Senior Vice President and CFO

Penford Corporation

303-649-1900

steve.cordier@penx.com

Consolidated revenues for the third quarter increased 9% to $92.9 million.

Gross margin up 10% to $11.5 million and Operating Income rose 43% to $3.5 million.

Company enters into a new Amended and Restated Bank Credit Agreement which increases borrowing capacity to $130 million.

Series A 15% Preferred Stock fully redeemed as of July 9, 2012.

Penford Corporation — Financial Highlights

(In thousands)

Food Ingredients:

Sales

Gross margin

Operating income

Depreciation and amortization

Industrial Ingredients:

Sales

Gross margin

Operating income (loss)

Depreciation and amortization

Consolidated:

Sales

Gross margin

Operating income (loss)

Depreciation and amortization

Food Ingredients reported record quarterly sales and gross margin.

Revenue grew 11% to $26.2 million. Sales to the coating, protein, dairy and gluten-free segments rose at double-digit rates.

Quarterly gross margin increased to $8.2 million on favorable product mix changes, new business wins and better pricing.

Lower operating income of $0.2 million reflects increased spending on new product development and marketing.

Fiscal year-to-date sales rose 29% and gross margins increased 23%. Higher prices, new product commercialization and mix improvements supported the results.

Revenue for the quarter increased over 8% to $66.8 million on stronger volumes as well as contributions from the Carolina Starches business acquired last January. Sales of modified ethylated starches increased more than 15%, and bio-product revenues grew over 20% from last year.

Income from operations expanded $0.8 million from a year ago, on better starch operating results and lower unit costs.

Revenue for the first nine months of fiscal 2012 gained 12% and gross margin rose 23% on increased selling prices in every category, a higher proportion of bio-products sales and lower manufacturing costs.

Ethanol sales for the quarter were $23.1 million. Robust industry supplies led to record inventory levels that have pressured industry margins. Third quarter market pricing of ethanol was about 15% lower than a year ago. Comparable industry crush margins fell by about $0.15 per gallon or 30% from a year ago. The combination of weak crush margins along with stronger starch and bio-product shipments led to a 3% reduction in ethanol volume for the quarter.

The premium required to procure physical corn increased significantly compared with the same period a year ago, thus reducing margins in all product categories. Low carry-out stock levels have recently pushed the premium to more than $0.70 per bushel above the five year average.

On July 9, 2012, the Company completed the redemption of the outstanding 58,750 shares Series A 15% Preferred Stock at the original issue price of $23.5 million plus $5.4 million of accrued dividends. In April 2012, the Company redeemed 41,250 shares for $20.0 million which included $3.5 million of accrued dividends.

In connection with the redemption in the third quarter, the Company accelerated the discount accretion and amortization of issuance costs related to the shares redeemed. The non-cash charge of $2.8 million was recorded as non-operating expense. The Company expects to record additional accelerated discount accretion and amortization of issuance costs in the fourth quarter of $3.8 million.

In April 2012, the holder of the Company’s Series B Voting Convertible Preferred Stock converted all of these shares into 1,000,000 shares of the Company’s common stock, as permitted by the terms of the preferred shares.

On July 9, 2012, the Company entered into an Amended and Restated its Credit Agreement which increased the Company’s revolving credit facility to $130 million from $60 million. The new agreement has a five year term with an optional “accordion” expansion feature which will allow the Company, under the conditions specified in the new agreement, to increase borrowing capacity by an additional $30 million.

The eight lenders in the new credit facility were led by Bank of Montreal and Rabobank. Other participating banks include JPMorgan Chase, KeyBank, First Midwest, Bank of America, Greenstone Farm Credit and Private Bank and Trust.

Bank loans rose to $48.2 million reflecting debt applied to redeem the Series A Preferred Stock in April 2012.

At May 31, 2012, the Company recorded a $1.8 million valuation allowance against a deferred tax asset related to the carryforward of the small ethanol producer tax credit due to the uncertainty of utilizing the credit prior to its expiration in fiscal 2014. The valuation allowance will be reversed in future years if the tax credit is utilized.

Penford Corporation

Financial Highlights

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Income from operations

Net loss

Loss per share, diluted

Cash flow provided by (used in) operations:

Operating activities

Investing activities

Financing activities

Total cash provided by (used in ) operations

Current assets

Property, plant and equipment, net

Other assets

Total assets

Current liabilities

Long-term debt

Redeemable preferred stock

Other liabilities

Shareholders’ equity

Total liabilities and equity

Penford Corporation

Consolidated Statements of Operations

(In thousands, except per share data)

Sales

Cost of sales

Gross margin

Operating expenses

Research and development expenses

Income from operations

Interest expense

Other non-operating income (expense), net

Income (loss) before income taxes

Income tax expense

Net loss

Weighted average common shares and equivalents outstanding, basic and diluted

Loss per common share, diluted