Earl Brown – IR Jay Gerlach – Chairman, CEO and President John Boylan – VP, CFO, Treasurer and Assistant Secretary

Mitchell Pinheiro – Janney Montgomery Jason Rodgers – Great Lakes Review David Leibowitz – Horizon Investments Sarah Lester – Sidoti & Company

Good morning. My name is Chris and I will be your conference operator today. At this time, I would like to welcome everyone to the Lancaster Colony Corporation's third fiscal quarter 2009 results conference call. Conducting today's call will be Jay Gerlach, Lancaster Colony Chairman and CEO, and John Boylan, Vice President, Treasurer and CFO. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. (Operator instructions) Thank you. And now to begin your conference, here is Earl Brown, Lancaster Colony Investor Relations.

Good morning. Let me also say thank you for joining us today for the Lancaster Colony third quarter fiscal year 2009 conference call. Now please bear with me while we take care of a few details. As with other presentations of this type, today's discussion by Jay Gerlach, Chairman and CEO, and John Boylan, Vice President, Treasurer and CFO, will contain forward-looking statements of what may happen in the future, including statements relating to Lancaster Colony's sales prospects, growth rates, expected future levels of profitability, as well as the extent of share repurchases and business acquisitions to be made by the company. These forward-looking statements are based on numerous assumptions and are subject to uncertainties and risks. Accordingly, investors are cautioned not to place undue reliance on such statements. Factors that might cause Lancaster's results to differ materially from forward-looking statements include but are not limited to risks relating to the economy, competitive challenges, changes in raw materials costs, the success of new product introductions, the effect of any restructurings and other factors as are discussed from time to time in more detail in the company's filings with the SEC, including Lancaster Colony's report on Form 10-K. Please note that the cautionary statements contained in the Safe Harbor paragraph of today's news release also apply to this conference call. Now here is Jay Gerlach. Jay?

Good morning and thank you for joining us. We are pleased to report a much improved third fiscal quarter, with sales up nearly 7% and earnings per share of $0.76 versus $0.30 in last year’s unusually weak quarter. For the second quarter in a row, we saw operating margins in the Specialty Foods segment returned to more historical mid-teen levels. During the quarter, we did not repurchase any shares and have 27,976,000 shares outstanding and 509,000 shares still authorized to repurchase. Capital expenditures totaled $2.2 million in the quarter and $8.9 million year-to-date. We would likely see full year capital expenditures of less than $15 million. With the help of both good earnings and inventory control, we reduced our outstanding debt at quarter-end to $15 million. Turning to our Specialty Foods segment, for the quarter we saw sales growth of 10%, of which about 7% was pricing and an operating margin of 16.5%. Most of our product lines contributed to the sales growth with pricing being the primary factor to the retail channel as unit volume was near flat. Our food service channel delivered sales growth as unit volume was up in this channel. Our sales of croutons from branded frozen retail breads and rolls outperformed that of our salad dressing and dip lines. Ingredient costs finally turned favorable year-over-year during the quarter by about $2 million. Freight costs also showed modest savings. Plant operating efficiency showed improvement as our entire operations team remains focused on enhancing productivity. Within the Glassware and Candles segment, candle sales declined for the quarter although they were actually a bit better than we had initially expected. The segment sales were certainly impacted by the deterioration in economic conditions, but we were encouraged by some new product placement, some beneficial planogram changes, and seeing some customers with better and expected sell-through. Our margins remained under significant pressure as high wax cost and reduced capacity utilization impacted our cost of sales. Wax costs are off their peaks, but not immediately helping the income statement. Let me ask John to make a few comments relative to our balance sheet and cash flows.

