements” in this Form 10-Q, such as statements about our future plans, goals and other events which have not yet occurred. We intend that these statements will qualify for the safe harbors from liability provided by the Private Securities Litigation Reform Act of 1995. You can generally identify these forward-looking statements because we use words such as we “believe,” “anticipate,” “expect” or similar words when we make them. Forward-looking statements include, among others, statements about actions by our competitors, sufficiency of our working capital, potential operational improvements and our efforts to improve profitability, sales ~~and marketing~~ strategies, ~~expected levels of trade and marketing spending,~~ anticipated ~~market share and~~ sales of our ~~branded products,~~ cranberry concentrates, ~~and~~potential ~~other~~future ~~products,~~strategic transactions and ~~disposition~~ the effects of ~~significant~~recent ~~litigation~~transactions. These forward-looking statements involve risks and uncertainties and the actual results could differ materially from those discussed in the forward-looking statements. These risks and uncertainties include, without limitation, risks associated with (i) ~~our ability to maintain our Northland and Seneca brand names, distribution capabilities and branded products market share; (ii)~~ the level of cranberry inventory held by industry participants; (~~iii~~ii) ~~the development, market share growth and consumer acceptance of our branded juice products; (iv)~~ agricultural factors affecting our crop and the crop of other North American growers; (viii) our ability to comply with the terms and conditions of, and to satisfy our responsibilities under, our ~~credit facilities and other~~ debt agreements; and (viiv) our ability to identify, evaluate and successfully execute any strategic alternatives. You ~~should~~ should consider these risks and factors and the impact they may have when you evaluate our forward-looking statements. We make these statements based only on our knowledge and expectations on the date of this Form 10-Q. We disclaim any duty to update these statements or other information in this Form 10-Q based on future events or circumstances. Please read this entire Form 10-Q to better understand our business and the risks associated with our operations. Specifically, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of our current financial condition~~, including our revised debt structure~~.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We do not enter into any material futures, forwards, swaps, options or other derivative financial instruments for trading or other purposes. Our primary exposure to market risk is related to changes in interest rates and the effects those changes may have on our earnings as a result of our long-term financing arrangements. We manage our exposure to this market risk by monitoring interest rates and possible alternative means of financing. Our earnings may be affected by changes in short-term interest rates under our revolving ~~line of~~ credit facility and certain term loans, pursuant to which our borrowings bear interest at a variable rate, subject to ~~minimum~~ minimum interest rates payable on certain loans. Based upon the debt outstanding under our revolving ~~line of~~ credit facility and certain term loans as of ~~November~~May 3031, ~~2004~~2005, an increase of 1.0% in market interest rates would increase our annual interest expense by ~~approximately~~ approximately $~~155~~4,000.

ITEM 4. CONTROLS AND PROCEDURES.

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

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

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On November 11, 2002, we filed an antitrust lawsuit against Ocean Spray alleging that it engaged in anticompetitive tactics and unlawfully monopolized the cranberry products industry to the detriment of its competitors and customersNone. ~~We dismissed the lawsuit with prejudice upon the consummation of the Ocean Spray Transaction on September 23, 2004.~~

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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

~~None~~As we previously announced, on September 23, 2004, we entered into various agreements with Ocean Spray. Among those agreements was an option agreement under which Ocean Spray paid to us a non-refundable (but creditable) $5.0 million cash fee in exchange for an option to purchase up to 14 of our 17 cranberry marshes, with the sale and purchase of any marsh to occur upon the terms and conditions of a previously negotiated agricultural asset purchase agreement. Ocean Spray’s option was exercisable, individually or collectively, only during the period beginning on December 1, 2004 and ending on March 22, 2005. The option agreement allowed Ocean Spray to assign its rights to receive title to the cranberry marshes that are subject to such option agreement to its cranberry producing members or any other person selected by Ocean Spray.

On February 28, 2005, we received notice from Ocean Spray that it had assigned to four of its cranberry producing members its rights to receive title to 10 of the 14 cranberry marshes subject to the option agreement. Between March 18 and March 22, 2005, we received executed agricultural asset purchase agreements from those four cranberry producing members of Ocean Spray relating to the purchase of an aggregate of nine marshes. Between March 23 and March 29, 2005, we countersigned those agreements, and those agreements became effective.

Under the Wisconsin Business Corporation Law (“WBCL”), no shareholder approval of the marsh sales was required. However, since the marsh sales constituted a significant corporate action, and since the agricultural asset purchase agreements contemplate potential receipt of shareholder approval in connection with the marsh sales, our board of directors nevertheless decided to seek shareholder approval of the marsh sales by obtaining the written consent of Sun Northland, LLC (“Sun Northland”), which beneficially owns approximately 94.6% of our issued and outstanding common stock. On March 31, 2005, Sun Northland approved the sale of the nine cranberry marshes by written consent action pursuant to the WBCL and our articles of incorporation and bylaws.

ITEM 6. EXHIBITS.

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

1824

SIGNATURE

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

	NORTHLAND CRANBERRIES, INC.
DATE: January 14, 2005	By: /s/ Nigel J. Cooper
DATE: July 15, 2005	By: /s/ Nigel J. Cooper
	Nigel J. Cooper
	Vice President - Finance

1925

EXHIBIT INDEX

EXHIBIT NO.

DESCRIPTION

410.1 ~~Amended~~Form ~~and~~of ~~Restated~~Agricultural ~~Loan~~Asset ~~and~~Purchase ~~Security~~ Agreement, ~~dated as of November 16, 2004, by and among the Company, the lenders signatory thereto as lenders, Wells Fargo Foothill, Inc. as Administrative Agent and Ableco Finance LLC as Collateral Agent.~~ [Incorporated by reference to Exhibit 410.1 to the Company’s Current Report on Form 8-K ~~dated~~filed ~~November~~March 1629, ~~2004~~2005.]

10.1 Asset Purchase Agreement dated as of September 23, 2004 by and between the Company and Ocean Spray Cranberries, Inc. [Incorporated by reference to Exhibit 10.15 to the Company’s Form 8-K dated September 23, 2004.]

10.2 Toll Processing Agreement dated as of September 23, 2004 by and between the Company and Ocean Spray Cranberries, Inc. [Incorporated by reference to Exhibit 10.16 to the Company’s Form 8-K dated September 23, 2004.]

10.3 Option Agreement dated as of September 23, 2004 by and between the Company and Ocean Spray Cranberries, Inc. [Incorporated by reference to Exhibit 10.17 to the Company’s Form 8-K dated September 23, 2004.]

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

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

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

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UNITED STATESSTATESSECURITIES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 2054920549FORM FORM 10-Q

NORTHLAND CRANBERRIES, INC.FORM 10-Q INDEX

PART I – FINANCIAL INFORMATION

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

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

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

NORTHLAND CRANBERRIES, INC. CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY THREENINE MONTHS ENDED NOVEMBERMAY 3031, 2004 2005(DOLLARS IN THOUSANDS) (Unaudited)

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

DISPOSITION OF BRANDED JUICE BUSINESS

EXERCISE OF OCEAN SPRAY OPTION

CRITICAL ACCOUNTING POLICIES

OFF-BALANCE SHEET ARRANGEMENTS

RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

PART II – OTHER INFORMATION

EXHIBIT INDEX

NORTHLAND CRANBERRIES, INC.
FORM 10-Q INDEX

Filing Compare · NORTHLAND CRANBERRIES INC /WI/