##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended February 29, 2008
 OR
 o
    
    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
  Washington
    
    91-1221360(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)
 7094 South Revere Parkway, 
Centennial, Colorado
    
    80112-3932(Address of Principal Executive Offices)
    
    (Zip Code)
 (303) 649-1900
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



PENFORD CORPORATION AND SUBSIDIARIES
 INDEX
 PagePART IFINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets  February 29, 2008 and August 31, 2007
    
    
    3Condensed Consolidated Statements of Operations  Three and Six Months ended February 29,
2008 and February 28, 2007
    
    
    4Condensed Consolidated Statements of Cash Flow  Six Months ended February 29, 2008 and
February 28, 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    22PART IIOTHER INFORMATIONItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    
    23Item 6. Exhibits
    
    
    24Signatures
    
    
    25Certification of Chief Executive Officer Pursuant to Section 302Certification of Chief Financial Officer Pursuant to Section 302Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906
  2




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PART I  FINANCIAL INFORMATION
 
 Item 1: Financial Statements
 
 PENFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 February 29,
    
    
    August 31,(In thousands, except per share data)
    
    2008
    
    
    2007(Unaudited)ASSETSCurrent assets:Cash
    
    $
    1,820
    
    
    $
    Trade accounts receivable, net
    
    
    50,397
    
    
    
    54,333Inventories
    
    
    48,022
    
    
    
    39,537Prepaid expenses
    
    
    4,400
    
    
    
    5,025Other
    
    
    5,530
    
    
    
    6,384Total current assets
    
    
    110,169
    
    
    
    105,279Property, plant and equipment, net
    
    
    175,147
    
    
    
    146,663Restricted cash value of life insurance
    
    
    10,426
    
    
    
    10,366Goodwill, net
    
    
    28,624
    
    
    
    23,477Other intangible assets, net
    
    
    851
    
    
    
    878Other assets
    
    
    1,252
    
    
    
    1,725Total assets
    
    $
    326,469
    
    
    $
    288,388LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Cash overdraft, net
    
    $
    4,745
    
    
    $
    5,468Current portion of long-term debt and capital lease obligations
    
    
    5,339
    
    
    
    4,056Short-term borrowings
    
    
    1,632
    
    
    
    7,218Accounts payable
    
    
    28,315
    
    
    
    32,410Accrued liabilities
    
    
    10,092
    
    
    
    17,094Total current liabilities
    
    
    50,123
    
    
    
    66,246Long-term debt and capital lease obligations
    
    
    52,759
    
    
    
    63,403Other post-retirement benefits
    
    
    13,069
    
    
    
    12,814Deferred income taxes
    
    
    2,640
    
    
    
    3,140Other liabilities
    
    
    17,731
    
    
    
    17,109Total liabilities
    
    
    136,322
    
    
    
    162,712Shareholders equity:Preferred stock, par value $1.00 per share, authorized 1,000 shares,
none issued
    
    
    
    
    
    
    Common stock, par value $1.00 per share, authorized 29,000 shares,
issued 13,103 and 11,099 shares, respectively
    
    
    13,103
    
    
    
    11,099Additional paid-in capital
    
    
    89,813
    
    
    
    43,902Retained earnings
    
    
    93,618
    
    
    
    89,486Treasury stock, at cost, 1,981 shares
    
    
    (32,757
    )
    
    
    (32,757
    )Accumulated other comprehensive income
    
    
    26,370
    
    
    
    13,946Total shareholders equity
    
    
    190,147
    
    
    
    125,676Total liabilities and shareholders equity
    
    $
    326,469
    
    
    $
    288,388
 The accompanying notes are an integral part of these statements.
 3




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PENFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months ended
    
    
    Six months endedFebruary 29,
    
    
    February 28,
    
    
    February 29,
    
    
    February 28,(In thousands, except per share data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Sales
    
    $
    87,889
    
    
    $
    85,241
    
    
    $
    182,750
    
    
    $
    170,741Cost of sales
    
    
    76,384
    
    
    