Thanks, Jay. Let’s start out by discussing several key components of our consolidated balance sheet. Consolidated accounts receivable at March 31, 2009 totaled $72,355,000. This amount represented a 22% increase over last June’s total and was about 14% about the level of last March. The relative strength in timing of the quarter sales led to this growth. With respect to our inventory, there we have a different story. Our consolidated total of approximately $91 million at the end of this March decreased nearly $30 million or 25% from the level of the past June. Further, on a year-over-year basis, our March inventories declined about $15 million or 14%. Seasonal factors influenced the June to March decline, but improved operating practices within our candle operations have also contributed to both these comparative declines, especially on a year-over-year basis. With respect to borrowings, our long-term debt of roughly $15 million has dropped $40 million since June 30, in part reflecting the extent of cash flow generated on our higher levels of profitability. We are obviously pretty well capitalized at the present time, with our gross debt outstanding a relatively modest 4% or so of total capitalization. Except for the items I've already discussed, I believe the other changes in our balance sheet components are relatively unremarkable. Starting with cash flows, I’d like to share a few items for your consideration. For the nine months ended March 31, 2009, Lancaster's consolidated cash flows provided by operating activities of continuing operations totaled approximately $92.8 million, which is well above the $63.5 million level of a year ago. This increase reflects some comparatively favorable changes in working capital components, especially from inventories as well as the impact of the higher level of consolidated net income through March. Within the current fiscal year, depreciation and amortization for the first nine months totaled $16,362,000, and shareholder dividends were $23,850,000. In concluding my remarks, just a brief comment on our corporate expenses and the consolidated tax provision for the quarter. As I mentioned on the last quarter’s call, we are incurring some costs associated with certain disposed non-food operations in our corporate expenses. These costs include amounts associated with idle real estate things held for sale as well as costs associated with serving of our defined benefit pension plan. We anticipate that these costs will continue for the foreseeable future at varying levels, although hopefully diminish over time. With respect to our consolidated tax provision, somewhat similar to a year ago, effective tax rate for the quarter of 34.7% was a tad lower than normal, reflecting factors associated with our state and local provisions. We anticipate a fourth quarter rate closer to that of the effective year-to-date rate. I appreciate your attention this morning and I’ll now turn the call back to Jay for our concluding remarks.

Thank you, John. Looking to our fourth quarter, we have developed some confidence in seeing better year-over-year food operating margins, but are cautious as to sales and unit volume growth. So far in April, our branded retail demand looks okay, while the food service channel demand is a bit off what we are seeing in recent months. Our list pricing has not changed, but we may see promotional spending perhaps increasing over time if necessary to address competitive activity. Our key new products of New York brand Dip'N Sticks and Ciabatta Cheese Rolls continue to perform well, as do our New York brand Texas Toast croutons. Marzetti hummus is starting to gain traction with several new customers. Current new product introductions include new flavors of hummus and our New York Texas Toast tortilla strips, just being shown to the trade. While the fourth quarter will have comparatively less favorable pricing impact in the third quarter, ingredient costs should be more favorable. We expect that off-season candle demand may pick up a bit from our earlier expectations, but operating margins are not likely to see significant improvement from lower wax costs and the benefits of any higher volumes until fiscal 2010. For now, we have put share repurchase on hold and are careful of capital expending, as we build a strong balance sheet for these uncertain times and opportunities that may come our way. Thank you for your interest and let me thank all members of our organization who strive everyday to make these improved results possible. Chris, we are ready to take questions.

(Operator instructions) Your first question comes from Mitchell Pinheiro with Janney Montgomery. Mitchell Pinheiro – Janney Montgomery: Hey, good morning.

Good morning, Mitch. Mitchell Pinheiro – Janney Montgomery: Hey, it was a heck of a quarter. First, I want to try to quantify – I may have missed it in your prepared remarks, Jay, the commodity cost impact. Did you define that?

Yes, I think I said it was about $2 million favorable. Mitchell Pinheiro – Janney Montgomery: $2 million favorable. So that’s declining. Is that in terms of year-over-year comparison? Is that declining? I know that was the first time – was that the first time it turned positive?

Yes, in several quarters. I don't know exactly how many, but yes. Mitchell Pinheiro – Janney Montgomery: Okay, all right. And so then – in your fourth quarter comments you talked – you sort of said that pricing is less favorable, material will be more favorable. Is that –?

Yes, that is what we see. We are anniversarying price increases, but it does look like ingredient costs should come down further, year-over-year. Mitchell Pinheiro – Janney Montgomery: Okay. Got you. When you look at the food service piece of the business, is pricing holding in food service?

