##### 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, 2009
 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 
incorporation or organization)
    
    (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
 o 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 INFORMATION
    
    
    
3Item 1. Consolidated Financial Statements:
    
    
    
    3Consolidated Balance Sheets  March 31, 2009 and June 30, 2008
    
    
    
    3Consolidated Statements of Income  Three and Nine Months Ended March 31, 2009 and 2008
    
    
    
4Consolidated Statements of Cash Flows  Nine Months Ended March 31, 2009 and 2008
    
    
    
5Notes to Consolidated Financial Statements
    
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    
    23Item 4. Controls and Procedures
    
    
    
    23PART II  OTHER INFORMATION
    
    
    
    23Item 1A. Risk Factors
    
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    
    23Item 6. Exhibits
    
    
    
    23SIGNATURES
    
    
    
    24INDEX TO EXHIBITS
    
    
    
    25Exhibit 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)
    
    2009
    
    
    2008ASSETSCurrent Assets:Cash and equivalents
    
    $
    19,264
    
    
    $
    19,417Receivables (less allowance for doubtful accounts,
March  $1,249 and June  $1,069)
    
    
    72,355
    
    
    
    59,409Inventories:Raw materials
    
    
    28,538
    
    
    
    34,787Finished goods and work in process
    
    
    62,179
    
    
    
    85,516Total inventories
    
    
    90,717
    
    
    
    120,303Deferred income taxes and other current assets
    
    
    24,041
    
    
    
    34,545Total current assets
    
    
    206,377
    
    
    
    233,674Property, Plant and Equipment:Land, buildings and improvements
    
    
    128,246
    
    
    
    138,771Machinery and equipment
    
    
    244,433
    
    
    
    240,490Total cost
    
    
    372,679
    
    
    
    379,261Less accumulated depreciation
    
    
    199,498
    
    
    
    199,688Property, plant and equipment  net
    
    
    173,181
    
    
    
    179,573Other Assets:Goodwill
    
    
    89,840
    
    
    
    89,840Other intangible assets  net
    
    
    10,969
    
    
    
    11,841Other noncurrent assets
    
    
    4,299
    
    
    
    5,250Total
    
    $
    484,666
    
    
    $
    520,178LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    36,343
    
    
    $
    45,964Accrued liabilities
    
    
    35,961
    
    
    
    42,785Total current liabilities
    
    
    72,304
    
    
    
    88,749Long-Term Debt
    
    
    15,000
    
    
    
    55,000Other Noncurrent Liabilities
    
    
    17,542
    
    
    
    14,547Deferred Income Taxes
    
    
    3,150
    
    
    
    2,664Shareholders Equity:Preferred stock  authorized 3,050,000 shares;
outstanding  noneCommon stock  authorized 75,000,000 shares; outstanding 
March 31, 2009  27,976,075 shares;
June 30, 2008  28,452,237 shares
    
    
    83,302
    
    
    
    82,652Retained earnings
    
    
    978,079
    
    
    
    941,244Accumulated other comprehensive loss
    
    
    (8,914
    )
    
    
    (5,775
    )Common stock in treasury, at cost
    
    
    (675,797
    )
    
    
    (658,903
    )Total shareholders equity
    
    
    376,670
    
    
    
    359,218Total
    
    $
    484,666
    
    
    $
    520,178
   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)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Net Sales
    
    $
    246,027
    
    
    $
    230,826
    
    
    $
    798,106
    
    
    $
    744,231Cost of Sales
    
    
    193,385
    
    
    
    199,152
    
    
    
    647,632
    
    
    
    624,115Gross Margin
    
    
    52,642
    
    
    
    31,674
    
    
    
    150,474
    
    
    
    120,116Selling, General and
Administrative Expenses
    
    
    20,155
    
    
    
    19,397
    
    
    
    62,333
    
    
    
    61,656Restructuring and Impairment Charges
    
    
    
    
    
    
    
    
    
    
    1,606
    
    
    
    182Operating Income
    
    
    32,487
    
    
    
    12,277
    
    
    
    86,535
    
    
    
    58,278Other (Expense) Income:Interest expense
    
    
    (64
    )
    
    
    (621
    )
    
    
    (1,194
    )
    
    
    (2,545
    )Other income  Continued Dumping and
Subsidy Offset Act
    
    
    
