##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 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 0-4065-1
 Lancaster Colony Corporation
 (Exact name of registrant as specified in its charter)
 Ohio(State or other jurisdiction of 
incorporation or organization)
    
    13-1955943(I.R.S. Employer
Identification No.)
 37 West Broad Street 
Columbus, Ohio(Address of principal executive offices)
    
    43215(Zip Code)
 614-224-7141
 (Registrants telephone number, including area code)
 þ o
  þ o o
 o þ




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##### 



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
  
 TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1.
    
    Consolidated Financial Statements:Consolidated Balance Sheets  March 31, 2007 and June 30, 2006Consolidated Statements of Income  Three and Nine Months Ended March 31, 2007 and 2006Consolidated Statements of Cash Flows  Nine Months Ended March 31, 2007 and 2006Notes to Consolidated Financial StatementsItem 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 4.
    
    Controls and ProceduresPART II  OTHER INFORMATIONItem 1.
    
    Legal ProceedingsItem 1A.
    
    Risk FactorsItem 2.
    
    Unregistered Sales of Equity Securities and Use of ProceedsItem 6.
    
    ExhibitsSIGNATURESINDEX TO EXHIBITSEX-31.1EX-31.2EX-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)
    
    2007
    
    
    2006ASSETSCurrent Assets:Cash and equivalents
    
    $
    7,966
    
    
    $
    6,050Short-term investments
    
    
    
    
    
    
    35,765Receivables (less allowance for doubtful accounts,
March  $1,012 and June  $1,006)
    
    
    109,326
    
    
    
    105,177Inventories:Raw materials
    
    
    44,333
    
    
    
    40,042Finished goods and work in process
    
    
    107,149
    
    
    
    117,661Total inventories
    
    
    151,482
    
    
    
    157,703Deferred income taxes and other current assets
    
    
    30,290
    
    
    
    26,032Current assets of discontinued operations
    
    
    
    
    
    
    8,056Total current assets
    
    
    299,064
    
    
    
    338,783Property, Plant and Equipment:Land, buildings and improvements
    
    
    155,935
    
    
    
    132,541Machinery and equipment
    
    
    395,898
    
    
    
    390,379Total cost
    
    
    551,833
    
    
    
    522,920Less accumulated depreciation
    
    
    350,315
    
    
    
    337,908Property, plant and equipment  net
    
    
    201,518
    
    
    
    185,012Other Assets:Goodwill
    
    
    79,219
    
    
    
    79,219Other intangible assets  net
    
    
    4,024
    
    
    
    4,416Other noncurrent assets
    
    
    19,384
    
    
    
    18,330Noncurrent assets of discontinued operations
    
    
    
    
    
    
    2,261Total
    
    $
    603,209
    
    
    $
    628,021LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    48,798
    
    
    $
    46,426Accrued liabilities
    
    
    51,230
    
    
    
    55,465Current liabilities of discontinued operations
    
    
    
    
    
    
    1,609Total current liabilities
    
    
    100,028
    
    
    
    103,500Other Noncurrent Liabilities
    
    
    22,016
    
    
    
    21,734Deferred Income Taxes
    
    
    6,175
    
    
    
    8,366Shareholders Equity:Preferred stock  authorized 3,050,000 shares;
outstanding  noneCommon stock  authorized 75,000,000 shares; outstanding 
March 31, 2007  31,298,991 shares;
June 30, 2006  32,245,735 shares
    
    
    81,225
    
    
    
    78,017Retained earnings
    
    
    945,176
    
    
    
    925,388Accumulated other comprehensive loss
    
    
    (5,813
    )
    
    
    (5,277
    )Total
    
    
    1,020,588
    
    
    
    998,128Common stock in treasury, at cost
    
    
    (545,598
    )
    
    
    (503,707
    )Total shareholders equity
    
    
    474,990
    
    
    
    494,421Total
    
    $
    603,209
    
    
    $
    628,021
  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)
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Net Sales
    
    $
    286,896
    
    
    $
    275,880
    
    
    $
    880,196
    
    
    $
    862,511Cost of Sales
    
    
    241,176
    
    
    
    235,211
    
    
    
    736,518
    
    
    
    711,288Gross Margin
    
    
    45,720
    
    
    
    40,669
    
    
    
    143,678
    
    
    
    151,223Selling, General and
Administrative Expenses
    
    
    25,322
    
    
    
