<PAGE>

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

                                   FORM 10-Q/A

(Mark One)

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

                For the quarterly period ended FEBRUARY 28, 2003

                                       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 No. 0-11488

                               PENFORD CORPORATION
             (Exact name of registrant as specified in its charter)

                WASHINGTON                                  91-1221360
-------------------------------------------       ------------------------------
         (State of Incorporation)                        (I.R.S. Employer
                                                        Identification No.)

        7094 SOUTH REVERE PARKWAY,
            ENGLEWOOD, COLORADO                             80112-3932
-------------------------------------------       ------------------------------
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code: (303) 649-1900

Indicate by a 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
    -----      -----

The number of shares of the Registrant's common stock (the Registrant's only
outstanding class of stock) outstanding as of April 10, 2003 was 8,512,753.

<PAGE>

                                EXPLANATORY NOTE

         This Amendment No. 1 on Form 10-Q/A revises Items 1 and 2 of Part I of
our Quarterly Report on Form 10-Q for the quarter ended February 28, 2003 that
was originally filed on April 14, 2003 ("Form 10-Q") and includes information in
response to comments from the staff of the Securities and Exchange Commission.

         This report continues to speak as of the date of the original filing of
the Form 10-Q and we have not updated this disclosure in this report to speak as
of a later date. All information contained in this report, the Form 10-Q, is
subject to updating and supplementing as provided in our periodic reports filed
with the Securities and Exchange Commission.

                      PENFORD CORPORATION AND SUBSIDIARIES

                                      INDEX

<Table>
<Caption>
                                                                                                             Page
                                                                                                            ------
<S>                                                                                                         <C>
PART I--FINANCIAL INFORMATION

   Item 1. Financial Statements

       Condensed Consolidated Balance Sheets - February 28, 2003 and August 31, 2002                             3

       Condensed Consolidated Statements of Income - Three Months and Six Months ended
         February 28, 2003 and 2002                                                                              4

       Condensed Consolidated Statements of Cash Flow - Six Months ended February 28, 2003 and 2002              5

       Notes to Condensed Consolidated Financial Statements                                                      6

   Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations               12


PART II--OTHER INFORMATION

   Item 6.  Exhibits and Reports on Form 8-K                                                                    15

   Signatures                                                                                                   16

   Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                     17
</Table>

                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

                      PENFORD CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                                                 February 28,          August 31,
(In thousands, except share and per share data)                                                      2003                 2002
-----------------------------------------------------------------------------------------        ------------         ------------
                                                                                                  (Unaudited)
                                     ASSETS
<S>                                                                                              <C>                  <C>
Current assets:
     Cash                                                                                        $      3,182         $        765
     Trade accounts receivable                                                                         32,496               29,744
     Inventories                                                                                       25,584               27,956
     Prepaid expenses and other                                                                         7,154                5,171
                                                                                                 ------------         ------------
       Total current assets                                                                            68,416               63,636

Property, plant and equipment, net                                                                    130,138              132,042
Deferred income taxes                                                                                  10,465               10,375
Restricted cash value of life insurance                                                                11,854               11,705
Goodwill, net                                                                                          17,367               15,850
Other intangible assets, net                                                                            2,728                2,770
Other assets                                                                                            3,438                3,592
                                                                                                 ------------         ------------
         Total assets                                                                            $    244,406         $    239,970
                                                                                                 ============         ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Cash overdraft                                                                              $         --         $      1,754
     Accounts payable                                                                                  19,147               17,161
     Accrued liabilities                                                                               10,818               10,872
     Current portion of long-term debt                                                                 69,352               18,779
                                                                                                 ------------         ------------
         Total current liabilities                                                                     99,317               48,566

Long-term debt                                                                                         20,933               77,632
Other postretirement benefits                                                                          11,369               11,240
Deferred income taxes                                                                                  19,706               20,474
Other liabilities                                                                                      14,977               13,094
                                                                                                 ------------         ------------
         Total liabilities                                                                            166,302              171,006

Shareholders' equity:
     Preferred stock, par value $1.00 per share, authorized 1,000,000 shares,
         none issued                                                                                       --                   --
     Common stock, par value $1.00 per share, authorized 29,000,000 shares,
         issued 9,793,720 and 9,666,149 shares, respectively                                            9,794                9,666
     Additional paid-in capital                                                                        27,249               26,055
     Retained earnings                                                                                 71,460               67,513
     Treasury stock, at cost, 1,981,016 shares                                                        (32,757)             (32,757)
     Accumulated other comprehensive income (loss)                                                      2,358               (1,513)
                                                                                                 ------------         ------------
         Total shareholders' equity                                                                    78,104               68,964
                                                                                                 ------------         ------------
         Total liabilities and shareholders' equity                                              $    244,406         $    239,970
                                                                                                 ============         ============
</Table>

The accompanying notes are an integral part of these statements.