    
    
    
    
    
    
    
    8,696
    
    
    
    2,533Interest income and other  net
    
    
    65
    
    
    
    298
    
    
    
    (131
    )
    
    
    694Income from Continuing Operations
Before Income Taxes
    
    
    32,488
    
    
    
    11,954
    
    
    
    93,906
    
    
    
    58,960Taxes Based on Income
    
    
    11,275
    
    
    
    3,952
    
    
    
    33,221
    
    
    
    21,037Income from Continuing Operations
    
    
    21,213
    
    
    
    8,002
    
    
    
    60,685
    
    
    
    37,923Discontinued Operations, Net of Tax:Income from Discontinued Operations
    
    
    
    
    
    
    783
    
    
    
    
    
    
    
    2,430Loss on Sale of Discontinued Operations
    
    
    
    
    
    
    (159
    )
    
    
    
    
    
    
    (159
    )Total Discontinued Operations
    
    
    
    
    
    
    624
    
    
    
    
    
    
    
    2,271Net Income
    
    $
    21,213
    
    
    $
    8,626
    
    
    $
    60,685
    
    
    $
    40,194Income Per Common Share from
Continuing Operations:Basic and Diluted
    
    $
    .76
    
    
    $
    .27
    
    
    $
    2.16
    
    
    $
    1.27Income Per Common Share from
Discontinued Operations:Basic and Diluted
    
    $
    
    
    
    $
    .02
    
    
    $
    
    
    
    $
    .08Net Income Per Common Share:Basic and Diluted
    
    $
    .76
    
    
    $
    .30
    
    
    $
    2.16
    
    
    $
    1.35Cash Dividends Per Common Share
    
    $
    .285
    
    
    $
    .28
    
    
    $
    .85
    
    
    $
    .83Weighted Average Common
Shares Outstanding:Basic
    
    
    27,933
    
    
    
    29,115
    
    
    
    28,048
    
    
    
    29,794Diluted
    
    
    27,949
    
    
    
    29,128
    
    
    
    28,058
    
    
    
    29,799
   4




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##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 Nine Months EndedMarch 31(Amounts in thousands)
    
    2009
    
    
    2008Cash Flows From Operating Activities:Net income
    
    $
    60,685
    
    
    $
    40,194Adjustments to reconcile net income to net
cash provided by operating activities:Income from discontinued operations
    
    
    
    
    
    
    (2,271
    )Depreciation and amortization
    
    
    16,362
    
    
    
    18,866Deferred income taxes and other noncash changes
    
    
    3,493
    
    
    
    2,260Restructuring and impairment charges
    
    
    (1,221
    )
    
    
    (202
    )Gain on sale of property
    
    
    (868
    )
    
    
    (125
    )Loss on sale of business
    
    
    
    
    
    
    5,947Pension plan activity
    
    
    (2,490
    )
    
    
    2,116Changes in operating assets and liabilities:Receivables
    
    
    (13,218
    )
    
    
    (8,736
    )Inventories
    
    
    29,586
    
    
    
    6,794Other current assets
    
    
    10,314
    
    
    
    (4,467
    )Accounts payable and accrued liabilities
    
    
    (9,867
    )
    
    
    3,167Net cash provided by operating activities from
continuing operations
    
    
    92,776
    
    
    
    63,543Cash Flows From Investing Activities:Payments on property additions
    
    
    (8,941
    )
    
    
    (15,016
    )Proceeds from sale of property
    
    
    1,991
    
    
    
    233Proceeds from sale of business
    
    
    
    
    
    
    19,575Other  net
    
    
    (1,026
    )
    
    
    (2,067
    )Net cash (used in) provided by investing activities from
continuing operations
    
    
    (7,976
    )
    
    
    2,725Cash Flows From Financing Activities:Net repayment of $100 million credit facility
    
    
    
    
    
    
    (42,500
    )Proceeds from debt
    
    
    25,000
    
    
    
    126,104Payments on debt
    
    
    (65,000
    )
    
    
    (48,604
    )Purchase of treasury stock
    
    
    (16,894
    )
    
    
    (76,759
    )Payment of dividends
    
    
    (23,850
    )
    
    
    (24,603
    )Proceeds from the exercise of stock options
    
    
    
    
    
