PART I

Item 1. Business

GENERAL

     Lancaster Colony Corporation, an Ohio corporation (reincorporated in 1992, successor to a Delaware corporation originally incorporated in 1961), is primarily a manufacturer and marketer of consumer goods. Our focus is manufacturing and marketing of specialty foods for the retail and foodservice markets. We also manufacture and market candles for the food, drug and mass markets. Less significantly, we have operations engaged in the distribution of various products, including glassware and candles, to commercial markets. In recent years, our strategy has shifted away from operating businesses in a variety of industries towards emphasizing the growth and success we have achieved in our Specialty Foods segment. Fiscal 2008 marked another significant year in implementing this strategy as we continued to divest nonfood operations and focus our capital investment in the Specialty Foods segment. Our principal executive offices are located at 37 West Broad Street, Columbus, Ohio 43215 and our telephone number is 614-224-7141.

     As used in this Annual Report on Form 10-K and except as the context otherwise may require, the terms “we,” “us,” “our,” “registrant,” or “the Company” mean Lancaster Colony Corporation and all entities owned or controlled by Lancaster Colony Corporation except where it is clear that the term only means the parent company. Unless otherwise noted, references to “year” pertain to our fiscal year; for example, 2008 refers to fiscal 2008, which is the period from July 1, 2007 to June 30, 2008.

Available Information

     Our Internet Web site address is http://www.lancastercolony.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available through our Web site as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission. The information contained on our Web site or connected to it is not incorporated into this Annual Report on Form 10-K.

DESCRIPTION OF AND FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS

     We operate in two business segments - “Specialty Foods” and “Glassware and Candles” - with the sales of these segments accounting for approximately 82% and 18%, respectively, of consolidated net sales of continuing operations for the year ended June 30, 2008. Previously, we also operated a third segment known as “Automotive.” In June 2008, we sold our remaining automotive operations and eliminated this segment from our continuing operations. The financial information relating to business segments for the three years in the periods ended June 30, 2008, 2007 and 2006 is included in Note 18 to the consolidated financial statements, which is included in Part II, Item 8 of this Annual Report on Form 10-K. Further description of each business segment within which we operate is provided below.

Specialty Foods

     The food products we manufacture and sell include salad dressings and sauces marketed under the brand names “Marzetti,” “T. Marzetti,” “Cardini’s,” “Pfeiffer” and “Girard’s”; fruit glazes, vegetable dips and fruit dips marketed under the brand name “T. Marzetti”; frozen hearth-baked breads marketed under the brand names “New York BRAND” and “Mamma Bella”; frozen Parkerhouse style yeast dinner rolls and sweet rolls, as well as biscuits, marketed under such brand names as “Sister Schubert’s,” “Marshall’s” and “Mary B’s”; premium dry egg noodles marketed under the brand names “Inn Maid” and “Amish Kitchen”; frozen specialty noodles and pastas marketed under the brand names “Reames” and “Aunt Vi’s”; croutons and related products marketed under the brand names “New York BRAND,” “Chatham Village,” “Cardini’s” and “T. Marzetti” and caviar marketed under the brand name “Romanoff.” A portion of our sales in this segment relates to products sold under private label to retailers, distributors and restaurants primarily in the United States. Additionally, a portion of our sales relates to frozen specialty noodles and pastas sold to industrial customers for use as ingredients in their products.

     The dressings, sauces, croutons, fruit glazes, vegetable dips, fruit dips, frozen hearth-baked breads and yeast rolls are sold primarily through sales personnel, food brokers and distributors in various metropolitan areas in the United States with sales being made to retail, club stores and foodservice markets. We have strong placement of products in U.S. grocery produce departments through our refrigerated salad dressings, vegetable and fruit dips, and croutons. Within the frozen aisles of grocery retailers, we also have prominent market positions of frozen yeast rolls, as well as garlic breads. Products we sell in the foodservice markets are often custom-formulated and include salad dressings, sandwich and dipping sauces, frozen breads and yeast rolls. Similar to our retail efforts, we utilize our research and development resources to accommodate a strong desire for new and differentiated products among our foodservice users. The dry egg noodles and frozen specialty noodles are sold through sales personnel, food brokers and distributors to retail, foodservice and industrial markets principally in the central and midwestern United States.