                                       3
<PAGE>

                       PENFORD CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                                   (Unaudited)

<Table>
<Caption>
                                                                      Three months ended                 Six months ended
                                                                          February 28,                      February 28,
                                                                ------------------------------    -------------------------------
(In thousands except share and per share data)                      2003              2002             2003              2002
-----------------------------------------------------------     ------------      ------------     ------------      ------------
<S>                                                             <C>               <C>              <C>               <C>
Sales                                                           $     61,692      $     54,837     $    127,734      $    111,142

Cost of sales                                                         51,145            44,773          105,302            90,880
                                                                ------------      ------------     ------------      ------------
   Gross margin                                                       10,547            10,064           22,432            20,262

Operating expenses                                                     5,813             5,346           12,180            10,060
Research and development expenses                                      1,336             1,450            2,748             3,021
Restructure costs, net                                                  (117)            1,383             (117)            1,383
                                                                ------------      ------------     ------------      ------------

   Income from operations                                              3,515             1,885            7,621             5,798

Non-operating income, net                                                269                21            2,181                44
Interest expense                                                       1,403             1,732            2,984             3,822
                                                                ------------      ------------     ------------      ------------

   Income before income taxes                                          2,381               174            6,818             2,020

Income taxes                                                             796                30            1,935               636
                                                                ------------      ------------     ------------      ------------

Net income                                                      $      1,585      $        144            4,883      $      1,384
                                                                ============      ============     ============      ============

Weighted average common shares and equivalents outstanding:
   Basic                                                           7,802,724         7,556,052        7,754,674         7,543,627
   Diluted                                                         7,934,858         7,735,320        7,902,764         7,668,426

Earnings per share:
   Basic                                                        $       0.20      $       0.02     $       0.63      $       0.18
   Diluted                                                      $       0.20      $       0.02     $       0.62      $       0.18

Dividends declared per common share                             $       0.06      $       0.06     $       0.12      $       0.12
</Table>

The accompanying notes are an integral part of these statements.

                                       4
<PAGE>

                      PENFORD CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                      FOR THE SIX MONTHS ENDED FEBRUARY 28

                                   (Unaudited)

<Table>
<Caption>
(In thousands)                                                          2003                 2002
------------------------------------------------------------        ------------         ------------
<S>                                                                 <C>                  <C>
Cash flows from operating activities:
   Net income                                                       $      4,883         $      1,384
   Adjustments to reconcile net income to net cash provided
      by operations:
         Depreciation and amortization                                     8,750                8,903
         Deferred income taxes                                              (951)                (318)
         Gain on sale of Hi-maize(R) assets                               (1,916)                  --
         Other                                                               422                   --
   Change in assets and liabilities:
         Trade receivables                                                (2,804)               1,505
         Inventories                                                       3,845                2,865
         Accounts payable, prepaids and other                                463               (1,481)
                                                                    ------------         ------------

   Net cash provided by operating activities                              12,692               12,858
                                                                    ------------         ------------

Cash flow provided by (used in) investing activities:
   Investment in property, plant and equipment, net                       (3,260)              (2,633)
   Proceeds from sale of Hi-maize(R) assets, net                           2,054                   --
   Proceeds from Hi-maize(R) licensing agreement, net                      1,653                   --
   Other                                                                    (314)                 550
                                                                    ------------         ------------

   Net cash provided by (used in) investing activities                       133               (2,083)
                                                                    ------------         ------------

Cash flow provided by (used in) financing activities:
   Borrowings on revolving lines of credit                                17,781                6,989
   Repayments on revolving lines of credit                               (14,333)              (9,184)
   Repayments of long-term debt                                          (12,345)              (7,483)
   Issuance of common stock                                                  953                  574
   Increase (decrease) in cash overdraft                                  (1,754)                (439)
   Payment of dividends                                                     (929)                (904)
                                                                    ------------         ------------

         Net cash used in financing activities                           (10,627)             (10,447)
                                                                    ------------         ------------

Effect of exchange rate changes on cash and cash equivalents                 219                  (60)
                                                                    ------------         ------------

Net increase in cash and cash equivalents                                  2,417                  268
Cash and cash equivalents at beginning of period                             765                  199
                                                                    ------------         ------------
Cash and cash equivalents at end of period                          $      3,182         $        467
                                                                    ============         ============
</Table>

The accompanying notes are an integral part of these statements.

                                       5
<PAGE>

                      PENFORD CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1--BUSINESS

         Penford Corporation ("Penford" or the "Company") is in the business of
developing, manufacturing and marketing specialty natural-based ingredient
systems for various applications, including papermaking, textiles and food
products. The Company operates manufacturing facilities in the United States,
Australia, and New Zealand. Penford's products provide excellent binding and
film-forming characteristics that make customers' products better through
natural, convenient and cost effective solutions. Sales of the Company's
products are generated using a combination of direct sales and distributor
agreements.

