UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2015



¨	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		43215
(Address of principal executive offices)		(Zip Code)

614-224-7141

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large Accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ¨ No ý

As of ~~April 24,~~October 22, 2015,, there were ~~27,357,000~~27,365,823 shares of Common Stock, without par value, outstanding.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS





PART I – FINANCIAL INFORMATION		3

Item 1.	Condensed Consolidated Financial Statements (unaudited):

	Condensed Consolidated Balance Sheets – ~~March 31,~~September 30, 2015 and June 30, ~~2014~~2015	3

	Condensed Consolidated Statements of Income – Three ~~and Nine~~ Months Ended ~~March 31,~~September 30, 2015 and 2014	4

	Condensed Consolidated Statements of Comprehensive Income – Three ~~and Nine~~ Months Ended ~~March 31,~~September 30, 2015 and 2014	5

	Condensed Consolidated Statements of Cash Flows – ~~Nine~~Three Months Ended ~~March 31,~~September 30, 2015 and 2014	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1613

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2117

Item 4.	Controls and Procedures	2117

PART II – OTHER INFORMATION		2218

Item 1A.	Risk Factors	2218

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2218

Item 6.	Exhibits	2218

SIGNATURES		2319

INDEX TO EXHIBITS		2420

PART I – FINANCIAL INFORMATION



~~Item 1.~~	~~Condensed Consolidated Financial Statements~~

Item 1. Condensed Consolidated Financial Statements

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


(Amounts in thousands, except share data)	March 31, 2015			June 30, 2014			September 30, 2015			June 30, 2015
ASSETS
Current Assets:
Cash and equivalents	$	161,417		$	211,539		$	199,410		$	182,202
Receivables (less allowance for doubtful accounts, March-$194; June-$432)	69,374			57,808
Receivables (less allowance for doubtful accounts, September-$147; June-$206)							74,141			62,437
Inventories:
Raw materials	29,951			28,069			34,158			30,655
Finished goods	42,319			46,447			55,997			47,244
Total inventories	72,270			74,516			90,155			77,899
Deferred income taxes and other current assets	26,128			23,428			18,273			20,460
Total current assets	329,189			367,291			381,979			342,998
Property, Plant and Equipment:
Land, buildings and improvements	112,836			107,690			113,938			113,844
Machinery and equipment	253,537			238,791			256,789			253,143
Total cost	366,373			346,481			370,727			366,987
Less accumulated depreciation	190,878			177,807			199,640			194,676
Property, plant and equipment-net	175,495			168,674			171,087			172,311
Other Assets:
Goodwill	126,723			89,840			143,788			143,788
Other intangible assets-net	51,696			5,376			47,025			47,771
Other noncurrent assets	8,127			7,449			8,148			8,076
Total	$	691,230		$	638,630		$	752,027		$	714,944
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	43,796		$	37,907		$	48,798		$	38,823
Accrued liabilities	33,226			31,165			47,694			35,821
Total current liabilities	77,022			69,072			96,492			74,644
Other Noncurrent Liabilities	20,868			22,208			23,694			23,654
Deferred Income Taxes	23,969			18,753			35,119			35,728
Commitments and Contingencies
Shareholders’ Equity:
Preferred stock-authorized 3,050,000 shares; outstanding-none
Common stock-authorized 75,000,000 shares; outstanding – March-27,356,804 shares; June-27,339,421 shares	107,020			104,789
Common stock-authorized 75,000,000 shares; outstanding – September-27,364,707 shares; June-27,360,581 shares							108,448			107,767
Retained earnings	1,206,136			1,167,211			1,234,161			1,219,119
Accumulated other comprehensive loss	(7,874		)	(8,061		)	(9,976		)	(10,057		)
Common stock in treasury, at cost	(735,911		)	(735,342		)	(735,911		)	(735,911		)
Total shareholders’ equity	569,371			528,597			596,722			580,918
Total	$	691,230		$	638,630		$	752,027		$	714,944

See accompanying notes to condensed consolidated financial statements.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)


	Three Months Ended March 31,						Nine Months Ended March 31,						Three Months Ended September 30,
(Amounts in thousands, except per share data)	2015			2014			2015			2014			2015		2014
Net Sales	$	263,400		$	241,849		$	826,798		$	782,267		$	294,085	$	259,987
Cost of Sales	206,775			189,941			634,096			591,565			226,118		202,563
Gross Margin	56,625			51,908			192,702			190,702			67,967		57,424
Selling, General and Administrative Expenses	25,417			23,073			76,674			69,251			26,079		22,820
Operating Income	31,208			28,835			116,028			121,451			41,888		34,604
Interest Income and Other-Net	(138		)	(204		)	(177		)	(328		)	122		8
Income From Continuing Operations Before Income Taxes	31,070			28,631			115,851			121,123
Income Before Income Taxes													42,010		34,612
Taxes Based on Income	10,667			9,731			39,733			41,038			14,382		11,851
Income From Continuing Operations	20,403			18,900			76,118			80,085
Discontinued Operations, Net of Tax:
Income from discontinued operations	—			325			—			3,175
Loss on sale of discontinued operations	—			(29,601		)	—			(29,601		)
Total discontinued operations	—			(29,276		)	—			(26,426		)
Net Income (Loss)	$	20,403		$	(10,376	)	$	76,118		$	53,659
Income Per Common Share From Continuing Operations:
Net Income													$	27,628	$	22,761
Net Income Per Common Share:
Basic and diluted	$	0.75		$	0.69		$	2.78		$	2.93		$	1.01	$	0.83
Loss Per Common Share From Discontinued Operations:
Basic and diluted	$	—		$	(1.07	)	$	—		$	(0.97	)
Net Income (Loss) Per Common Share:
Basic	$	0.75		$	(0.38	)	$	2.78		$	1.97
Diluted	$	0.75		$	(0.38	)	$	2.78		$	1.96

Cash Dividends Per Common Share	$	0.46		$	0.44		$	1.36		$	1.28		$	0.46	$	0.44

Weighted Average Common Shares Outstanding:
Basic	27,303			27,261			27,294			27,258			27,319		27,286
Diluted	27,330			27,297			27,323			27,303			27,344		27,316

See accompanying notes to condensed consolidated financial statements.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)


	Three Months Ended March 31,						Nine Months Ended March 31,						Three Months Ended September 30,
(Amounts in thousands)	2015			2014			2015			2014			2015			2014
Net Income (Loss)	$	20,403		$	(10,376	)	$	76,118		$	53,659
Net Income													$	27,628		$	22,761
Other Comprehensive Income:
Defined Benefit Pension and Postretirement Benefit Plans:
Amortization of loss, before tax	100			109			300			325			131			100
Amortization of prior service asset, before tax	(1		)	(1		)	(3		)	(3		)	(1		)	(1		)
Total Other Comprehensive Income, Before Tax	99			108			297			322			130			99
Tax Attributes of Items in Other Comprehensive Income:
Amortization of loss, tax	(38		)	(41		)	(111		)	(120		)	(49		)	(36		)
Amortization of prior service asset, tax	1			1			1			1			—			—
Total Tax Expense	(37		)	(40		)	(110		)	(119		)	(49		)	(36		)
Other Comprehensive Income, Net of Tax	62			68			187			203			81			63
Comprehensive Income (Loss)	$	20,465		$	(10,308	)	$	76,305		$	53,862
Comprehensive Income													$	27,709		$	22,824

