##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 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 March 31, 2010
 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 number 000-04065
 Lancaster Colony Corporation
 (Exact name of registrant as specified in its charter)
 Ohio
    
    13-1955943(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)37 West Broad Street
    
    43215Columbus, Ohio
    
    (Zip Code)(Address of principal executive offices)
 614-224-7141  (Registrants telephone number, including area code)
 þ o
 Yes o
No o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 Yes o No þ




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##### 



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1. Consolidated Financial Statements (unaudited):
    
    
    3Consolidated Balance Sheets  March 31, 2010 and June 30, 2009
    
    
    3Consolidated Statements of Income  Three and Nine Months Ended March 31, 2010 and 2009
    
    
    4Consolidated Statements of Cash Flows  Nine Months Ended March 31, 2010 and 2009
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    25PART II  OTHER INFORMATIONItem 1A. Risk Factors
    
    
    25Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 6. Exhibits
    
    
    25SIGNATURES
    
    
    26INDEX TO EXHIBITS
    
    
    27Exhibit 31.1Exhibit 31.2Exhibit 32
   2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Consolidated Financial Statements
 LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 UNAUDITED
 March 31
    
    
    June 30(Amounts in thousands, except share data)
    
    2010
    
    
    2009ASSETSCurrent Assets:Cash and equivalents
    
    $
    95,662
    
    
    $
    38,484Receivables (less allowance for doubtful accounts,
March  $776 and June  $942)
    
    
    80,011
    
    
    
    61,152Inventories:Raw materials
    
    
    31,547
    
    
    
    33,067Finished goods and work in process
    
    
    65,806
    
    
    
    69,456Total inventories
    
    
    97,353
    
    
    
    102,523Deferred income taxes and other current assets
    
    
    29,848
    
    
    
    20,653Total current assets
    
    
    302,874
    
    
    
    222,812Property, Plant and Equipment:Land, buildings and improvements
    
    
    129,181
    
    
    
    130,683Machinery and equipment
    
    
    239,536
    
    
    
    239,380Total cost
    
    
    368,717
    
    
    
    370,063Less accumulated depreciation
    
    
    202,932
    
    
    
    199,163Property, plant and equipment  net
    
    
    165,785
    
    
    
    170,900Other Assets:Goodwill
    
    
    89,840
    
    
    
    89,840Other intangible assets  net
    
    
    9,805
    
    
    
    10,678Other noncurrent assets
    
    
    3,557
    
    
    
    4,251Total
    
    $
    571,861
    
    
    $
    498,481LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    41,434
    
    
    $
    41,180Accrued liabilities
    
    
    33,553
    
    
    
    33,399Total current liabilities
    
    
    74,987
    
    
    
    74,579Other Noncurrent Liabilities
    
    
    15,676
    
    
    
    16,719Deferred Income Taxes
    
    
    5,671
    
    
    
    4,627Shareholders Equity:Preferred stock  authorized 3,050,000 shares; outstanding  noneCommon stock  authorized 75,000,000 shares; outstanding 
March  28,248,471 shares; June  28,101,885 shares
    
    
    94,294
    
    
    
    88,962Retained earnings
    
    
    1,065,671
    
    
    
    998,476Accumulated other comprehensive loss
    
    
    (8,641
    )
    
    
    (9,085
    )Common stock in treasury, at cost
    
    
    (675,797
    )
    
    
    (675,797
    )Total shareholders equity
    
    
    475,527
    
    
    
    402,556Total
    
    $
    571,861
    
    
    $
    498,481
   3




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##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 UNAUDITED
 Three Months Ended
    
    
    Nine Months EndedMarch 31
    
    
    March 31(Amounts in thousands, except per share data)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net Sales
    
    $
    250,328
    
    
    $
    246,027
    
    
    $
    808,603
    
    
    $
    798,106Cost of Sales
    
    
    188,405
    
    
    
    193,385
    
    
    