    
    646Decrease in cash overdraft balance
    
    
    (4,209
    )
    
    
    (4,294
    )Net cash used in financing activities from
continuing operations
    
    
    (84,953
    )
    
    
    (70,010
    )Cash Flows From Discontinued Operations:Net cash provided by operating activities from discontinued operations
    
    
    
    
    
    
    8,634Net cash used in investing activities from discontinued operations
    
    
    
    
    
    
    (961
    )Net cash provided by discontinued operations
    
    
    
    
    
    
    7,673Effect of exchange rate changes on cash
    
    
    
    
    
    
    2Net change in cash and equivalents
    
    
    (153
    )
    
    
    3,933Cash and equivalents at beginning of year
    
    
    19,417
    
    
    
    8,316Cash and equivalents at end of period
    
    $
    19,264
    
    
    $
    12,249Supplemental Disclosure Of Operating Cash Flows:Cash paid during the period for income taxes
    
    $
    18,803
    
    
    $
    22,981
   5




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##### Table of Contents



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
 10-K.
 Note 2  Impact of Recently Issued Accounting Standards
   Note 3  Goodwill and Other Intangible Assets
   6




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##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except share and per share data)
  March 31
    
    
    June 302009
    
    
    2008Specialty FoodsTrademarks (40-year life)Gross carrying value
    
    $
    370
    
    
    $
    370Accumulated amortization
    
    
    (165
    )
    
    
    (158
    )Net Carrying Value
    
    $
    205
    
    
    $
    212Customer Relationships (12 to 15-year life)Gross carrying value
    
    $
    13,020
    
    
    $
    13,020Accumulated amortization
    
    
    (2,884
    )
    
    
    (2,182
    )Net Carrying Value
    
    $
    10,136
    
    
    $
    10,838Non-compete Agreements (5 to 8-year life)Gross carrying value
    
    $
    1,540
    
    
    $
    1,540Accumulated amortization
    
    
    (912
    )
    
    
    (749
    )Net Carrying Value
    
    $
    628
    
    
    $
    791Total Net Carrying Value
    
    $
    10,969
    
    
    $
    11,841
  Note 4  Long-Term Debt
     7




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##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (Tabular amounts in thousands, except share and per share data)
 Note 5  Pension Benefits
   Three Months
    
    
    Nine MonthsEnded
    
    
    EndedMarch 31
    
    
    March 312009
    
    
    2008
    
    
    2009
    
    
    2008Components of net periodic benefit costService cost
    
    $
    29
    
    
    $
    39
    
    
    $
    89
    
    
    $
    117Interest cost
    
    
    543
    
    
    
    543
    
    
    
    1,625
    
    
    
    1,837Expected return on plan assets
    
    
    (566
    )
    
    
    (647
    )
    
    
    (1,770
    )
    
    
    (2,257
    )SFAS 88 curtailment/settlement charge
    
    
    331
    
    
    
    
    
    
    
    331
    
    
    
    2,972Amortization of unrecognized net loss
    
    
    83
    
    
    
    30
    
    
    
    207
    
    
    
    116Amortization of prior service cost
    
    
    19
    
    
    
    25
    
    
    
    71
    
    
    
    77Amortization of unrecognized net
obligation existing at transition
    
    
    
    
    
    
    1
    
    
    
    2
    
    
    
    3Net periodic benefit cost
    
    $
    439
    
    
    $
    (9
    )
    
    $
    555
    
    
    $
    2,865
     8




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##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except share and per share data)
 Note 6  Postretirement Benefits
   Three Months
    
    
    Nine MonthsEnded
    
    
    EndedMarch 31
    
    
    March 312009
    
    
    2008
    
    
    2009
    
    
    2008Components of net periodic benefit costService cost
    
    $
    4
    
    
    $
    7
    
    
    $
    13
    
    
    $
    20Interest cost
    
    
    49
    
    
    
    58
    
    
    
    148
    
    
    
    173Amortization of unrecognized gain
    
    
    (4
    )
    
    
    
    
    
    
    (13
    )
    
    
    Amortization of prior service asset
    
    
    (1
    )
    
    
    (2
    )
    
    
    (4
    )
    