    72,839
    
    
    
    154,992
    
    
    
    145,145Gross margin
    
    
    11,505
    
    
    
    12,402
    
    
    
    27,758
    
    
    
    25,596Operating expenses
    
    
    6,666
    
    
    
    7,333
    
    
    
    13,906
    
    
    
    14,433Research and development expenses
    
    
    2,073
    
    
    
    1,578
    
    
    
    4,095
    
    
    
    3,150Restructure costs
    
    
    95
    
    
    
    
    
    
    
    1,329
    
    
    
    Income from operations
    
    
    2,671
    
    
    
    3,491
    
    
    
    8,428
    
    
    
    8,013Non-operating income, net
    
    
    791
    
    
    
    229
    
    
    
    1,254
    
    
    
    751Interest expense
    
    
    601
    
    
    
    1,689
    
    
    
    1,867
    
    
    
    2,993Income before income taxes
    
    
    2,861
    
    
    
    2,031
    
    
    
    7,815
    
    
    
    5,771Income taxes
    
    
    546
    
    
    
    325
    
    
    
    2,338
    
    
    
    1,492Net income
    
    $
    2,315
    
    
    $
    1,706
    
    
    $
    5,477
    
    
    $
    4,279Weighted average common shares and
equivalents outstanding:Basic
    
    
    10,857
    
    
    
    8,957
    
    
    
    9,988
    
    
    
    8,950Diluted
    
    
    11,195
    
    
    
    9,152
    
    
    
    10,381
    
    
    
    9,103Income per share:Basic
    
    $
    0.21
    
    
    $
    0.19
    
    
    $
    0.55
    
    
    $
    0.48Diluted
    
    $
    0.21
    
    
    $
    0.19
    
    
    $
    0.53
    
    
    $
    0.47Dividends declared per common share
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.12
    
    
    $
    0.12
 The accompanying notes are an integral part of these
statements.
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PENFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
 Six Months Ended(In thousands)
    
    February 29, 2008
    
    
    February 28, 2007Cash flows from operating activities:Net income
    
    $
    5,477
    
    
    $
    4,279Adjustments to reconcile net income to net cash provided by
operations:Depreciation and amortization
    
    
    7,841
    
    
    
    7,896Stock-based compensation
    
    
    989
    
    
    
    590Loss on sale of fixed assets
    
    
    
    
    
    
    142Deferred income taxes
    
    
    (2,530
    )
    
    
    (175
    )Loss on derivative transactions
    
    
    4,085
    
    
    
    1,825Foreign currency transaction gain
    
    
    (1,015
    )
    
    
    Other
    
    
    (12
    )
    
    
    (72
    )Change in assets and liabilities:Trade accounts receivable
    
    
    6,295
    
    
    
    (5,221
    )Prepaid expenses
    
    
    779
    
    
    
    846Inventories
    
    
    (5,095
    )
    
    
    (8,290
    )Accounts payable and accrued liabilities
    
    
    (11,847
    )
    
    
    (88
    )Taxes payable
    
    
    (1,874
    )
    
    
    (2,254
    )Other
    
    
    (368
    )
    
    
    1,814Net cash provided by operating activities
    
    
    2,725
    
    
    
    1,292Cash flows from investing activities:Investment in property, plant and equipment, net
    
    
    (29,429
    )
    
    
    (15,122
    )Other
    
    
    (60
    )
    
    
    (64
    )Net cash used in investing activities
    
    
    (29,489
    )
    
    
    (15,186
    )Cash flows from financing activities:Proceeds from short-term borrowings
    
    
    2,424
    
    
    
    5,143Payments on short-term borrowings
    
    
    (8,710
    )
    
    
    (7,643
    )Proceeds from revolving line of credit
    
    
    40,529
    
    
    
    33,652Payments on revolving line of credit
    
    
    (25,052
    )
    
    
    (15,339
    )Proceeds from long-term debt
    
    
    
    
    
    
    4,200Payments of long-term debt
    
    
    (25,625
    )
    