         The Company has extensive research and development capabilities, which
are used in understanding the complex chemistry of carbohydrate-based materials
and their application. In addition, the Company has specialty processing
capabilities for a variety of modified starches.

2--BASIS OF PRESENTATION

         The accompanying condensed consolidated financial statements include
the accounts of Penford and its wholly-owned subsidiaries. All material
intercompany transactions and balances have been eliminated. The condensed
consolidated balance sheet at February 28, 2003 and the condensed consolidated
statements of income and cash flows for the interim periods ended February 28,
2003 and 2002 have been prepared by the Company without audit. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
that are necessary to present fairly the financial information have been made.
Certain information and footnote disclosures normally included in financial
statements, prepared in accordance with generally accepted accounting
principles, have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission ("SEC"). The results of operations for
interim periods are not necessarily indicative of the operating results of a
full year or of future operations. Certain prior period amounts have been
reclassified to conform with the current period presentation. The accompanying
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements included in the Company's Annual Report on
Form 10-K for the year ended August 31, 2002.

         Effective September 1, 2002, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 144, "Accounting for Impairment or Disposal of
Long-Lived Assets." SFAS No. 144, which supercedes SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of," retains the fundamental provisions with respect to the recognition and
measurement of long-lived asset impairment but does not apply to goodwill and
other intangible assets. However, SFAS No. 144 provides expanded guidance with
respect to appropriate cash flows to be used to determine whether recognition of
any long-lived asset impairment is required, and if required, how to measure the
amount of the impairment. SFAS No. 144 also requires that any net assets to be
disposed of by sale be reported at the lower of carrying value or fair value
less cost to sell, and expands the reporting of discontinued operations. The
adoption of SFAS No. 144 had no effect on the Company's results of operations,
financial position or liquidity.

         Effective September 1, 2002, the Company adopted SFAS No. 145,
"Rescission of Financial Accounting Standards Board ("FASB") Statement No. 4,
44, and 62, Amendment of FASB Statement No. 13, and Technical Corrections."
Among other things, this statement rescinds SFAS No. 4, "Reporting Gains and
Losses from Extinguishment of Debt," which requires all gains and losses from
extinguishments of debt to be aggregated and, if material, classified as an
extraordinary item, net of related income tax effect. As a result, Accounting
Principles Board Opinion No. 30, "Reporting the Results of Operations--Reporting
the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions" ("APB No. 30") will now be
used to classify those gains and losses. The adoption of SFAS No. 145 had no
effect on the Company's financial position or results of operations for the
three and six month periods ended February 28, 2003. The Company will reclassify
extraordinary items from all prior periods into income from continuing
operations. It is unlikely that the Company will classify future gains or losses
from extinguishment of debt as extraordinary in nature.

                                       6
<PAGE>

         Effective January 1, 2003, the Company adopted SFAS No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146
requires that a liability for costs associated with exit or disposal activities
be recognized and measured initially at fair value only when the liability is
incurred. SFAS No. 146 is effective for exit or disposal activities that are
initiated after December 31, 2002. The adoption of SFAS No. 146 did not have an
effect on the Company's financial position, results of operations or liquidity.

         Effective December 1, 2002, the Company adopted FASB Interpretation No.
45, "Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others" ("FIN No. 45"). FIN No.
45 requires certain disclosures to be made by a guarantor effective for interim
and annual periods ending after December 15, 2002. FIN No. 45 also requires the
guarantor to recognize, at the inception of a guarantee, a liability for the
fair value of the obligation relating to the guarantee. The initial recognition
and measurement provisions of FIN No. 45 are applicable on a prospective basis
to guarantees issued or modified after December 31, 2002. The Company has no
guarantees which are subject to the recognition and measurement provisions of
FIN No. 45. The adoption of FIN No. 45 had no effect on the Company's reported
financial position, results of operations or liquidity. See Note 6 for
disclosure of parent company guarantee of subsidiary debt to a third party.

         Effective March 1, 2003, the Company will adopt the disclosure
alternative prescribed by SFAS No. 123, "Accounting for Stock-Based
Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure." The Company will continue to account
for its stock-based employee compensation related to stock options in accordance
with APB Opinion No. 25, "Accounting for Stock Issued to Employees" and its
various interpretations. SFAS No. 148 requires prominent disclosure of the
method used to account for stock-based employee compensation, the amount of
employee stock-based compensation cost included in reported net income, and pro
forma net income and earnings per share as if the fair value recognition
provisions of SFAS No. 123 had been adopted. SFAS No. 148 is effective for
interim periods beginning after December 15, 2002. The adoption of SFAS No. 148
will not have an effect on the Company's reported financial position, results of
operations or liquidity.