    
    (4
    )Net periodic benefit cost
    
    $
    48
    
    
    $
    63
    
    
    $
    144
    
    
    $
    189
  Note 7  Stock-Based Compensation
   Stock Options
       9




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##### Table of Contents



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 at beginning of period
    
    
    239,000
    
    
    $
    41.52Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (17,750
    )
    
    
    41.52Outstanding at end of period
    
    
    221,250
    
    
    $
    41.52
    
    
    
    0.92
    
    
    $
    Exercisable and vested at end of period
    
    
    221,250
    
    
    $
    41.52
    
    
    
    0.92
    
    
    $
    Vested and expected to vest at end of period
    
    
    221,250
    
    
    $
    41.52
    
    
    
    0.92
    
    
    $
    
  WeightedNumber
    
    
    Averageof
    
    
    Grant DateShares
    
    
    Fair ValueUnvested at beginning of period
    
    
    1,567
    
    
    $
    8.14Vested
    
    
    (791
    )
    
    
    8.14Forfeited
    
    
    (776
    )
    
    
    8.14Unvested at end of period
    
    
    
    
    
    $
    
  Stock-Settled Stock Appreciation Rights
     10




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##### Table of Contents



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
    
    
    IntrinsicRights
    
    
    Price
    
    
    Life
    
    
    ValueOutstanding at beginning of period
    
    
    153,550
    
    
    $
    38.31Exercised
    
    
    (732
    )
    
    
    38.31Granted
    
    
    77,700
    
    
    
    39.86Forfeited
    
    
    (500
    )
    
    
    38.31Outstanding at end of period
    
    
    230,018
    
    
    $
    38.83
    
    
    
    4.25
    
    
    $
    609Exercisable and vested at end of period
    
    
    50,284
    
    
    $
    38.31
    
    
    
    3.92
    
    
    $
    159Vested and expected to vest at end of period
    
    
    221,268
    
    
    $
    38.83
    
    
    
    4.25
    
    
    $
    586
  WeightedNumber
    
    
    Averageof
    
    
    Grant DateRights
    
    
    Fair ValueUnvested at beginning of period
    
    
    153,550
    
    
    $
    6.00Granted
    
    
    77,700
    
    
    
    6.89Vested
    
    
    (51,016
    )
    
    
    6.00Forfeited
    
    
    (500
    )
    
    
    6.00Unvested at end of period
    
    
    179,734
    
    
    $
    6.38
  Restricted Stock
    11




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##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Tabular amounts in thousands, except share and per share data)
  WeightedNumber
    
    
    Averageof
    
    
    Grant DateShares
    
    
    Fair ValueUnvested restricted stock at beginning of period
    
    
    26,600
    
    
    $
    38.29Granted
    
    
    19,800
    
    
    
    32.45Vested
    
    
    (3,000
    )
    
    
    38.14Forfeited
    
    
    (300
    )
    
    
    38.31Unvested restricted stock at end of period
    
    
    43,100
    
    
    $
    35.62Expected to vest restricted stock at end of period
    
    
    42,230
    
    
    $
    35.55
   Note 8  Restructuring and Impairment Charges
 Specialty Foods Segment
   Accrual at
    
    
    
    
    
    
    2009
    
    
    Accrual atJune 30,
    
    
    2009
    
    
    Cash
    
    
    March 31,2008
    
    
    Charge
    
    
    Outlays
    
    
    2009Restructuring and Impairment ChargesEmployee Separation Costs
    
    $
    
    
    
    $
    555
    
    
    $
    (555
    )
    
    $
    Other Costs
    
    
    
    
    
    
    162
    
    
    
    (162
    )
    
    
    Subtotal
    
    $
    
    
    
    
    717
    
    
    $
    (717
    )
    
    $
    Fixed Asset Impairment
    
    
    
    
    
    
    47Total
    
    
    
    
    
    $
    764
  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)
 Other Segments
     Accrual at
    
    
    
    
    
    
    2009
    
    
    Accrual atJune 30,
    
    
    2009
    
    
    Cash
    
    
    March 31,2008
    
    
    Charge
    
    
    Outlays
    
    
    2009Restructuring and Impairment ChargesEmployee Separation Costs
    
    $
    69
    
    
    $
    
    
    
    $
    (69
    )
    
    $
    Other Costs
    
    
    1,184
    
    
    
    842
    
    
    
    (2,026
    )
    