See accompanying notes to condensed consolidated financial statements.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine Months Ended March 31,						Three Months Ended September 30,
(Amounts in thousands)	2015			2014			2015			2014
Cash Flows From Operating Activities:
Net income	$	76,118		$	53,659		$	27,628		$	22,761
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,937			15,596			6,039			4,766
Deferred income taxes and other noncash changes	2,527			5,144			(791		)	(1,218		)
Stock-based compensation expense	2,211			1,777			785			811
Excess tax benefit from stock-based compensation	(456		)	(927		)	(186		)	(167		)
Gain on sale of property	—			(6		)
Loss on sale of discontinued operations	—			44,027
Pension plan activity	(444		)	(182		)	(74		)	(148		)
Changes in operating assets and liabilities:
Receivables	(8,981		)	(10,813		)	(11,633		)	(5,336		)
Inventories	5,996			7,901			(12,256		)	(4,095		)
Other current assets	(1,853		)	(13,602		)	2,587			7,317
Accounts payable and accrued liabilities	6,508			(3,779		)	21,212			11,227
Net cash provided by operating activities	96,563			98,795			33,311			35,918
Cash Flows From Investing Activities:
Cash paid for acquisition, net of cash acquired	(92,217		)	—			(12		)	—
Payments on property additions	(15,752		)	(8,143		)	(3,360		)	(7,940		)
Proceeds from sale of property	—			6
Proceeds from sale of discontinued operations	—			25,616
Other-net	(1,410		)	(854		)	(331		)	(93		)
Net cash (used in) provided by investing activities	(109,379		)	16,625
Net cash used in investing activities							(3,703		)	(8,033		)
Cash Flows From Financing Activities:
Purchase of treasury stock	(569		)	(3,120		)
Payment of dividends	(37,193		)	(34,960		)	(12,586		)	(12,030		)
Excess tax benefit from stock-based compensation	456			927			186			167
Decrease in cash overdraft balance	—			(324		)
Net cash used in financing activities	(37,306		)	(37,477		)	(12,400		)	(11,863		)
Net change in cash and equivalents	(50,122		)	77,943			17,208			16,022
Cash and equivalents at beginning of year	211,539			123,385			182,202			211,539
Cash and equivalents at end of period	$	161,417		$	201,328		$	199,410		$	227,561
Supplemental Disclosure of Operating Cash Flows:
Cash paid during the period for income taxes	$	37,835		$	36,941		$	2,237		$	478

See accompanying notes to condensed consolidated financial statements.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

Note 1 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and SEC Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, the interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the results of operations and financial position for such periods. All such adjustments reflected in the interim condensed consolidated financial statements are considered to be of a normal recurring nature. The results of operations for any interim period are not necessarily indicative of results for the full year. Accordingly, these financial statements should be read in conjunction with the financial statements and notes thereto contained in our ~~2014~~2015 Annual Report on Form 10-K. ~~Prior-year results reflect the classification of the sold candle manufacturing and marketing operations as discontinued operations.~~ Unless otherwise noted, the term “year” and references to a particular year pertain to our fiscal year, which begins on July 1 and ends on June 30; for example, ~~2015~~2016 refers to fiscal ~~2015~~2016, which is the period from July 1, ~~2014~~2015 to June 30, ~~2015~~2016.

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation, except for those acquired as part of a business combination, which are stated at fair value at the time of purchase. Purchases of property, plant and equipment included in accounts payable and excluded from the property additions and the change in accounts payable in the Condensed Consolidated Statements of Cash Flows were as follows:

March 31,
2015 2014
Construction in progress in accounts payable $ 489
$ 1,465

~~Accrued Distribution~~

~~Accrued distribution costs included in accrued liabilities were $6.1 million and $6.4 million at March 31, 2015 and June 30, 2014, respectively.~~



	September 30,
	2015		2014
Construction in progress in accounts payable	$	616	$	1,081

Earnings Per Share

Earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock and common stock equivalents (restricted stock and stock-settled stock appreciation rights) outstanding during each period. Unvested shares of restricted stock granted to employees are considered participating securities since employees receive nonforfeitable dividends prior to vesting and, therefore, are included in the earnings allocation in computing EPS under the two-class method. Basic EPS excludes dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing income available to common shareholders by the diluted weighted average number of common shares outstanding during the period, which includes the dilutive potential common shares associated with nonparticipating restricted stock and stock-settled stock appreciation rights.

Basic and diluted net income per common share were calculated as follows:



	Three Months Ended September 30,
	2015			2014
Net income	$	27,628		$	22,761
Net income available to participating securities	(35		)	(39		)
Net income available to common shareholders	$	27,593		$	22,722

Weighted average common shares outstanding – basic	27,319			27,286
Incremental share effect from:
Nonparticipating restricted stock	5			5
Stock-settled stock appreciation rights	20			25
Weighted average common shares outstanding – diluted	27,344			27,316

Net income per common share – basic and diluted	$	1.01		$	0.83

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

~~Basic and diluted income per common share from continuing operations were calculated as follows:~~

Three Months Ended
March 31, Nine Months Ended
March 31,
2015 2014 2015 2014
Income from continuing operations $ 20,403
$ 18,900
$ 76,118
$ 80,085
Income from continuing operations available to participating securities (26 ) (21 ) (109 ) (139 )
Income from continuing operations available to common shareholders $ 20,377
$ 18,879
$ 76,009
$ 79,946

Weighted average common shares outstanding – basic 27,303
27,261
27,294
27,258
Incremental share effect from:
Nonparticipating restricted stock 2
2
3
3
Stock-settled stock appreciation rights 25
34
26
42
Weighted average common shares outstanding – diluted 27,330
27,297
27,323
27,303

Income per common share from continuing operations – basic and diluted $ 0.75
$ 0.69
$ 2.78
$ 2.93

Reclassifications Out of Accumulated Other Comprehensive Loss

The following table presents the amounts reclassified out of accumulated other comprehensive loss by component:


	Three Months Ended March 31,						Nine Months Ended March 31,						Three Months Ended September 30,
	2015			2014			2015			2014			2015			2014
Accumulated other comprehensive loss at beginning of period	$	(7,936	)	$	(8,256	)	$	(8,061	)	$	(8,391	)	$	(10,057	)	$	(8,061	)
Defined Benefit Pension Plan Items:
Amortization of unrecognized net loss ⁽¹⁾	107			115			321			345			135			107
Postretirement Benefit Plan Items:
Amortization of unrecognized net gain ⁽¹⁾	(7		)	(6		)	(21		)	(20		)	(4		)	(7		)
Amortization of prior service asset ⁽¹⁾	(1		)	(1		)	(3		)	(3		)	(1		)	(1		)
Total other comprehensive income, before tax	99			108			297			322			130			99
Total tax expense	(37		)	(40		)	(110		)	(119		)	(49		)	(36		)
Other comprehensive income, net of tax	62			68			187			203			81			63
Accumulated other comprehensive loss at end of period	$	(7,874	)	$	(8,188	)	$	(7,874	)	$	(8,188	)	$	(9,976	)	$	(7,998	)

(1) Included in the computation of net periodic benefit income/cost. See Notes 79 and 810 for additional information.

Significant Accounting Policies

There were no changes to our Significant Accounting Policies from those disclosed in our ~~2014~~2015 Annual Report on Form 10-K.

~~LANCASTER COLONY CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular amounts in thousands, except per share data)~~

Recently Issued Accounting Standards

In ~~May 2014,~~July 2015, the Financial Accounting Standards Board (“FASB”) issued ~~Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers~~new accounting guidance which requires entities to measure most inventory “at the lower of cost or net realizable value,” ~~(“ASU 14-09”)~~thereby simplifying current guidance. Under current guidance an entity must measure inventory at the lower of cost or market, where market is defined as one of three different measures, one of which ~~creates~~is net realizable value. The guidance will be effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2016. We are currently evaluating this guidance, but do not believe it will have a ~~comprehensive set of guidelines~~material impact on our consolidated financial statements.

In May 2014, the FASB issued new accounting guidance for the recognition of revenue under the principle: “Recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” ~~The requirements~~Following a one-year deferral of ~~ASU 14-09 are~~the effective date, the guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, ~~2016~~2017 and will require either retrospective application to each prior period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. We are currently evaluating the impact of this ~~ASU~~guidance.

Recently Adopted Accounting Standards

In September 2015, the FASB issued new accounting guidance which allows entities to prospectively reflect adjustments made to provisional amounts recognized for a business combination during the measurement period. Under the current guidance these adjustments need to be reflected retrospectively as if the accounting had been completed at the acquisition date. The guidance will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 but can be adopted early if financial statements have not been issued. We are adopting this guidance effective July 1, 2015, but it is not expected to have a material impact on our consolidated financial ~~position and results of operations.~~statements.

Note 2 – Acquisition

On March 13, 2015, we acquired all of the issued and outstanding capital stock of Flatout Holdings, Inc. (“Flatout”), a privately owned manufacturer and marketer of flatbread wraps and pizza crusts based in Saline, Michigan. The purchase price, net of cash acquired, was $92.2 million and was funded by cash on hand. ~~The purchase price is subject to the finalization of cash and net working capital adjustments.~~ Flatout is reported in our Specialty Foods segment, and its results of operations have been included in our ~~condensed~~ consolidated financial statements from the date of ~~acquisition, but such results were not material to our condensed consolidated financial statements.~~

The following preliminary purchase price allocation is based on the estimated fair value of the net assets acquired, as adjusted for the estimate of the final net working capital of $0.2 million recorded as of March 31:

Balance Sheet Captions Allocation
Receivables $ 2,532
Inventories 3,748
Other current assets 512
Property, plant and equipment 7,198
Goodwill (not tax deductible) 36,883
Other intangible assets 47,100
Current liabilities (2,310 )
Deferred tax liabilities (3,225 )
Net assets acquired $ 92,438

Further adjustments are expected to the allocation above as the third-party valuation is finalized and certain tax aspects of the transaction and a customary post-closing review are completed during the measurement period.