    
    (2,249
    )Exercise of stock options
    
    
    69
    
    
    
    528Net proceeds from issuance of common stock
    
    
    46,844
    
    
    
    Payment of loan fees
    
    
    
    
    
    
    (836
    )Decrease in cash overdraft
    
    
    (723
    )
    
    
    (961
    )Payment of dividends
    
    
    (1,100
    )
    
    
    (1,073
    )Other
    
    
    (9
    )
    
    
    44Net cash provided by financing activities
    
    
    28,647
    
    
    
    15,466Effect of exchange rate changes on cash and cash equivalents
    
    
    (63
    )
    
    
    204Net increase in cash and cash equivalents
    
    
    1,820
    
    
    
    1,776Cash and cash equivalents, beginning of period
    
    
    
    
    
    
    939Cash and cash equivalents, end of period
    
    $
    1,820
    
    
    $
    2,715
 The accompanying notes are an integral part of these statements.
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PENFORD CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1 BUSINESS
     2 BASIS OF PRESENTATION
 Consolidation
  Accounting Changes
   6




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Recent Accounting Pronouncements
    3 STOCK-BASED COMPENSATION
 Stock Compensation Plans
  7




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Stock Option Awards
  WeightedWeighted
    
    AverageNumber of
    
    Average
    
    Remaining
    
    AggregateShares
    
    Exercise Price
    
    Term (in years)
    
    Intrinsic ValueOutstanding Balance, August 31, 2007
    
    
    1,033,977
    
    
    $
    14.25Granted
    
    
    
    
    
    
    Exercised
    
    
    (4,450
    )
    
    
    15.53Cancelled
    
    
    (1,000
    )
    
    
    16.34Outstanding Balance, February 29, 2008
    
    
    1,028,527
    
    
    $
    14.25
    
    
    
    5.12
    
    
    $
    7,860,700Options Exercisable at February 29, 2008
    
    
    764,527
    
    
    $
    13.76
    
    
    
    4.81
    
    
    $
    6,212,500
   Restricted Stock Awards
  WeightedAverageNumber of
    
    Grant DateShares
    
    Fair ValueNonvested at August 31, 2007
    
    
    5,796
    
    
    $
    14.50Granted
    
    
    106,467
    
    
    
    34.69Vested
    
    
    (2,898
    )
    
    
    14.50Cancelled
    
    
    
    
    
    
    Nonvested at February 29, 2008
    
    
    109,365
    
    
    $
    34.15
   Compensation Expense
  8




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Three Months Ended
    
    Six Months EndedFebruary 29,
    
    February 28,
    
    February 29,
    
    February 28,2008
    
    2007
    
    2008
    
    2007Cost of sales
    
    $
    48
    
    
    $
    17
    
    
    $
    86
    
    
    $
    41Operating expenses
    
    
    577
    
    
    
    270
    
    
    
    897
    
    
    
    539Research and development expenses
    
    
    2
    
    
    
    3
    
    
    
    6
    
    
    
    10Total stock-based compensation expense
    
    $
    627
    
    
    $
    290
    
    
    $
    989
    
    
    $
    590Tax benefit
    
    
    238
    
    
    
    107
    
    
    
    376
    
    
    
    218Total stock-based compensation expense,
net of tax
    
    $
    389
    
    
    $
    183
    
    
    $
    613
    
    
    $
    372
  4 INVENTORIES
  February 29,
    
    
    August 31,2008
    
    
    2007(In thousands)Raw materials
    
    $
    23,693
    
    
    $
    17,438Work in progress
    
    
    751
    
    
    
    720Finished goods
    
    
    23,578
    
    
    
    21,379Total inventories
    
    $
    48,022
    
    
    $
    39,537
  5 PROPERTY, PLANT AND EQUIPMENT
  February 29,
    
    
    August 31,2008
    
    
    2007(In thousands)Land
    
    $
    19,650
    
    
    $
    17,694Plant and equipment
    
    
    352,356
    
    
    
