UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December~~March 31, ~~2013~~2014

Commission File Number 1-9788


	LANDAUER, INC. (Exact Name of registrant as specified in its charter)

	Delaware	06-1218089
	(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification Number)

	2 Science Road, Glenwood, IL 60425 (Address of principal executive offices and zip code)

	Registrant’s telephone number, including area code: (708) 755-7000

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 [ X ] 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 (Section 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 [ X ] 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.


Large accelerated filer	[ ]	Accelerated filer	[ X ]
Non-accelerated filer	[ ]	Smaller reporting company	[ ]
(Do not check if a smaller reporting company)

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

As of ~~January~~April 28, 2014, ~~9,537,544~~9,551,929 shares of common stock, par value $0.10 per share, of the registrant were outstanding.

TABLE OF CONTENTS



PART I FINANCIAL INFORMATION

Item 1.	Financial Statements

		Consolidated Balance Sheets (Unaudited)	3

		Consolidated Statements of Operations (Unaudited)	4

		Consolidated Statements of Comprehensive Income (Loss) ~~Income~~ (Unaudited)	5

		Consolidated Statement of Stockholders’ Equity (Unaudited)	6

		Consolidated Statements of Cash Flows (Unaudited)	7

		Notes to Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		1316

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		1924

Item 4.	Controls and Procedures		1924


PART II OTHER INFORMATION

Item 1.	Legal Proceedings		1926

Item 1A.	Risk Factors		1926

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		2027

Item 3.	Defaults Upon Senior Securities		2027

Item 4.	Mine Safety Disclosures		2027

Item 5.	Other Information		2027

Item 6.	Exhibits		2128


SIGNATURE			2229

PART I FINANCIAL INFORMATION

Item 1.Financial Statements

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (Unaudited)



(Dollars in Thousands)	December 31, 2013		September 30, 2013		March 31, 2014		September 30, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	13,272	$	11,184	$	10,991	$	11,184
Receivables, net of allowances of $570 and $600 respectively		34,178		38,419
Receivables, net of allowances of $630 and $600 respectively						35,487		38,419
Inventories		8,301		9,539		7,509		9,539
Prepaid income taxes		2,671		3,132		2,411		3,132
Prepaid expenses and other current assets		5,220		4,019		5,145		4,019
Current assets		63,642		66,293		61,543		66,293
Property, plant and equipment, at cost		104,316		107,446		104,822		107,446
Accumulated depreciation and amortization		(53,407)		(55,514)		(55,275)		(55,514)
Net property, plant and equipment		50,909		51,932		49,547		51,932
Equity in joint ventures		22,600		23,942		23,356		23,942
Goodwill		86,529		84,436		86,384		84,436
Intangible assets, net of accumulated amortization of $14,790 and $13,605, respectively		37,022		37,161
Dosimetry devices, net of accumulated depreciation of $9,915 and $9,472, respectively		5,739		5,798
Intangible assets, net of accumulated amortization of $15,826 and $13,604, respectively						36,198		37,161
Dosimetry devices, net of accumulated depreciation of $10,406 and $9,472, respectively						5,734		5,798
Other assets		7,704		7,271		7,621		7,271
Assets	$	274,145	$	276,833	$	270,383	$	276,833
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	6,036	$	6,310	$	6,830	$	6,310
Dividends payable		5,433		5,419		5,352		5,419
Deferred contract revenue		13,572		13,181		13,120		13,181
Accrued compensation and related costs		6,160		8,207		7,176		8,207
Other accrued expenses		6,217		7,531		6,125		7,531
Current liabilities		37,418		40,648		38,603		40,648
Non-current liabilities:
Long-term debt		143,785		142,785		138,285		142,785
Pension and postretirement obligations		13,308		13,047		13,331		13,047
Deferred income taxes		10,324		9,817		10,823		9,817
Other non-current liabilities		1,890		915		1,750		915
Non-current liabilities		169,307		166,564		164,189		166,564
Stockholders' equity:
Preferred stock, $.10 par value per share, authorized 1,000,000 shares; none issued		-		-		-		-
Common stock, $.10 par value per share, authorized 20,000,000 shares; 9,615,711 and 9,575,926 issued and outstanding at December 31, 2013 and September 30, 2013 respectively		962		958
Common stock, $.10 par value per share, authorized 20,000,000 shares; 9,626,074 and 9,575,926 issued and outstanding at March 31, 2014 and September 30, 2013 respectively						963		958
Additional paid in capital		39,653		39,465		39,755		39,465
Accumulated other comprehensive loss		(4,547)		(4,456)		(4,092)		(4,456)
Retained earnings		29,582		32,012		29,606		32,012
Landauer, Inc. stockholders' equity		65,650		67,979		66,232		67,979
Noncontrolling interest		1,770		1,642		1,359		1,642
Stockholders' equity		67,420		69,621		67,591		69,621
Liabilities and Stockholders' Equity	$	274,145	$	276,833	$	270,383	$	276,833



		Three Months Ended December 31,				Three Months Ended March 31,				Six Months Ended March 31,
(Dollars in Thousands, Except per Share)	2013		2012		2014		2013		2014		2013
Service revenues	$	31,894	$	31,469	$	32,983	$	32,533	$	64,877	$	64,002
Product revenues		5,811		5,212		6,571		4,549		12,382		9,761
Net revenues		37,705		36,681		39,554		37,082		77,259		73,763

Cost and expenses:
Service costs		15,049		14,308		15,195		14,863		30,244		29,171
Product costs		3,158		2,255		3,150		2,187		6,308		4,442
Total cost of sales		18,207		16,563		18,345		17,050		36,552		33,613
Selling, general and administrative		14,362		13,391		13,735		12,578		28,097		25,969
Acquisition and reorganization costs		111		0
Acquisition, reorganization and nonrecurring costs						109		300		220		300
Costs and expenses		32,680		29,954		32,189		29,928		64,869		59,882

Operating income		5,025		6,727		7,365		7,154		12,390		13,881
Equity in income of joint ventures		573		1,528		535		556		1,108		2,084
Interest expense, net		(892)		(1,033)		(975)		(1,081)		(1,867)		(2,114)
Other income, net		37		95

Other (loss) income, net						(8)		224		29		319
Income before taxes		4,743		7,317		6,917		6,853		11,660		14,170
Income taxes		1,496		2,274		1,954		1,620		3,450		3,894

Net income		3,247		5,043		4,963		5,233		8,210		10,276
Less: Net income attributed to noncontrolling interest		196		166

Less: Net (loss) income attributed to noncontrolling interest						(34)		80		162		246
Net income attributed to Landauer, Inc.	$	3,051	$	4,877	$	4,997	$	5,153	$	8,048	$	10,030

Net income per share attributable to Landauer, Inc. shareholders:
Basic	$	0.32	$	0.52	$	0.52	$	0.54	$	0.84	$	1.06
Weighted average basic shares outstanding		9,422		9,336		9,460		9,417		9,441		9,391

Diluted	$	0.32	$	0.52	$	0.52	$	0.54	$	0.84	$	1.05
Weighted average diluted shares outstanding		9,467		9,385		9,501		9,462		9,485		9,438


								Three Months Ended March 31, 2014
(Dollars in Thousands)								Landauer, Inc.		Noncontrolling Interest		Total
Net income (loss)								$	4,997	$	(34)	$	4,963
Other comprehensive income:
Defined benefit pension and postretirement plans activity, net of tax									46		-		46
Foreign currency translation adjustment									409		19		428
Comprehensive income (loss)								$	5,452	$	(15)	$	5,437
		Three Months Ended December 31, 2013
								Three Months Ended March 31, 2013
(Dollars in Thousands)	Landauer, Inc.			Noncontrolling Interest		Total		Landauer, Inc.		Noncontrolling Interest		Total
Net income		$	3,051	$	196	$	3,247	$	5,153	$	80	$	5,233
Other comprehensive income:
Defined benefit pension and postretirement plans activity, net of tax			165		-		165		28		-		28
Foreign currency translation adjustment			(256)		(68)		(324)		(1,564)		7		(1,557)
Comprehensive income		$	2,960	$	128	$	3,088	$	3,617	$	87	$	3,704

