BELLEVUE, Wash., March 19, 2002

Englewood, Co., March 20, 2003 - Penford Corporation (Nasdaq: PENX) today reported financial results for the second quarter and first half of fiscal year 2003. For the quarter ended February 28, 2003, consolidated sales increased 13% to $61.7 million from $54.8 million for the same quarter last year. Net income for the second quarter of fiscal 2003 increased to $1.6 million, or $0.20 per diluted share, from $0.1 million, or $0.02 per diluted share for the prior year quarter. Results for the second quarter of fiscal 2002 included a $1.4 million pre-tax restructuring charge ($0.12 after tax per diluted share) related to the Company's relocation of its Bellevue, Washington headquarters office to Denver, Colorado.

Sales for the six months ended February 28, 2003 increased 15% to $127.7 million, compared to $111.1 million for the year-ago period. Net income for the first half of fiscal 2003 was $4.9 million compared to $1.4 million for the same period in fiscal 2002. Diluted earnings per share for the first half of fiscal 2003 were $0.62 compared with $0.18 last year. The results for the six months ended February 28, 2003 included a previously discussed $1.9 million pre-tax gain on the sale of the Company's Hi-maize^® business ($0.21 after tax per diluted share) and the results for the first half of fiscal 2002 include the a $1.4 million pre-tax restructuring charge ($0.12 after tax per diluted share) described above.

Segment Results
Sales at Penford's Industrial Ingredients business unit rose 11% compared to the prior year with strong volume increases in every core product category. This is the third sequential quarter of revenue strength, reflecting improving demand for our customers' products as well as the success of several new product initiatives. Gross margin as a percent of sales declined in the second quarter primarily due to higher energy costs. Operating income for the quarter increased 8% from the same period last year.

Second quarter sales at the North American Food Ingredients business increased 3% on higher volumes of protein and dextrose products. Operating income increased 10% as revenue gains and lower discretionary spending reduced the impact of higher manufacturing costs.

Penford's Australia/New Zealand operations increased revenues by 25% in the second quarter of fiscal 2003 compared to last year on higher volumes, improved pricing and favorable foreign exchange rates. Income from operations rose 6% as stronger revenues and currencies more than offset higher grain input costs caused by serious drought conditions in the region.

Thomas Malkoski, Chief Executive Officer of Penford Corporation said, "All three of our business segments contributed to strong revenue and operating income gains in the second quarter. The North American Food Ingredients business expanded revenue while advancing important new product initiatives. Sales at our Industrial Ingredients business and Penford Australia have increased by more than 15% during the first half of fiscal 2003. We are improving our industry position and net profit margins despite the challenges of higher energy costs in the U.S. and drought in Australia. Our strategic emphasis on providing value-added products from renewable sources is contributing to our progress."

Penford Corporation will host a conference call to discuss first quarter financial and operational results today, March 20, 2003 at 9:00 a.m. Mountain Time (11:00 a.m. Eastern Time). The Web-cast and replay of the call will be available at www.penx.com until March 24, 2003.

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

This press release contains forward-looking statements concerning the Company's future performance and the prospects for the continuation of current performance trends in fiscal 2003. 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 and commercialization efforts, interest rate and energy cost volatility, foreign exchange rate fluctuations and those listed in the Company's SEC reports, including the report on Form 10-K for the year ended August 31, 2002.

- Tables Follow -

PENFORD CORPORATION FINANCIAL HIGHLIGHTS
(In thousands except per share data)
	Three Months Ended February 28		Six Months Ended February 28
	2003	2002	2003	2002
Consolidated Results
Sales	$ 61,692	$ 54,837	$127,734	$111,142
Net income	$ 1,585	$ 144	$ 4,883	$ 1,384
Earnings per share, diluted	$ 0.20	$ 0.02	$ 0.62	$ 0.18
Results by Segment
Industrial Ingredients:
Sales	$33,672	$30,398	$ 69,360	$ 59,870
Gross margin	15.6%	16.4%	16.2%	15.2%
Operating income	2,396	2,216	5,200	3,570
Food Ingredients - North America:
Sales	$10,953	$10,610	$ 22,463	$ 22,116
Gross margin	29.5%	30.3%	29.5%	30.5%
Operating income	1,685	1,538	3,385	3,408
Australia/New Zealand:
Sales	$ 17,344	$ 13,829	$ 36,247	$ 29,156
Gross margin	11.8%	13.6%	12.6%	15.2%
Operating income	1,017	957	2,465	2,509

	February 28, 2003	August 31, 2002
Current assets	$ 68,416	$ 62,871
Property, plant and equipment, net	130,138	132,042
Other assets	45,852	44,292
Total assets	244,406	239,205
Current portion of debt*	69,352	18,779
Other current liabilities	29,965	29,022
Long-term debt	20,933	77,632
Other liabilities	46,052	44,808
Shareholders' equity	78,104	68,964
Total liabilities and equity	$ 244,406	$ 239,205

Penford CorporationConsolidated Statements of Income (unaudited)
(In thousands except share and per share data)
	Three Months Ended February 28		Six Months Ended February 28
	2003	2002	2003	2002
Sales	$ 61,692	$ 54,837	$127,734	$111,142
Cost of sales	51,145	44,773	105,302	90,880
Gross margin	10,547	10,064	22,432	20,262
Operating expenses	5,813	5,346	12,180	10,060
Research and development expenses	1,336	1,450	2,748	3,021
Restructure costs, net	(117)	1,383	(117)	1,383
Income from operations	3,515	1,885	7,621	5,798
Non-operating income, net	269	21	2,181	44
Interest expense	1,403	1,732	2,984	3,822
Income before income taxes	2,381	174	6,818	2,020
Income taxes	796	30	1,935	636
Net income	$ 1,585	$ 144	$ 4,883	$ 1,384
Weighted average common shares and equivalents outstanding, diluted	7,934,858	7,735,320	7,902,764	7,668,426
Earnings per share, diluted	$ 0.20	$ 0.02	$ 0.62	$ 0.18
Dividends declared per common share	$ 0.06	$ 0.06	$ 0.12	$ 0.12