    338,496Construction in progress
    
    
    52,936
    
    
    
    27,433424,942
    
    
    
    383,623Accumulated depreciation
    
    
    (249,795
    )
    
    
    (236,960
    )Net property, plant and equipment
    
    $
    175,147
    
    
    $
    146,663
   9




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6 DEBT
      7 INCOME TAXES
 FIN 48
   10




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Effective Tax Rate
    8 STOCKHOLDERS EQUITY
  11




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9 OTHER COMPREHENSIVE INCOME (LOSS)
  Three months ended
    
    
    Six months endedFebruary
    
    
    February
    
    
    February
    
    
    February29, 2008
    
    
    28, 2007
    
    
    29, 2008
    
    
    28, 2007(In thousands)Net income
    
    $
    2,315
    
    
    $
    1,706
    
    
    $
    5,477
    
    
    $
    4,279Foreign currency translation adjustments
    
    
    5,598
    
    
    
    987
    
    
    
    11,069
    
    
    
    2,924Net unrealized gain (loss) on derivative
instruments that qualify as cash flow
hedges,
net of tax
    
    
    1,294
    
    
    
    (273
    )
    
    
    1,355
    
    
    
    (1,341
    )Total comprehensive income (loss)
    
    $
    9,207
    
    
    $
    2,420
    
    
    $
    17,901
    
    
    $
    5,862
 10 NON-OPERATING INCOME, NET
  Three months ended
    
    
    Six months endedFebruary 29,
    
    
    February 28,
    
    
    February 29,
    
    
    February 28,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Royalty and licensing income
    
    $
    405
    
    
    $
    405
    
    
    $
    855
    
    
    $
    923Loss on sale of assets
    
    
    
    
    
    
    (142
    )
    
    
    
    
    
    
    (142
    )Gain on foreign currency transactions
    
    
    434
    
    
    
    
    
    
    
    444
    
    
    
    Other
    
    
    (48
    )
    
    
    (34
    )
    
    
    (45
    )
    
    
    (30
    )Total
    
    $
    791
    
    
    $
    229
    
    
    $
    1,254
    
    
    $
    751
    12




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11 PENSION AND POST-RETIREMENT BENEFIT PLANS
  Three months ended
    
    
    Six months endedFebruary 29,
    
    
    February 28,
    
    
    February 29,
    
    
    February 28,2008
    
    
    2007
    
    
    2008
    
    
    2007Defined benefit pension plans
    
    (In thousands)Service cost
    
    $
    371
    
    
    $
    345
    
    
    $
    742
    
    
    $
    733Interest cost
    
    
    623
    
    
    
    516
    
    
    
    1,246
    
    
    
    1,100Expected return on plan assets
    
    
    (663
    )
    
    
    (593
    )
    
    
    (1,326
    )
    
    
    (1,186
    )Amortization of prior service cost
    
    
    63
    
    
    
    47
    
    
    
    126
    
    
    
    93Amortization of actuarial losses
    
    
    13
    
    
    
    48
    
    
    
    26
    
    
    
    96Net periodic benefit cost
    
    $
    407
    
    
    $
    363
    
    
    $
    814
    
    
    $
    836
 Three months ended
    
    
    Six months endedFebruary 29,
    
    
    February 28,
    
    
    February 29,
    
    
    February 28,2008
    
    
    2007
    
    
    2008
    
    
    2007Post-retirement health care plans
    
    (In thousands)Service cost
    
    $
    78
    
    
    $
    78
    
    
    $
    156
    
    
    $
    155Interest cost
    
    
    213
    
    
    
    204
    
    
    
    426
    
    
    
    409Amortization of prior service cost
    
    
    (38
    )
    
    
    (38
    )
    
    
    (76
    )
    