    23,192
    
    
    
    75,230
    
    
    
    73,611Restructuring and Impairment Charge
    
    
    1,005
    
    
    
    575
    
    
    
    1,050
    
    
    
    618Operating Income
    
    
    19,393
    
    
    
    16,902
    
    
    
    67,398
    
    
    
    76,994Other Income (Expense):Interest Expense
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    Other Income  Continued Dumping and
Subsidy Offset Act
    
    
    
    
    
    
    
    
    
    
    699
    
    
    
    11,376Interest Income and Other  Net
    
    
    269
    
    
    
    779
    
    
    
    833
    
    
    
    3,435Income Before Income Taxes
    
    
    19,662
    
    
    
    17,681
    
    
    
    68,917
    
    
    
    91,805Taxes Based on Income
    
    
    7,259
    
    
    
    6,305
    
    
    
    25,366
    
    
    
    32,887Income From Continuing Operations
    
    
    12,403
    
    
    
    11,376
    
    
    
    43,551
    
    
    
    58,918Discontinued Operations, Net of Tax:Income From Discontinued Operations
    
    
    357
    
    
    
    398
    
    
    
    819
    
    
    
    1,132Gain on Sale of Discontinued Operations
    
    
    739
    
    
    
    
    
    
    
    739
    
    
    
    Total Discontinued Operations
    
    
    1,096
    
    
    
    398
    
    
    
    1,558
    
    
    
    1,132Net Income
    
    $
    13,499
    
    
    $
    11,774
    
    
    $
    45,109
    
    
    $
    60,050Basic Income Per Common Share:Continuing Operations
    
    $
    .39
    
    
    $
    .34
    
    
    $
    1.37
    
    
    $
    1.75Discontinued Operations
    
    
    .03
    
    
    
    .01
    
    
    
    .05
    
    
    
    .03Net Income
    
    $
    .43
    
    
    $
    .35
    
    
    $
    1.42
    
    
    $
    1.78Diluted Income Per Common Share:Continuing Operations
    
    $
    .39
    
    
    $
    .34
    
    
    $
    1.37
    
    
    $
    1.74Discontinued Operations
    
    
    .03
    
    
    
    .01
    
    
    
    .05
    
    
    
    .03Net Income
    
    $
    .43
    
    
    $
    .35
    
    
    $
    1.42
    
    
    $
    1.78Cash Dividends Per Common Share
    
    $
    .27
    
    
    $
    .26
    
    
    $
    .80
    
    
    $
    2.77Weighted Average Common
Shares Outstanding:Basic
    
    
    31,531
    
    
    
    33,214
    
    
    
    31,728
    
    
    
    33,757Diluted
    
    
    31,560
    
    
    
    33,236
    
    
    
    31,755
    
    
    
    33,795
  4




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Nine Months EndedMarch 31(Amounts in thousands)
    
    2007
    
    
    2006Cash Flows From Operating Activities:Net income
    
    $
    45,109
    
    
    $
    60,050Adjustments to reconcile net income to net
cash provided by operating activities:Income from discontinued operations
    
    
    (1,558
    )
    
    
    (1,132
    )Depreciation and amortization
    
    
    23,131
    
    
    
    24,138Deferred income taxes and other noncash charges
    
    
    431
    
    
    
    (450
    )Restructuring and impairment charge
    
    
    2,382
    
    
    
    542Gain on sale of property
    
    
    (556
    )
    
    
    (1,111
    )(Gain) loss on sale of business
    
    
    (8
    )
    
    
    185Activity of the pension plans
    
    
    (557
    )
    
    
    (2,800
    )Changes in operating assets and liabilities:Receivables
    
    
    (4,041
    )
    
    
    (6,815
    )Inventories
    
    
    4,822
    
    
    
    8,601Other current assets
    
    
    (4,780
    )
    
    
    (11,455
    )Accounts payable and accrued liabilities
    
    
    1,481
    
    
    
    (3,394
    )Net cash provided by operating activities from
continuing operations
    
    
    65,856
    
    
    
    66,359Cash Flows From Investing Activities:Payments on property additions
    
    
    (39,121
    )
    
    
    (50,440
    )Proceeds from sale of discontinued operations
    
    
    10,119
    
    
    
    Proceeds from sale of property
    
    
    1,003
    
    
    