The goodwill recognized above arose because the purchase price for Flatout reflects a number of factors including the future earnings and cash flow potential of Flatout and the avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance our existing product offerings and enter the supermarket deli department. Goodwill also results from the workforce acquired with Flatout.

We have determined the preliminary values and lives of the other intangible assets listed in the allocation above as: $37.6 million for the tradename with an indefinite life; $5.0 million for the customer relationships with a 10-year life; $3.9 million for the technology / know-how with a 10-year life and $0.6 million for the non-compete agreements with a 5-year life. We will continue to evaluate these values and lives during the measurement period.

~~Pro forma results of operations have not been presented herein as the acquisition was not considered material to our results of operations.~~acquisition.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

~~Note 3 – Goodwill and Other Intangible Assets~~

~~Goodwill attributable to~~The following preliminary purchase price allocation is based on the ~~Specialty Foods segment was $126.7 million and $89.8 million at~~ ~~March 31, 2015~~ ~~and~~ ~~June 30, 2014, respectively. The increase in goodwill is the result~~fair value of the ~~acquisition of Flatout on March 13, 2015. See further discussion in Note 2.~~

~~The following table is a rollforward of goodwill from June 30, 2014 to~~ ~~March 31, 2015~~:net assets acquired:

Carrying Value
Goodwill at beginning of year $ 89,840
Goodwill acquired during the period 36,883
Goodwill at end of period $ 126,723



Balance Sheet Captions	Allocation
Receivables	$	2,479
Inventories	3,748
Other current assets	212
Property, plant and equipment	6,937
Goodwill (not tax deductible)	53,948
Other intangible assets	44,000
Current liabilities	(2,445		)
Deferred tax liabilities	(16,651		)
Net assets acquired	$	92,228

~~The following table summarizes our identifiable other intangible assets, all included in the Specialty Foods segment. The intangible asset values and lives related~~Further adjustments may occur to the ~~Flatout acquisition, which~~allocation above as certain tax aspects of the transaction are ~~included in the table below, are preliminary and subject to further review over~~finalized during the measurement period. ~~See further discussion in Note 2.~~

March 31,
2015 June 30,
2014
Tradename (indefinite life)
Gross carrying value $ 37,600
$ —
Trademarks (40-year life)
Gross carrying value $ 370
$ 370
Accumulated amortization (221 ) (214 )
Net carrying value $ 149
$ 156
Customer Relationships (10 to 15-year life)
Gross carrying value $ 18,020
$ 13,020
Accumulated amortization (8,531 ) (7,800 )
Net carrying value $ 9,489
$ 5,220
Technology / Know-how (10-year life)
Gross carrying value $ 3,900
$ —
Accumulated amortization (32 ) —
Net carrying value $ 3,868
$ —
Non-compete Agreements (5-year life)
Gross carrying value $ 600
$ —
Accumulated amortization (10 ) —
Net carrying value $ 590
$ —
Total net carrying value $ 51,696
$ 5,376

~~Amortization expense for our other intangible assets was as follows:~~

Three Months Ended
March 31, Nine Months Ended
March 31,
2015 2014 2015 2014
Amortization expense $ 308
$ 236
$ 780
$ 709

~~LANCASTER COLONY CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular amounts in thousands, except per share data)~~

~~Total annual amortization expense for each of the next five years is estimated to be as follows:~~

2016 $ 1,785
2017 $ 1,614
2018 $ 1,614
2019 $ 1,614
2020 $ 1,574

Note 43 – Long-Term Debt

At ~~March 31,~~September 30, 2015 and June 30, ~~2014,~~2015, we had an unsecured credit facility (“Facility”) under which we may borrow, on a revolving credit basis, up to a maximum of $120 million at any one time, with potential to expand the total credit availability to $200 million ~~based on~~subject to us obtaining consent of the issuing banks and certain other conditions. The Facility expires on April 18, 2017, and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to LIBOR or an alternative base rate defined in the credit agreement, at our option. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. Loans may be used for general corporate purposes. ~~Based on the long-term nature of this Facility, when~~When we have outstanding borrowings under this Facility, they will be classified as long-term ~~debt.~~debt due to the long-term nature of this Facility.

At ~~March 31,~~September 30, 2015 and June 30, ~~2014,~~2015, we had no borrowings outstanding under this Facility. At ~~March 31,~~September 30, 2015, we had $~~4.2~~4.7 million of standby letters of credit outstanding, which reduced the amount available for borrowing on the Facility. We paid no interest for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2015 and 2014. ~~At March 31, 2015 and June 30, 2014, we exceeded the requirements of the financial covenants by substantial margins.~~

The Facility contains certain restrictive covenants, including limitations on indebtedness, asset sales and acquisitions. There are two principal financial covenants: an interest expense test that requires us to maintain an interest coverage ratio not less than 2.5 to 1 at the end of each fiscal quarter; and an indebtedness test that requires us to maintain a consolidated leverage ratio not greater than 3 to 1 at all times. The interest coverage ratio is calculated by dividing Consolidated EBIT (as defined more specifically in the credit agreement) by Consolidated Interest Expense (as defined more specifically in the credit agreement), and the leverage ratio is calculated by dividing Consolidated Debt (as defined more specifically in the credit agreement) by Consolidated EBITDA (as defined more specifically in the credit agreement).

Note 54 – ~~Income Taxes~~

~~Prepaid Federal, state~~Commitments and ~~local income taxes of $10.3 million and $9.7 million were included in deferred income taxes and other current assets at March 31, 2015 and June 30, 2014, respectively.~~Contingencies

~~The gross tax contingency reserve at~~At ~~March 31,~~September 30, 2015 ~~was~~ ~~$1.0 million~~, we were a party to various claims and ~~consisted~~litigation matters arising in the ordinary course of ~~tax liabilities of~~ ~~$0.6 million~~ ~~and interest and penalties of~~ ~~$0.4 million. We have~~business. Such matters did not ~~classified any of the gross tax contingency reserve as current liabilities as none of these amounts are expected to be resolved within the next 12 months. The entire liability of~~ ~~$1.0 million~~ ~~was included in other noncurrent liabilities. We expect that the amount of these liabilities will change within the next 12 months; however, we do not expect the change to~~ have a ~~significant~~material effect on the current-year results of operations and, in our opinion, their ultimate disposition will not have a material effect on our consolidated financial ~~position or results of operations. We recognize interest and penalties related to these tax liabilities in income tax expense.~~statements.

Note 65 – ~~Stock-Based Compensation~~Goodwill and Other Intangible Assets

~~Our shareholders previously approved the adoption of and subsequent amendments~~Goodwill attributable to the ~~Lancaster Colony Corporation 2005 Stock Plan (the “2005 Plan”). The 2005 Plan reserved~~Specialty Foods segment was $143.8 million at ~~2,000,000~~September 30, 2015 ~~common shares for issuance to our employees~~ and directors, and all awards granted under the 2005 Plan will be exercisable at prices not less than fair market value as of the date of the grant. The vesting period for awards granted under the 2005 Plan varies as to the type of award granted, but generally these awards have a maximum term of ~~five years~~June 30, 2015.

~~Stock-Settled Stock Appreciation Rights~~

We use periodic grants of stock-settled stock appreciation rights (“SSSARs”) as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. We calculate the fair value of SSSARs grants using the Black-Scholes option-pricing model. Our policy is to issue shares upon SSSARs exercise from new shares that had been previously authorized.