		Three Months Ended December 31, 2012						Six Months Ended March 31, 2014

(Dollars in Thousands)		Landauer, Inc.		Noncontrolling Interest		Total		Landauer, Inc.		Noncontrolling Interest		Total
Net income		$	4,877	$	166	$	5,043	$	8,048	$	162	$	8,210
Other comprehensive income:
Defined benefit pension and postretirement plans activity, net of tax			108		-		108		211		-		211
Foreign currency translation adjustment			(624)		2		(622)		153		(49)		104
Comprehensive income		$	4,361	$	168	$	4,529	$	8,412	$	113	$	8,525

								Six Months Ended March 31, 2013
(Dollars in Thousands)								Landauer, Inc.		Noncontrolling Interest		Total
Net income								$	10,030	$	246	$	10,276
Other comprehensive income:
Defined benefit pension and postretirement plans activity, net of tax									136		-		136
Foreign currency translation adjustment									(2,188)		9		(2,179)
Comprehensive income								$	7,978	$	255	$	8,233


			Landauer, Inc. Stockholders' Equity												Landauer, Inc. Stockholders' Equity
(Dollars in Thousands)	Common Stock Shares		Common Stock		Addi- tional Paid in Capital		Accumulated Other Compre-hensive (Loss) Income		Retained Earnings		Non- Controlling Interest		Total Stock- holders' Equity		Common Stock Shares		Common Stock		Addi- tional Paid in Capital		Accumulated Other Compre-hensive (Loss) Income		Retained Earnings		Non- Controlling Interest		Total Stock- holders' Equity
Balance September 30, 2013		9,575,926	$	958	$	39,465	$	(4,456)	$	32,012	$	1,642	$	69,621		9,575,926	$	958	$	39,465	$	(4,456)	$	32,012	$	1,642	$	69,621
Stock-based compensation arrangements		39,785		4		188		-		-		-		192		50,148		5		290		-		-		-		295
Dividends		-		-		-		-		(5,481)		-		(5,481)		-		-		-		-		(10,454)		(396)		(10,850)
Net income		-		-		-		-		3,051		196		3,247		-		-		-		-		8,048		162		8,210
Foreign currency translation adjustment		-		-		-		(256)		-		(68)		(324)		-		-		-		153		-		(49)		104
Defined benefit pension and postretirement plans activity, net of tax		-		-		-		165		-		-		165		-		-		-		211		-		-		211
Balance December 31, 2013		9,615,711	$	962	$	39,653	$	(4,547)	$	29,582	$	1,770	$	67,420
Balance March 31, 2014																9,626,074	$	963	$	39,755	$	(4,092)	$	29,606	$	1,359	$	67,591



	Three Months Ended December 31,					Six Months Ended March 31,
(Dollars in Thousands)		2013		2012			2014		2013
Cash flows from operating activities:
Net income		$	3,247	$	5,043		$	8,210	$	10,276
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			3,894		3,450			7,662		6,976
Equity in income of joint ventures			(573)		(1,528)			(1,108)		(2,084)
Dividends from joint ventures			1,340		1,892			1,340		1,891
Stock-based compensation and related net tax benefits			282		625			453		1,504
Current and long-term deferred taxes, net			292		7			791		284
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable, net			4,396		(1,114)			3,119		(1,244)
Decrease in prepaid taxes			466		1,449
Increase in other operating assets, net			(88)		(1,953)
Decrease (increase) in prepaid taxes								721		(2,755)
Decrease (increase) in other operating assets, net								571		(2,839)
Decrease in accounts payable and other accrued liabilities			(3,502)		(5,775)			(2,025)		(2,959)
Increase in other operating liabilities, net			200		244
Increase (decrease) in other operating liabilities, net								430		(26)
Net cash provided by operating activities			9,954		2,340			20,164		9,024
Cash flows used by investing activities:
Acquisition of property, plant and equipment			(1,071)		(1,902)			(2,415)		(5,962)
Acquisition of joint ventures and businesses, net of cash acquired			(1,800)		-			(1,800)		-
Other investing activities, net			(719)		(453)			(840)		(678)
Net cash used by investing activities			(3,590)		(2,355)			(5,055)		(6,640)
Cash flows (used) provided by financing activities:
Net borrowings on revolving credit facility			(21)		-			(43)		-
Long-term borrowings - loan			14,000		4,300			20,000		10,300
Long-term borrowings - repayment			(13,000)		-			(24,500)		(8,587)
Dividends paid to stockholders			(5,274)		(5,229)			(10,520)		(10,429)
Other financing activities, net			49		(248)			(347)		(260)
Net cash used by financing activities			(4,246)		(1,177)			(15,410)		(8,976)

Effects of foreign currency translation			(30)		56			108		13

Net increase (decrease) in cash and cash equivalents			2,088		(1,136)
Net decrease in cash and cash equivalents								(193)		(6,579)
Opening balance - cash and cash equivalents			11,184		17,633			11,184		17,633
Ending balance - cash and cash equivalents		$	13,272	$	16,497		$	10,991	$	11,054
Accrued capital spending included in accounts payable and other accrued liabilities							$	258	$	1,789

The accompanying notes are an integral part of these financial ~~statements.~~statements.

As used herein, the “Company” or “Landauer” refers to Landauer, Inc. and its subsidiaries.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013 and other financial information filed with the Securities and Exchange Commission (the “SEC”).

The accounting policies followed by the Company are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. There have been no changes to the accounting policies for the ~~three~~six month period ended ~~December~~March 31, ~~2013.~~2014.

The results of operations for the three and six month period ended ~~December~~March 31, ~~2013~~2014 are not necessarily indicative of the results to be expected for the full fiscal year. The September 30, 2013 balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for a fair statement of such financial statements. Certain reclassifications have been made in the financial statements for comparative purposes. These reclassifications have no effect on the results of operations or financial position of the Company.

In connection with the preparation of the consolidated financial statements for the second quarter of fiscal 2014, the Company identified an error in the treatment of accrued additions for property, plant and equipment in the Consolidated Statements of Cash Flows. This error affected the year-to-date Consolidated Statements of Cash Flows presented in each of the quarters of fiscal 2013 and the first quarter of fiscal 2014, as well as the consolidated financial statements for the fiscal years ended September 30, 2013, 2012 and 2011. This error resulted in an understatement of net cash provided by operating activities and net cash used in investing activities in each of the quarters of fiscal 2013 and the first quarter of fiscal 2014, as well as the year-end consolidated financial statements for the fiscal years ended September 30, 2013 and 2011. This error resulted in an overstatement of net cash provided by operating activities and net cash used in investing activities for the fiscal year ended September 30, 2012. In addition, the Company identified an error in its Consolidated Statement of Cash Flows which affected the quarters in 2013. This error related to the classification of debt financing fees and it resulted in an understatement of net cash provided by operating activities and net cash used by financing activities. In accordance with accounting guidance presented in ASC 250-10 and SEC Staff Accounting Bulletin No. 99, Materiality, the Company assessed the materiality of these errors and concluded that they were not material to any of the Company’s previously issued financial statements. The Company will revise its previously issued financial statements to correct for these errors. These revisions did not impact the Company’s Consolidated Statements of Operations or Consolidated Balance Sheets for any of these periods.