     Sales attributable to one customer comprised approximately 13%, 13% and 12% of this segment’s total net sales in 2008, 2007 and 2006, respectively. No other customer accounted for more than 10% of this segment’s total net sales. Although we have the leading market share in several product categories, all of the markets in which we sell food products are highly competitive in the areas of price, quality and customer service.

     The Specialty Foods segment reported its 38th consecutive year of record sales in 2008. Our strong retail brands and product development capabilities continue to be a source of future growth for this segment. In foodservice markets, we attempt to expand existing customer relationships and pursue new opportunities by leveraging our culinary skills and experience to support the development of new menu offerings. Acquisitions are also a component of our future growth plans, with a focus on fit and value. The 2007 acquisition of Marshall Biscuit Company, Inc., a privately owned producer and marketer of frozen yeast rolls and biscuits, is the most recent example of this segment’s growth through complementary acquisitions.

     A significant portion of this segment’s product lines is manufactured at our 16 plants located throughout the United States. However, certain items are also manufactured and packaged by third parties located in the United States, Canada and England under contractual agreements established by us.

     Efficient and cost-effective production remains a key focus of the Specialty Foods segment. Beyond this segment’s ongoing initiatives for cost savings and operational improvements, we recently completed the construction of two new production facilities in Hart County, Kentucky. In 2007, we began production at our new salad dressing plant with the incremental capacity enabling us to achieve operating efficiencies at both the new and existing dressing plant locations. In 2008, we started production at a newly constructed facility for the manufacture of frozen yeast rolls. This new facility is helping to satisfy increased customer demand and improve operating efficiencies.

     The operations of this segment are not affected to any material extent by seasonal fluctuations. We do not utilize any franchises or concessions in this business segment. The trademarks that we utilize are significant to the overall success of this segment. The patents and licenses under which we operate, however, are not essential to the overall success of this segment.

Glassware and Candles

     We sell candles, candle accessories, and other home fragrance products in a variety of sizes, forms and fragrance in retail markets to mass merchants, supermarkets, drug stores and specialty shops under the “Candle-lite” brand name. A portion of our candle business is marketed under private label. Of less significance, we also sell candles, glassware and various other products to customers in certain commercial markets, including restaurants, hotels, hospitals and schools.

     All the markets in which we sell candle products are highly competitive in the areas of design, price, quality and customer service. Sales attributable to one customer comprised approximately 34%, 30% and 29% of this segment’s total net sales in 2008, 2007 and 2006, respectively. No other customer accounted for more than 10% of this segment’s total net sales.

     Seasonal retail stocking patterns cause certain of this segment’s products to experience increased sales in the first half of the fiscal year. We do not use any franchises or concessions in this segment. The patents and

licenses under which we operate are not essential to the overall success of this segment. Certain trademarks are important, however, to this segment’s marketing efforts.

     In March 2007, we announced the closing of our industrial glass operation located in Lancaster, Ohio. Active business operations have ceased for this operation and we are attempting to sell the remaining real estate.

     In November 2007, as part of a strategic alternative review of nonfood operations, we announced the sale of most of our consumer and floral glass operating assets. These operations generated net sales of approximately $18 million in 2008 and approximately $53 million in both 2007 and 2006.

NET SALES BY CLASS OF PRODUCTS

     The following table sets forth business segment information with respect to the percentage of net sales contributed by each class of similar products that account for at least 10% of our consolidated net sales in any year from 2006 through 2008:

		2008				2007				2006
Specialty Foods:
Retail			42	%			40	%			41	%
Foodservice			41	%			37	%			36	%
Glassware and Candles:
Consumer Table and Giftware			15	%			18	%			18	%

     Net sales attributable to Wal-Mart Stores, Inc. (“Wal-Mart”) totaled approximately 17%, 17% and 16% of consolidated net sales for 2008, 2007 and 2006, respectively.

RESEARCH AND DEVELOPMENT

     The estimated amount spent during each of the last three years on research and development activities determined in accordance with generally accepted accounting principles is not considered material.

BACKLOG

     The nature of our backlog varies by segment. Orders in our Specialty Foods segment are generally filled in three to seven days following the receipt of the order. In our Glassware and Candles segment, certain orders are received in a highly seasonal manner, and the timing of the receipt of several large customer orders can materially impact the amount of the backlog at any point in time without being an indication of longer-term sales. Due to these variables, we do not view the amount of backlog at any particular point in time as a meaningful indicator of longer-term shipments.