119

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

~~In the nine months ended March 31, 2015 and 2014, we granted SSSARs under the terms of the 2005 Plan.~~ The following table summarizes ~~information relating to these grants:~~our identifiable other intangible assets, all included in the Specialty Foods segment:

Nine Months Ended
March 31,
2015 2014
SSSARs granted 149
146
Weighted average grant date fair value per right $ 9.94
$ 11.84
Weighted average assumptions used in fair value calculations:
Risk-free interest rate 0.86 % 0.75 %
Dividend yield 2.02 % 1.97 %
Volatility factor of the expected market price of our common stock 19.62 % 22.35 %
Weighted average expected life in years 2.71
3.12



	September 30, 2015			June 30, 2015
Tradename (30-year life)
Gross carrying value	$	34,500		$	34,500
Accumulated amortization	(623		)	(365		)
Net carrying value	$	33,877		$	34,135
Trademarks (40-year life)
Gross carrying value	$	370		$	370
Accumulated amortization	(225		)	(223		)
Net carrying value	$	145		$	147
Customer Relationships (10 to 15-year life)
Gross carrying value	$	18,020		$	18,020
Accumulated amortization	(9,241		)	(8,882		)
Net carrying value	$	8,779		$	9,138
Technology / Know-how (10-year life)
Gross carrying value	$	3,900		$	3,900
Accumulated amortization	(211		)	(114		)
Net carrying value	$	3,689		$	3,786
Non-compete Agreements (5-year life)
Gross carrying value	$	600		$	600
Accumulated amortization	(65		)	(35		)
Net carrying value	$	535		$	565
Total net carrying value	$	47,025		$	47,771

For these grants, the volatility factor was estimated based on actual historical volatility of our stock for a time period equal to the term of the SSSARs. The expected average life was determined based on historical exercise experience for this type of grant. The SSSARs we grant vest ~~one-third~~ ~~on the first anniversary of the grant date, one-third on the second anniversary of the grant date and one-third on the third anniversary of the grant date. As needed, we estimate a forfeiture rate~~Amortization expense for our ~~SSSARs grants based on historical experience.~~

~~We recognize compensation expense over the requisite service period. Compensation expense was~~other intangible assets, which is reflected in ~~Cost of Sales or~~ Selling, General and Administrative Expenses, based on the grantees’ salaries expense classification. We recorded tax benefits and excess tax benefits related to SSSARs. These excess tax benefits were included in the financing section of the Condensed Consolidated Statements of Cash Flows. The following table summarizes our continuing operations SSSARs compensation expense and tax benefits recorded:

Three Months Ended
March 31, Nine Months Ended
March 31,
2015 2014 2015 2014
Compensation expense $ 308
$ 304
$ 893
$ 804
Tax benefits $ 108
$ 106
$ 313
$ 281
Intrinsic value of exercises $ 207
$ 2,343
$ 863
$ 2,431
Excess tax benefits $ 72
$ 820
$ 302
$ 851

~~The total fair values of SSSARs vested were~~was as follows:

Nine Months Ended
March 31,
2015 2014
Fair value of vested rights $ 1,245
$ 1,138



	Three Months Ended September 30,
	2015		2014
Amortization expense	$	746	$	236

~~LANCASTER COLONY CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular amounts in thousands, except per share data)~~

~~The following table summarizes the activity relating to SSSARs granted under the 2005 Plan~~Total annual amortization expense for ~~the~~ ~~nine~~ ~~months ended~~ ~~March 31, 2015~~:

Number
of Rights

Weighted
Average
Exercise Price

Weighted
Average
Remaining
Contractual
Life in
Years

Aggregate
Intrinsic
Value
Outstanding at beginning of year 358
$ 76.75

Exercised (54 ) $ 63.54

Granted 149
$ 91.13

Forfeited (31 ) $ 79.42

Outstanding at end of period 422
$ 83.35
3.73 $ 4,984
Exercisable and vested at end of period 154
$ 74.70
2.66 $ 3,150
Vested and expected to vest at end of period 412
$ 83.35
3.73 $ 4,873

~~At March 31, 2015, there was $2.3 million of unrecognized compensation expense related to SSSARs that we will recognize over a weighted-average period of 2 years.~~

~~Restricted Stock~~

We use periodic grants of restricted stock as a vehicle for rewarding our nonemployee directors and certain employees with long-term incentives for their efforts in helping to create long-term shareholder value.

~~In the nine months ended March 31, 2015 and 2014, we granted shares of restricted stock to various employees under the terms~~each of the ~~2005 Plan. The following table summarizes information relating~~next five years is estimated to ~~these grants:~~

Nine Months Ended
March 31,
2015 2014
Employees
Restricted stock granted 9
24
Grant date fair value $ 845
$ 2,190
Weighted average grant date fair value per award $ 91.13
$ 89.21

The restricted stock under these employee grants vests on the third anniversary of the grant date. As needed, we estimate a forfeiture rate for our restricted stock grants based on historical experience. Under the terms of our grants, employees receive dividends on unforfeited restricted stock regardless of their vesting status. In the nine months ended March 31, 2015 and 2014, 19,000 and 6,000 shares, respectively, of employee restricted stock vested.

In November 2014 and 2013, we granted shares of restricted stock to our nonemployee directors under the terms of the 2005 Plan. The following table summarizes information relating to each of these grants:

Nine Months Ended
March 31,
2015 2014
Nonemployee directors
Restricted stock granted 7
6
Grant date fair value $ 639
$ 490
Weighted average grant date fair value per award $ 92.92
$ 84.42

~~The 2015 grant vests over a one-year period, and all of these shares are expected to vest. Dividends earned on the stock during the vesting period will~~ be paid to the directors at the time the stock vests. In the nine months ended March 31, 2015 and 2014, 6,000 and 7,000 shares, respectively, of nonemployee director restricted stock vested, and the directors were paid the related dividends.

~~LANCASTER COLONY CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Tabular amounts in thousands, except per share data)~~

We recognize compensation expense over the requisite service period. Compensation expense was reflected in Cost of Sales or Selling, General and Administrative Expenses based on the grantees’ salaries expense classification. We recorded tax benefits and excess tax benefits related to restricted stock. These excess tax benefits were included in the financing section of the Condensed Consolidated Statements of Cash Flows. The following table summarizes our continuing operations restricted stock compensation expense and tax benefits recorded:

Three Months Ended
March 31, Nine Months Ended
March 31,
2015 2014 2015 2014
Compensation expense $ 384
$ 366
$ 1,318
$ 1,027
Tax benefits $ 134
$ 128
$ 461
$ 359
Excess tax benefits $ 142
$ 68
$ 154
$ 76

~~The total fair values of restricted stock vested were~~ as follows:

Nine Months Ended
March 31,
2015 2014
Fair value of vested shares $ 1,818
$ 877

~~The following table summarizes the activity relating to restricted stock granted under the 2005 Plan for the~~ ~~nine~~ ~~months ended~~ ~~March 31, 2015~~:

Number of
Shares

Weighted Average
Grant Date Fair
Value
Unvested restricted stock at beginning of year 58
$ 79.09
Granted 16
$ 91.89
Vested (25 ) $ 71.86
Forfeited (3 ) $ 79.22
Unvested restricted stock at end of period 46
$ 87.61

~~At March 31, 2015, there was $2.6 million of unrecognized compensation expense related to restricted stock that we will recognize over a weighted-average period of 2 years.~~




2017	$	2,764
2018	$	2,764
2019	$	2,764
2020	$	2,729
2021	$	2,644

Note 76 – ~~Pension Benefits~~Income Taxes

Accrued Federal income taxes of $8.9 million were included in Accrued Liabilities on the Condensed Consolidated Balance Sheet at September 30, 2015. Prepaid Federal income taxes of $3.8 million were included in Deferred Income Taxes and Other Current Assets at June 30, 2015. Prepaid state and local income taxes of $0.3 million and $0.6 million were included in Deferred Income Taxes and Other Current Assets at September 30, 2015 and June 30, 2015, respectively.

The gross tax contingency reserve at September 30, 2015 was $1.5 million and consisted of tax liabilities of $1.0 million and interest and penalties of $0.5 million. We ~~sponsor multiple defined benefit pension plans that covered certain union workers. However,~~have not classified any of the gross tax contingency reserve at September 30, 2015 as a ~~result~~current liability as none of ~~prior-years' restructuring activities, for all periods presented, we no longer have any active employees continuing~~these amounts are expected to ~~accrue service cost or otherwise eligible to receive plan benefits. Benefits being paid under~~be resolved within the ~~plans are primarily based on negotiated rates and years~~next 12 months. Consequently, the entire liability of ~~service.~~$1.5 million was included in other noncurrent liabilities. We ~~contribute to~~expect that the amount of these ~~plans at least~~liabilities will change within the ~~minimum amount required by regulation.~~

~~The following table summarizes the components of net periodic benefit income for our pension plans:~~

Three Months Ended
March 31, Nine Months Ended
March 31,
2015 2014 2015 2014
Components of net periodic benefit income
Interest cost $ 403
$ 439
$ 1,209
$ 1,315
Expected return on plan assets (658 ) (614 ) (1,974 ) (1,842 )
Amortization of unrecognized net loss 107
115
321
345
Net periodic benefit income $ (148 ) $ (60 ) $ (444 ) $ (182 )

~~For the three and nine months ended~~ ~~March 31, 2015, we made~~ no ~~pension plan contributions and~~next 12 months; however, we do not expect the change to ~~make any contributions~~have a significant effect on our financial position or results of operations. We recognize interest and penalties related to ~~our pension plans during~~ these tax liabilities in income tax expense.~~2015~~.