3--INVENTORIES

         The components of inventory are as follows:

<Table>
<Caption>
                                           February 28,         August 31,
                                               2003                2002
                                           --------------------------------
                                                    (In thousands)
<S>                                        <C>                 <C>
Raw materials and other                    $     10,487        $     14,250
Work in progress                                    575                 597
Finished goods                                   14,522              13,109
                                           ------------        ------------
       Total inventories                   $     25,584        $     27,956
                                           ============        ============
</Table>

                                       7
<PAGE>

4--PROPERTY, PLANT AND EQUIPMENT
<Table>
<Caption>
                                                             February 28,          August 31,
                                                                 2003                 2002
                                                             ---------------------------------
                                                                       (In thousands)
<S>                                                          <C>                  <C>
Land                                                         $     13,885         $     13,153
Plant and equipment                                               274,330              267,837
Construction in progress                                            4,895                5,415
                                                             ------------         ------------
                                                                  293,110              286,405
Accumulated depreciation                                         (162,972)            (154,363)
                                                             ------------         ------------
       Net property, plant and equipment                     $    130,138         $    132,042
                                                             ============         ============
</Table>

5--RESTRUCTURING RESERVE

         In the second quarter of fiscal 2002, the Company announced a strategic
restructuring of its business operations, including the relocation of its
headquarters from the State of Washington to Colorado. During fiscal 2002, the
Company recorded restructuring costs totaling $1,383,000 primarily related to
severance and lease termination costs.. The restructuring covers seven
employees, one of which had been terminated as of August 31, 2002. Five
additional employees were terminated during the first half of fiscal 2003. In
the second quarter of fiscal 2003, the Company settled its lease obligations for
less cost than had been expected and, therefore, adjusted the restructuring
reserve. The following table is an analysis of the restructuring reserve for the
six months ended February 28, 2003.


<Table>
<Caption>
                                                      Employee              Lease Termination
                                                        Costs                  and Other                    Total
                                                  -----------------         -----------------         -----------------
                                                                             (In thousands)
<S>                                               <C>                       <C>                       <C>
Balance, August 31, 2002                          $           1,014         $             264         $           1,278
Payments                                                       (371)                     (100)                     (471)
Adjustment                                                       --                      (117)                     (117)
                                                  -----------------         -----------------         -----------------
Balance, February 28, 2003                        $             643         $              47         $             690
                                                  =================         =================         =================
</Table>

6--DEBT

         On November 26, 2002, the Company's banks approved an amendment to the
Company's credit agreements to modify the leverage ratio and to reduce scheduled
term loan payments in fiscal 2003 to reflect the current operating environment
and to ensure continued availability of credit. The Company is required to
reduce its leverage ratio (the ratio of our debt balance to the trailing four
quarters of earnings before interest, taxes, depreciation and amortization) as
follows: 3.15 to 1 at November 30, 2002; 3.00 to 1 at February 28, 2003; 2.75 to
1 at August 31, 2003; 2.50 to 1 at February 28, 2004; 2.25 to 1 at August 31,
2004 and 2.00 to 1 at November 30, 2004 and thereafter. The Company was in
compliance with the amended covenants and expects to be in compliance for the
remainder of the fiscal year.

         Pursuant to the Company's credit agreements dated November 2000, the
revolving lines of credit expire on October 31, 2003. Therefore, $51.0 million
of amounts due on these lines of credit at February 28, 2003 has been classified
as current maturities of long-term debt in the Condensed Consolidated Balance
Sheets. The Company expects to refinance its revolving credit agreements on or
before the maturity date.

         In September 2000, Penford Australia, a wholly-owned subsidiary of the
Company, obtained a revolving credit facility to finance grain inventory
purchases from a bank in Australia. Also in September 2000, as security for the
credit facility, the Company entered into a guarantee with the bank in
Australia. The credit facility is also secured by the grain in inventory. The
guarantee continues until maturity of the credit facility in September 2003. The
maximum amount of future payments under the guarantee is the current outstanding
balance of the credit facility, $4.1 million and $6.6 million at February 28,
2003 and August 31, 2002, respectively, plus accrued interest

                                       8
<PAGE>

and fees. The outstanding balances of the credit facility are included in
current portion of long-term debt in the Condensed Consolidated Balance Sheets.

7--TAXES

         The Company's effective tax rate for the three and six months ended
February 28, 2003 varied from the U.S. federal statutory rate due to lower
foreign tax rates and a lower tax rate applied as a result of the sale of
certain assets of the Company's Hi-maize(R) business in Australia as discussed
in Note 11.