    
    (76
    )Net periodic benefit cost
    
    $
    253
    
    
    $
    244
    
    
    $
    506
    
    
    $
    488
 12 RESTRUCTURING COSTS
   13 SEGMENT REPORTING
  13




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Three months ended
    
    
    Six months endedFebruary
    
    
    February
    
    
    February
    
    
    February29, 2008
    
    
    28, 2007
    
    
    29, 2008
    
    
    28, 2007(In thousands)Sales:Industrial IngredientsNorth America
    
    $
    49,076
    
    
    $
    46,713
    
    
    $
    98,286
    
    
    $
    90,685Food IngredientsNorth America
    
    
    15,642
    
    
    
    14,561
    
    
    
    31,718
    
    
    
    29,801Australia/New Zealand operations
    
    
    23,458
    
    
    
    24,104
    
    
    
    53,402
    
    
    
    50,628Intercompany sales
    
    
    (287
    )
    
    
    (137
    )
    
    
    (656
    )
    
    
    (373
    )$
    87,889
    
    
    $
    85,241
    
    
    $
    182,750
    
    
    $
    170,741Income (loss) from operations:Industrial IngredientsNorth America
    
    $
    4,568
    
    
    $
    3,649
    
    
    $
    10,265
    
    
    $
    6,830Food IngredientsNorth America
    
    
    2,207
    
    
    
    2,160
    
    
    
    4,859
    
    
    
    5,013Australia/New Zealand operations
    
    
    (2,045
    )
    
    
    (57
    )
    
    
    (2,120
    )
    
    
    751Corporate and other
    
    
    (2,059
    )
    
    
    (2,261
    )
    
    
    (4,576
    )
    
    
    (4,581
    )$
    2,671
    
    
    $
    3,491
    
    
    $
    8,428
    
    
    $
    8,013
 February 29,
    
    
    August 31,2008
    
    
    2007(In thousands)Total assets:Industrial IngredientsNorth America
    
    $
    163,147
    
    
    $
    133,187Food IngredientsNorth America
    
    
    33,873
    
    
    
    33,684Australia/New Zealand operations
    
    
    117,810
    
    
    
    108,084Corporate and other
    
    
    11,639
    
    
    
    13,433$
    326,469
    
    
    $
    288,388
  Three months ended
    
    Six months endedFebruary 29,
    
    February 28,
    
    February 29,
    
    February 28,2008
    
    2007
    
    2008
    
    2007(In thousands)
    
    (In thousands)Industrial IngredientsNorth
America
    
    $
    151
    
    
    $
    68
    
    
    $
    239
    
    
    $
    136Food IngredientsNorth America
    
    
    84
    
    
    
    55
    
    
    
    140
    
    
    
    98Australia/New Zealand operations
    
    
    9
    
    
    
    9
    
    
    
    19
    
    
    
    29Corporate
    
    
    383
    
    
    
    158
    
    
    
    591
    
    
    
    327$
    627
    
    
    $
    290
    
    
    $
    989
    
    
    $
    590
  14




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14 EARNINGS PER SHARE
  Three months ended
    
    
    Six months endedFebruary
    
    
    February
    
    
    February
    
    
    February29, 2008
    
    
    28, 2007
    
    
    29, 2008
    
    
    28, 2007(In thousands)Weighted average common shares outstanding
    
    
    10,857
    
    
    
    8,957
    
    
    
    9,988
    
    
    
    8,950Dilutive stock options and awards
    
    
    338
    
    
    
    195
    
    
    
    393
    
    
    
    153Weighted average common shares
outstanding,
assuming dilution
    
    
    11,195
    
    
    
    9,152
    
    
    
    10,381
    
    
    