The following tables present the effect of this correction on the Company’s Consolidated Statements of Cash Flows for all periods affected:



	Nine Months Ended June 30, 2013						Six Months Ended March 31, 2013
(Dollars in Thousands)	As Previously Reported		Adjustment		As Revised		As Previously Reported		Adjustment		As Revised
Cash flows from operating activities:
(Increase) decrease in other operating assets, net	$	(3,679)	$	200	$	(3,479)	$	(3,039)	$	200	$	(2,839)
(Decrease) increase in accounts payable and other accrued liabilities		(4,006)		2,849		(1,157)		(4,310)		1,351		(2,959)
Net cash provided by operating activities		16,533		3,049		19,582		7,473		1,551		9,024
Cash flows used by investing activities:
Acquisition of property, plant and equipment		(5,286)		(2,849)		(8,135)		(4,611)		(1,351)		(5,962)
Net cash used by investing activities		(7,259)		(2,849)		(10,108)		(5,289)		(1,351)		(6,640)
Cash flows used by financing activities:
Long-term borrowings - loan		19,600		(200)		19,400		10,500		(200)		10,300
Net cash used by financing activities		(17,705)		(200)		(17,905)		(8,776)		(200)		(8,976)

In February 2013, the FASB issued new guidance on the presentation of comprehensive income. This guidance requires reclassification adjustments from other comprehensive income to be presented either in the financial statements or in the notes to the financial statements. The standard would not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the guidance would require an entity to provide enhanced disclosures to present separately by component reclassifications out of accumulated other comprehensive income. This guidance was adopted by the Company in the first quarter of fiscal 2014. The adoption did not have a material impact on its consolidated financial statements.

In March 2013, the FASB issued an accounting update that clarifies the applicable guidance for the release of the cumulative translation adjustment when an entity ceases to have a controlling financial interest in a subsidiary or a group of assets that is a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This guidance was adopted by the Company in the first quarter of fiscal 2014. The adoption did not have a material impact on its consolidated financial statements.

In July 2013, the FASB issued new guidance to reduce the diversity in presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit

carryforward exists. This requires an unrecognized tax benefit to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions listed in the guidance. This guidance is effective for the Company in the first quarter of fiscal 2015. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. A fair value hierarchy with three tiers has been established to prioritize the inputs to valuation techniques used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. Level 1 inputs include quoted prices in active markets for identical assets and liabilities. Level 2 inputs consist of observable inputs other than quoted prices in active markets or indirectly observable through corroboration with observable market data. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.

As of ~~December~~March 31, ~~2013~~2014 and September 30, 2013, the Company’s financial assets measured and recorded at fair value on a recurring basis were comprised of investments in trading securities, which are reported in other long-term assets. The investments are held in a Rabbi trust for benefits under the Company’s deferred compensation plan. Under the plan, participants designate investment options to serve as the basis for measurement of the notional value of their accounts. The investments include a money market fund and mutual funds that are publicly traded. The fair values of the shares or underlying securities of these funds are based on quoted market prices and, therefore, are categorized as Level 1 in the fair value hierarchy.

Financial assets measured at fair value on a recurring basis are summarized below:

As of ~~December~~March 31, ~~2013,~~2014, the carrying amount of the Company’s long-term debt, which is categorized as Level 12 in the fair value hierarchy, approximated fair value as the stated interest rates were variable in relation to prevailing market rates.

Basic net income per share was computed by dividing net income available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share was computed by dividing net income available to common stockholders for the period by the weighted average number of shares of common stock that would have been outstanding assuming dilution from stock-based compensation awards during the period.

On December 3, 2013 and February 21, 2014, the Company declared a regular quarterly cash dividend in the amount of $0.55 per share for the ~~fourth~~first and second quarter of fiscal ~~2013. The dividends were paid on January 6,~~ 2014, ~~to shareholders of record as of December 23, 2013.~~ respectively.



	Three Months Ended March 31,				Six Months Ended March 31,
(Dollars in Thousands, Except per Share)	2014		2013		2014		2013
Basic Net Income per Share:
Net income attributed to Landauer, Inc.	$	4,997	$	5,153	$	8,048	$	10,030
Less: Income allocated to unvested restricted stock		46		43		91		75
Net income available to common stockholders	$	4,951	$	5,110	$	7,957	$	9,955
Basic weighted average shares outstanding		9,460		9,417		9,441		9,391
Net income per share - Basic	$	0.52	$	0.54	$	0.84	$	1.06

Diluted Net Income per Share:
Net income attributed to Landauer, Inc.	$	4,997	$	5,153	$	8,048	$	10,030
Less: Income allocated to unvested restricted stock		46		43		91		75
Net income available to common stockholder	$	4,951	$	5,110	$	7,957	$	9,955
Basic weighted average shares outstanding		9,460		9,417		9,441		9,391
Effect of dilutive securities		41		45		44		47
Diluted weighted averages shares outstanding		9,501		9,462		9,485		9,438
Net income per share - Diluted	$	0.52	$	0.54	$	0.84	$	1.05

The components of net periodic benefit cost for pension and other benefits were as follows:

The Company, under the IRS minimum funding standards, has no required contributions to make to its defined benefit pension plan during fiscal 2014.

The Company maintains 401(k) Retirement Savings Plans for certain employees, which may provide for employer matching contributions, and a supplemental defined contribution plan for certain executives, which provides for employer contributions at the discretion of the Company. Amounts expensed for Company contributions under these plans during the ~~first~~ three months ~~of fiscal~~ended March 31, 2014 and 2013 were ~~$458~~$401 and ~~$371,~~$430, respectively.

Amounts expensed during the six months ended March 31, 2014 and 2013 were $859 and $801, respectively.

Radiation Measurement

Medical
Physics

Medical
Products

Total

Balance as of September 30, 2013

$
20,456

$
22,611

$
41,369

$
84,436
Increase related to acquisitions, net
of subsequent adjustments for
deferred taxes

-

-

2,019

2,019
Effects of foreign currency

74

74
Accumulated goodwill impairment charges

-
Goodwill, net as of December 31, 2013

$
20,530

$
22,611

$
43,388

$
86,529



	Radiation Measurement		Medical Physics		Medical Products		Total
Balance as of September 30, 2013	$	20,456	$	22,611	$	41,369	$	84,436
Increase related to acquisitions		-		-		1,781		1,781
Effects of foreign currency		158		-		9		167
Goodwill, net as of March 31, 2014	$	20,614	$	22,611	$	43,159	$	86,384

On December 23rd, 2013, the Company acquired a small German distributor on behalf of the Medical Products segment. The preliminary purchase price allocation indicates an increase in customer lists of ~~$772 and~~$768, an increase in goodwill of ~~$2,019.~~$1,781 and an earn-out liability of $885.

Intangible assets were as follows for the ~~years ended December 31, were as follows:~~periods ended:

Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Intangible assets amortization expenses were $1,037 and $2,222 for the three and six months ended March 31, 2014 and $839 and $1,698 for the three and six months ended March 31, 2013.

Accumulated elements of other comprehensive (loss) income ~~(loss)~~ (“AOCI”), net of tax, are included in the stockholders’ equity section of the condensed consolidated balance sheets. Changes in each component of AOCI are as follows:

Reclassifications out of accumulated other comprehensive (loss) income ~~(loss)~~ included in the computation of net periodic benefit costs (refer to Note 5 of the Notes to Consolidated Financial Statements for additional details regarding employee benefit plans) ~~was~~were as follows:

During the first fiscal quarter of 2014, the Company changed the presentation of its reporting segments to separately disclose certain ‘corporate expenses’ that had previously been reported within the Radiation Measurement segment. As a result, the current segment disclosures will reflect three reporting segments: Radiation Measurement, Medical Physics, Medical Products and one functional group: Corporate. The following tables summarize financial information for each reportable segment:



	Three Months Ended March 31,				Six Months Ended March 31,
	2014		2013		2014		2013
Revenues by segment:
Radiation Measurement	$	29,184	$	27,249	$	56,925	$	53,652
Medical Physics		8,029		7,598		15,768		15,187
Medical Products		2,341		2,235		4,566		4,924
Consolidated revenues	$	39,554	$	37,082	$	77,259	$	73,763

	Three Months Ended March 31,				Six Months Ended March 31,
	2014		2013		2014		2013
Operating income (loss) by segment:
Radiation Measurement	$	10,301	$	10,141	$	18,880	$	19,573
Medical Physics		600		732		1,033		1,524
Medical Products		(174)		304		(612)		974
Corporate		(3,362)		(4,023)		(6,911)		(8,190)
Consolidated operating income	$	7,365	$	7,154	$	12,390	$	13,881

The Company has a minority interest in Yamasato, Fujiwara, Higa & Associates, Inc. doing business as Aquila. The Company provides dosimetry parts to Aquila for their military contract. The sales to Aquila during the three months ended March 31, 2014 and 2013 were $681 and $1,191, respectively. Sales during the six months ended March 31, 2014 and 2013 were $681 and $2,758, respectively. The purchases from Aquila during the three months ended March 31, 2014 and 2013 were $253 and $0, respectively. Purchases during the six months ended March 31, 2014 and 2013 were $253 and $27, respectively.