Well, Mitch, as we’ve talked in the past, that pricing generally fluctuates pretty closely to input costs. So there's not – has not been dramatic negative impact yet, but we’ll start to see more of that I think as we go through the fourth quarter and the next year. Mitchell Pinheiro – Janney Montgomery: Is there like a quarter lag or two-quarter lag? Or is there a way I could think about that?

I don’t think it’s quite that quantifiable. So I couldn’t give you a specific time frame, Mitch. Mitchell Pinheiro – Janney Montgomery: Okay. When – a touch surprised that the premium products will be like Marzetti, the categories are holding up. What type of – can you define or can you talk about the category growth in refrigerated dressings?

Actually the category growth there is not really holding up too well, Mitch. I think if we look at just the most recent 10-week or 12-week period, we’d see refrigerated dressings up slightly. But veggie, fruit, apple dips, that whole area is showing negative comparisons. Mitchell Pinheiro – Janney Montgomery: Okay. So the refrigerated dressings up slightly, even despite we had the decline we’ve seen – decline in bag lettuce, bag salads. Has that had an impact on your business?

Part of what's having an impact is consumers do seem to be buying less fresh produce right now. Obviously if you don’t have the produce, you don't necessarily need the dips or the dressings to the same degree. Mitchell Pinheiro – Janney Montgomery: Right.

There is also the opportunity, particularly on the dressing side for the consumer to – if they want to trade down, they can certainly look to the grocery shelf instead of the produce department for – and refrigerated dressings. Mitchell Pinheiro – Janney Montgomery: Right. But the fact that refrigerated dressings were up slightly is – I mean, it’s not an anomaly, but to mean it seems to be bucking the trend of – it's not people aren’t trading down there. And there is less fresh produce. What do you think drives that category? Just more eating at home? Is that it, plain and simple, or –?

I mean, yes, I think that may be the one thing that is up on the category, yes. Mitchell Pinheiro – Janney Montgomery: Okay. When you look at the frozen – the New York brand products, how are they performing in the marketplace?

In the whole frozen bread category, we see a category that is showing some modest growth. And there we generally are growing the category, again, I think helped by some of the new products that we’ve been talking about for the last couple of quarters. Mitchell Pinheiro – Janney Montgomery: Right. In the frozen bread side, can you talk about – when I go to stores and I look private label, let’s say, the core product, the frozen garlic toast seems to be about half the price of the branded, either yours or your competitor’s. Is that – are you seeing any move in private label in that segment, or is that – are people really more brand loyal?

I think private label is getting a little bit of share there. But I don’t think there is typically that big a spread between branded and private label. You may see that in certain stores perhaps, but I think more broadly it’s not that big a discrepancy. Mitchell Pinheiro – Janney Montgomery: Okay. Did the early Easter – you talked about it in the – you said the later Easter this year, I kind of thought the Easter was earlier this year versus last year.

No, it’s about three weeks later. So that probably did push a little bit of volume actually from this third quarter into the fourth quarter. Mitchell Pinheiro – Janney Montgomery: I’m sorry, that’s what I meant. But – so you did not benefit – you actually got hurt?

On a comparative basis, yes. That was a little bit unfavorable. And that’s particularly in our sister Schubert product line that has a fair amount of holiday kick to it and maybe to a lesser degree, but perhaps a little bit of that in the veggie dip and dressing area, refrigerated dressing. Mitchell Pinheiro – Janney Montgomery: Okay, got it. Also last question, on your candle business, the wax costs, what’s the underlying driver of like sort of the – you know, wax is down, but still up. What’s the underlying driver that stubbornness?

Stubbornness of the – Mitchell Pinheiro – Janney Montgomery: (inaudible) on the cost side, I mean it doesn’t seem to have – I mean, you would expect on a year-over-year based on petroleum costs, it would be down significantly, but it doesn’t seem like you’re seeing the benefit there.