8--OTHER COMPREHENSIVE INCOME (LOSS)

         The components of total comprehensive income are as follows:

<Table>
<Caption>
                                                                    Three months ended                  Six months ended
                                                                        February 28,                       February 28,
                                                               -----------------------------     -----------------------------
                                                                   2003             2002             2003             2002
                                                               ------------     ------------     ------------     ------------
                                                                                        (In thousands)
<S>                                                            <C>              <C>              <C>              <C>
Net income                                                     $      1,585     $        144     $      4,883     $      1,384
Foreign currency translation adjustments                              3,056              131            3,808             (884)
Change in unrealized gains (losses) on derivative
   instruments that qualify as cash flow hedges                         415               --               63              (31)
                                                               ------------     ------------     ------------     ------------
       Total comprehensive income                              $      5,056     $        275     $      8,754     $        469
                                                               ============     ============     ============     ============
</Table>

9--SEGMENT REPORTING

         Financial information for the Company's three segments is presented
below. The first two segments, Industrial Ingredients--North America and Food
Ingredients--North America, are broad categories of end-market users, primarily
served by the Company's U.S. operation. The third segment is the Company's
geographically separate operations in Australia and New Zealand, which are
engaged primarily in the food ingredients business. A fourth item for "corporate
and other" activity is presented to provide reconciliation to amounts reported
in the condensed consolidated financial statements. Corporate and other
represents the activities related to the corporate headquarters such as public
company reporting, personnel costs of the executive management team,
corporate-wide professional services and elimination and consolidation entries.
Intercompany sales of $277,000 and $336,000 in the three and six month periods
ended February 28, 2003 between Australia/New Zealand operations and Food
Ingredients--North America are eliminated in corporate and other since the chief
operating decision maker views segment results prior to intercompany
eliminations. There were no intercompany sales in the three or six months ended
February 28, 2002.

                                       9
<PAGE>

<Table>
<Caption>
                                                                     Three months ended                   Six months ended
                                                                         February 28,                        February 28,
                                                                ------------------------------      ------------------------------
                                                                    2003              2002              2003              2002
                                                                ------------      ------------      ------------      ------------
                                                                                          (In thousands)
<S>                                                             <C>               <C>               <C>               <C>
Sales:
   Industrial Ingredients--North America                        $     33,672      $     30,398      $     69,360      $     59,870
   Food Ingredients--North America                                    10,953            10,610            22,463            22,116
   Australia/New Zealand operations                                   17,344            13,829            36,247            29,156
   Corporate and other                                                  (277)               --              (336)               --
                                                                ------------      ------------      ------------      ------------
                                                                $     61,692      $     54,837      $    127,734      $    111,142
                                                                ============      ============      ============      ============

Income (loss) from operations:
   Industrial Ingredients--North America                        $      2,396      $      2,216      $      5,200      $      3,570
   Food Ingredients--North America                                     1,685             1,538             3,385             3,408
   Australia/New Zealand operations                                    1,017               957             2,465             2,509
   Corporate and other                                                (1,700)           (1,443)           (3,546)           (2,306)
   Restructuring costs, net                                              117            (1,383)              117            (1,383)
                                                                ------------      ------------      ------------      ------------
                                                                $      3,515      $      1,885      $      7,621      $      5,798
                                                                ============      ============      ============      ============
</Table>

<Table>
<Caption>
                                                                                          February 28,      August 31,
                                                                                              2003             2002
<S>                                                                                       <C>              <C>
Total assets:
   Industrial Ingredients-North America                                                   $    108,625     $    108,635
   Food Ingredients--North America                                                              32,739           35,171
   Australia/New Zealand operations                                                             78,849           75,042
   Corporate and other                                                                          24,193           21,122
                                                                                          ------------     ------------
                                                                                          $    244,406     $    239,970
                                                                                          ============     ============
</Table>

10--EARNINGS PER SHARE

         Basic earnings per share reflects only the weighted average common
shares outstanding during the period. Diluted earnings per share reflects
weighted average common shares outstanding and the effect of any dilutive common
stock equivalent shares. The following table presents the computation of diluted
weighted average shares outstanding for the three and six month periods ended
February 28, 2003 and 2002.

<Table>
<Caption>
                                                         Three months ended                 Six months ended
                                                            February 28,                       February 28,
                                                    -----------------------------     -----------------------------
                                                        2003             2002             2003             2002
                                                    ------------     ------------     ------------     ------------
<S>                                                 <C>              <C>              <C>              <C>
Weighted average common shares outstanding             7,802,724        7,556,052        7,754,674        7,543,627
Dilutive stock options                                   132,134          179,268          148,090          124,799
Weighted average common shares,
                                                    ------------     ------------     ------------     ------------
    outstanding, assuming dilution                     7,934,858        7,735,320        7,902,764        7,668,426
                                                    ============     ============     ============     ============
</Table>

                                       10
<PAGE>

11--NATIONAL STARCH

         In November 2002, the Company sold certain assets of its resistant
starch Hi-maize(R) business to National Starch Corporation ("National Starch"),
a wholly-owned subsidiary of ICI of the U.K, for $2.5 million. The Company
recorded a $1.9 million pre-tax gain on the sale of these assets, which gain is
included in net non-operating income in the Condensed Consolidated Statements of
Income for the six months ended February 28, 2003.