The Company has a 50% equity interest in Nagase-Landauer, Ltd. (“Nagase”), a radiation measurement company in Japan. The sales to Nagase during the three months ended March 31, 2014 and 2013 were $284 and $67, respectively. Sales during the six months ended March 31, 2014 and 2013 were $621 and $236, respectively. The purchases from Nagase during the three months ended March 31, 2014 and 2013 were $319 and $881, respectively. Purchases during the six months ended March 31, 2014 and 2013 were $801 and $1,738, respectively.

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

The following discussion and analysis of ~~our~~the Company’s unaudited consolidated financial condition and results of operations should be read in conjunction with ~~our~~the annual audited consolidated financial statements and related notes thereto. The following discussion includes forward-looking statements that involve certain risks and uncertainties. For additional information regarding forward-looking statements and risk factors, see “Forward-Looking Statements” herein and Item 1A. “Risk Factors” in ~~our~~the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013.

The preparation of financial statements in conformity with GAAP requires that management make assumptions and estimates that affect the results of operations and the amounts of assets and liabilities reported in the financial statements as well as related disclosures. Critical accounting policies are those that are most important to the portrayal of a company’s financial condition and results, and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. ~~We base our~~The Company bases their estimates, judgments and assumptions on historical experience and other relevant factors that are believed to be reasonable under the circumstances. In any given reporting period, ~~our~~the Company’s actual results may differ from the estimates, judgments and assumptions used in preparing ~~our~~the consolidated financial statements.

~~There~~As of March 31, 2014, the Medical Products reporting unit had a goodwill balance of $43.2 million. The annual impairment testing of goodwill, as required by GAAP, was ~~no provision for impairment charges during~~performed in the ~~first three months~~fourth quarter of fiscal ~~2014~~year 2013, based on fair values and ~~fiscal 2013, respectively.~~net carrying values. The ~~Company will continue to evaluate goodwill and other identified intangible assets for impairment. Goodwill and other identified intangible assets are material components~~estimated fair value of the ~~Company’s financial statements and impairment charges to the Company’s goodwill or other identified intangible assets in future periods could be material to the Company’s results~~Company's Medical Products business exceeded its carrying value by less than 10% as of ~~operations.~~

September 30, 2013. While historical performance and current expectations have resulted in fair values of goodwill and other identified intangible assets in excess of carrying values, if ~~our~~the Company’s assumptions are not realized, it is possible that in the future an additional impairment charge may need to be recorded. However, it is not possible at this time to determine if an impairment charge would result or if such a charge would be material. The Company will continue to monitor the recoverability of its remaining goodwill.

For a detailed discussion of the Company’s critical accounting policies, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in ~~our~~the Annual Report on Form 10-K for the year ended September 30, 2013.

Comparison of the ~~first~~second fiscal quarter ended ~~December~~March 31, ~~2013~~2014 and the ~~first~~second fiscal quarter ended ~~December~~March 31, ~~2012~~2013

Revenues for the ~~first~~second fiscal quarter of 2014 were ~~$37.7~~$39.5 million, an increase of ~~$1.0~~$2.4 million, or ~~2.7%~~6.5%, compared with revenues of ~~$36.7~~$37.1 million for the ~~first~~second fiscal quarter of 2013. The Radiation Measurement segment experienced an increase of ~~$1.4~~$1.9 million, due primarily to a ~~$1.1~~$2.2 million increase in revenue from international ~~operations.~~operations offset by a decrease in domestic revenues of $0.3 million. Medical ~~Products~~Physics segment revenues ~~decreased~~increased by ~~$0.5~~$0.4 million due primarily to ~~the decline in the Spherz selling price and shipments.~~increased imaging services.

Cost of sales for the ~~first~~second fiscal quarter of 2014 was ~~$18.2~~$18.3 million, an increase of ~~$1.6~~$1.3 million, or ~~9.6%~~7.6%, compared with cost of sales of ~~$16.6~~$17.0 million for the ~~first~~second fiscal quarter of 2013. The cost of sales increase was due primarily to increased international expenses of ~~$0.4~~$0.9 million as a result of increased international sales ~~an increase in material costs of $0.5 million~~ and an increase in service costs of ~~$0.3 million.~~

$0.6 million on higher startup costs in new regions for Medical Physics, offset by decreased labor costs of $0.4 million due primarily to lower benefit costs.

Selling, general and administrative expenses for the ~~first~~second fiscal quarter of 2014 were ~~$14.5~~$13.7 million, an increase of $1.1 million, or ~~8.2%~~8.7%, compared with operating expenses of ~~$13.4~~$12.6 million for the ~~first~~second fiscal quarter of 2013. The selling, general and administrative expense increase was due primarily to ~~$1.0 million of~~ increased research and development expenses of $0.5 million, primarily attributed to advancement of ~~our~~the Company’s next generation dosimetry platform, ~~$0.4~~an increase in amortization costs of $0.3 million, an increase in ~~increased amortization expense and $0.2~~payroll of $0.3 million, ~~in increased payroll~~ largely due to new personnel, an increase in international costs of $0.2 million and an increase in professional fees of $0.2 million, offset by ~~$0.5~~a decrease in outside services of $0.4 million ~~of reduced stock compensation expense from revised estimates consistent with the company’s fiscal 2014 guidance.~~related to customer service support.

Operating income for the ~~first~~second fiscal quarter of 2014 was ~~$5.0~~$7.4 million, ~~a decrease~~an increase of ~~$1.7~~$0.2 million, or ~~25.4%~~2.8%, compared with operating income of ~~$6.7~~$7.2 million for the ~~first~~second fiscal quarter of 2013. The ~~decrease~~increase was related to increased revenue of $2.4 million and $0.4 million of reduced outside customer service support, offset by an increase in ~~operating income was due to~~costs of sales of $1.3 million and increased research and development ~~costs of $1.0 million, a $0.5 decrease in Spherz revenue, an increase in material~~ costs of $0.5 million, an increase in amortization costs, of ~~$0.4~~$0.3 million, due to ~~revised intangible life~~an adjustment to useful lives and an increase in ~~services and~~service costs of $0.6 million, payroll costs of ~~$0.5~~$0.2 million, ~~offset by $0.7~~an increase in international costs of $0.2 million and an increase in professional fees of ~~increased international operating income and $0.5 million of reduced stock compensation expense from revised estimates.~~$0.2 million.

Equity in income of joint ventures for the ~~first~~second fiscal quarter of 2014 was ~~$0.6~~$0.5 million, a decrease of ~~$0.9~~$0.1 million, or ~~60.0%~~16.7%, from the prior year ~~first~~second fiscal quarter amount of ~~$1.5~~$0.6 million, due primarily to ~~decreases of equipment shipments of~~ the ~~RadWatch product largely related with services and associated timing of military funding of defense department budgets.~~negative foreign exchange impact on equity earnings from Nagase-Landauer in Japan.

The effective tax rate for the ~~first~~second fiscal quarter of 2014 and 2013 was ~~31.5%~~28.2% and ~~31.1%~~23.6%, respectively. The increase in the effective tax rate was due primarily to ~~a true-up of a prior year pension adjustment.~~the research and development credit not being retroactively reenacted as it was in fiscal 2013.