1410

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

Note 7 – Business Segment Information

The September 30, 2015 identifiable assets by reportable segment are consistent with that of June 30, 2015. The following summary of financial information is consistent with the basis of segmentation and measurement of segment profit or loss presented in our June 30, 2015 consolidated financial statements:



	Three Months Ended September 30,
	2015			2014
Net Sales	$	294,085		$	259,987
Operating Income
Specialty Foods	$	44,961		$	37,499
Corporate Expenses	(3,073		)	(2,895		)
Total	$	41,888		$	34,604

Note 8 – ~~Postretirement~~Stock-Based Compensation

Our shareholders previously approved the adoption of and subsequent amendments to the Lancaster Colony Corporation 2005 Stock Plan (the “2005 Plan”). The 2005 Plan reserved 2,000,000 common shares for issuance to our employees and directors, and all awards granted under the 2005 Plan were exercisable at prices not less than fair market value as of the date of the grant. The vesting period for awards granted under the 2005 Plan varies as to the type of award granted, but generally these awards have a maximum term of five years. As the 2005 Plan expired in May 2015, we are seeking shareholder approval for adoption of a new equity compensation plan at our November 2015 Annual Meeting of Shareholders. The new plan will not affect any currently outstanding equity awards granted under the 2005 Plan.

In general, varying levels of stock-settled stock appreciation rights (“SSSARs”) and restricted stock awards are granted to certain employees in the third fiscal quarter each year. Restricted stock grants to our nonemployee directors generally occur in the second fiscal quarter each year.

We recognize compensation expense over the requisite service period of the grant. Compensation expense is reflected in Cost of Sales or Selling, General and Administrative Expenses based on the grantees’ salaries expense classification. We record tax benefits and excess tax benefits related to SSSARs and restricted stock awards. These excess tax benefits are included in the financing section of the Condensed Consolidated Statements of Cash Flows.

Stock-Settled Stock Appreciation Rights

We use periodic grants of SSSARs as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value. We calculate the fair value of SSSARs grants using the Black-Scholes option-pricing model. Our policy is to issue shares upon SSSARs exercise from new shares that had been previously authorized.

The following table summarizes our SSSARs compensation expense recorded:



	Three Months Ended September 30,
	2015		2014
Compensation expense	$	347	$	354

At September 30, 2015, there was $1.5 million of unrecognized compensation expense related to SSSARs that we will recognize over a weighted-average period of 2 years.

Restricted Stock

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

The following table summarizes our restricted stock compensation expense recorded:



	Three Months Ended September 30,
	2015		2014
Compensation expense	$	438	$	457

At September 30, 2015, there was $1.7 million of unrecognized compensation expense related to restricted stock that we will recognize over a weighted-average period of 2 years.

Note 9 – Pension Benefits

We sponsor multiple defined benefit pension plans that covered certain workers under collective bargaining contracts. However, as a result of prior-years’ restructuring activities, for all periods presented, we no longer have any active employees continuing to accrue service cost or otherwise eligible to receive plan benefits. Benefits being paid under the plans are primarily based on negotiated rates and ~~certain~~years of ~~our operating subsidiaries provide multiple postretirement medical and life insurance benefit plans.~~service. We ~~recognize~~contribute to these plans at least the ~~cost of benefits as the employees render service. Postretirement benefits are funded as incurred.~~minimum amount required by regulation.

The following table summarizes the components of net periodic benefit ~~cost~~income for our ~~postretirement~~pension plans:

Three Months Ended
March 31, Nine Months Ended
March 31,
2015 2014 2015 2014
Components of net periodic benefit cost
Service cost $ 8
$ 8
$ 24
$ 24
Interest cost 27
33
81
97
Amortization of unrecognized net gain (7 ) (6 ) (21 ) (20 )
Amortization of prior service asset (1 ) (1 ) (3 ) (3 )
Net periodic benefit cost $ 27
$ 34
$ 81
$ 98



	Three Months Ended September 30,
	2015			2014
Components of net periodic benefit income
Interest cost	$	421		$	403
Expected return on plan assets	(630		)	(658		)
Amortization of unrecognized net loss	135			107
Net periodic benefit income	$	(74	)	$	(148	)

For the three ~~and nine~~ months ended ~~March 31,~~September 30, 2015, we made ~~$20,000~~no pension plan contributions and ~~$74,000, respectively, in~~we do not expect to make any contributions to our ~~postretirement medical and life insurance benefit plans. We expect to make approximately~~ ~~$0.1 million~~ ~~more in contributions to our postretirement medical and life insurance benefit~~pension plans during ~~the remainder of~~ ~~2015~~2016.

~~Note 9 – Commitments and Contingencies~~

At ~~March 31, 2015~~, we were a party to various claims and litigation matters arising in the ordinary course of business. Such matters did not have a material effect on the current-year results of operations and, in our opinion, their ultimate disposition will not have a material effect on our consolidated financial statements.

Note 10 – ~~Business Segment Information~~Postretirement Benefits

We and certain of our operating subsidiaries provide multiple postretirement medical and life insurance benefit plans. We recognize the cost of benefits as the employees render service. Postretirement benefits are funded as incurred.

The following ~~summary~~table summarizes the components of ~~financial information by business segment is consistent with the basis of segmentation and measurement of segment profit or loss presented in~~net periodic benefit cost for our ~~June 30, 2014~~ ~~consolidated financial statements. The~~ ~~March 31, 2015~~ ~~identifiable assets by reportable segment are generally consistent with that of~~ ~~June 30, 2014~~. However, due to the acquisition of Flatout in March 2015, the amount of Specialty Foods assets increased and Corporate assets declined as compared to June 30, 2014. The increase in Specialty Foods assets reflects goodwill and other intangible assets related to the acquisition of Flatout. Corporate assets declined because of a decrease in cash, which is treated as a Corporate asset, due to cash paid for the acquisition of Flatout.postretirement plans:

Three Months Ended
March 31, Nine Months Ended
March 31,
2015 2014 2015 2014
Net Sales - Specialty Foods $ 263,400
$ 241,849
$ 826,798
$ 782,267
Operating Income
Specialty Foods $ 34,170
$ 31,408
$ 124,909
$ 130,364
Corporate Expenses (2,962 ) (2,573 ) (8,881 ) (8,913 )
Total $ 31,208
$ 28,835
$ 116,028
$ 121,451



	Three Months Ended September 30,
	2015			2014
Components of net periodic benefit cost
Service cost	$	7		$	8
Interest cost	30			27
Amortization of unrecognized net gain	(4		)	(7		)
Amortization of prior service asset	(1		)	(1		)
Net periodic benefit cost	$	32		$	27

For the three months ended September 30, 2015, we made $29,000 in contributions to our postretirement medical and life insurance benefit plans. We expect to make approximately $0.1 million more in contributions to our postretirement medical and life insurance benefit plans during the remainder of 2016.

1512

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~~

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, ~~2015~~2016 refers to fiscal ~~2015~~2016, which is the period from July 1, ~~2014~~2015 to June 30, ~~2015~~2016.

The following discussion should be read in conjunction with our condensed 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, uncertainties and other factors, 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 due to these factors. For more information, see the section below entitled “Forward-Looking Statements.”

OVERVIEW

Business Overview

Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice markets.

In March 2015 we acquired all of the issued and outstanding capital stock of Flatout Holdings, Inc. (“Flatout”), a privately owned manufacturer and marketer of flatbread wraps and pizza crusts based in Saline, Michigan. The purchase price was $92.2 million, net of cash acquired. This transaction is discussed in further detail in Note 2.

Part of our future growth may result from acquisitions. We ~~also manufactured and marketed candles for the food, drug and mass markets until~~continue to review potential acquisitions that ~~business was sold on January 30, 2014. The financial results of these operations, previously included~~we believe will complement our existing product lines, enhance our gross margins and/or offer good expansion opportunities in a manner that fits our ~~Glassware and Candles segment, are reported as discontinued operations for all periods presented herein.~~overall strategic goals.