Well, the other factor I think is there is a limited number of suppliers of wax. And they are certainly doing their best to hang on, I’m sure, to the margins that they have today. Mitchell Pinheiro – Janney Montgomery: So –

It has been slow coming down, you’re right. Mitchell Pinheiro – Janney Montgomery: Yes. Okay. And in terms of pricing, how much pricing were you able to get in candles on a year-over-year basis?

Mitch, this is John. I think that the pricing within the candle side, it’s a little harder to quantify than in the food just because of the SKU turnover that we see on candles. But broadly speaking, I’d say in the high-single digits on many of the continuing items. And also let’s go back to your earlier question regarding the lag and seeing a drop in wax cost. I’d note that from an accounting standpoint within our financials, there is some lag in getting recognition of lower wax cost to the bottom line just because of the slower turnover at the candle inventory. So you will see some of that lower wax cost begin to come through as we move late into the fourth quarter and into early fiscal 2010. Mitchell Pinheiro – Janney Montgomery: Okay. All right. Well, thank you.

Thanks, Mitch.

Your next question comes from Jason Rodgers with Great Lakes Review. Jason Rodgers – Great Lakes Review: Hello.

Good morning. Jason Rodgers – Great Lakes Review: Looking at your pricing, you mentioned in the fourth quarter it’s not going to be as great of a benefit it was in the third. I was wondering if you had maybe a range where you think pricing might end up in the quarter to the fourth.

Jason, we can’t give you a range on that. We just recognize that – again, we’re anniversarying price increases on our retail product line and we’ll probably see a little bit of deflationary pricing on the food service side of the business. Jason Rodgers – Great Lakes Review: Okay. And given you’re now seeing positive raw material costs and just in general raw material costs have come down pretty dramatically from what they were a year ago, are you seeing pricing pressure both from your supermarket customers on the retail side? And also just looking at competition in general, given what’s happened with the economy if you’re seeing more aggressive attempts from your competitors?

As it relates to the trade, Jason, I think there are routine discussions around pricing as there always are. So I wouldn’t describe it as dramatically different than what we usually deal with every day. I’m sorry, the other part of your question was –? Jason Rodgers – Great Lakes Review: Just competition, are you seeing increases there –?

We are seeing in a couple of – relative to a couple of our product lines some step-up competitive activity, but not anything we describe as dramatic or significant at this point. Jason Rodgers – Great Lakes Review: Okay, thank you.

Sure. You’re welcome.

(Operator instructions) Your next question comes from David Leibowitz with Horizon Investments. David Leibowitz – Horizon Investments: Good morning.

Hello, David.

Hello, David. David Leibowitz – Horizon Investments: A few quickies. First, are you gaining or losing share of market in your key product lines?

I think we are holding flat to gaining share in key product lines. I don’t think we have any that actually are going the other way on us. David Leibowitz – Horizon Investments: Excellent. Second, on the balance sheet, the interest income and other and interest expense, there were significant moves, one year-over-year. How do you explain that?

We might recognize interest rates are much lower than a year ago, plus our borrowings outstanding are down substantially as well. David Leibowitz – Horizon Investments: Okay. And if I move candles completely out of the picture, I move the government giving you money much greater amount this year versus last year. We have few shares outstanding. What does the operating number look like on the pretax line versus a year ago?

That I don’t have it at hand, David, and I can get back to you on that. David Leibowitz – Horizon Investments: It would be so kind, thank you. Two others. Nothing was said about acquisitions on the call. Usually you have at least throwaway line, we're trying but they think their company is worth more than we do. Is there anything to report at all?

David, no, there is. We continue to look for opportunities, but it’s been a very, very quiet deal market. So, nothing really to report there. We’re obviously interested there. Longer term, I think that’s an opportunity that the strong balance sheet may help us execute on if the opportunity develops. But it’s very quiet right now. David Leibowitz – Horizon Investments: Okay. And Jay, you said the capital expenditures for the fiscal year will be roughly $15 million. What was it last year?

I think last year in total was a little over $16 million is my recollection. We might actually be less than $15 million. David Leibowitz – Horizon Investments: Okay. But it’s basically $1 million, $2 million differential year-over-year.

Yes, in that range. David Leibowitz – Horizon Investments: Do you still have properties left to be sold?