Net income attributable to Landauer for the ~~first~~second fiscal quarter of 2014 was ~~$3.1~~$5.0 million, a decrease of ~~$1.8~~$0.2 million, or ~~36.7%~~3.8%, compared with net income of ~~$4.9~~$5.2 million in the ~~first~~second fiscal quarter of 2013. The decrease ~~in net income~~ was ~~due~~primarily related to ~~an increase in~~increased research and development ~~costs of $1.0 million, a decrease in equity earnings due to timing of $0.9 million, a $0.5 million decrease in Spherz revenue, an increase in material~~ costs of $0.5 million, an increase in amortization costs, of ~~$0.4~~$0.3 million, due to an adjustment to useful lives and an increase in services of $0.6 million, payroll costs of $0.3 million, an increase in international costs of $0.2 million and an increase in ~~services~~professional fees of $0.2 million, other income decrease of $0.2 million and ~~payroll costs~~increased taxes of ~~$0.5~~$0.3 million, offset by ~~$0.7~~a net gross margin benefit on increased sales of $1.1 million ~~in international operating income, a decrease of $0.8 million in income taxes~~ and ~~$0.5~~$0.4 million of reduced ~~stock compensation expense from revised estimates.~~outside customer services support.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the ~~first~~second fiscal quarter of 2014 were ~~$9.2~~$11.6 million compared with ~~$11.5~~$11.3 million for the ~~first~~second fiscal quarter of 2013. The ~~decline~~increase was due primarily to ~~lower income, lower provision for income taxes offset by slightly~~increased revenue and gross profit outpacing higher ~~depreciation.~~selling, general and administrative expense. A reconciliation of net income to EBITDA and Adjusted EBITDA is included herein under this Item 2.

Radiation Measurement revenues for the ~~first~~second fiscal quarter of 2014 were ~~$27.7~~$29.2 million, an increase of ~~$1.4~~$1.9 million, or ~~5.3%~~7.0%, from the ~~first~~second fiscal quarter of 2013 of ~~$26.4~~$27.3 million. The ~~$1.4~~$1.9 million increase in the fiscal quarter was due primarily to increases in revenues from ~~both~~ equipment and ~~measurement services at international subsidiaries. Operating income for~~non-recurring service revenue to Health Canada and equipment sales in the ~~first fiscal quarter of 2014~~EMEA region, and increases

~~was $8.6~~in measurement services at international subsidiaries of $2.2 million, aoffset by domestic business decrease of ~~$0.9~~$0.3 million due largely to lower military Radwatch revenues. Operating income for the second fiscal quarter of 2014 was $10.3 million, an increase of $0.2 million, or ~~9.6%~~2.0%, compared to operating income of ~~$9.4~~$10.1 million for the ~~first~~second fiscal quarter of 2013. The ~~decrease~~increase in operating income was due to increased revenue of $1.9 million, offset by increased costs of sales of $0.6 million, increased research and development expenses of ~~$1.0~~$0.4 million, primarily attributed to advancement of ~~our~~the Company’s next generation dosimeter and increased ~~materials expenses~~employee costs due primarily to new personnel of ~~$0.3~~$0.5 million ~~offset by~~and increased international ~~operating income~~costs of ~~$0.7~~$0.2 million.

Medical Physics revenues for the ~~first~~second fiscal quarter of 2014 were ~~$7.7~~$8.0 million, an increase of ~~$0.1~~$0.4 million, or ~~1.3%~~5.3%, as compared to $7.6 million for the ~~first~~second fiscal quarter of 2013. The increase in revenue is primarily attributable to increased imaging services. Medical Physics operating income for the ~~first~~second fiscal quarter of 2014 was ~~$0.4~~$0.6 million, or ~~5.2%~~7.5% of revenues, as compared to ~~$0.8~~$0.7 million, or ~~10.5%~~9.2% of revenues, in the ~~first~~second fiscal quarter of 2013. The decrease in operating income was partially due to increased staffing in support of the continued advancement of ~~its~~the segment’s system-sell ~~initiatives~~initiatives.

Medical Products revenues for the second fiscal quarter of 2014 were $2.3 million, an increase of $0.1 million, or 4.5%, compared to $2.2 million for the second fiscal quarter of 2013. Operating loss for the second fiscal quarter of 2014 was $0.2 million, a decrease of $0.5 million, as compared to operating income of $0.3 million for the second fiscal quarter of 2013. The decrease is due primarily to an increase in costs related to a mix in revenue of $0.3 million and ~~previously unallocated~~increased amortization of $0.3 million.

Corporate selling, general and administrative expenses reflect costs associated with supporting the entire Company, including executive management and administrative functions such as accounting, treasury, legal, human resources, and information technology management, as well as other costs required to support the Company. Corporate expenses for the second fiscal quarter of 2014 were $3.4 million, a decrease of $0.6 million as compared to $4.0 million in the second fiscal quarter of 2013. The decrease was due primarily to reduced employee incentives of $0.2 million and the allocation of staffing to support segment initiatives.

Comparison of the six months ended March 31, 2014 and the six months ended March 31, 2013

Revenues for the first six months of fiscal 2014 were $77.3 million, an increase of $3.5 million, or 4.7%, compared with revenues of $73.8 million for the first six months of fiscal 2013. The Radiation Measurement segment experienced an increase of $3.2 million, due primarily to an increase in revenue from international operations. Medical Physics segment revenues increased by $0.6 million due primarily to increased imaging services, offset by decreased Medical Products revenue of $0.3 million as a result of decreased Spherz pricing and shipments.

Cost of sales for the first six months of fiscal 2014 was $36.6 million, an increase of $3.0 million, or 8.9%, compared with cost of sales of $33.6 million for the first six months of fiscal 2013. The cost of sales increase was due primarily to increased international expenses of $1.3 million as a result of increased international sales, an increase in service costs of $1.0 million on higher startup costs in new regions for Medical Physics and $0.7 million of IT platform expenses, offset by decreased labor costs of $0.7 million due primarily to lower benefit costs.

Selling, general and administrative expenses for the first six months of fiscal 2014 were $28.1 million, an increase of $2.1 million, or 8.1%, compared with operating expenses of $26.0 million for the

first six months of fiscal 2013. The selling, general and administrative expense increase was due primarily to increased research and development expenses of $1.6 million, primarily attributed to advancement of the Company’s next generation dosimetry platform, an increase in amortization costs of $0.7 million, an increase in professional fees of $0.5 million and increased international costs of $0.2 million, offset by $1.1 million of reduced outside services related to prior year customer service support.

Operating income for the first six months of fiscal 2014 was $12.4 million, a decrease of $1.5 million, or 10.8%, compared with operating income of $13.9 million for the first six months of fiscal 2013. The decrease was due primarily to ~~changes~~increased research and development expenses of $1.6 million, primarily attributed to advancement of the Company’s next generation dosimetry platform, an increase in ~~segment presentation.~~amortization costs of $0.7 million, an increase in professional fees of and an increase in international costs of $0.2 million, offset by $1.1 million of reduced outside services related to prior year customer service support and increased gross margins of $0.5 million on increased revenues, reduced by increased cost of goods and services.

Equity in income of joint ventures for the first six months of fiscal 2014 was $1.1 million, a decrease of $1.0 million from the prior fiscal year’s first six months amount of $2.1 million, due primarily to decreases in sales of a joint venture partner unrelated to the Company’s Radwatch radiation measurement products.

The effective tax rate for the first six months of fiscal 2014 and 2013 was 29.6% and 27.5%, respectively. The increase in the effective tax rate was due primarily to the research and development credit not being retroactively reenacted as it was in fiscal 2013.

Net income attributable to Landauer for the first six months of fiscal 2014 was $8.0 million, a decrease of $2.0 million, or 20.0%, compared with net income of $10.0 million in the first six months of fiscal 2013. The decrease was due to increased research and development costs of $1.6 million, an increase in amortization costs, of $0.7 million, due to an adjustment to useful lives, equity income decrease of $1.0 million, offset by reduced outside customer service support of $1.1 million and decreased taxes on lower income of $0.5 million.

EBITDA for the first six months of fiscal 2014 were $20.8 million compared with $22.8 million for the first six months of fiscal 2013. The decrease was due primarily to increased research and development expenses. A reconciliation of net income to EBITDA and Adjusted EBITDA is included herein under this Item 2.