Our operations are organized into one reportable segment: “Specialty Foods.” ~~The~~Our sales ~~of this segment~~ are predominately domestic.

~~We view this segment as having~~Our business has the potential to achieve future growth in sales and profitability due to attributes such as:

leading retail market positions in several branded products with a high-quality perception;

recognized innovation in retail products;

a broad customer base in both retail and foodservice accounts;

well-regarded culinary expertise among foodservice accounts;

recognized leadership in foodservice product development;

experience in integrating complementary business acquisitions; and

historically strong cash flow generation that supports growth opportunities.

Our goal is to grow both retail and foodservice sales over time by:

leveraging the strength of our retail brands to increase current product sales;

introducing new retail products and expanding into new channels;

growing our foodservice sales through the strength of our reputation in product development and quality; and

pursuing acquisitions that meet our strategic criteria.

Consistent with our current acquisition strategy, in March 2015 we acquired all of the issued and outstanding capital stock of Flatout Holdings, Inc. (“Flatout”), a privately owned manufacturer and marketer of flatbread and pizza crusts based in Saline, Michigan. The purchase price was $92.2 million, net of cash acquired. This transaction is discussed in further detail in Note 2.

We have made substantial capital investments to support our existing food operations and future growth opportunities. For example, in 2015 we completed a significant processing capacity expansion at our Horse Cave, Kentucky dressing facility to help meet demand for our dressing products. Based on our current plans and expectations, we believe our capital expenditures for ~~2015~~2016 could total approximately $15 to $20 million. We anticipate we will ~~total between $18 and $20 million.~~be able to fund all of our capital needs in 2016 with cash generated from operations.

RESULTS OF CONSOLIDATED OPERATIONS

Net Sales and Gross Margin


	Three Months Ended March 31,										Nine Months Ended March 31,										Three Months Ended September 30,
(Dollars in thousands)	2015			2014			Change				2015			2014			Change				2015			2014			Change
Net Sales - Specialty Foods	$	263,400		$	241,849		$	21,551	9	%	$	826,798		$	782,267		$	44,531	6	%
Net Sales																					$	294,085		$	259,987		$	34,098	13	%
Gross Margin	$	56,625		$	51,908		$	4,717	9	%	$	192,702		$	190,702		$	2,000	1	%	$	67,967		$	57,424		$	10,543	18	%
Gross Margin as a Percentage of Net Sales	21.5		%	21.5		%					23.3		%	24.4		%					23.1		%	22.1		%

In March 2015 we acquired Flatout and its results of operations have been included in our ~~condensed~~ consolidated financial statements from the date of acquisition ~~but such results were not material~~with Flatout contributing $12 million in net sales to our ~~condensed consolidated financial statements.~~results for the three months ended September 30, 2015.

Net sales for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2015 increased ~~9% and 6%, respectively, and the~~13%. The growth was primarily driven by ~~volume~~the contribution from Flatout, as well as increased retail and ~~mix.~~foodservice volumes on our existing business. Net pricing actions relating to our ingredient cost changes and lower new product placement costs also contributed to our net sales growth. Retail net sales increased ~~14% and 6%~~16% during the three ~~and nine~~ months ended ~~March 31,~~September 30, 2015 ~~respectively. This year's earlier Easter holiday shifted seasonal retail sales into~~on the ~~third quarter. Third quarter retail sales growth was also attributed to~~addition of Flatout and higher sales of certain product lines including ~~New York~~ ~~BRAND~~Olive Garden^® ~~frozen garlic bread,~~retail dressings, Marzetti^®Simply Dressed^®refrigerated dressings and New York BRAND^® croutons and salad ~~toppings and Olive Garden~~^®~~retail dressings. For the nine months ended March 31, 2015, retail sales increased on higher sales of New York~~ ~~BRAND~~^® ~~frozen garlic bread and Olive Garden~~^® ~~retail dressings, but were offset in part by increased promotional spending on some retail product offerings and by placement costs for new products.~~toppings. Foodservice net sales improved ~~4% and 5% for the quarter and year-to-date periods, respectively, primarily due to increased sales to~~11% as demand from national chain ~~restaurants. The segment's~~restaurants remained strong. Our overall sales volume, as measured by pounds shipped, ~~is estimated to have~~ improved by 5% and 4% for the three and nine months ended March 31, 2015, respectively. The impact of a more favorable sales mix was estimated to be 4% and 1% for the three and nine months ended March 31, 2015, respectively.8%. In general, the ~~impacts~~net impact of higher pricing ~~for both retail and foodservice were less than 1% of segment net sales for both the three and nine months ended March 31, 2015.~~

Gross margin percentages were unchanged for the three months ended March 31, 2015 while the year-to-date percentages declined as the benefits from the improved sales volumes were offset by increased operating costs due to capacity constraints in our dressing manufacturing, higher freight expense, and the increased promotional spending on some retail product offerings and placement costs for new products. We estimate that lower ingredient costs beneficially affected the segment's gross margins by less thanrepresented 1% of net sales for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2015.

Excluding sales contributed by Flatout, net sales increased 9% for the three months ended September 30, 2015.

Gross margin percentages improved for the three months ended September 30, 2015 due to the benefits of a more favorable retail sales mix, improved operating efficiencies in our dressing and sauce manufacturing, lower new product placement costs and lower soybean oil and dairy-based ingredient costs. These benefits were offset, in part, by higher egg costs attributed to the avian influenza outbreak. Excluding any pricing actions, we estimate total ingredient costs negatively affected our gross margins by nearly 2% of net sales for the quarter.

Selling, General and Administrative Expenses


	Three Months Ended March 31,										Nine Months Ended March 31,										Three Months Ended September 30,
(Dollars in thousands)	2015			2014			Change				2015			2014			Change				2015			2014			Change
SG&A Expenses	$	25,417		$	23,073		$	2,344	10	%	$	76,674		$	69,251		$	7,423	11	%	$	26,079		$	22,820		$	3,259	14	%
SG&A Expenses as a Percentage of Net Sales	9.6		%	9.5		%					9.3		%	8.9		%					8.9		%	8.8		%

~~Consolidated selling,~~Selling, general and administrative expenses increased ~~10% and 11%~~14% for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2015 ~~respectively, and~~but were ~~generally~~ consistent as a percentage of net sales for the ~~third~~first quarter of ~~2015~~2016 and ~~2014. The third quarter and year-to-date periods include $0.4 million of transaction expenses related to~~2015. In general, the ~~acquisition of Flatout in March 2015. The year-to-date~~ increase in these costs ~~also reflected~~reflects the influence of higher ~~consumer promotional spending on new products, as well as increased consumer spending on certain branded retail products.~~sales volumes and amortization expense attributable to the Flatout intangible assets.

Operating Income

The foregoing factors contributed to consolidated operating income totaling ~~$31.2~~$41.9 million ~~and~~ ~~$116.0 million~~ for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2015~~, respectively.~~. Our operating income can be summarized as follows:


	Three Months Ended March 31,											Nine Months Ended March 31,											Three Months Ended September 30,
(Dollars in thousands)	2015			2014			Change					2015			2014			Change					2015			2014			Change
Operating Income
Specialty Foods	$	34,170		$	31,408		$	2,762		9	%	$	124,909		$	130,364		$	(5,455	)	(4	)%	$	44,961		$	37,499		$	7,462		20	%
Corporate Expenses	(2,962		)	(2,573		)	(389		)	15	%	(8,881		)	(8,913		)	32			—	%	(3,073		)	(2,895		)	(178		)	6	%
Total	$	31,208		$	28,835		$	2,373		8	%	$	116,028		$	121,451		$	(5,423	)	(4	)%	$	41,888		$	34,604		$	7,284		21	%
Operating Income as a Percentage of Net Sales
Specialty Foods	13.0		%	13.0		%						15.1		%	16.7		%						15.3		%	14.4		%
Total	11.8		%	11.9		%						14.0		%	15.5		%						14.2		%	13.3		%

Looking forward, we are entering what is typically our strongest sales quarter due to the holiday impact. We expect continued incremental benefit from our Flatout business, as ~~we enter the final quarter of our fiscal year, we~~well as volume-driven growth from both retail and foodservice channels. We anticipate ~~continued investment in certain branded retail products~~higher marketing and promotional costs in support of our retail brands, especially Sister Schubert's,^®for the holiday season. High egg costs remain a concern, with pricing actions helping to ~~support products introduced since last spring as well as new products~~offset some of the impact. Excluding eggs, commodity costs are expected to ~~be introduced in the fourth quarter. We expect slightly higher freight costs, but we anticipate material costs to be~~remain modestly favorable for the ~~fourth quarter; however, this is tempered by~~quarter. Finally, the ~~possibility~~level of a sizeable outbreak of Avian influenza within U.S. laying flocks and its unknown impacts on the price of our egg-based ingredients. Finally, although Easter sales will be absent from the upcoming quarter dueefficiency gains we are ultimately able to ~~the earlier holiday in 2015, we will capture a full quarter of contribution~~achieve from our ~~recently acquired Flatout~~^® ~~flatbread business, but this contribution~~dressing capacity expansion and our other cost-saving initiatives will ~~be lessened by transitional costs expected to be approximately $0.8 million.~~impact our results.