ENVIRONMENTAL MATTERS

     Certain of our operations are subject to various Federal, state and local environmental protection laws. Based upon available information, compliance with these laws and regulations is not expected to have a material adverse effect upon the level of capital expenditures, earnings or our competitive position for the remainder of the current and succeeding year.

EMPLOYEES AND LABOR RELATIONS

     As of June 30, 2008, we had approximately 3,500 employees. Approximately 23% of these employees are represented under various collective bargaining agreements, which expire at various times through calendar year 2013. While we believe that labor relations with unionized employees are good, a prolonged labor dispute could have a material adverse effect on our business and results of operations.

FOREIGN OPERATIONS AND EXPORT SALES

     Foreign operations and export sales have not been significant in the past and are not expected to be significant in the future based upon existing operations.

RAW MATERIALS

     During 2008, we obtained adequate supplies of raw materials for all of our segments. We rely on a variety of raw materials for the day-to-day production of our products, including soybean oil, certain dairy-related products, flour, fragrances and colorant agents, paraffin wax and plastic and paper packaging materials.

     We purchase the majority of these materials on the open market to meet current requirements, but we also have some longer-term, fixed-price contracts. See further discussion in our contractual obligations disclosure in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Although the availability of certain of these materials has become more influenced by the level of global demand, we anticipate that future sources of supply will generally be adequate for our needs.

Item 1A. Risk Factors

     An investment in our common stock is subject to certain risks inherent in our business. The material risks and uncertainties that we believe affect us are described below. Before making an investment decision, you should carefully consider the risks and uncertainties described below, together with all of the other information included or incorporated by reference in this Annual Report on Form 10-K. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are not aware of, or focused on, or that we currently deem immaterial, may also impair our business operations.

     If any of the following risks occur, our financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of our common stock could decline significantly.

Competitive conditions within our markets could impact our sales volumes and operating margins.

     Competition within all our markets is intense and is expected to remain so. Numerous competitors exist, many of which are larger in size. Global production overcapacity has also had an impact on operations within our Glassware and Candles segment. These competitive conditions could lead to significant downward pressure on the prices of our products, which could have a material adverse effect on our revenues and profitability.

     Competitive considerations in the various product categories in which we sell are multifaceted and include price, product innovation, product quality, brand recognition and loyalty, effectiveness of marketing, promotional activity and the ability to identify and satisfy consumer preferences. In order to protect existing market share or capture increased market share among our retail channels, we may decide to increase our spending on marketing, advertising and new product innovation. The success of marketing, advertising and new product innovation is subject to risks, including uncertainties about trade and consumer acceptance. As a result, any increased expenditures we make may not maintain or enhance market share and could result in lower profitability.

Wal-Mart is our largest customer, and the loss of its business could cause our sales and net income to decrease.

     Our net sales to Wal-Mart represented approximately 17% of consolidated net sales for the year ended June 30, 2008. We believe that our relationship with Wal-Mart is good, but we cannot assure that we will be able to maintain this relationship. The loss of, or a significant reduction in, this business could have a material adverse effect on our sales and profitability. Unfavorable changes in Wal-Mart’s financial condition could also have a material adverse effect on our business and results of operations.

Increases in the costs or limitations to the availability of raw materials we use to produce our products could adversely affect our business by increasing our costs to produce goods.

     We purchase a majority of our key raw materials on the open market. Our ability to avoid the adverse effects of a pronounced, sustained price increase in our raw materials is limited. However, we try to limit our exposure to price fluctuations for raw materials by occasionally entering into longer-term, fixed-price contracts for certain raw materials. Our principal raw-material needs include soybean oil, various dairy-

related products, flour, paper and plastic packaging materials and paraffin wax. We have observed increased pricing on many of these raw materials in recent years. During 2007, and more so in 2008, commodity markets for grain-based products, on which our food products depend, including dairy, soybean oil and flour products, rose significantly and became extremely volatile due to recent concerns over grain-based fuel sources and worldwide demand for petroleum. Further, escalating petroleum costs have adversely impacted our costs of paraffin wax and inbound freight on all purchased materials. We anticipate that future sources of supply will generally be adequate for our needs, but disruptions in availability and increased prices could have a material adverse effect on our business and results of operations.