    1,492Proceeds from sale of business
    
    
    8
    
    
    
    459Purchases of short-term investments
    
    
    (5,000
    )
    
    
    (26,350
    )Proceeds from short-term investment sales, calls and maturities
    
    
    40,765
    
    
    
    56,575Other net
    
    
    (2,836
    )
    
    
    (863
    )Net cash provided by (used in) investing activities from
continuing operations
    
    
    4,938
    
    
    
    (19,127
    )Cash Flows From Financing Activities:Purchase of treasury stock
    
    
    (41,891
    )
    
    
    (59,982
    )Payment of dividends
    
    
    (25,321
    )
    
    
    (93,316
    )Proceeds from the exercise of stock options
    
    
    3,118
    
    
    
    3,797(Decrease) increase in cash overdraft balance
    
    
    (4,815
    )
    
    
    658Net cash used in financing activities from continuing operations
    
    
    (68,909
    )
    
    
    (148,843
    )Cash Flows From Discontinued Operations:Net cash provided by (used in) operating activities from
discontinued operations
    
    
    426
    
    
    
    (76
    )Net cash used in investing activities from discontinued operations
    
    
    (387
    )
    
    
    (148
    )Net cash provided by (used in) discontinued operations
    
    
    39
    
    
    
    (224
    )Effect of exchange rate changes on cash
    
    
    (8
    )
    
    
    5Net change in cash and equivalents
    
    
    1,916
    
    
    
    (101,830
    )Cash and equivalents at beginning of year
    
    
    6,050
    
    
    
    113,265Cash and equivalents at end of period
    
    $
    7,966
    
    
    $
    11,435Supplemental Disclosure Of Operating Cash Flows:Cash paid during the period for income taxes
    
    $
    32,345
    
    
    $
    43,483
  5




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Tabular amounts in thousands, except share and per share data)
 Note 1  Summary of Significant Accounting Policies
 Basis of Presentation
  Property, Plant and Equipment
  Significant Accounting Policies
  Note 2  Discontinued Operations
    June 302006Assets of Discontinued OperationsReceivables
    
    $
    3,811Inventories
    
    
    4,245Total current assets of discontinued operations
    
    
    8,056Property, plant and equipment, net
    
    
    2,260Other noncurrent assets
    
    
    1Total noncurrent assets of discontinued operations
    
    
    2,261Total assets of discontinued operations
    
    $
    10,317
 6




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except share and per share data)
 June 302006Current Liabilities of Discontinued OperationsAccounts payable
    
    $
    1,258Accrued liabilities
    
    
    351Total current liabilities of discontinued operations
    
    $
    1,609
 Note 3  Short-Term Investments
   Note 4  Impact of Recently Issued Accounting Standards
      7




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except share and per share data)
  Note 5  Goodwill and Other Intangible Assets
   March 31
    
    
    June 302007
    
    
    2006Specialty FoodsTrademarks (40-year life)Gross carrying value
    
    $
    370
    
    
    $
    370Accumulated amortization
    
    
    (147
    )
    
    
    (140
    )Net Carrying Value
    
    $
    223
    
    
    $
    230Customer Lists (12-year life)Gross carrying value
    
    $
    4,100
    
    
    $
    4,100Accumulated amortization
    
    
    (1,110
    )
    
    
    (854
    )Net Carrying Value
    
    $
    2,990
    
    
    $
    3,246Non-compete Agreements (8-year life)Gross carrying value
    
    $
    1,200
    
    
    $
    1,200Accumulated amortization
    
    
    (488
    )
    
    
    (375
    )Net Carrying Value
    
    $
    712
    
    
    $
    825Glassware and Candles  Customer Lists (12-year life)Gross carrying value
    
    $
    250
    
    
    $
    250Accumulated amortization
    
    
    (151
    )
    
    
    (135
    )Net Carrying Value
    
    $
    99
    
    
    $
    115Total Net Carrying Value
    
    $
    4,024
    
    
    $
    4,416
  Note 6  Short-Term Borrowings
  Note 7  Pension Benefits
  8




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except share and per share data)
  Three Months
    
    
    Nine MonthsEnded
    
    
    EndedMarch 31
    
    
    March 312007
    
    
    2006
    
    
    2007
    
    
    2006Components of net periodic benefit costService cost
    
    $
    128
    
    
    $
    188
    
    
    $
    382
    
    
    $
    564Interest cost
    
    
    618
    
    
    