Interest Income and Other – Net

Interest income and other was not material infor the three ~~and nine~~ months ended ~~March 31,~~September 30, 2015 and 2014 due to the nominal interest rates earned by us on our cash balances, our customers being largely invoiced in U.S. dollars and our capital structure.

Income ~~From Continuing Operations~~ Before Income Taxes

As impacted by the factors discussed above, income ~~from continuing operations~~ before income taxes for the three months ended ~~March 31,~~September 30, 2015 increased by ~~$2.5~~$7.4 million to ~~$31.1~~$42.0 million from the prior-year total of ~~$28.6~~$34.6 million.

Taxes Based on Income ~~from continuing operations before income taxes for the nine months ended March 31, 2015 and 2014 was $115.9 million and $121.1 million, respectively.~~

Consistent with our expectations, our effective tax rate was ~~34.3%~~34.2% for the ~~nine~~three months ended ~~March 31,~~September 30, 2015~~, as compared to~~ and was unchanged from the ~~prior-year rate~~prior year.

Net Income

First quarter net income for 2016 of ~~33.9%~~.

~~Income From Continuing Operations~~

~~Third quarter income from continuing operations for 2015 of $20.4~~$27.6 million increased from the preceding ~~year's~~year’s net income ~~from continuing operations~~ for the quarter of ~~$18.9~~$22.8 million, as influenced by the factors noted above. ~~Our~~Diluted weighted average shares outstanding have remained ~~fairly consistent for all periods~~relatively stable. As a result, and due to the ~~limited levels of share grants and share repurchases. Consequently, and as largely influenced by the increase~~change in income from continuing operations, diluted income per common share from continuing operations increased from $0.69 for the prior year to $0.75 per diluted share for the third quarter of 2015. Year-to-date income from continuing operations of $76.1 million decreased from the prior year-to-date total of $80.1 million. Year-to-date income from continuing operations per share was $2.78 per diluted share compared to $2.93 per diluted share for the prior-year period.

~~Discontinued Operations~~

There were no discontinued operations in 2015. Loss from discontinued operations, net of tax, totaled $29.3 million and $26.4 million for the three and nine months ended March 31, 2014, respectively. These amounts included an after-tax loss of $29.6 million on the January 2014 sale of our candle manufacturing and marketing operations. Loss from discontinued operations per share for the third quarter of 2014 was $1.07 per diluted share. Year-to-date loss from discontinued operations per share was $0.97 per diluted share for the nine months ended March 31, 2014.

~~Net Income (Loss)~~

~~Third quarter~~ net income for ~~2015~~ ~~of $20.4 million increased from the preceding year’s~~each year, net ~~loss for the quarter of $10.4 million, as influenced by the factors noted above. Year-to-date net income of $76.1 million was higher than the prior year-to-date total of $53.7 million. Net~~ income per share for the ~~third~~first quarter of ~~2015~~2016 totaled ~~$0.75~~$1.01 per diluted share, as compared to a net ~~loss~~income of ~~$0.38~~$0.83 per diluted share in the prior year. ~~Year-to-date net income per share was $2.78 per diluted share, as compared to $1.96 per diluted share for the prior-year period.~~

FINANCIAL CONDITION

For the ~~nine~~three months ended ~~March 31,~~September 30, 2015,, net cash provided by operating activities totaled ~~$96.6~~$33.3 million, as compared to ~~$98.8~~$35.9 million in the prior-year period. ~~This change~~The decrease was ~~largely influenced~~due to higher working capital requirements as partially offset by the increase in net income and depreciation and amortization. In general, the increased levels of working capital requirements reflect higher sales volumes, the influence of inventory builds for our second quarter seasonal sales and the impact of our recent Flatout acquisition. Additionally, the changes in other current assets and accounts payable and accrued liabilities reflect the timing of estimated tax payments and the favorable tax impact of the loss on sale of discontinued operations ~~resulting from~~in prior years. The increase in depreciation and amortization reflects the ~~sale~~amortization of ~~our candle manufacturing~~intangibles relating to the Flatout acquisition and ~~marketing operations, which were sold in January 2014.~~the related depreciation on its acquired fixed assets, as well as additional depreciation on recent capital expenditures.

Cash used in investing activities for the ~~nine~~three months ended ~~March 31,~~September 30, 2015 was $~~109.4~~3.7 million, as compared to ~~cash provided of~~ $~~16.6~~8.0 million in the prior year. ~~The cash used in investing activities in the current year reflects $92.2 million paid for the acquisition of Flatout in March 2015, as well as~~This decrease reflected a ~~higher~~lower level of capital expenditures in 2016. Our 2015 ~~the majority of this being spent on our~~capital expenditures included a processing capacity expansion project at our Horse Cave, Kentucky dressing facility which was essentially complete at December 31, 2014. ~~The prior year cash provided by investing activities reflected the impact of the proceeds received on the January 2014 sale of our candle manufacturing and marketing operations.~~

Cash used in financing activities for the ~~nine~~three months ended ~~March 31,~~September 30, 2015 of $~~37.3~~12.4 million deincreased slightly from the prior-year total of ~~$37.5 million~~.$11.9 million. This ~~decrease~~increase was ~~primarily~~ due to ~~a lower level of~~higher dividend payments. There were no share repurchases in the ~~current year, as partially offset by higher dividend payments.~~three months ended September 30, 2015 and 2014. At ~~March 31,~~September 30, 2015,, ~~1,420,000~~ 1,419,682 shares remained authorized for future buyback under the existing share repurchase program.

Under our unsecured revolving credit facility (“Facility”), we may borrow up to a maximum of $120 million at any one time. Loans may be used for general corporate purposes. We had no borrowings outstanding under this Facility at ~~March 31,~~September 30, 2015. At ~~March 31,~~September 30, 2015, we had $~~4.2~~4.7 million of standby letters of credit outstanding, which reduced the amount available for borrowing on the Facility. The Facility expires in April 2017, and all outstanding amounts are then due and payable. Interest is variable based upon formulas tied to LIBOR or an alternative base rate defined in the credit agreement, at our option. We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio. ~~Based on the long-term nature of this Facility, when~~When we have outstanding borrowings under this Facility, they will be classified as long-term ~~debt.~~debt due to the long-term nature of this Facility.

The Facility contains certain restrictive covenants, including limitations on indebtedness, asset sales and acquisitions, and financial covenants relating to interest coverage and leverage. At ~~March 31,~~September 30, 2015, we were in compliance with all applicable provisions and covenants of the Facility, and we exceeded the requirements of the financial covenants by substantial margins.

We ~~currently~~ expect to remain in compliance with the Facility’s covenants for the foreseeable future. However, a default under the Facility could accelerate the repayment of any outstanding indebtedness and limit our access to additional credit available under the Facility. Such an event could require a reduction in or curtailment of cash dividends or share repurchases, reduce or delay beneficial expansion or investment plans, or otherwise impact our ability to meet our obligations when due. At ~~March 31,~~September 30, 2015, we were not aware of any event that would constitute a default under the Facility.

We believe that internally generated funds and our existing balances in cash and equivalents, in addition to our currently available bank credit arrangements, should be adequate to meet our cash requirements through ~~2015~~2016. If we were to borrow outside of our Facility under current market terms, our average interest rate may increase significantly and have an adverse effect on our results of operations.

CONTRACTUAL OBLIGATIONS

We have various contractual obligations that are appropriately recorded as liabilities in our condensed consolidated financial statements. Certain other items, such as purchase obligations, are not recognized as liabilities in our condensed consolidated financial statements. Examples of ~~such purchase obligations~~items not recognized as liabilities in our condensed consolidated financial statements are commitments to purchase raw materials or inventory that has not yet been received as of ~~March 31,~~September 30, 2015 and future minimum lease payments for the use of property and equipment under operating lease agreements. Aside from expected changes in raw-material needs due to changes in product demand and the impact of commodity prices, there have been no significant changes to the contractual obligations disclosed in our ~~2014~~2015 Annual Report on Form 10-K.