     The increase in the costs of raw materials used in our Specialty Foods segment during 2007 and 2008 had an adverse impact on our operating income. We have taken, and plan to take, further measures to offset the impact of these higher costs, including the implementation of higher pricing. However, uncertainty exists as to our ability to implement these measures, as well as the reaction of consumers to them. There is also no assurance that we will not experience further increases in the costs of raw materials. Such further increases, as well as an inability to effectively implement additional measures to offset higher costs, could have a material adverse effect on our business and results of operations.

A disruption of production at certain of our manufacturing facilities could result in an inability to provide adequate levels of customer service.

     Because we produce certain products at a single manufacturing site, it is possible that we could experience a production disruption that results in a reduction or elimination of the availability of some of our products. Should we not be able to obtain alternate production capability in a timely manner, a negative impact on our operations could result.

We may be subject to product recalls or product liability claims for misbranded, adulterated, contaminated or spoiled food products or defective consumer products.

     Our operations could be impacted by both genuine and fictitious claims regarding our products and our competitors’ products. Under adverse circumstances, we may need to recall some of our products if they become adulterated, misbranded, contaminated, or contain a defect, which could create a substantial product hazard or create an unreasonable risk of serious injury or death, and we may also be liable if the consumption of any of our products causes injury.

     Any claim or product recall could result in noncompliance with regulations of the Food and Drug Administration or the U.S. Consumer Product Safety Commission. Such an action could force us to stop selling our products and create significant adverse publicity that could harm our credibility and decrease market acceptance of our products.

     If we are required to defend against a product liability claim, whether or not we are found liable under the claim, we could incur substantial costs, our reputation could suffer and our customers might substantially reduce their existing or future orders from us.

     In addition, either a significant product recall or a product liability claim involving a competitor’s products or products in markets related to those in which we compete could result in a loss of consumer confidence in our products or our markets generally and could have a material impact on consumer demand. For example, in fiscal 2007, media reports of contaminated produce products led to a decrease in consumer demand for bagged salads, which affected sales of our Specialty Foods segment.

Increases in energy-related costs could negatively affect our business by increasing our costs to produce goods.

     We are subject to volatility in energy-related costs that affect the cost of producing our products. This is especially true in our Glassware and Candles segment, in which we use large amounts of paraffin wax, and in our Specialty Foods segment, in which we utilize petroleum-derived packaging materials. Increases in these types of costs could have a material adverse effect on our business and results of operations.

The availability and cost of transportation for our products is vital to our success, and the loss of availability or increase in the cost of transportation could have an unfavorable impact on our business and results of operations.

     Our ability to obtain adequate and reasonably priced methods of transportation to distribute our products is a key factor in our success. Our Specialty Foods segment requires the use of refrigerated trailers to ship many of its products. Delays in transportation, especially in our Specialty Foods segment, where orders are generally filled in three to seven days following the receipt of the order, could have a material adverse effect on our business and results of operations. Further, high fuel costs also impact our financial results. We are often required to pay fuel surcharges to third-party transporters of our products due to high fuel costs. These fuel surcharges can be substantial and increase our cost of goods sold. If we are unable to pass those high costs to our customers in the form of price increases, those high costs could have a material adverse effect on our business and results of operations.

Our inability to successfully renegotiate union contracts and any prolonged work stoppages or other business disruptions could have an adverse effect on our business and results of operations.

     Three of our union contracts will be subject to renegotiation during fiscal 2009. We believe that our labor relations with unionized employees are good, but our inability to successfully negotiate the renewal of these contracts could have a material adverse effect on our business and results of operations. Any prolonged work stoppages could also have an adverse effect on our results of operations.

     We are also subject to risks of other business disruptions associated with our dependence on our production facilities and our distribution systems. Natural disasters, terrorist activity or other events could interrupt our production or distribution and have a material adverse effect on our business and results of operations.

There is no certainty regarding the amount of future CDSOA distributions.

     The Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”) provides for the distribution of monies collected by U.S. Customs from antidumping cases to qualifying domestic producers. Our reported CDSOA receipts totaled approximately $2.5 million, $0.7 million, and $11.4 million in 2008, 2007 and 2006, respectively. These remittances related to certain candles being imported from the People’s Republic of China.