    598,196
    
    
    
    647,632Gross Margin
    
    
    61,923
    
    
    
    52,642
    
    
    
    210,407
    
    
    
    150,474Selling, General and
Administrative Expenses
    
    
    24,328
    
    
    
    20,155
    
    
    
    69,196
    
    
    
    62,333Restructuring and Impairment Charges
    
    
    87
    
    
    
    
    
    
    
    2,133
    
    
    
    1,606Operating Income
    
    
    37,508
    
    
    
    32,487
    
    
    
    139,078
    
    
    
    86,535Other (Expense) Income:Interest expense
    
    
    
    
    
    
    (64
    )
    
    
    
    
    
    
    (1,194
    )Other income  Continued Dumping and
Subsidy Offset Act
    
    
    
    
    
    
    
    
    
    
    893
    
    
    
    8,696Interest income and other  net
    
    
    (6
    )
    
    
    65
    
    
    
    53
    
    
    
    (131
    )Income Before Income Taxes
    
    
    37,502
    
    
    
    32,488
    
    
    
    140,024
    
    
    
    93,906Taxes Based on Income
    
    
    13,280
    
    
    
    11,275
    
    
    
    47,870
    
    
    
    33,221Net Income
    
    $
    24,222
    
    
    $
    21,213
    
    
    $
    92,154
    
    
    $
    60,685Net Income Per Common Share:Basic and Diluted
    
    $
    .86
    
    
    $
    .76
    
    
    $
    3.27
    
    
    $
    2.16Cash Dividends Per Common Share
    
    $
    .30
    
    
    $
    .285
    
    
    $
    .885
    
    
    $
    .85Weighted Average Common
Shares Outstanding:Basic
    
    
    28,173
    
    
    
    27,933
    
    
    
    28,134
    
    
    
    28,048Diluted
    
    
    28,198
    
    
    
    27,938
    
    
    
    28,163
    
    
    
    28,053
   4




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 Nine Months EndedMarch 31(Amounts in thousands)
    
    2010
    
    
    2009Cash Flows From Operating Activities:Net income
    
    $
    92,154
    
    
    $
    60,685Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    15,666
    
    
    
    16,362Deferred income taxes and other noncash changes
    
    
    1,777
    
    
    
    3,493Restructuring and impairment charges
    
    
    528
    
    
    
    (1,221
    )Gain on disposal of property
    
    
    (25
    )
    
    
    (868
    )Pension plan activity
    
    
    (405
    )
    
    
    (2,490
    )Changes in operating assets and liabilities:Receivables
    
    
    (19,204
    )
    
    
    (13,218
    )Inventories
    
    
    4,990
    
    
    
    29,586Other current assets
    
    
    (9,350
    )
    
    
    10,314Accounts payable and accrued liabilities
    
    
    743
    
    
    
    (9,867
    )Net cash provided by operating activities
    
    
    86,874
    
    
    
    92,776Cash Flows From Investing Activities:Payments on property additions
    
    
    (8,088
    )
    
    
    (8,941
    )Proceeds from sale of property
    
    
    28
    
    
    
    1,991Other  net
    
    
    (953
    )
    
    
    (1,026
    )Net cash used in investing activities
    
    
    (9,013
    )
    
    
    (7,976
    )Cash Flows From Financing Activities:Proceeds from debt
    
    
    
    
    
    
    25,000Payments on debt
    
    
    
    
    
    
    (65,000
    )Purchase of treasury stock
    
    
    
    
    
    
    (16,894
    )Payment of dividends
    
    
    (24,959
    )
    
    
    (23,850
    )Proceeds from the exercise of stock options
    
    
    4,276
    
    
    
    Decrease in cash overdraft balance
    
    
    
    
    
    
    (4,209
    )Net cash used in financing activities
    
    
    (20,683
    )
    
    
    (84,953
    )Net change in cash and equivalents
    
    
    57,178
    
    
    