CRITICAL ACCOUNTING POLICIES

There have been no changes in critical accounting policies from those policies disclosed in our ~~2014~~2015 Annual Report on Form 10-K.

~~RECENTLY ISSUED~~RECENT ACCOUNTING ~~STANDARDS~~PRONOUNCEMENTS

~~In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers~~” (“ASU 14-09”) which creates a comprehensive set of guidelines for the recognition of revenue under the principle: “Recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” The requirements of ASU 14-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and will require either retrospective application to each prior period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. We are currently evaluating the impact this ASU will have on our financial position and results of operations.

~~RECENTLY ADOPTED ACCOUNTING STANDARDS~~

~~There were no recently adopted~~Recent accounting pronouncements ~~that impacted~~and their impact on our consolidated financial ~~statements.~~statements are disclosed in Note 1 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). This Quarterly Report on Form 10-Q contains various “forward-looking statements” within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words “anticipate,” “estimate,” “project,” “believe,” “intend,” “plan,” “expect,” “hope” or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed in the forward-looking statements. Actual results may differ as a result of factors over which we have no, or limited, control including, without limitation, the specific influences outlined below. Management believes these forward-looking statements to be reasonable; however, one should not place undue reliance on such statements that are based on current expectations. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements, except as required by law.

Items which could impact these forward-looking statements include, but are not limited to:

the ~~ability~~potential for another large outbreak of avian influenza in the U.S. and the resulting fluctuations in the cost and availability of egg-based ingredients;

fluctuations in the cost and availability of other raw materials and packaging;

the reaction of customers or consumers to ~~successfully integrate~~ the ~~acquisition~~effect of ~~Flatout;~~price increases we may implement;

the potential for loss of larger programs or key customer relationships;

the effect of consolidation of customers within key market channels;

price and product competition;

the success and cost of new product development efforts;

the lack of market acceptance of new products;

~~price and product competition;~~

~~the reaction of customers or consumers to the effect of price increases we may implement;~~

the possible occurrence of product recalls or other defective or mislabeled product costs;

changes in demand for our products, which may result from loss of brand reputation or customer goodwill;

maintenance of competitive position with respect to other manufacturers;

~~the extent to which future business acquisitions are completed and acceptably integrated;~~

~~efficiencies~~adverse changes in ~~plant operations;~~

~~fluctuations in the cost and availability~~freight, energy or other costs of ~~raw materials and packaging;~~producing, distributing or transporting our products;

capacity constraints that may affect our ability to meet demand or may increase our costs;

dependence on contract manufacturers;

efficiencies in plant operations;

stability of labor relations;

~~adverse changes in freight, energy~~the outcome of any litigation or ~~other costs of producing, distributing or transporting our products;~~arbitration;

the impact of fluctuations in our pension plan asset values on funding levels, contributions required and benefit costs;

the ability to successfully grow the Flatout business;

the extent to which future business acquisitions are completed and acceptably integrated;

dependence on key personnel;

changes in financial markets;

access to any required financing;

changes in estimates in critical accounting judgments;

~~the outcome of any litigation or arbitration;~~ and

certain other factors, including the information disclosed in our discussion of risk factors under Item 1A of our ~~2014~~2015 Annual Report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our market risks have not changed materially from those disclosed in our ~~2014~~2015 Annual Report on Form 10-K.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer evaluated, with the participation of management, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of ~~March 31,~~September 30, 2015 to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is 1) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and 2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.

(b) Changes in Internal Control Over Financial Reporting. No changes were made to our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2117

PART II – OTHER INFORMATION

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed under Item 1A in our ~~2014~~2015 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c) In November 2010, our Board of Directors approved a share repurchase authorization of 2,000,000 shares, of which ~~1,420,000~~1,419,682 shares remained authorized for future repurchases at ~~March 31,~~September 30, 2015. This share repurchase authorization does not have a stated expiration date. In the ~~third~~first quarter, we ~~made the following repurchases~~did not repurchase any of our common ~~stock:~~stock.

Period
Total
Number of
Shares
Purchased

Average
Price Paid
Per Share

Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans

Maximum
Number of
Shares that
May Yet be
Purchased
Under the
Plans
January 1-31, 2015 —
$ —
—
1,425,949
February 1-28, 2015 (1) 6,267
$ 90.76
6,267
1,419,682
March 1-31, 2015 —
$ —
—
1,419,682
Total 6,267
$ 90.76
6,267
1,419,682



Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet be Purchased Under the Plans
July 1-31, 2015	—	$	—	—	1,419,682
August 1-31, 2015	—	$	—	—	1,419,682
September 1-30, 2015	—	$	—	—	1,419,682
Total	—	$	—	—	1,419,682

(1) Represents shares that were repurchased in satisfaction of tax withholding obligations arising from the vesting of restricted stock granted to employees under the Lancaster Colony Corporation 2005 stock plan.

Item 6. Exhibits

See Index to Exhibits following Signatures.

2218

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




		LANCASTER COLONY CORPORATION
			(Registrant)
Date:	~~May 7,~~November 3, 2015	By:	/s/ JOHN B. GERLACH, JR.
			John B. Gerlach, Jr.
			Chairman, Chief Executive Officer,
			President and Director
			(Principal Executive Officer)

Date:	~~May 7,~~November 3, 2015	By:	/s/ DOUGLAS A. FELL
			Douglas A. Fell
			Treasurer, Vice President,
			Assistant Secretary and
			Chief Financial Officer
			(Principal Financial and Accounting Officer)

2319

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

FORM 10-Q

~~MARCH 31,~~SEPTEMBER 30, 2015

INDEX TO EXHIBITS




Exhibit Number	Description	Located at

10.1*2.1	~~Form~~First Amendment, dated as of ~~Restricted~~September 30, 2015, to Stock ~~Award~~Purchase Agreement, ~~for employees~~dated as of March 13, 2015, by and ~~consultants under~~among T. Marzetti Company, as Buyer, Flatout Holdings, Inc., as the ~~Lancaster Colony Corporation 2005 Stock Plan~~	~~Filed herewith~~

10.2*	~~Form~~Company, the Shareholders of ~~Stock Appreciation Rights Award Agreement for employees~~the Company, as Sellers, and ~~consultants under the Lancaster Colony Corporation 2005 Stock Plan~~NCP-Flatout Seller Rep LLC, as Sellers’ Representative	Filed herewith

31.1	Certification of CEO under Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

31.2	Certification of CFO under Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

32	Certification of CEO and CFO under Section 906 of the Sarbanes-Oxley Act of 2002	Furnished herewith

101.INS	XBRL Instance Document	Filed herewith

101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith

101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith

*Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates.

2420



	March 31,
	2015		2014
Construction in progress in accounts payable	$	489	$	1,465



	Carrying Value
Goodwill at beginning of year	$	89,840
Goodwill acquired during the period	36,883
Goodwill at end of period	$	126,723



	March 31, 2015			June 30, 2014
Tradename (indefinite life)
Gross carrying value	$	37,600		$	—
Trademarks (40-year life)
Gross carrying value	$	370		$	370
Accumulated amortization	(221		)	(214		)
Net carrying value	$	149		$	156
Customer Relationships (10 to 15-year life)
Gross carrying value	$	18,020		$	13,020
Accumulated amortization	(8,531		)	(7,800		)
Net carrying value	$	9,489		$	5,220
Technology / Know-how (10-year life)
Gross carrying value	$	3,900		$	—
Accumulated amortization	(32		)	—
Net carrying value	$	3,868		$	—
Non-compete Agreements (5-year life)
Gross carrying value	$	600		$	—
Accumulated amortization	(10		)	—
Net carrying value	$	590		$	—
Total net carrying value	$	51,696		$	5,376



	Number of Rights		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at beginning of year	358		$	76.75
Exercised	(54	)	$	63.54
Granted	149		$	91.13
Forfeited	(31	)	$	79.42
Outstanding at end of period	422		$	83.35	3.73	$	4,984
Exercisable and vested at end of period	154		$	74.70	2.66	$	3,150
Vested and expected to vest at end of period	412		$	83.35	3.73	$	4,873



	Number of Shares		Weighted Average Grant Date Fair Value
Unvested restricted stock at beginning of year	58		$	79.09
Granted	16		$	91.89
Vested	(25	)	$	71.86
Forfeited	(3	)	$	79.22
Unvested restricted stock at end of period	46		$	87.61