     The CDSOA has faced a growing number of legal challenges. In February 2006, legislation was enacted to repeal the applicability of the CDSOA to duties collected on imported products after September 2007. This legislation is expected to reduce any distributions in years after 2007, with distributions eventually ceasing. In addition, the U.S. Court of International Trade (“CIT”) ruled in two separate cases that the procedure for determining recipients eligible to receive CDSOA distributions is unconstitutional. The CIT rulings are still under appeal, and other cases have been brought, from time to time, challenging various aspects of the CDSOA. The ultimate resolution of ongoing litigation concerning the CDSOA and the effects, if any, the litigation will have on our financial results or receipt of future CDSOA distributions, are uncertain. Based on the current legal challenges, it is possible that we may not receive any CDSOA distributions in 2009 and beyond.

Restructuring and impairment charges could have a material adverse effect on our financial results.

     We recorded restructuring and impairment charges totaling approximately $1.3 million and $3.5 million in 2008 and 2007, respectively, including less than $0.1 million and approximately $1.4 million recorded in cost of sales for the write-down of inventories in 2008 and 2007, respectively. Likewise, future events may occur that would adversely affect the reported value of our assets and require impairment charges. Such events may include, but are not limited to, strategic decisions made in response to changes in economic and competitive conditions, the impact of the economic environment on our customer base, or a material adverse change in our relationship with significant customers.

We may not be able to successfully consummate proposed acquisitions or divestitures or integrate acquired businesses.

     From time to time, we evaluate acquiring other businesses that would strategically fit within our various operations. If we are unable to consummate, successfully integrate and grow these acquisitions and to realize contemplated revenue synergies and cost savings, our financial results could be adversely affected. In addition, we may, from time to time, divest businesses that are less of a strategic fit within our portfolio or do not meet our growth or profitability targets. As a result, our profitability may be impacted by either gains or losses on the sales of those businesses or lost operating income or cash flows from those businesses. We may also not be able to divest businesses that are not core businesses or may not be able to do so on terms that are favorable to us. Further, a buyer’s inability to fulfill contractual obligations that were assigned as part of a business divestiture, including those relating to customer contracts, could lead to future financial loss on our part. In addition, we may be required to incur asset impairment or restructuring charges related to acquired or divested businesses, which may reduce our profitability and cash flows. These potential acquisitions or divestitures present financial, managerial and operational challenges, including diversion of management attention from existing businesses, difficulty with integrating or separating personnel and financial and other systems, increased expenses, assumption of unknown liabilities, indemnities and potential disputes with the buyers or sellers.

Potential indemnification costs relating to business divestitures could have a material adverse effect on our business and results of operations.

     We made several business divestitures in 2008 and 2007. These divestitures were made pursuant to agreements that contain customary indemnification provisions, some of which run in favor of the purchasers. In the future, if any of these indemnification provisions are triggered, we may be required to make indemnification payments to these purchasers or other parties. Any potential payments that we may be required to make under our divestiture agreements could have a material adverse effect on our business and results of operations.

A future increase in our indebtedness could adversely affect our profitability and operational flexibility.

     For the first time in several years, we began incurring borrowings in 2007. These borrowings continued throughout 2008. We anticipate that such indebtedness will persist in 2009, perhaps at higher average levels than in 2008. A consequence of such indebtedness could be a reduction in the level of our profitability due to higher interest expense. Depending on the future extent and availability of our borrowings, we could also become more vulnerable to economic downturns, require curtailment of cash dividends or share repurchases, reduce or delay beneficial expansion or investment plans, or otherwise be unable to meet our obligations when due.

We are subject to Federal, state and local government regulations that could adversely affect our business and results of operations.

     Certain of our business operations are subject to regulation by various Federal, state and local government entities and agencies. As a producer of food products for human consumption, our operations are subject to stringent production, packaging, quality, labeling and distribution standards, including regulations mandated by the Federal Food, Drug and Cosmetic Act. We cannot predict if future regulation by various Federal, state and local governmental entities and agencies would adversely affect our business and results of operations.

     In addition, our business operations and the past and present ownership and operation of our properties are subject to extensive and changing Federal, state and local environmental laws and regulations pertaining to the discharge of materials into the environment, the handling and disposition of wastes (including solid and hazardous wastes) or otherwise relating to protection of the environment. We cannot assure that environmental issues relating to presently known matters or identified sites or to other matters or sites will not require additional, currently unanticipated investigation, assessment or expenditures.