    
    Total
    
    $
    1,253
    
    
    $
    842
    
    
    $
    (2,095
    )
    
    $
    
  Note 9  Income Taxes
   13




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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  Business Segment Information
  Three Months Ended
    
    
    Nine Months EndedMarch 31
    
    
    March 312009
    
    
    2008
    
    
    2009
    
    
    2008Net SalesSpecialty Foods
    
    $
    216,894
    
    
    $
    197,249
    
    
    $
    683,073
    
    
    $
    597,188Glassware and Candles
    
    
    29,133
    
    
    
    33,577
    
    
    
    115,033
    
    
    
    147,043Total
    
    $
    246,027
    
    
    $
    230,826
    
    
    $
    798,106
    
    
    $
    744,231Operating Income (Loss)Specialty Foods
    
    $
    35,910
    
    
    $
    14,361
    
    
    $
    99,050
    
    
    $
    66,444Glassware and Candles
    
    
    (927
    )
    
    
    (38
    )
    
    
    (4,796
    )
    
    
    1,595Corporate Expenses
    
    
    (2,496
    )
    
    
    (2,046
    )
    
    
    (7,719
    )
    
    
    (9,761
    )Total
    
    $
    32,487
    
    
    $
    12,277
    
    
    $
    86,535
    
    
    $
    58,278
 Note 11   Commitments and Contingencies
    Note 12  Comprehensive Income
   14




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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, 2009 and our financial condition as of
March 31, 2009. 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, 2009 refers to fiscal 2009, which is
the period from July 1, 2008 to June 30, 2009. In the discussion that follows, we analyze the
results of our operations for the three and nine months ended March 31, 2009, 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;
    
    continuing to grow our foodservice sales through the strength of our reputation in
product development and quality; and
    
    pursuing acquisitions that meet our strategic criteria.
  15




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Summary of 2009 Results
    RESULTS OF CONSOLIDATED OPERATIONS
 Net Sales and Gross Margin
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedMarch 31
    
    
    
    
    
    
    
    
    
    
    March 312009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeNet SalesSpecialty Foods
    
    $
    216,894
    
    
    $
    197,249
    
    
    $
    19,645
    
    
    
    10
    %
    
    $
    683,073
    
    
    $
    597,188
    
    
    $
    85,885
    
    
    
    14
    %Glassware and Candles
    
    
    29,133
    
    
    
    33,577
    
    
    
    (4,444
    )
    
    
    (13
    )%
    
    
    115,033
    
    
    
    147,043
    
    
    
    (32,010
    )
    
    
    (22
    )%Total
    
    $
    246,027
    
    
    $
    230,826
    
    
    $
    15,201
    
    
    
    7
    %
    
    $
    798,106
    
    
    $
    744,231
    
    
    $
    53,875
    
    
    
    7
    %Gross Margin
    
    $
    52,642
    
    
    $
    31,674
    
    
    $
    20,968
    
    
    
    66
    %
    
    $
    150,474
    
    
    $
    120,116
    
    
    $
    30,358
    
    
    
    25
    %Gross Margin
as a Percentage of Sales
    
    
    21.4
    %
    
    
    13.7
    %
    
    
    
    
    
    
    
    
    
    
    18.9
    %
    
    
    16.1
    %
    16




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##### Table of Contents



Selling, General and Administrative Expenses
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedMarch 31
    
    
    
    
    
    
    
    
    
    
    March 312009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeSelling, General and
Administrative Expenses
    
    $
    20,155
    
    
    $
    19,397
    
    
    $
    758
    
    
    
    4
    %
    
    $
    62,333
    
    
    $
    61,656
    
    
    $
    677
    
    
    
    1
    %SG&A Expenses as a
Percentage of Sales
    
    
    8.2
    %
    
    
    8.4
    %
    
    
    
    
    
    
    
    
    
    
    7.8
    %
    
    
    8.3
    %
   17




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##### Table of Contents



Restructuring and Impairment Charges
 Specialty Foods Segment
   Accrual at
    
    
    
    
    
    
    2009
    
    
    Accrual atJune 30,
    
    
    2009
    
    
    Cash
    
    
    March 31,2008
    
    
    Charge
    
    
    Outlays
    
    
    2009Restructuring and Impairment ChargesEmployee Separation Costs
    
    $
    
    
    
    $
    555
    
    
    $
    (555
    )
    
