BELLEVUE, Wash., March 08, 2001

Penford Corporation Reports Second Quarter Results

Penford Corporation (Nasdaq: PENX) today reported results for its second quarter ended February 28, 2001.

Penford Corporation reported a net loss of $0.8 million, or $0.11 per share, versus net income of $2.7 million, or $0.35 per share, in the second quarter of last year. Second quarter sales increased 32 percent to $50.7 million versus $38.3 million last year for the same period, due mainly to the acquisition of Penford Australia Limited which constituted sales of $13.7 million.

For the first six months of fiscal 2001, Penford earned $0.4 million, or $0.05 per share, versus net income of $5.2 million, or $0.68 per share, in the same period of last year. Six-month sales increased 24 percent to $97.6 million versus $78.9 million for the same period in fiscal 2000, again buoyed by the Australian acquisition.

"2001 has been a difficult year for many markets. As anticipated, increased energy costs and a slowdown in the North American paper industry continued to have an effect on Penford's overall operating results through the first half of 2001. We are optimistic that these short-term obstacles will not hinder the strategies we have in place to drive results forward as we move through the balance of fiscal year 2001 and into fiscal 2002," said President and CEO, Jeffrey T. Cook.

"Penford remains a leader in providing natural chemistry solutions to a wide variety of food and industrial market applications. We continue to see a strong growth rate in our food ingredients product line, a business that has grown an average of 40 percent in each of the past four years. We also remain dedicated to leveraging our strong North American industrial market presence into new earnings and growth opportunities in key markets. The new product and revenue initiatives we've announced over the last several months, ranging from the acquisition of Penford Australia Limited to the addition of a new global food service customer, have positioned Penford solidly for enhancing shareholder value in the quarters ahead," Cook said.

Penford Corporation will host a conference call to discuss second quarter financial and operational results today, March 15 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time). The live Web-cast and replay of the call will be available at www.penx.com or www.vcall.com until March 31, 2001.

About Penford
Penford Corporation develops, manufactures and markets specialty natural-based ingredient systems for various applications, including papermaking, textiles and food products.

For automated shareholder information, please call 1-888-317-2013.

This press release contains forward-looking statements concerning future performance of the Company's specialty ingredient systems and the prospects for the continuation of current performance trends in fiscal 2001. There are a variety of factors which could cause actual events to differ materially from those projected in the forward-looking statements such as decreases or delays in customer demand or orders, increased competition, decreases in market share, unfavorable changes in product mix, disappointments in product development efforts, interest rate and energy cost volatility, foreign exchange rate fluctuations and those listed in the Company's SEC reports, including the reports on Form 10-K for the year ended August 31, 2000.