We rely on the value of our brands, and the costs of maintaining and enhancing the awareness of our brands are increasing, which could have an adverse impact on our revenues and profitability.

     We rely on the success of our well-recognized brand names. We intend to maintain our strong brand recognition by continuing to devote resources to advertising, marketing and other brand-building efforts. If we are not successful in maintaining our brand recognition, this could have a material adverse effect on our business and results of operations.

Inherent risks associated with our idle real property, such as our inability to sell it in a reasonable time period, could have an adverse effect on our business and results of operations.

     As a result of recent strategic alternative activities, we currently hold various parcels of real property that are not currently used in our operations. These facilities have a net book value at June 30, 2008 of approximately $3.2 million. In addition, we may make further specific determinations in the future with respect to additional facilities or sell other operations while retaining the associated real property. These determinations could be announced at any time. Possible adverse consequences resulting from or related to these properties may include various accounting charges, disposition costs related to the potential sale of a property, costs associated with leasing obligations, and other normal or attendant risks and uncertainties associated with holding, leasing or selling real property.

     Although most of our properties have been subjected to periodic environmental assessments, these assessments may be limited in scope and may not include or identify all potential environmental liabilities or risks associated with any particular property. We cannot be certain that our environmental assessments have identified all potential environmental liabilities or that we will not incur material environmental liabilities in the future. If we do incur or discover any material environmental liabilities or potential environmental liabilities in the future, we may face significant remediation costs and find it difficult to sell or lease any affected properties.

     In addition, if and as these properties become ready and available for sale, it may take months and possibly longer to sell these properties at a suitable price. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell a property for the price or on the terms set by us or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We cannot predict the length of time needed to find a willing purchaser and to close the sale of any property. If we are unable to sell a property when we determine to do so, it could have an adverse effect on our cash flow and results of operations.

Item 1B. Unresolved Staff Comments

     None

Item 2. Properties

     We use approximately 2.8 million square feet of space for our operations. Of this space, approximately 0.5 million square feet are leased.

     The following table summarizes our locations that in total exceed 75,000 square feet of space (including aggregation of multiple facilities) and that are considered our principal manufacturing and warehousing operations:

				Approximate				Terms of
Location		Business Segment		Square Feet				Occupancy
Altoona, IA (1)		Specialty Foods			109,000			Owned/Leased
Bedford Heights, OH (1)		Specialty Foods			98,000			Owned/Leased
Columbus, OH (1)		Specialty Foods			392,000			Owned/Leased
Grove City, OH		Specialty Foods			195,000			Owned
Horse Cave, KY		Specialty Foods			333,000			Owned
Luverne, AL		Specialty Foods			91,000			Owned
Milpitas, CA (2)		Specialty Foods			130,000			Owned/Leased
Wilson, NY		Specialty Foods			80,000			Owned
Leesburg, OH		Glassware and Candles			860,000			Owned
Jackson, OH		Glassware and Candles			122,000			Owned

     As a result of our strategic alternative activities, we also hold various parcels of real property that we do not currently use in our operations. The related facilities contain in excess of 2 million square feet.

Item 3. Legal Proceedings

     We currently are a party to various legal proceedings. Such matters did not have a material adverse effect on the current-year results of operations. While we believe that the ultimate outcome of these various proceedings, individually and in the aggregate, will not have a material adverse effect on our financial position or future results of operations, litigation is always subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include monetary damages or an injunction prohibiting us from manufacturing or selling one or more products. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on net income for the period in which the ruling occurs and future periods.

Item 4. Submission of Matters to a Vote of Security Holders

     None

PART II

Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

     Our common stock trades on The NASDAQ Global Select Market under the symbol LANC. The following table sets forth the high and low prices for Lancaster Colony Corporation common shares and the dividends paid for each quarter of 2008 and 2007. Stock prices were provided by The NASDAQ Stock Market LLC.