         The Company also licensed to National Starch the exclusive rights to
its resistant starch intellectual property portfolio for applications in human
nutrition. The Company retained the rights to practice its resistant starch
intellectual property for all non-human nutrition applications. Under the terms
of the licensing agreement, the Company received an initial licensing fee of
$2.25 million ($1.6 million net of transaction expenses) which is being
amortized over the life of the royalty agreement. In addition, the Company will
receive annual royalty payments for a period of seven years or until a maximum
of $11.0 million in royalties is received by the Company. The amortization of
the initial licensing fee and royalty income, totaling $0.4 million for both the
three and six months ended February 28, 2003, are included in non-operating
income.

         The Company also entered into a tolling arrangement under which the
Company will manufacture resistant starch products for National Starch, if
requested by National Starch. Sales of these products and the costs to
manufacture pursuant to this agreement are included in income from operations in
the statements of income.

12--ISSUANCE OF COMMON STOCK

         On March 14, 2003, the Company sold 650,000 shares of its common stock
to the T. Rowe Price Small-Cap Value Fund at $11.11 per share. In March 2003,
approximately $6.8 million of the proceeds were used to reduce the Company's
term loans outstanding. The issuance of the common shares and the use of
proceeds to repay debt occurred subsequent to the date of the balance sheet,
February 28, 2003, and, therefore, have not been reflected in the accompanying
condensed consolidated financial statements.

                                       11
<PAGE>

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

FORWARD-LOOKING STATEMENTS

Investors should read the following discussion and analysis in conjunction with
the consolidated financial statements and notes thereto included elsewhere in
this report. In addition to historical information, the following discussion and
statements found in the Notes to the Condensed Consolidated Financial Statements
contain certain forward-looking statements within the meaning of Section 21E of
the Securities and Exchange Act, as amended, that involve known and unknown
risks and uncertainties, such as statements of Penford's plans, objectives,
expectations and intentions, including the Company's expectation to be in
compliance with its amended debt covenants, the expectation that the Company
will be able to refinance its revolving credit agreement on or before the
maturity date, the expectation that the Company will not need to increase
borrowings in the normal course of operations for the remainder of the fiscal
year and the expectation that the Company will not incur additional compensation
expenses related to its outgoing officers. You should read the cautionary
statements made in this report as being applicable to all related
forward-looking statements wherever they appear in this report. Forward-looking
statements typically can be identified by the use of words such as "believes,"
"intends," "may," "will," "looks," "should," "could," "anticipates," "expects,"
"estimates" or comparable terminology or by strategies or trends, although some
forward-looking statements are expressed differently. Finally, there may be
other factors not mentioned above or included in our SEC filings that may cause
our actual results to differ materially from those in any
forward-looking statement such as global economic conditions and additional
threatened terrorist attacks and responses thereto, including war. You should
not rely on these forward-looking statements, which reflect only the Company's
opinion as of the date of this report. We do not assume any obligation to revise
forward-looking statements.

RESULTS OF OPERATIONS

         Results of operations for the Company's three segments are presented
below. The first two segments, Industrial Ingredients--North America and Food
Ingredients--North America, are broad categories of end-market users, primarily
served by the Company's U.S. operation. The third segment is the Company's
geographically separate operations in Australia and New Zealand, which are
engaged primarily in the food ingredients business, although the industrial
market is an important and growing category there. A fourth item for "corporate
and other" activity is presented to provide reconciliation to amounts reported
in the consolidated financial statements. Corporate and other represents the
activities related to the corporate headquarters such as public company
reporting, personnel costs of the executive management team, corporate-wide
professional services and elimination and consolidation entries.

Sales

         Consolidated sales for the three months ended February 28, 2003
increased $6.9 million, or 13%, to $61.7 million from $54.8 million for the
three months ended February 28, 2002. Consolidated sales for the six months
ended February 28, 2003 rose to $127.7 million, an increase of 15% over the same
period in the prior year.

         Sales at the Company's Industrial Ingredients--North America business
unit increased by $3.3 million, or 11%, in the second quarter of fiscal 2003
compared to the year-ago quarter. Sales for the six months ended February 28,
2003 increased $9.5 million over the same period in the prior year. The increase
in sales during fiscal 2003 is due to growth in sales volumes, reflecting
improving demand for the Company's paper customers' products.

         Sales at Penford's Australia/New Zealand operations rose by 25%, or
$3.5 million, in the second quarter of fiscal 2003 compared to the same quarter
of fiscal 2002. Sales for the six months ended February 28, 2003 increased to
$36.2 million, or a 24% increase over the same period last year. Favorable
foreign currency exchange rates of approximately $1.7 million and $4.3 million
contributed to the increase in sales for the three and six month periods ended
February 28, 2003.

                                       12
<PAGE>

         The Food Ingredients--North America sales in the second quarter of
fiscal 2003 increased by 3% compared to the prior year period and sales for the
six months ended February 28, 2003 were comparable to the same period a year
ago. The slight change in sales is reflective of the soft customer demand in the
quick service restaurant business, the primary end market for many of this
segment's products.