    636
    
    
    
    1,882
    
    
    
    1,906Expected return on plan assets
    
    
    (746
    )
    
    
    (724
    )
    
    
    (2,242
    )
    
    
    (2,170
    )SFAS 88 curtailment/settlement charges
    
    
    287
    
    
    
    
    
    
    
    638
    
    
    
    Amortization of unrecognized net loss
    
    
    73
    
    
    
    178
    
    
    
    203
    
    
    
    532Amortization of prior service cost
    
    
    61
    
    
    
    59
    
    
    
    183
    
    
    
    176Amortization of unrecognized net
obligation existing at transition
    
    
    
    
    
    
    8
    
    
    
    2
    
    
    
    26Net periodic benefit cost
    
    $
    421
    
    
    $
    345
    
    
    $
    1,048
    
    
    $
    1,034
    Note 8  Postretirement Benefits
   Three Months
    
    
    Nine MonthsEnded
    
    
    EndedMarch 31
    
    
    March 312007
    
    
    2006
    
    
    2007
    
    
    2006Components of net periodic benefit costService cost
    
    $
    42
    
    
    $
    44
    
    
    $
    100
    
    
    $
    131Interest cost
    
    
    119
    
    
    
    87
    
    
    
    317
    
    
    
    260Amortization of unrecognized net loss
    
    
    42
    
    
    
    36
    
    
    
    95
    
    
    
    108Amortization of prior service asset
    
    
    (2
    )
    
    
    (2
    )
    
    
    (6
    )
    
    
    (5
    )SFAS 88 curtailment benefit
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    Net periodic benefit cost
    
    $
    201
    
    
    $
    165
    
    
    $
    497
    
    
    $
    494
  9




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except share and per share data)
  Note 9  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 share and per share data)
  WeightedWeighted
    
    
    AverageNumber
    
    
    Average
    
    
    Remaining
    
    
    Aggregateof
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Life
    
    
    ValueOutstanding stock options vested and
expected to vest at beginning of period
    
    
    470,982
    
    
    $
    39.92Exercised
    
    
    (78,390
    )
    
    
    37.55Granted
    
    
    
    
    
    
    Forfeited
    
    
    (13,442
    )
    
    
    41.28Outstanding stock options vested and
expected to vest at end of period
    
    
    379,150
    
    
    $
    40.36
    
    
    
    2.40
    
    
    $
    1,453Exercisable and vested stock options
at end of period
    
    
    371,363
    
    
    $
    40.33
    
    
    
    2.39
    
    
    $
    1,432
  WeightedNumber
    
    
    Averageof
    
    
    Grant DateShares
    
    
    Fair ValueUnvested stock options at beginning of period
    
    
    16,315
    
    
    $
    7.82Granted
    
    
    
    
    
    
    Vested
    
    
    (8,528
    )
    
    
    7.52Forfeited
    
    
    
    
    
    
    Unvested stock options at end of period
    
    
    7,787
    
    
    $
    8.14
  Restricted Stock
   WeightedNumber
    
    
    Averageof
    
    
    Grant DateShares
    
    
    Fair ValueUnvested restricted stock at beginning of period
    
    
    
    
    
    
    Granted
    
    
    3,500
    
    
    $
    42.70Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Unvested restricted stock at end of period
    
    
    3,500
    
    
    $
    42.70
  11




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except share and per share data)
  Note 10  Restructuring and Impairment Charge
    Accrual at
    
    
    
    
    
    
    2007
    
    
    Accrual atJune 30,
    
    
    2007
    
    
    Cash
    
    
    March 31,2006
    
    
    Charge
    
    
    Outlays
    
    
    2007Restructuring and Impairment ChargeEmployee Separation Costs
    
    $
    
    
    
    $
    16
    
    
    $
    
    
    
    $
    16Pension Curtailment Charges
    
    
    
    
    
    
    287Accelerated Depreciation
    
    
    
    
    
    
    701Inventory Write-Down
    
    
    
    
    
    
    1,400Total Restructuring and Impairment Charge
    
    
    
    
    
    $
    2,404
  Note 11  Business Segment Information
  Three Months Ended
    
    
    Nine Months EndedMarch 31
    
    
    March 312007
    
    
    2006
    
    
    2007
    
    
    2006Net SalesSpecialty Foods
    
    $
    178,212
    
    
    $
    168,233
    
    
    $
    543,093
    
    
    $
    527,272Glassware and Candles
    
    
    50,238
    
    
    