Radiation Measurement revenues for the first six months of fiscal 2014 were $56.9 million, an increase of $3.2 million, or 6.0%, from the first six months of fiscal 2013 of $53.7 million. The $2.7 million increase in the first six months of fiscal 2014 was due primarily to increases in revenues from both equipment and measurement services at international subsidiaries of $3.3 million. Operating income for the first six months of fiscal 2014 was $18.9 million, a decrease of $0.7 million, or 3.6%, compared to operating income of $19.6 million for the first six months of fiscal 2013. The decrease in operating income was due to increased costs of sales of $1.5 million, increased research and development expenses of $1.5 million primarily attributed to advancement of the Company’s next generation dosimeter and increased employee costs, due primarily to new personnel, of $0.9 million, increase in professional fees of $0.3 million, increased amortization costs of $0.2 million and increased international costs of $0.2 million, offset by $3.2 million of higher revenue and $1.0 million of reduced outside services related to prior year customer service support.

Medical Physics revenues for the first six months of fiscal 2014 were $15.8 million, an increase of $0.6 million, or 3.9%, as compared to $15.2 million for the first six months of fiscal 2013. The increase

in revenue is primarily attributable to increased imaging services. Medical Physics operating income for the first six months of fiscal 2014 was $1.0 million, or 6.3% of revenues, as compared to $1.5 million, or 9.9% of revenues, in the first six months of fiscal 2013. The decrease in operating income was partially due to increased staffing in support of the continued advancement of the segment’s system-sell initiatives.

Medical Products revenues for the first six months of fiscal ~~quarter of~~ 2014 were ~~$2.2~~$4.6 million, a decrease of ~~$0.5~~$0.3 million, or ~~18.5%~~6.1%, compared to ~~$2.7~~$4.9 million for the first six months of fiscal ~~quarter~~2013. The decrease in revenues of ~~2013.~~$0.3 million is due primarily to the decline in the Spherz selling price and shipments. Operating loss for the first six months of fiscal ~~quarter of~~ 2014 was ~~$0.4~~$0.6 million, a decrease of ~~$1.1~~$1.6 million, as compared to operating income of ~~$0.7~~$1.0 million for the first six months of fiscal ~~quarter of~~ 2013. The decrease is due primarily to a decrease in revenue of ~~$0.5~~$0.3 million, an increase in ~~amortization~~costs related to a mix in revenue of ~~$0.4~~$0.5 million and increased ~~material~~amortization costs of ~~$0.2~~$0.7 million.

Corporate selling, general and administrative expenses reflect costs associated with supporting the entire Company, including executive management and administrative functions such as accounting, treasury, legal, human resources, and information technology management, as well as other costs required to support the Company. Corporate expenses for the first six months of fiscal ~~quarter of~~ 2014 were ~~$3.6~~$6.9 million, a decrease of ~~$0.6~~$1.3 million as compared to ~~$4.2~~$8.2 million in the first six months of fiscal ~~quarter of~~ 2013. The decrease was due primarily to ~~$0.5~~reduced employee incentives of $0.9 million and the allocation of ~~reduced stock compensation expense from revised estimates consistent with the company’s fiscal 2014 guidance.~~staffing to support segment initiatives.

Landauer’s business plan for fiscal 2014 currently anticipates aggregate revenues for the year to be in the range of $140.0 to $160.0 million, and reflects the uncertainty of government funding during fiscal 2014 related to the military equipment sales opportunities the Company has developed. The Company also anticipates that the effective tax rate for the full fiscal year will now be within a range of ~~28%~~29% to ~~32%~~31%.

Based upon the above assumptions, the Company anticipates reported net income for fiscal 2014 in the range of $16.0 to $18.0 million, and revised Adjusted EBITDA for fiscal 2014 in the range of ~~$46.0~~$44.0 to ~~$49.0~~$47.0 million.

Cash provided by operations was ~~$10.0~~$20.2 million and ~~$2.3~~$9.0 million infor the first six months of fiscal ~~quarter of~~ 2014 and 2013, respectively. The increase was due primarily to a ~~$5.5~~$4.4 million increase in receivable collections as a result of system go-live normalization following the Company’s IT platform enhancement and other favorable working capital changes of ~~$2.2~~$4.7 million.

Cash used by investing activities for the first six months of fiscal ~~quarter of~~ 2014 was ~~$3.6~~$5.1 million compared to the prior fiscal year’s first ~~fiscal quarter~~six months amount of ~~$2.4~~$6.6 million. The primary difference was due to a reduction in capital spending, partially offset by a small acquisition of a German distributor on behalf of the Medical Products segment for $1.8 million.

Financing activities for the first six months of fiscal ~~quarter of~~ 2014 were comprised primarily of long-term borrowings onunder the credit agreement of ~~$14.0~~$20.0 million compared to the previous fiscal year’s first ~~fiscal quarter~~six months borrowings of ~~$4.3~~$10.3 million, offset by ~~$13.0~~$24.5 million of repayments in the first six months of fiscal ~~quarter of~~ 2014 and no$8.6 million of repayments in the previous fiscal year’s first ~~fiscal quarter. The~~six months. As of March 31, 2014, the Company had ~~$31.0~~$36.7 million of unused availability under its current $175.0 million credit

facility, which provides adequate liquidity to meet its current and anticipated obligations. During the first six months of fiscal ~~quarter of~~ 2014 and 2013, the Company funded cash dividends of ~~$5.3~~$10.5 million and ~~$5.2~~$10.4 million, respectively, or $0.55 per share, for cash dividends declared in ~~each~~the fourth fiscal quarter of 2013 and ~~2012.~~2012 and the first fiscal quarter of 2014 and 2013.

The Company expects to meet short-term liquidity requirements (including capital expenditures) through net cash from operating activities, cash on hand and, if necessary, the debt facility. As of March 31, 2014, long-term liquidity requirements consist primarily of obligations under the long-term debt obligations. The Company does not have any required debt repayments until August 2, 2018 when the debt facility expires.

The tables below include financial measures of EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per Diluted Share. These are non-GAAP measures. Management believes that such measures supplement evaluations using operating income, net income, and diluted earnings per share and other GAAP measures, and are a useful indicator for investors. These indicators can help readers gain a meaningful understanding of the Company’s core operating results and future prospects without the effect of non-recurring and non-cash items and the Company’s ability to generate cash flows from operations that are available for taxes, capital expenditures, and debt repayment. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with GAAP.

The Company uses these non-GAAP financial measures for internal budgeting and other managerial purposes, such as when publicly providing the Company’s business outlook and as a measurement for potential acquisitions. A limitation associated with Adjusted EBITDA is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company’s business. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures. Management compensates for these limitations by also relying on the comparable GAAP financial measure of operating income, which includes depreciation and amortization.

These non-GAAP measures may be considered in addition to results prepared in accordance with GAAP, but they should not be considered a substitute for, or superior to, GAAP results. The Company intends to continue to provide these non-GAAP financial measures as part of its future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in the Company’s financial reporting.

A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is provided below:



	Three Months Ended March 31,				Six Months Ended March 31,
	2014		2013		2014		2013
Adjusted EBITDA
Net income attributed to Landauer, Inc.	$	4,997	$	5,153	$	8,048	$	10,030
Add back:
Interest expense, net		873		976		1,662		1,908
Depreciation and amortization		3,768		3,526		7,662		6,976
Provision for income taxes		1,954		1,620		3,450		3,894
Earnings before interest, taxes, depreciation and amortization (EBITDA)	$	11,592	$	11,275	$	20,822	$	22,808
Adjustments:
Non-cash stock based compensation		171		382		463		1,066
IT platform enhancements expenses		-		27		-		205
Acquisition, reorganization and nonrecurring costs		109		300		220		300
Sub-total adjustments		280		709		683		1,571
Adjusted EBITDA	$	11,872	$	11,984	$	21,505	$	24,379

	Three Months Ended March 31,				Six Months Ended March 31,
	2014		2013		2014		2013
Adjusted Net Income
Net income attributed to Landauer, Inc.	$	4,997	$	5,153	$	8,048	$	10,030
Sub-total adjustments		280		709		683		1,571
Income-taxes on adjustments		(75)		(167)		(202)		(432)
Adjustments, net		205		542		481		1,139
Adjusted, Net Income	$	5,202	$	5,695	$	8,529	$	11,169
Adjusted Net Income per Diluted Share	$	0.55	$	0.60	$	0.90	$	1.18

Three Months Ended
December 31,

2013

2012
Adjusted EBITDA

Net income attributed to Landauer, Inc.
$
3,051

$
4,877
Add back:

Interest expense, net

789

932
Depreciation and amortization

3,894

3,450
Provision for income taxes

1,496

2,274
Earnings before interest, taxes, depreciation and amortization (EBITDA)
$
9,230

$
11,533
Adjustments:

Non-cash stock based compensation

292

684
IT platform enhancements expenses

-

178
Acquisition and reorganization costs

111

-
Sub-total adjustments

403

862
Adjusted EBITDA
$
9,633

$
12,395

Adjusted Net Income

Net income attributed to Landauer, Inc.
$
3,051

$
4,877
Sub-total adjustments

403

862
Income-taxes on adjustments

(127)

(268)
Adjustments, net

276

594
Adjusted, Net Income
$
3,327

$
5,471
Adjusted Net Income per Diluted Share
$
0.35

$
0.58

Recent Accounting Pronouncements

See Note 2 to the Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q.