Income from operations

         Consolidated income from operations increased by $1.6 and $1.8 million
for the three and six month periods in fiscal 2003 compared to the same periods
last year. These increases are primarily due to the Company recording a $1.4
million restructuring reserve in the second quarter of last year. Also
contributing to the increase in income from operations was a $0.1 million credit
adjustment to the restructuring reserve in the second quarter of this year. See
Note 5 to the Condensed Consolidated Financial Statements. Revenue growth due to
an increase in volumes and favorable currency exchange rates was offset by
higher costs of natural gas and grain as discussed below.

         Income from operations at the Company's Industrial Ingredients--North
America business unit rose $0.2 million and $1.6 million, respectively, for the
second quarter and first half of fiscal 2003 primarily on higher sales volumes
discussed above. The increase in sales was offset by higher natural gas costs of
$0.9 million and $1.2 million for the three and six month periods ended February
28, 2003, respectively.

         Penford's Australia/New Zealand operating income for both the three and
six months ended February 28, 2003 was comparable to the prior year. Higher
sales as discussed above were offset by significantly higher raw material grain
costs caused by the continuing drought in the region. Increases in grain costs
were $0.7 million and $1.6 million for the three and six months ended February
28, 2003, respectively.

         The Food Ingredients--North American business unit recorded an increase
in income from operations of $0.1 million in the second quarter of fiscal 2003
primarily due to reductions in personnel. Income from operations for the six
months ended February 28, 2003 was comparable to the same period in 2002.

         Corporate operating expenses increased approximately $0.3 million and
$1.2 million, respectively, for the three and six months ended February 28, 2003
compared to the same periods in the prior year. During the first quarter of
fiscal 2003, the Company incurred increased compensation expenses for both
current and outgoing officers of the Company which have not continued in the
second quarter.

Interest expense and taxes

         Interest expense decreased 19% and 22%, respectively, for the three and
six month periods ended February 28, 2003 compared to the same periods in the
prior year. The decrease in interest expense is attributable to lower debt
balances and favorable interest rates.

         The Company's effective tax rate for the three and six months ended
February 28, 2003 varied from the U.S. federal statutory rate due to the effect
of lower statutory tax rates in Australia and a lower tax rate applied as a
result of the sale of certain assets of the Company's Hi-maize(R) business in
Australia as discussed below.

Restructuring costs

         In the second quarter of fiscal 2002, the Company announced a strategic
restructuring of its business operations, including the relocation of its
headquarters from the State of Washington to Colorado. During the second quarter
of 2002, the Company recorded restructuring costs totaling $1.4 million
primarily related to severance and lease termination expenses which are included
in income from operations. In the second quarter of fiscal 2003, the Company
settled its lease obligations for less cost than had been expected and adjusted
the restructuring reserve by $0.1 million. Restructuring costs are shown
separately in the Condensed Consolidated Statements of Income.

                                       13
<PAGE>

Non-operating income, net

         Non-operating income, net increased for the six months ended February
28, 2003 due to the $1.9 pretax gain on the sale of certain assets of the
Company's resistant starch Hi-maize(R) business to National Starch Corporation
in November 2002.

LIQUIDITY AND CAPITAL RESOURCES

         At February 28, 2003, the Company had $30.9 million in negative working
capital compared to $15.1 million of positive working capital at August 31,
2002. Excluding the current portion of the Company's revolving and term credit
agreement, the Company had $34.3 million of positive working capital at February
28, 2003. Cash flow from operations was $12.7 million and $12.9 million for the
six months ended February 28, 2003 and 2002, respectively.

         Cash flow from investing activities increased approximately $2.2
million for the six months ended February 28, 2003 compared to the same period
in 2002. The increase is primarily due to the receipts of cash related to the
Company's sale of certain assets of its Hi-maize(R) business and an upfront
licensing fee for the use of certain intellectual property, partially offset by
an increase in capital expenditures.

         At February 28, 2003, the Company had $55.1 million outstanding under
its revolving credit facilities and Australian inventory financing credit
agreement. The Company's revolving lines of credit mature October 31, 2003.
Therefore, $51.0 million due on these lines of credit at February 28, 2003 has
been classified as current maturities of long-term debt. The Company expects to
refinance its revolving credit agreements on or before the maturity date.

         Under the amended financial covenants of its credit agreements, the
Company is required over the coming fiscal quarters to improve its leverage
ratio (the ratio of the debt balance to the trailing four quarters of earnings
before interest, taxes, depreciation and amortization) to 3.00 to 1 at February
28, 2003; 2.75 to 1 at August 31, 2003; 2.50 to 1 at February 29, 2004; 2.25 to
1 at August 31, 2004; and 2.00 to 1 at November 30, 2004. The Company has
limited ability to borrow on available capacity under its existing credit lines
until the leverage ratio improves. However, the Company does not expect to
increase borrowings, other than seasonal borrowing related to grain purchasing
in our Australia/New Zealand operations. The Company anticipates that it will
have sufficient borrowing capacity and availability on its credit lines to fund
those seasonal grain purchases.