										Dividends
		Stock Prices								Paid
		High				Low				Per Share
2008
First quarter		$	44.02			$	35.89			$	.27
Second quarter			44.10				36.11				.28
Third quarter			41.05				32.72				.28
Fourth quarter			41.62				30.27				.28
Year										$	1.11
2007
First quarter		$	46.00			$	37.28			$	.26
Second quarter			47.38				39.31				.27
Third quarter			45.96				39.99				.27
Fourth quarter			45.09				41.23				.27
Year										$	1.07

     The number of shareholders as of August 20, 2008 was approximately 6,400. The highest and lowest prices for our common stock from July 1, 2008 to August 20, 2008 were $38.00 and $29.57.

     We have paid dividends for 180 consecutive quarters. Future dividends will depend on our earnings, financial condition and other factors.

Issuer Purchases of Equity Securities

     Our Board of Directors (“Board”) approved a share repurchase authorization of 2,000,000 shares in August 2007. Approximately 1,005,000 shares from this authorization remained authorized for future purchase at June 30, 2008. In the fourth quarter, we made the following repurchases of our common stock:

										Total Number
		Total				Average				of Shares				Maximum Number
		Number				Price				Purchased as				of Shares That May
		of Shares				Paid Per				Part of Publicly				Yet be Purchased
Period		Purchased				Share				Announced Plans				Under the Plans
April 1-30, 2008			95,250			$	39.91				95,250				1,275,199
May 1-31, 2008			240,260			$	32.55				240,260				1,034,939
June 1-30, 2008			30,155			$	31.71				30,155				1,004,784
Total			365,665			$	34.40				365,665				1,004,784

     This share repurchase authorization does not have a stated expiration date.

PERFORMANCE GRAPH

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
OF LANCASTER COLONY CORPORATION, THE S&P MIDCAP 400 INDEX
AND THE DOW JONES U.S. FOOD PRODUCERS INDEX

     The graph set forth below compares the five-year cumulative total return from investing $100 on June 30, 2003 in each of our Common Stock, the S&P Midcap 400 Index and the Dow Jones U.S. Food Producers Index. It is assumed that all dividends are reinvested.

Cumulative Total Return (Dollars)

				6/03					6/04					6/05					6/06					6/07					6/08
	Lancaster Colony Corporation				100.00					109.95					116.01					114.99					125.13					93.20
	S&P Midcap 400				100.00					127.98					145.94					164.88					195.40					181.07
	Dow Jones U.S. Food Producers				100.00					120.67					126.81					137.93					161.55					146.84

     There can be no assurance that our stock performance will continue into the future with the same or similar trends depicted in the above graph.

Item 6. Selected Financial Data

LANCASTER COLONY CORPORATION AND SUBSIDIARIES
FIVE YEAR FINANCIAL SUMMARY

(Thousands Except		Years Ended June 30
Per Share Figures)		2008				2007				2006				2005				2004
Operations
Net Sales(1)		$	980,915			$	945,810			$	924,571			$	907,345			$	870,351
Gross Margin(1)		$	157,341			$	181,740			$	189,074			$	191,014			$	188,479
Percent of Sales			16.0	%			19.2	%			20.4	%			21.1	%			21.7	%
Interest Expense		$	(3,076	)		$	(150	)		$	—			$	—			$	—
Percent of Sales			0.3	%			0.0	%			0.0	%			0.0	%			0.0	%
Other Income — Continued Dumping and Subsidy Offset Act		$	2,533			$	699			$	11,376			$	26,226			$	1,987
Income from Continuing Operations Before Income Taxes(1)		$	75,668			$	101,260			$	125,734			$	141,928			$	116,432
Percent of Sales			7.7	%			10.7	%			13.6	%			15.6	%			13.4	%
Taxes Based on Income(1)		$	27,229			$	36,981			$	44,494			$	52,550			$	43,559
Income from Continuing Operations(1)		$	48,439			$	64,279			$	81,240			$	89,378			$	72,873
Percent of Sales			4.9	%			6.8	%			8.8	%			9.9	%			8.4	%
Income (Loss) from Discontinued Operations, Net of Tax		$	2,633			$	(3,475	)		$	1,714			$	3,710			$	7,129
Loss on Sale of Discontinued Operations, Net of Tax		$	(13,452	)		$	(15,120	)		$	—			$	—			$	—
Net Income		$	37,620			$	45,684			$	82,954			$	93,088			$	80,002
Percent of Sales			3.8	%			4.8	%			9.0	%			10.3	%			9.2	%
Diluted Income (Loss) per Common Share:
Continuing Operations(1)		$	1.64			$	2.03			$	2.42			$	2.56			$	2.04
Discontinued Operations		$	(.37	)		$	(.59	)		$	.05			$	.11			$	.20
Net Income		$	1.28			$	1.45			$	2.48			$	2.67			$	2.24
Cash Dividends per Common Share		$	1.11			$	1.07			$	3.03			$	.98			$	.89
Financial Position
Cash, Equivalents and Short-Term Investments(1)		$	19,417			$	8,316			$	41,815			$	184,580			$	178,503
Total Assets		$	520,178			$	598,497			$	628,021			$	731,278			$	712,885
Working Capital		$	144,925			$	137,121			$	235,283			$	370,559			$	358,274
Property, Plant and Equipment-Net(1)		$	179,573			$	194,589			$	162,107			$	131,837			$	134,325
Long-Term Debt		$	55,000			$	—			$	—			$	—			$	—
Property Additions(1)		$	16,832			$	53,589			$	51,860			$	18,917			$	13,329
Depreciation and Amortization(1)		$	24,138			$	24,081			$	24,980			$	26,351			$	23,717
Shareholders’ Equity		$	359,218			$	444,309			$	494,421			$	587,726			$	586,785
Per Common Share		$	12.63			$	14.45			$	15.33			$	17.17			$	16.54
Weighted Average Common Shares Outstanding–Diluted			29,499				31,603				33,502				34,925				35,778