    48,457
    
    
    
    175,325
    
    
    
    174,001Automotive
    
    
    58,446
    
    
    
    59,190
    
    
    
    161,778
    
    
    
    161,238Total
    
    $
    286,896
    
    
    $
    275,880
    
    
    $
    880,196
    
    
    $
    862,511Operating IncomeSpecialty Foods
    
    $
    22,046
    
    
    $
    22,102
    
    
    $
    76,997
    
    
    $
    79,520Glassware and Candles
    
    
    987
    
    
    
    (2,586
    )
    
    
    4,109
    
    
    
    3,034Automotive
    
    
    (1,400
    )
    
    
    (727
    )
    
    
    (7,976
    )
    
    
    (78
    )Corporate Expenses
    
    
    (2,240
    )
    
    
    (1,887
    )
    
    
    (5,732
    )
    
    
    (5,482
    )Total
    
    $
    19,393
    
    
    $
    16,902
    
    
    $
    67,398
    
    
    $
    76,994
 12




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LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except share and per share data)
 Note 12  Commitments and Contingencies
      Note 13  Comprehensive Income
  13




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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
         14




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Forward-Looking Statements
  Summary of Results
    15




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##### Table of Contents



RESULTS OF CONSOLIDATED OPERATIONS
 Net Sales and Gross Margin
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedMarch 31
    
    
    
    
    
    
    
    
    
    
    March 312007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    ChangeNet SalesSpecialty Foods
    
    $
    178,212
    
    
    $
    168,233
    
    
    $
    9,979
    
    
    
    6
    %
    
    $
    543,093
    
    
    $
    527,272
    
    
    $
    15,821
    
    
    
    3
    %Glassware and Candles
    
    
    50,238
    
    
    
    48,457
    
    
    
    1,781
    
    
    
    4
    %
    
    
    175,325
    
    
    
    174,001
    
    
    
    1,324
    
    
    
    1
    %Automotive
    
    
    58,446
    
    
    
    59,190
    
    
    
    (744
    )
    
    
    (1
    )%
    
    
    161,778
    
    
    
    161,238
    
    
    
    540
    
    
    
    0
    %Total
    
    $
    286,896
    
    
    $
    275,880
    
    
    $
    11,016
    
    
    
    4
    %
    
    $
    880,196
    
    
    $
    862,511
    
    
    $
    17,685
    
    
    
    2
    %Gross Margin
    
    $
    45,720
    
    
    $
    40,669
    
    
    $
    5,051
    
    
    
    12
    %
    
    $
    143,678
    
    
    $
    151,223
    
    
    $
    (7,545
    )
    
    
    (5
    )%Gross Margin
as a Percent of Sales
    
    
    15.9
    %
    
    
    14.7
    %
    
    
    
    
    
    
    
    
    
    
    16.3
    %
    
    
    17.5
    %
       16




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##### Table of Contents



Selling, General and Administrative Expenses
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedMarch 31
    
    
    
    
    
    
    
    
    
    
    March 312007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    ChangeSelling, General and
Administrative Expenses
    
    $
    25,322
    
    
    $
    23,192
    
    
    $
    2,130
    
    
    
    9
    %
    
    $
    75,230
    
    
    $
    73,611
    
    
    $
    1,619
    
    
    
    2
    %SG&A Expenses as a
Percent of Sales
    
    
    8.8
    %
    
    
    8.4
    %
    
    
    
    
    
    
    
    
    
    
    8.5
    %
    
    
    8.5
    %
  Restructuring and Impairment Charge
   17




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##### Table of Contents



Accrual at
    
    
    
    
    
    
    2007
    
    
    Accrual atJune 30,
    
    
    2007
    
    
    Cash
    
    
    March 31,2006
    
    
    Charge
    
    
    Outlays
    
    
    2007Restructuring and Impairment ChargeEmployee Separation Costs
    
    $
    
    
    
    $
    16
    
    
    $
    
    
    
    $
    16Pension Curtailment Charges
    
    
    
    
    
    
    287Accelerated Depreciation
    
    
    
    
    
    
    701Inventory Write-Down
    
    
    
    
    