    (153
    )Cash and equivalents at beginning of year
    
    
    38,484
    
    
    
    19,417Cash and equivalents at end of period
    
    $
    95,662
    
    
    $
    19,264Supplemental Disclosure of Operating Cash Flows:Cash paid during the period for income taxes
    
    $
    55,634
    
    
    $
    18,803
   5




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##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Tabular amounts in thousands, except per share data)
 Note 1  Summary of Significant Accounting Policies
 Basis of Presentation
  Subsequent Events
  Property, Plant and Equipment
  Earnings Per Share
   6




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except per share data)
  Three Months Ended
    
    
    Nine Months EndedMarch 31
    
    
    March 312010
    
    
    2009
    
    
    2010
    
    
    2009Net income
    
    $
    24,222
    
    
    $
    21,213
    
    
    $
    92,154
    
    
    $
    60,685Net income allocated to participating securities
    
    
    (45
    )
    
    
    (22
    )
    
    
    (158
    )
    
    
    (59
    )Net income allocated to common shareholders
    
    $
    24,177
    
    
    $
    21,191
    
    
    $
    91,996
    
    
    $
    60,626Weighted average common shares outstanding:Basic
    
    
    28,173
    
    
    
    27,933
    
    
    
    28,134
    
    
    
    28,048Incremental share effect from:Stock options
    
    
    1
    
    
    
    
    
    
    
    4
    
    
    
    Restricted stock
    
    
    2
    
    
    
    5
    
    
    
    6
    
    
    
    5Stock-settled stock appreciation rights
    
    
    22
    
    
    
    
    
    
    
    19
    
    
    
    Diluted
    
    
    28,198
    
    
    
    27,938
    
    
    
    28,163
    
    
    
    28,053Net income per common share  basic and diluted
    
    $
    .86
    
    
    $
    .76
    
    
    $
    3.27
    
    
    $
    2.16
 Significant Accounting Policies
 Form 10-K.
 Note 2  Impact of Recently Issued Accounting Standards
  Note 3  Goodwill and Other Intangible Assets
   7




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except per share data)
  March 31
    
    
    June 302010
    
    
    2009Trademarks (40-year life)Gross carrying value
    
    $
    370
    
    
    $
    370Accumulated amortization
    
    
    (175
    )
    
    
    (167
    )Net Carrying Value
    
    $
    195
    
    
    $
    203Customer Relationships (12 to 15-year life)Gross carrying value
    
    $
    13,020
    
    
    $
    13,020Accumulated amortization
    
    
    (3,820
    )
    
    
    (3,118
    )Net Carrying Value
    
    $
    9,200
    
    
    $
    9,902Non-compete Agreements (5 to 8-year life)Gross carrying value
    
    $
    1,540
    
    
    $
    1,540Accumulated amortization
    
    
    (1,130
    )
    
    
    (967
    )Net Carrying Value
    
    $
    410
    
    
    $
    573Total Net Carrying Value
    
    $
    9,805
    
    
    $
    10,678
  Note 4  Long-Term Debt
    Note 5  Pension Benefits
   8




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except per share data)
  Three Months Ended
    
    
    Nine Months EndedMarch 31
    
    
    March 312010
    
    
    2009
    
    
    2010
    
    
    2009Components of net periodic benefit costService cost
    
    $
    
    
    
    $
    29
    
    
    $
    45
    
    
    $
    89Interest cost
    
    
    529
    
    
    
    543
    
    
    
    1,588
    
    
    
    1,625Expected return on plan assets
    
    
    (537
    )
    
    
    (566
    )
    
    
    (1,613
    )
    
    
    (1,770
    )Curtailment charge
    
    
    
    
    
    
    331
    
    
    
    349
    
    
    
    331Amortization of unrecognized net loss
    
    
    124
    
    
    
    83
    
    
    
    372
    
    
    
    207Amortization of prior service cost
    
    
    
    
    
    
    19
    
    
    