Contractual Obligations

There have been no material changes, outside of the ordinary course of business, in the Company’s outstanding contractual obligations since the end of fiscal year 2013 through ~~December~~March 31, ~~2013.~~2014.

Forward-Looking Statements

Certain matters contained in this report, including the information contained under the heading “Fiscal 2014 Outlook,” constitute forward-looking statements that are based on certain assumptions and involve certain risks and uncertainties. These include the following, without limitation: assumptions, risks and uncertainties associated with the Company’s future performance, the Company’s development and introduction of new technologies in general; the ability to protect and utilize the Company’s intellectual property; continued customer acceptance of the InLight technology; the adaptability of optically stimulated luminescence (“OSL”) technology to new platforms and formats; military and other government funding for the purchase of certain of the Company’s equipment and services; the impact on sales and pricing of certain customer group purchasing arrangements; changes in spending or

reimbursement for medical products or services; the costs associated with the Company’s research and business development efforts; the usefulness of older technologies and related licenses and intellectual property; the effectiveness of and costs associated with the Company’s IT platform enhancements; the anticipated results of operations of the Company and its subsidiaries or ventures; valuation of the Company’s long-lived assets or business units relative to future cash flows; changes in pricing of services and products; changes in postal and delivery practices; the Company’s business plans; anticipated revenue

and cost growth; the ability to integrate the operations of acquired businesses and to realize the expected benefits of acquisitions; the risks associated with conducting business internationally; costs incurred for potential acquisitions or similar transactions; other anticipated financial events; the effects of changing economic and competitive conditions, including instability in capital markets which could impact availability of short and long-term financing; the timing and extent of changes in interest rates; the level of borrowings; foreign exchange rates; government regulations; accreditation requirements; changes in the trading market that affect the costs of obligations under the Company’s benefit plans; and pending accounting pronouncements. These assumptions may not materialize to the extent assumed, and risks and uncertainties may cause actual results to be different from what is anticipated today. These risks and uncertainties also may result in changes to the Company’s business plans and prospects, and could create the need from time to time to write down the value of assets or otherwise cause the Company to incur unanticipated expenses. Additional information may be obtained by reviewing the information set forth in Item 1A “Risk Factors” and Item 7A “Quantitative and Qualitative Disclosures about Market Risk” and information contained in the Company's Annual Report on Form 10-K for the year ended September 30, 2013 and other reports filed by the Company, from time to time, with the SEC. The Company does not undertake, and expressly disclaims, any duty to update any forward-looking statement whether as a result of new information, future events or changes in the Company’s expectations, except as required by law.

1823

Item 3.quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk, including changes in foreign currency exchange rates. These risks are set forth in Item 7A “Quantitative and Qualitative Disclosures about Market Risk” of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year through ~~December~~March 31, ~~2013.~~2014.

Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of ~~the end of the period covered by this report,~~March 31, 2014, an evaluation was performed under the supervision and with the participation of ~~the Company’s~~our management, including ~~the~~our Chief Executive Officer (“CEO”) and ~~the~~ Chief Financial Officer (“CFO”) (the Company’s principal executive officer and principal financial officer, respectively), of the effectiveness of the design and operation of the Company’s ~~disclosure~~“disclosure controls and ~~procedures~~procedures” as defined in ~~Rule 13(a)-15(e)~~Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended.

Based upon that evaluation, ~~the Company’s~~our CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as a result of the material weakness that existed in our internal control over financial reporting described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

We did not design effective controls over the preparation and review of our Consolidated Statement of Cash Flows. Specifically, controls were not designed to ensure transactions were properly classified within the Consolidated Statement of Cash Flows, including nonrecurring transactions and adjustments pertaining to purchases of property, plant and equipment. This control deficiency resulted in an auditor adjustment for the six months ended March 31, 2014 and the revision of our consolidated financial statements for the fiscal years ended September 30, 2011, 2012, and 2013, the interim periods within fiscal 2013, and the three months ended December 31, 2013. Additionally, this control deficiency could result in misstatements of our Consolidated Statements of Cash Flows that would result in a material misstatement of the consolidated financial statements that would not be prevented or detected on a timely basis. Accordingly, our management has determined that this control deficiency constitutes a material weakness.

In light of the material weakness as of March 31, 2014 described above, we re-evaluated our conclusion regarding the effectiveness of our internal control over financial reporting as of September 30, 2013. As a result of an audit adjustment identified in the Consolidated Statement of Cash Flows as of September 30, 2013 and the revision to the Consolidated Statement of Cash Flows for the year ended September 30, 2012 as disclosed in our 2013 Form 10-K filed on December 16, 2013, we had previously identified a deficiency in the controls over the preparation and review of the Consolidated Statement of Cash Flows that was not considered to be a material weakness at the time. Given the additional errors identified in the Consolidated Statement of Cash Flows for the year ended September 30, 2013, as well as auditor adjustments in our Consolidated Statement of Cash flows for the six months ended March 31, 2014, we now consider the control deficiency identified as of September 30, 2013 ~~were effective.~~to be a material weakness. As of September 30, 2013, we did not design effective controls over the preparation and review of our Consolidated Statement of Cash Flows as described above.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Notwithstanding the identified material weakness, management believes the consolidated financial statements included in this Quarterly Report on Form 10-Q fairly state in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

Plan for Remediation of the Material Weakness

In response to the material weakness described above, our management, with the oversight from our Audit Committee of the Board of Directors, has taken steps and plans to take additional measures to remediate the underlying causes of the material weakness, primarily by enhancing processes to increase the effectiveness of review over nonrecurring transactions and adjustments pertaining to purchases of property, plant, and equipment. While we believe we will remediate the material weakness prior to filing our Annual Report on Form 10-K for the fiscal year ending September 30, 2014, we can provide no assurance at this time that management will be able to report that our internal control over financial reporting is effective as of September 30, 2014. Until the remediation steps set forth below are fully implemented, the material weakness described above will continue to exist.

In response to the material weakness identified related to the preparation and review of the Consolidated Statements of Cash Flows in the six month period ended March 31, 2014, we have taken the following actions to improve the design of our internal control in order to remediate this weakness:

Enhance our checklist to identify the most common elements of investing and financing activities, including nonrecurring transactions and adjustments; and

Enhance our process to accurately estimate adjustments pertaining to purchases of property, plant and equipment. We will also improve the precision of our review of adjustments made to the Consolidated Statement of Cash Flows as well as the templates and supporting schedules that support the Statement of Cash Flows.

In addition, for future reporting periods, we intend to do the following in order to remediate the material weakness:

Enhance our templates and supporting schedules that facilitate the preparation of the Consolidated Statement of Cash Flows. We will also implement additional procedures for the review of these supporting schedules.

We believe these additional internal controls will be effective in remediating the material weakness related to the preparation and review of the Consolidated Statements of Cash Flows described above. As we continue to evaluate and work to improve our internal control over financial reporting, management may determine to take additional measures to address the material weakness or determine to modify the remediation plan described above.