    $
    Other Costs
    
    
    
    
    
    
    162
    
    
    
    (162
    )
    
    
    Subtotal
    
    $
    
    
    
    
    717
    
    
    $
    (717
    )
    
    $
    Fixed Asset Impairment
    
    
    
    
    
    
    47Total
    
    
    
    
    
    $
    764
 Other Segments
     Accrual at
    
    
    
    
    
    
    2009
    
    
    Accrual atJune 30,
    
    
    2009
    
    
    Cash
    
    
    March 31,2008
    
    
    Charge
    
    
    Outlays
    
    
    2009Restructuring and Impairment ChargesEmployee Separation Costs
    
    $
    69
    
    
    $
    
    
    
    $
    (69
    )
    
    $
    Other Costs
    
    
    1,184
    
    
    
    842
    
    
    
    (2,026
    )
    
    
    Total
    
    $
    1,253
    
    
    $
    842
    
    
    $
    (2,095
    )
    
    $
    
   18




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Operating Income (Loss)
  Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedMarch 31
    
    
    
    
    
    
    
    
    
    
    March 312009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeOperating Income (Loss)Specialty Foods
    
    $
    35,910
    
    
    $
    14,361
    
    
    $
    21,549
    
    
    
    150
    %
    
    $
    99,050
    
    
    $
    66,444
    
    
    $
    32,606
    
    
    
    49
    %Glassware and Candles
    
    
    (927
    )
    
    
    (38
    )
    
    
    (889
    )
    
    NM
    
    
    (4,796
    )
    
    
    1,595
    
    
    
    (6,391
    )
    
    
    (401
    )%Corporate Expenses
    
    
    (2,496
    )
    
    
    (2,046
    )
    
    
    (450
    )
    
    
    22
    %
    
    
    (7,719
    )
    
    
    (9,761
    )
    
    
    2,042
    
    
    
    (21
    )%Total
    
    $
    32,487
    
    
    $
    12,277
    
    
    $
    20,210
    
    
    
    165
    %
    
    $
    86,535
    
    
    $
    58,278
    
    
    $
    28,257
    
    
    
    48
    %Operating Income (Loss)
as a Percentage of SalesSpecialty Foods
    
    
    16.6
    %
    
    
    7.3
    %
    
    
    
    
    
    
    
    
    
    
    14.5
    %
    
    
    11.1
    %Glassware and Candles
    
    
    (3.2
    )%
    
    
    
    %
    
    
    
    
    
    
    
    
    
    
    (4.2
    )%
    
    
    1.1
    %Consolidated
    
    
    13.2
    %
    
    
    5.3
    %
    
    
    
    
    
    
    
    
    
    
    10.8
    %
    
    
    7.8
    %
 Interest Expense
  Other Income  Continued Dumping and Subsidy Offset Act
   Interest Income and Other  Net
  Income from Continuing Operations Before Income Taxes
   19




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Income from Continuing Operations
   Discontinued Operations
  Net Income
  FINANCIAL CONDITION
       20




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CONTRACTUAL OBLIGATIONS
  CRITICAL ACCOUNTING POLICIES
  RECENTLY ISSUED ACCOUNTING STANDARDS
    21




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RECENTLY ADOPTED ACCOUNTING STANDARDS
  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 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;
    
    maintenance of competitive position with respect to other manufacturers, including
import sources of production;
    
    the impact of fluctuations in our pension plan asset values on funding levels,
contributions required and benefit costs;
    
    dependence on key personnel;
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##### Table of Contents




    
    stability of labor relations;
    
    fluctuations in energy costs;
    
    dependence on contract copackers;
    
    effect of governmental regulations, including environmental matters;
    
    legislation and litigation affecting the future administration of the Continued
Dumping and Subsidy Offset Act of 2000;
    
    access to any required financing;
    
    changes in income tax laws;
    
    the uncertainty regarding the effect or outcome of our decision to explore
strategic alternatives among our nonfood operations;
    
    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 7, 2009
    
    By:
    
    /s/ John B. Gerlach, Jr.

John B. Gerlach, Jr.Chairman, Chief Executive Officer,President and Director(Principal Executive Officer)Date: May 7, 2009
    
    By:
    
    /s/ John L. Boylan

John 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, 2009
 
 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
  25