We sure do. David Leibowitz – Horizon Investments: And what are they on the balance sheet for right now?

The net carrying value of those properties, David, is in the neighborhood of $2.5 million. David Leibowitz – Horizon Investments: And what were they originally on the books for?

I couldn’t tell you what the original cost of those properties would be, as many of those have been with the company many years. Those are largely idle manufacturing facilities held from an accounting standpoint as available for sale. David Leibowitz – Horizon Investments: :

We will see. It will depend upon how we're able to dispose of those properties. Obviously the industrial real estate market at the present time is relatively slow, although we have been able to dispose of a couple properties within the current fiscal year. We have a handful more to work our way through. David Leibowitz – Horizon Investments: And do we have very much in the way of new product to be introduced during the fiscal fourth quarter?

David, right now the two things that I’ll quickly mention, the new hummus flavors as well as the New York tortilla strips are the primary things on the food retail side. They are getting introduced and have any impact in the fourth quarter. On the food service side, there are always new things being developed. I really couldn’t give you a sense of exactly what that might look like in the fourth quarter, but there will be new things going on there. David Leibowitz – Horizon Investments: And given the price wars the fast food restaurant chains, have you seen any pickup in your business as a consequence?

I don’t know that there is anything we can attribute to specific price wars or competitive activity. But I think our food service business through the third quarter anyhow has frankly performed pretty well. I think we’ve had the good fortune of some new products and programs that have come our way over the last 12 months that have ramped up. And we are fortunate to have some good customers there that maybe are seeing better results than the broader industry. I wouldn’t necessarily attribute it to just more competitive activity. David Leibowitz – Horizon Investments: And last question if I may. The trend with raw material costs coming down, if you annualize where we stand currently for the fiscal year upcoming, how much of a dollar savings would that amount to?

And David, I’m not quite sure the time period that you’re looking for – David Leibowitz – Horizon Investments: I would say, fiscal 2010 that commences on July 1, for the full year, if raw material costs would remain where they are right now and that can come down further, how much of the annual savings would that amount to?

I don’t think at this time we can comment on that. We don’t have a good number on hand, frankly, for the full fiscal year. Clearly, as you look back for the first three quarters of the current fiscal year, we have nearly $30 million of adverse cost comparison. We should be able to, at current cost levels, recover a good chunk of that over the next 12 months would be my guess. David Leibowitz – Horizon Investments: That’s a great start. And I’d say, thank you very much.

Thank you.

Your next question comes from Sarah Lester with Sidoti & Company. Sarah Lester – Sidoti & Company: Good morning.

Good morning, Sarah. Sarah Lester – Sidoti & Company: Just one quick question on food service. I guess could you break that out a little bit more and talk about quick serve versus casual dining?

Well, again, I think we are – you know, our food service business is skewed a little bit more to the quick serve end of the business. But actually I think as we look at – I mean, what we’ve seen current demand-wise from some even of our casual food service customers, volume is soft but not as much as you might think given all the bad news you hear out there. Sarah Lester – Sidoti & Company: And then I guess one other related question. I think you had said 3% of growth is from volume in Specialty Foods and volume was slight in retail. Was that correct?

Yes, yes. Our total – of our 10% growth, 7% of that was pricing and about 3% was volume and some mix benefit. Sarah Lester – Sidoti & Company: Okay. So that implies that unit volume in food service is roughly 6% pretty good. Is that right?

I think that’s in the ballpark, yes. Sarah Lester – Sidoti & Company: Okay. Is that more attributed to sort of special items or special products, or is it just – you're just seeing continued strong growth there?

Well, I think it is again helped by new products and programs, and almost by definition, most things we do in the food service channel are special because they are almost all custom formulated for our customers. Sarah Lester – Sidoti & Company: Okay. Okay, thank you.

You’re welcome.

There are no further questions at this time. I will turn the call back over to Mr. Gerlach for any concluding remarks.

Well, thank you for joining us this morning. We are looking forward to talking to your about our fourth quarter and full fiscal year 2009 results in August. Thank you.

This concludes today's conference call. You may now disconnect.