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 years in the periods ended June 30, 2008, 2007 and 2006 and our liquidity and capital resources as of June 30, 2008 and 2007. 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, 2008 refers to fiscal 2008, which is the period from July 1, 2007 to June 30, 2008. In the discussion that follows, we analyze the results of our operations for the last three years, including the trends in our overall business, followed by a discussion of our cash flows and liquidity and contractual obligations. We then provide a review of the critical accounting policies and estimates that we believe are most important to an understanding of our MD&A and our consolidated financial statements. We conclude our MD&A with information on recently issued accounting pronouncements.

     The following discussion should be read in conjunction with the “Selected Financial Data” and our consolidated financial statements and the notes thereto, all included elsewhere in this Annual Report on Form 10-K. 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

     Lancaster Colony Corporation is primarily a manufacturer and marketer of consumer goods. Our focus is manufacturing and marketing specialty foods for the retail and foodservice markets. We also manufacture and market candles for the food, drug and mass markets. Less significantly, we have operations engaged in the distribution of various products, including glassware and candles, to commercial markets. Our operating businesses are organized in two reportable segments: Specialty Foods and Glassware and Candles. Over 90% of the sales of each segment are made to customers in the United States.

     In recent years, our strategy has shifted away from operating businesses in a variety of industries towards emphasizing the growth and success we have achieved in our Specialty Foods segment. Fiscal 2008 marked another significant year in implementing this strategy as we continued to divest nonfood operations and focus our capital investment in the Specialty Foods segment. In June 2008, we sold substantially all of the assets of our remaining automotive operations. In November 2007, we sold most of our consumer and floral glass operating assets. These transactions, combined with other strategic dispositions and investments in 2007 and 2008, have resulted in transforming our company into a food-focused business. In 2008, approximately 82% of our consolidated net sales and effectively all of our operating income were derived from the Specialty Foods segment. For perspective, in 1998, our Specialty Foods segment comprised approximately 41% and 40% of our reported consolidated net sales and operating income, respectively. Below is a list of the material transactions and other events that have contributed toward our transition to a food-focused business over the past two fiscal years:

	•		June 2008 — Sale of the remaining automotive operations, ending the previously reported Automotive segment;
	•		November 2007 — Sale of substantially all of the operating assets of our consumer and floral glass operations;
	•		September 2007 — Substantial completion and operational start-up of new frozen yeast roll facility in Horse Cave, Kentucky. This facility adjoins the dressing facility noted below and allows us to take advantage of various synergies;
	•		June 2007 — Sale of our automotive accessory operations based in Coshocton, Ohio and LaGrange, Georgia;

	•		June 2007 — Acquisition of Marshall Biscuit Company, Inc. (“Marshall Biscuit”);
	•		March 2007 — Sale of automotive accessory operations in Wapakoneta, Ohio;
	•		March 2007 — Initiated closure of our industrial glass operations located in Lancaster, Ohio; and