    5
    
    
    
    71Amortization of unrecognized net
obligation existing at transition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Net periodic benefit cost
    
    $
    116
    
    
    $
    439
    
    
    $
    746
    
    
    $
    555
    Note 6  Postretirement Benefits
   Three Months Ended
    
    
    Nine Months EndedMarch 31
    
    
    March 312010
    
    
    2009
    
    
    2010
    
    
    2009Components of net periodic benefit costService cost
    
    $
    4
    
    
    $
    4
    
    
    $
    12
    
    
    $
    13Interest cost
    
    
    48
    
    
    
    49
    
    
    
    144
    
    
    
    148Amortization of unrecognized gain
    
    
    (4
    )
    
    
    (4
    )
    
    
    (10
    )
    
    
    (13
    )Amortization of prior service asset
    
    
    (1
    )
    
    
    (1
    )
    
    
    (3
    )
    
    
    (4
    )Net periodic benefit cost
    
    $
    47
    
    
    $
    48
    
    
    $
    143
    
    
    $
    144
   9




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except per share data)
  Note 7  Stock-Based Compensation
   Stock Options
      10




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except per share data)
  WeightedWeighted
    
    
    AverageNumber
    
    
    Average
    
    
    Remaining
    
    
    Aggregateof
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Life in Years
    
    
    ValueOutstanding at beginning of period
    
    
    96
    
    
    $
    41.52Exercised
    
    
    (95
    )
    
    
    41.52Expired
    
    
    (1
    )
    
    
    41.52Outstanding at end of period
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
 Stock-Settled Stock Appreciation Rights
     11




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except per share data)
  WeightedWeighted
    
    
    AverageNumber
    
    
    Average
    
    
    Remaining
    
    
    Aggregateof
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicRights
    
    
    Price
    
    
    Life in Years
    
    
    ValueOutstanding at beginning of period
    
    
    222
    
    
    $
    38.85Exercised
    
    
    (74
    )
    
    
    38.66Granted
    
    
    168
    
    
    
    58.79Forfeited
    
    
    (1
    )
    
    
    38.31Outstanding at end of period
    
    
    315
    
    
    $
    49.54
    
    
    
    4.17
    
    
    $
    2,945Exercisable and vested at end of period
    
    
    45
    
    
    $
    38.63
    
    
    
    3.12
    
    
    $
    909Vested and expected to vest at end of period
    
    
    301
    
    
    $
    49.57
    
    
    
    4.17
    
    
    $
    2,809
  WeightedNumber
    
    
    Averageof
    
    
    Grant DateRights
    
    
    Fair ValueUnvested at beginning of period
    
    
    179
    
    
    $
    6.39Granted
    
    
    168
    
    
    
    11.81Vested
    
    
    (76
    )
    
    
    6.30Forfeited
    
    
    (1
    )
    
    
    6.00Unvested at end of period
    
    
    270
    
    
    $
    9.78
  Restricted Stock
     12




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except per share data)
   WeightedNumber
    
    
    Averageof
    
    
    Grant DateShares
    
    
    Fair ValueUnvested restricted stock at beginning of period
    
    
    43
    
    
    $
    35.61Granted
    
    
    33
    
    
    
    56.79Vested
    
    
    (14
    )
    
    
    29.57Forfeited
    
    
    
    
    
    
    Unvested restricted stock at end of period
    
    
    62
    
    
    $
    48.46Expected to vest restricted stock at end of period
    
    
    60
    
    
    $
    48.35
  Note 8  Restructuring and Impairment Charges
 Specialty Foods Segment  Fiscal 2010
    13




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except per share data)
  Accrual at
    
    
    
    
    
    
    2010
    
    
    Accrual atJune 30,
    
    
    2010
    
    
    Cash
    
    
    March 31,2009
    
    
    Charges
    
    
    Outlays
    
    
    2010Restructuring ChargesEmployee Separation Costs
    
    $
    
    
    