         The financial covenants in the Company's credit agreement also restrict
new indebtedness, require maintenance of minimum tangible net worth and limit
annual capital expenditures to $15 million for fiscal 2003. In addition to the
leverage ratio, the Company is also required to maintain interest coverage and
fixed charges coverage ratios. If earnings fall below projected levels, the
Company may be required to limit capital expenditures and/or dividends. The
Company was in compliance with the amended covenants and expects to be in
compliance for the remainder of the fiscal year.

         On March 14, 2003, the Company sold 650,000 shares of its common stock
to an accredited investor for $11.11 per share. In March 2003, approximately
$6.8 million of the proceeds were used to reduce the Company's term loans
outstanding. These transactions, which were effected subsequent to February 28,
2003, are not reflected in the condensed consolidated financial statements as of
February 28, 2003.

         During the six months ended February 28, 2003, the Company paid
dividends of $0.9 million, comparable to the dividend payment in the same period
last year. Any future dividends will be paid at the discretion of the Company's
board of directors and will depend upon, among other things, earnings, financial
condition, cash requirements and availability, and contractual requirements.

                                       14
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K.

 (a)     Exhibits

      99.1           Certification Pursuant to 18 U.S.C. Section 1350, as
                     Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
                     of 2002

      99.2           Certification Pursuant to 18 U.S.C. Section 1350, as
                     Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
                     of 2002

(b)      Reports on Forms 8-K.

                     A Form 8-K was filed on March 20, 2003, reporting
                     Registrant's issuance of common stock. Filed as an exhibit
                     was a press release dated March 20, 2003.

                                       15
<PAGE>

                                   SIGNATURES

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

                                     Penford Corporation
                                     ------------------------------------------
                                     (Registrant)

July 10, 2003                        /s/ Steven O. Cordier
                                     ------------------------------------------
                                     Steven O. Cordier
                                     Vice President and Chief Financial Officer

                                       16
<PAGE>

                      CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Thomas D. Malkoski, certify that:

1.       I have reviewed this quarterly report on Form 10-Q/A of Penford
         Corporation;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

            a)       designed such disclosure controls and procedures to ensure
                     that material information relating to the registrant,
                     including its consolidated subsidiaries, is made known to
                     us by others within those entities, particularly during the
                     period in which this quarterly report is begin prepared;

            b)       evaluated the effectiveness of the registrant's disclosure
                     controls and procedures as of a date within 90 days prior
                     to the filing date of this quarterly report (the
                     "Evaluation Date"); and

            c)       presented in this quarterly report our conclusions about
                     the effectiveness of the disclosure controls and procedures
                     based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

            a)       All significant deficiencies in the design or operation of
                     internal controls which could adversely affect the
                     registrant's ability to record, process, summarize and
                     report financial data and have identified for the
                     registrant's auditors any material weaknesses in internal
                     controls; and

            b)       Any fraud, whether or not material, that involves
                     management or other employees who have a significant role
                     in the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

                                              PENFORD CORPORATION

Date:  July 10, 2003                          /s/ THOMAS D. MALKOSKI
                                              ---------------------------------
                                              Thomas D. Malkoski
                                              Chief Executive Officer

                                       17
<PAGE>

                      CHIEF FINANCIAL OFFICER CERTIFICATION

I, Steven O. Cordier, certify that:

1.       I have reviewed this quarterly report on Form 10-Q/A of Penford
         Corporation;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

            a)       designed such disclosure controls and procedures to ensure
                     that material information relating to the registrant,
                     including its consolidated subsidiaries, is made known to
                     us by others within those entities, particularly during the
                     period in which this quarterly report is begin prepared;

            b)       evaluated the effectiveness of the registrant's disclosure
                     controls and procedures as of a date within 90 days prior
                     to the filing date of this quarterly report (the
                     "Evaluation Date"); and

            c)       presented in this quarterly report our conclusions about
                     the effectiveness of the disclosure controls and procedures
                     based on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

            a)       All significant deficiencies in the design or operation of
                     internal controls which could adversely affect the
                     registrant's ability to record, process, summarize and
                     report financial data and have identified for the
                     registrant's auditors any material weaknesses in internal
                     controls; and

            b)       Any fraud, whether or not material, that involves
                     management or other employees who have a significant role
                     in the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

                                                 PENFORD CORPORATION

Date:  July 10, 2003                             /s/ STEVEN O. CORDIER
                                                 ------------------------------
                                                 Steven O. Cordier
                                                 Chief Financial Officer

                                       18
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
Exhibit
Number                                     Description
------              ------------------------------------------------------------
<S>                 <C>
  99.1              Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

  99.2              Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
</Table>