    
    1,400Total Restructuring and Impairment Charge
    
    
    
    
    
    $
    2,404
  Operating Income
  Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedMarch 31
    
    
    
    
    
    
    
    
    
    
    March 312007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    ChangeOperating IncomeSpecialty Foods
    
    $
    22,046
    
    
    $
    22,102
    
    
    $
    (56
    )
    
    
    0
    %
    
    $
    76,997
    
    
    $
    79,520
    
    
    $
    (2,523
    )
    
    
    (3
    )%Glassware and Candles
    
    
    987
    
    
    
    (2,586
    )
    
    
    3,573
    
    
    
    N/M
    
    
    
    4,109
    
    
    
    3,034
    
    
    
    1,075
    
    
    
    35
    %Automotive
    
    
    (1,400
    )
    
    
    (727
    )
    
    
    (673
    )
    
    
    (93
    )%
    
    
    (7,976
    )
    
    
    (78
    )
    
    
    (7,898
    )
    
    
    N/MCorporate Expenses
    
    
    (2,240
    )
    
    
    (1,887
    )
    
    
    (353
    )
    
    
    19
    %
    
    
    (5,732
    )
    
    
    (5,482
    )
    
    
    (250
    )
    
    
    5
    %Total
    
    $
    19,393
    
    
    $
    16,902
    
    
    $
    2,491
    
    
    
    15
    %
    
    $
    67,398
    
    
    $
    76,994
    
    
    $
    (9,596
    )
    
    
    (12
    )%Operating Income
as a Percent of SalesSpecialty Foods
    
    
    12.4
    %
    
    
    13.1
    %
    
    
    
    
    
    
    
    
    
    
    14.2
    %
    
    
    15.1
    %Glassware and Candles
    
    
    2.0
    %
    
    
    (5.3
    )%
    
    
    
    
    
    
    
    
    
    
    2.3
    %
    
    
    1.7
    %Automotive
    
    
    (2.4
    )%
    
    
    (1.2
    )%
    
    
    
    
    
    
    
    
    
    
    (4.9
    )%
    
    
    0.0
    %Consolidated
    
    
    6.8
    %
    
    
    6.1
    %
    
    
    
    
    
    
    
    
    
    
    7.7
    %
    
    
    8.9
    %
 Interest Expense
  Other Income  Continued Dumping and Subsidy Offset Act
  Interest Income and Other  Net
  18




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##### Table of Contents



Income Before Income Taxes
  Income from Continuing Operations
  Discontinued Operations
  Net Income
  FINANCIAL CONDITION
    19




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##### Table of Contents



CONTRACTUAL OBLIGATIONS
   CRITICAL ACCOUNTING POLICIES
  RECENTLY ISSUED ACCOUNTING STANDARDS
   20




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
 Changes in Internal Control Over Financial Reporting.
 
 PART II OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  21




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Total Number
    
    
    Maximum NumberTotal
    
    
    Average
    
    
    of Shares
    
    
    of Shares That MayNumber
    
    
    Price
    
    
    Purchased as
    
    
    Yet be Purchasedof Shares
    
    
    Paid Per
    
    
    Part of Publicly
    
    
    Under the Plans orPeriod
    
    Purchased
    
    
    Share
    
    
    Announced Plans
    
    
    ProgramsJanuary 1-31, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    2,223,166February 1-28, 2007
    
    
    75,128
    
    
    $
    43.72
    
    
    
    75,128
    
    
    
    2,148,038March 1-31, 2007
    
    
    242,800
    
    
    $
    42.24
    
    
    
    242,800
    
    
    
    1,905,238Total
    
    
    317,928
    
    
    $
    42.59
    
    
    
    317,928
    
    
    
    1,905,238
  
 Item 6. Exhibits .
 22




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##### Table of Contents



SIGNATURES
  Lancaster Colony Corporation

                  (Registrant)Date: May 10, 2007
    
    By:
    
    /s/ John B. Gerlach, Jr.

John B. Gerlach, Jr.Chairman, Chief Executive Officer,
President and DirectorDate: May 10, 2007
    
    By:
    
    /s/ John L. Boylan

John L. BoylanTreasurer, Vice President,
Assistant Secretary,
Chief Financial Officer
(Principal Financial
and Accounting Officer)
and Director
 23




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##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
FORM 10-Q
MARCH 31, 2007
 
 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
 24