    $
    1,643
    
    
    $
    (1,643
    )
    
    $
    Other Costs
    
    
    
    
    
    
    141
    
    
    
    (141
    )
    
    
    Subtotal
    
    $
    
    
    
    
    1,784
    
    
    $
    (1,784
    )
    
    $
    Pension Curtailment Charges
    
    
    
    
    
    
    349Inventory Write-Down
    
    
    
    
    
    
    179Total Restructuring Charges
    
    
    
    
    
    $
    2,312
  Specialty Foods Segment  Fiscal 2009
  Other Segments  Fiscal 2009
  Held for Sale
   14




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except per share data)
 Note 9  Income Taxes
   Note 10  Business Segment Information
  Three Months Ended
    
    
    Nine Months EndedMarch 31
    
    
    March 312010
    
    
    2009
    
    
    2010
    
    
    2009Net SalesSpecialty Foods
    
    $
    216,471
    
    
    $
    216,894
    
    
    $
    675,911
    
    
    $
    683,073Glassware and Candles
    
    
    33,857
    
    
    
    29,133
    
    
    
    132,692
    
    
    
    115,033Total
    
    $
    250,328
    
    
    $
    246,027
    
    
    $
    808,603
    
    
    $
    798,106Operating Income (Loss)Specialty Foods
    
    $
    38,702
    
    
    $
    35,910
    
    
    $
    138,000
    
    
    $
    99,050Glassware and Candles
    
    
    1,672
    
    
    
    (927
    )
    
    
    9,485
    
    
    
    (4,796
    )Corporate Expenses
    
    
    (2,866
    )
    
    
    (2,496
    )
    
    
    (8,407
    )
    
    
    (7,719
    )Total
    
    $
    37,508
    
    
    $
    32,487
    
    
    $
    139,078
    
    
    $
    86,535
 Note 11  Commitments and Contingencies
     15




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except per share data)
   Note 12  Comprehensive Income
   16




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 LANCASTER COLONY CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Tabular dollars in thousands)
 OVERVIEW
 This Managements Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) describes the matters that we consider to be important in understanding the results of our
operations for the three and nine months ended March 31, 2010 and our financial condition as of
March 31, 2010. Our fiscal year begins on July 1 and ends on June 30. Unless otherwise noted,
references to year pertain to our fiscal year; for example, 2010 refers to fiscal 2010, which is
the period from July 1, 2009 to June 30, 2010. In the discussion that follows, we analyze the
results of our operations for the three and nine months ended March 31, 2010, including the trends
in our overall business, followed by a discussion of our financial condition.
 The following discussion should be read in conjunction with our consolidated financial
statements and the notes thereto, all included elsewhere in this report. The forward-looking
statements in this section and other parts of this report involve risks and uncertainties including
statements regarding our plans, objectives, goals, strategies, and financial performance. Our
actual results could differ materially from the results anticipated in these forward-looking
statements as a result of factors set forth under the caption Forward-Looking Statements.
 EXECUTIVE SUMMARY
 Business Overview
    
    
    leading retail market positions in several branded products with a high-quality perception;
    
    a broad customer base in both retail and foodservice accounts;
    
    well-regarded culinary expertise among foodservice accounts;
    
    recognized leadership in foodservice product development;
    
    demonstrated experience in integrating complementary business acquisitions; and
    
    historically strong cash flow generation that supports growth opportunities.
  
    
    leveraging the strength of our retail brands to increase current product sales and
introduce new products;
    
    growing our foodservice sales through the strength of our reputation in product
development and quality; and
    
    pursuing acquisitions that meet our strategic criteria.
 