    9,103
  15 LEGAL PROCEEDINGS
     15




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Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-looking Statements
 The statements contained in this Quarterly Report on Form 10-Q (Quarterly Report) that are
not historical facts, including, but not limited to statements found in the Notes to Condensed
Consolidated Financial Statements and in Item 2  Managements Discussion and Analysis of
Financial Condition and Results of Operations, are forward-looking statements that represent
managements beliefs and assumptions based on currently available information. Forward-looking
statements can be identified by the use of words such as believes, may, will, looks,
should, could, anticipates, expects, or comparable terminology or by discussions of
strategies or trends.
 Although the Company believes that the expectations reflected in such forward-looking
statements are reasonable, it cannot give any assurances that these expectations will prove to be
correct. Such statements by their nature involve substantial risks and uncertainties that could
significantly affect expected results. Actual future results could differ materially from those
described in such forward-looking statements, and the Company does not intend to update or revise
any forward-looking statements, whether as a result of new information, future events or otherwise.
Among the factors that could cause actual results to differ materially are the risks and
uncertainties discussed in this Quarterly Report, including those referenced in Item 1A in this
Quarterly Report, and those described from time to time in other filings with the Securities and
Exchange Commission, including the Companys Annual Report on Form 10-K for the year ended August
31, 2007, which include, but are not limited to:
 
    
    competition;
    
    the possibility of interruption of business activities due to equipment problems,
accidents, strikes, weather or other factors;
    
    product development risk;
    
    changes in corn and other raw material prices and availability;
    
    expectations regarding the construction cost of the ethanol facility and the timing
of ethanol production;
    
    changes in general economic conditions or developments with respect to specific
industries or customers affecting demand for the Companys products including
unfavorable shifts in product mix;
    
    unanticipated costs, expenses or third-party claims;
    
    the risk that results may be affected by construction delays, cost overruns,
technical difficulties, nonperformance by contractors or changes in capital improvement
project requirements or specifications;
    
    interest rate, chemical and energy cost volatility;
    
    foreign currency exchange rate fluctuations;
    
    changes in assumptions used for determining employee benefit expense and obligations;
or
    
    other unforeseen developments in the industries in which Penford operates.
 Overview
   16




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##### Table of Contents



Accounting Changes
   Results of Operations
 Executive Overview
   Industrial IngredientsNorth America
  17




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##### Table of Contents



Food IngredientsNorth America
   Australia/New Zealand Operations
   18




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##### Table of Contents



Corporate operating expenses
  Interest and taxes
      Non-operating income, net
  Three months ended
    
    
    Six months endedFebruary 29,
    
    
    February 28,
    
    
    February 29,
    
    
    February 28,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Royalty and licensing income
    
    $
    405
    
    
    $
    405
    
    
    $
    855
    
    
    $
    923Loss on sale of assets
    
    
    
    
    
    
    (142
    )
    
    
    
    
    
    
    (142
    )Gain on foreign currency
transactions
    
    
    434
    
    
    
    
    
    
    
    444
    
    
    
    Other
    
    
    (48
    )
    
    
    (34
    )
    
    
    (45
    )
    
    
    (30
    )Total
    
    $
    791
    
    
    $
    229
    
    
    $
    1,254
    
    
    $
    751
 19




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Liquidity and Capital Resources
        20




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##### Table of Contents



Contractual Obligations
   2008
    
    $
    2,0442009-2010
    
    
    22,2412011-2012
    
    
    29,2452013 & After
    
    
    6,200$
    59,730
 Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
    Critical Accounting Policies and Estimates
  21




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##### Table of Contents



Income Taxes
  
 Item 3: Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4: Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  22




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1: Legal Proceedings
     
 Item 1A: Risk Factors
  
 Item 4: Submission of Matters to a Vote of Security Holders
  Director
    
    Votes For
    
    Votes WithheldWilliam E. Buchholz
    
    
    9,521,053
    
    
    
    348,718John C. Hunter III
    
    
    9,521,781
    
    
    
    347,990James E. Warjone
    
    
    9,521,681
    
    
    
    348,090
  23




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##### Table of Contents



BrokerVotes For
    
    Votes Against
    
    Abstain
    
    Non-Votes9,644,938
    
    218,933
    
    5,900
    
    1,352,027
 
 Item 6: Exhibits.
  31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 24




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##### Table of Contents



SIGNATURES
  Penford Corporation(Registrant)April 9, 2008
    /s/ Steven O. CordierSteven O. Cordier
Senior Vice President and Chief Financial Officer 25




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200232
    
    Certifications of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 26