Changes in Internal Control Over Financial Reporting

~~There were no~~As described above, there have been changes in ~~the Company’s~~our internal control over financial reporting ~~that occurred~~ during the ~~quarterly period~~quarter ended ~~December~~March 31, ~~2013~~2014 that have materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal control over financial ~~reporting.~~reporting . At the time that our Annual Report on Form 10-K for the year ended September 30, 2013 was filed on December 16, 2013, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2013. Subsequent to that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of September 30, 2013 and subsequent periods through March 31, 2014 because of the material weakness in our internal control over financial reporting described above. Subsequent to the filing of this Quarterly Report, we will file an amended Form 10-K for the fiscal year ended September 30, 2013 to revise our disclosures in Item 9A for this material weakness.

PART II OTHER INFORMATION

Item 1.Legal Proceedings

The Company is a party, from time to time, to various legal proceedings, lawsuits and other claims arising in the ordinary course of its business. The Company does not believe that any such litigation pending as of ~~December~~March 31, ~~2013,~~2014, if adversely determined, would have a material effect on its business, financial position, results of operations, or cash flows.

Item 1A.Risk Factors

Information regarding risk factors are set forth in Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year through ~~December~~March 31, ~~2013.~~2014.

1926

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

The Company’s purchases of its equity securities from the end of the preceding fiscal year through ~~December~~March 31, ~~2013~~2014 includes the deemed surrender of existing shares of Landauer common stock to the Company by stock-based compensation plan participants to satisfy the exercise price or tax liability of employee stock awards at the time of exercise or vesting. These surrendered shares are not part of any publicly announced share repurchase program.



Period	Total Number of Shares Purchased		Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs	Total Number of Shares Purchased		Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
October 1 - October 31, 2013	105	$	51.26	-	-	105	$	51.26	-	-
November 1 - November 30, 2013	1,426		47.80	-	-	1,426		47.80	-	-
December 1 - December 31, 2013	3,260		52.16	-	-	3,260		52.16	-	-
Quarter ended December 31, 2013	4,791	$	50.84	-	-	4,791	$	50.84	-	-
January 1 - January 31, 2014						541	$	52.56	-	-
February 1 - February 28, 2014						0		0.00	-	-
March 1 - March 31, 2014						0		0.00	-	-
Quarter ended March 31, 2014						541	$	52.56	-	-

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.



	Three Months Ended December 31, 2012						Year Ended September 30, 2012
(Dollars in Thousands)	As Previously Reported		Adjustment		As Revised		As Previously Reported		Adjustment		As Revised
Cash flows from operating activities:
(Decrease) increase in accounts payable and other accrued liabilities	$	(5,775)	$	1,812	$	(3,963)	$	3,982	$	(677)	$	3,305
Net cash provided by operating activities		2,340		1,812		4,152		37,517		(677)		36,840
Cash flows used by investing activities:
Acquisition of property, plant and equipment		(1,902)		(1,812)		(3,714)		(15,196)		677		(14,519)
Net cash used by investing activities		(2,355)		(1,812)		(4,167)		(126,133)		677		(125,456)



	Year Ended September 30, 2011
(Dollars in Thousands)	As Previously Reported		Adjustment		As Revised
Cash flows from operating activities:
(Decrease) increase in accounts payable and other accrued liabilities	$	(323)	$	492	$	169
Net cash provided by operating activities		31,237		492		31,729
Cash flows used by investing activities:
Acquisition of property, plant and equipment		(12,923)		(492)		(13,415)
Net cash used by investing activities		(17,349)		(492)		(17,841)



	Fair Value Measurements at ~~December~~March 31, ~~2013~~2014 Using
	Quoted Prices in Active Markets for Identical Assets ~~(Level~~ (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category
Cash equivalents	$	~~118~~114	$	-	$	-
Mutual funds		~~3,473~~3,445		-		-
Total financial assets at fair value	$	~~3,591~~3,559	$	-	$	-


	Fair Value Measurements at September 30, 2013 Using
	Quoted Prices in Active Markets for Identical Assets ~~(Level~~ (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category
Cash equivalents	$	55	$	-	$	-
Mutual funds		2,922		-		-
Total financial assets at fair value	$	2,977	$	-	$	-



		December 31, 2013				September 30, 2013
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization			March 31, 2014				September 30, 2013
									Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer lists	$	44,865	$	12,676	$	43,954	$	11,639	$	44,925	$	13,562	$	43,954	$	11,639
Trademarks and tradenames		2,156		451		2,154		400		2,174		502		2,154		400
Licenses and patents		4,214		1,106		4,080		1,009		4,348		1,205		4,080		1,008
Other intangibles		577		557		577		557		577		557		577		557
Intangible assets	$	51,812	$	14,790	$	50,765	$	13,605	$	52,024	$	15,826	$	50,765	$	13,604



	Foreign Currency Translation Adjustments		Pension and Postretirement Plans, net of tax		Total		Foreign Currency Translation Adjustments		Pension and Postretirement Plans, net of tax		Total
Balance at September 30, 2013	$	(178)	$	(4,278)	$	(4,456)	$	(178)	$	(4,278)	$	(4,456)
Other comprehensive income before reclassifications		(256)		-		(256)		153		-		153
Amounts reclassified from accumulated other comprehensive income		-		165		165		-		211		211
Net current period other comprehensive income		(256)		165		(91)		153		211		364
Balance at December 31, 2013	$	(434)	$	(4,113)	$	(4,547)
Balance at March 31, 2014							$	(25)	$	(4,067)	$	(4,092)



	Three Months Ended December 31, 2013						Year Ended September 30, 2013
(Dollars in Thousands)	As Previously Reported		Adjustment		As Revised		As Previously Reported		Adjustment		As Revised
Cash flows from operating activities:
(Decrease) increase in accounts payable and other accrued liabilities	$	(3,502)	$	174	$	(3,328)	$	(3,389)	$	2,793	$	(596)
Net cash provided by operating activities		9,954		174		10,128		22,957		2,793		25,750
Cash flows used by investing activities:
Acquisition of property, plant and equipment		(1,071)		(174)		(1,245)		(6,352)		(2,793)		(9,145)
Net cash used by investing activities		(3,590)		(174)		(3,764)		(8,503)		(2,793)		(11,296)



Pension Benefits	Three Months Ended December 31,				Three Months Ended March 31,				Six Months Ended March 31,
	2013		2012		2014		2013		2014		2013
Interest cost	$	375	$	340	$	375	$	340	$	750	$	680
Expected return on plan assets		(377)		(365)		(377)		(365)		(754)		(730)
Amortization of net loss		48		108		49		108		97		216
Net periodic benefit cost	$	46	$	83	$	47	$	83	$	93	$	166

Other Benefits	Three Months Ended December 31,				Three Months Ended March 31,				Six Months Ended March 31,
	2013		2012		2014		2013		2014		2013
Service cost	$	15	$	17	$	16	$	17	$	31	$	34
Interest cost		13		12		12		11		25		23
Amortization of net (gain) loss		(3)		-
Amortization of net gain						(3)		-		(6)		-
Net periodic benefit cost	$	25	$	29	$	25	$	28	$	50	$	57



Pension and Postretirement Plans	Three Months Ended December 31,				Three Months Ended March 31,				Six Months Ended March 31,
	2013		2012		2014		2013		2014		2013
Amortization of net loss	$	45	$	108	$	46	$	108	$	91	$	216
Provision for income taxes		120		-		-		-		120		-
Total net of tax	$	165	$	108	$	46	$	108	$	211	$	216




31.1*		Certification of William E. Saxelby, President and Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Michael K. Burke, Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of William E. Saxelby, President and Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification of Michael K. Burke, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS**		XBRL INSTANCE FILE

101.SCH**		XBRL SCHEMA FILE

101.CAL**		XBRL CALCULATION FILE

101.DEF**		XBRL DEFINITION FILE

101.LAB**		XBRL LABEL FILE

101.PRE**		XBRL PRESENTATION FILE

	* Filed herewith
	** Furnished with the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended ~~December~~March 31, ~~2013~~2014

8
11

		LANDAUER, INC.

Date: ~~February 10,~~May 19, 2014		/s/ Michael K. Burke
		Michael K. Burke
		Senior Vice President and Chief Financial Officer (Principal Financial Officer)