  17




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##### Table of Contents



Summary of 2010 Results
    RESULTS OF CONSOLIDATED OPERATIONS
 Net Sales and Gross Margin
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedMarch 31
    
    
    
    
    
    
    
    
    
    
    March 312010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeNet SalesSpecialty Foods
    
    $
    216,471
    
    
    $
    216,894
    
    
    $
    (423
    )
    
    
    0
    %
    
    $
    675,911
    
    
    $
    683,073
    
    
    $
    (7,162
    )
    
    
    (1
    )%Glassware and Candles
    
    
    33,857
    
    
    
    29,133
    
    
    
    4,724
    
    
    
    16
    %
    
    
    132,692
    
    
    
    115,033
    
    
    
    17,659
    
    
    
    15
    %Total
    
    $
    250,328
    
    
    $
    246,027
    
    
    $
    4,301
    
    
    
    2
    %
    
    $
    808,603
    
    
    $
    798,106
    
    
    $
    10,497
    
    
    
    1
    %Gross Margin
    
    $
    61,923
    
    
    $
    52,642
    
    
    $
    9,281
    
    
    
    18
    %
    
    $
    210,407
    
    
    $
    150,474
    
    
    $
    59,933
    
    
    
    40
    %Gross Margin
as a Percentage of Sales
    
    
    24.7
    %
    
    
    21.4
    %
    
    
    
    
    
    
    
    
    
    
    26.0
    %
    
    
    18.9
    %
     18




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##### Table of Contents



Selling, General and Administrative Expenses
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedMarch 31
    
    
    
    
    
    
    
    
    
    
    March 312010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeSelling, General and
Administrative Expenses
    
    $
    24,328
    
    
    $
    20,155
    
    
    $
    4,173
    
    
    
    21
    %
    
    $
    69,196
    
    
    $
    62,333
    
    
    $
    6,863
    
    
    
    11
    %SG&A Expenses as a
Percentage of Sales
    
    
    9.7
    %
    
    
    8.2
    %
    
    
    
    
    
    
    
    
    
    
    8.6
    %
    
    
    7.8
    %
  Restructuring and Impairment Charges
 Specialty Foods Segment  Fiscal 2010
    19




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##### Table of Contents



Accrual at
    
    
    
    
    
    
    2010
    
    
    Accrual atJune 30,
    
    
    2010
    
    
    Cash
    
    
    March 31,2009
    
    
    Charges
    
    
    Outlays
    
    
    2010Restructuring ChargesEmployee Separation Costs
    
    $
    
    
    
    $
    1,643
    
    
    $
    (1,643
    )
    
    $
    Other Costs
    
    
    
    
    
    
    141
    
    
    
    (141
    )
    
    
    Subtotal
    
    $
    
    
    
    
    1,784
    
    
    $
    (1,784
    )
    
    $
    Pension Curtailment Charges
    
    
    
    
    
    
    349Inventory Write-Down
    
    
    
    
    
    
    179Total Restructuring Charges
    
    
    
    
    
    $
    2,312
  Specialty Foods Segment  Fiscal 2009
  Other Segments  Fiscal 2009
  Held for Sale
   20




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Operating Income (Loss)
  Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedMarch 31
    
    
    
    
    
    
    
    
    
    
    March 312010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeOperating Income (Loss)Specialty Foods
    
    $
    38,702
    
    
    $
    35,910
    
    
    $
    2,792
    
    
    
    8
    %
    
    $
    138,000
    
    
    $
    99,050
    
    
    $
    38,950
    
    
    
    39
    %Glassware and Candles
    
    
    1,672
    
    
    
    (927
    )
    
    
    2,599
    
    
    
    280
    %
    
    
    9,485
    
    
    
    (4,796
    )
    
    
    14,281
    
    
    
    298
    %Corporate Expenses
    
    
    (2,866
    )
    
    
    (2,496
    )
    
    
    (370
    )
    
    
    15
    %
    
    
    (8,407
    )
    
    
    (7,719
    )
    
    
    (688
    )
    
    
    9
    %Total
    
    $
    37,508
    
    
    $
    32,487
    
    
    $
    5,021
    
    
    
    15
    %
    
    $
    139,078
    
    
    $
    86,535
    
    
    $
    52,543
    
    
    
    61
    %Operating Income (Loss) as
a Percentage of SalesSpecialty Foods
    
    
    17.9
    %
    
    
    16.6
    %
    
    
    
    
    
    
    
    
    
    
    20.4
    %
    
    
    14.5
    %Glassware and Candles
    
    
    4.9
    %
    
    
    (3.2
    )%
    
    
    
    
    
    
    
    
    
    
    7.1
    %
    
    
    (4.2
    )%Consolidated
    
    
    15.0
    %
    
    
    13.2
    %
    
    
    
    
    
    
    
    
    
    
    17.2
    %
    
    
    10.8
    %
 Interest Expense
  Other Income  Continued Dumping and Subsidy Offset Act
     21




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##### Table of Contents



Income Before Income Taxes
  Net Income
  FINANCIAL CONDITION
        22




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CONTRACTUAL OBLIGATIONS
  CRITICAL ACCOUNTING POLICIES
  RECENTLY ISSUED ACCOUNTING STANDARDS
  RECENTLY ADOPTED ACCOUNTING STANDARDS
   23




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FORWARD-LOOKING STATEMENTS
   
    
    the potential for loss of larger programs or key customer relationships;
    
    the effect of consolidation of customers within key market channels;
    
    the continued solvency of key customers;
    
    the success and cost of new product development efforts;
    
    the lack of market acceptance of new products;
    
    the reaction of customers or consumers to the effect of price increases we may implement;
    
    changes in demand for our products, which may result from loss of brand reputation
or customer goodwill;
    
    changes in market trends;
    
    the extent to which future business acquisitions are completed and acceptably integrated;
    
    the possible occurrence of product recalls;
    
    efficiencies in plant operations, including the ability to optimize overhead
utilization in candle operations;
    
    the overall strength of the economy;
    
    changes in financial markets;
    
    slower than anticipated sales growth;
    
    the extent of operational efficiencies achieved;
    
    price and product competition;
    
    the uncertainty regarding the effect or outcome of any decision to explore further
strategic alternatives among our nonfood operations;
    
    fluctuations in the cost and availability of raw materials;
    
    adverse changes in energy costs and other factors that may affect costs of
producing, distributing or transporting our products;
    
    the impact of fluctuations in our pension plan asset values on funding levels,
contributions required and benefit costs;
    
    maintenance of competitive position with respect to other manufacturers, including
import sources of production;
    
    dependence on key personnel;
  24




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##### Table of Contents




    
    stability of labor relations;
    
    dependence on contract copackers;
    
    effect of governmental regulations, including environmental matters;
    
    legislation and litigation affecting the future administration of the CDSOA;
    
    access to any required financing;
    
    changes in income tax laws;
    
    unexpected costs relating to the holding or disposition of idle real estate;
    
    changes in estimates in critical accounting judgments; and
    
    innumerable other factors.
 
 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.
 
 PART II OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 6. Exhibits
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##### Table of Contents



SIGNATURES
  Lancaster Colony Corporation(Registrant)Date: May 10, 2010
    
    By:
    
    /s/ John B. Gerlach, Jr.

John B. Gerlach, Jr.Chairman, Chief Executive Officer,President and Director(Principal Executive Officer)Date: May 10, 2010
    
    By:
    
    /s/ John L. BoylanJohn L. BoylanTreasurer, Vice President,
Assistant Secretary,Chief Financial Officer and Director(Principal Financial and Accounting Officer)
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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 FORM 10-Q
 MARCH 31, 2010
 
 INDEX TO EXHIBITS
 ExhibitNumber
    
    Description
    
    Located at31.1
    
    
    Certification of CEO under Section 302 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith31.2
    
    
    Certification of CFO under Section 302 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith32
    
    
    Certification of CEO and CFO under Section 906 of the Sarbanes-Oxley
Act of 2002
    
    Filed herewith
  27