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 ~~March 31,~~June 30, 2017

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 No.)

	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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 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)		Emerging growth company	[ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

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 ~~May~~August 4, 2017, ~~9,639,863~~9,638,580 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 (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		18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		23

Item 4.	Controls and Procedures		24


PART II OTHER INFORMATION

Item 1.	Legal Proceedings		25

Item 1A.	Risk Factors		25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		25

Item 3.	Defaults Upon Senior Securities		25

Item 4.	Mine Safety Disclosures		25

Item 5.	Other Information		25

Item 6.	Exhibits		26


SIGNATURE			27

PART I FINANCIAL INFORMATION

Item 1.Financial Statements

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (Unaudited)


(Dollars in Thousands)	March 31, 2017		September 30, 2016		June 30, 2017		September 30, 2016
Assets
Cash and cash equivalents	$	12,875	$	13,285	$	21,064	$	13,285
Receivables, net of allowances of $1,380 at March 31, 2017 and $1,296 at September 30, 2016		36,195		31,998
Receivables, net of allowances of $1,324 at June 30, 2017 and $1,296 at September 30, 2016						33,618		31,998
Inventories		6,026		5,670		5,229		5,670
Deferred income tax assets - current		2,014		2,098		4,470		2,098
Prepaid income taxes		862		764		5,692		764
Prepaid expenses and other current assets		3,707		2,187		3,186		2,187
Total current assets		61,679		56,002		73,259		56,002
Property, plant and equipment, at cost		108,939		105,237		111,994		105,237
Less accumulated depreciation and amortization		(62,389)		(58,820)		(64,768)		(58,820)
Property, plant and equipment, net		46,550		46,417		47,226		46,417
Equity in joint ventures		25,312		26,174		26,488		26,174
Goodwill		33,469		33,807		33,916		33,807
Intangible assets, net of accumulated amortization of $12,060 at March 31, 2017 and $11,772 at September 30, 2016		8,786		9,297
Dosimetry devices, net of accumulated depreciation of $6,615 at March 31, 2017 and $6,197 at September 30, 2016		2,724		3,162
Intangible assets, net of accumulated amortization of $12,704 at June 30, 2017 and $11,772 at September 30, 2016						8,602		9,297
Dosimetry devices, net of accumulated depreciation of $6,845 at June 30, 2017 and $6,197 at September 30, 2016						2,638		3,162
Deferred income tax assets		5,507		9,104		74		9,104
Other assets		6,481		6,853		5,963		6,853
Total assets	$	190,508	$	190,816	$	198,166	$	190,816

Liabilities
Accounts payable	$	2,482	$	3,012	$	3,158	$	3,012
Dividends payable		2,871		2,815		2,911		2,815
Deferred contract revenue		14,651		13,932		14,910		13,932
Accrued compensation and related costs		7,370		9,256		9,464		9,256
Accrued severance		128		302		64		302
Other accrued expenses		5,863		5,181		5,800		5,181
Total current liabilities		33,365		34,498		36,307		34,498
Long-term debt		105,100		109,100		100,600		109,100
Pension and postretirement obligations		25,166		24,833		25,184		24,833
Deferred income tax liabilities		109		86		4,450		86
Uncertain income tax liabilities		1,516		1,495		518		1,495
Other non-current liabilities		181		205		222		205
Total liabilities		165,437		170,217		167,281		170,217
Commitments and Contingencies

Stockholders' equity
Preferred stock, $0.10 par value per share, authorized 1,000,000 shares; none issued		-		-		-		-
Common stock, $0.10 par value per share, authorized 20,000,000 shares; 9,814,751 and 9,727,264 shares issued and outstanding at March 31, 2017 and September 30, 2016, respectively		981		973
Common stock, $0.10 par value per share, authorized 20,000,000 shares; 9,811,668 and 9,727,264 shares issued and outstanding at June 30, 2017 and September 30, 2016, respectively						981		973
Additional paid in capital		45,861		43,982		46,842		43,982
Accumulated other comprehensive loss		(16,714)		(15,266)		(15,780)		(15,266)
Accumulated deficit		(6,319)		(10,511)		(2,611)		(10,511)
Landauer, Inc. stockholders' equity		23,809		19,178		29,432		19,178
Noncontrolling interest		1,262		1,421		1,453		1,421
Total stockholders' equity		25,071		20,599		30,885		20,599
Total Liabilities and Stockholders' Equity	$	190,508	$	190,816	$	198,166	$	190,816

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


	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands, Except per Share)	2017		2016		2017		2016		2017		2016		2017		2016
Revenues:
Service revenues	$	34,213	$	33,162	$	66,962	$	64,707	$	34,609	$	32,344	$	101,571	$	97,051
Product revenues		4,909		4,920		9,732		9,905		5,279		5,510		15,011		15,415
Total revenues		39,122		38,082		76,694		74,612		39,888		37,854		116,582		112,466

Costs and expenses:
Service costs		16,775		16,498		32,753		32,676		16,939		16,032		49,692		48,708
Product costs		2,030		1,829		3,989		3,666		1,862		2,304		5,851		5,970
Total cost of sales		18,805		18,327		36,742		36,342		18,801		18,336		55,543		54,678

Gross profit		20,317		19,755		39,952		38,270		21,087		19,518		61,039		57,788
Selling, general and administrative expense		12,508		12,538		24,701		24,801		12,504		11,805		37,205		36,606
Operating income		7,809		7,217		15,251		13,469		8,583		7,713		23,834		21,182
Equity in income of joint ventures		1,173		252		1,809		553		1,206		244		3,015		797
Interest expense, net		(609)		(1,129)		(1,403)		(2,062)		(695)		(703)		(2,098)		(2,765)
Other income (expense), net		71		103		(257)		(57)		15		3,550		(242)		3,493
Income before taxes		8,444		6,443		15,400		11,903		9,109		10,804		24,509		22,707
Income tax expense		3,091		2,005		5,467		3,692		2,509		3,382		7,976		7,074
Net income		5,353		4,438		9,933		8,211		6,600		7,422		16,533		15,633
Less: Net income attributed to noncontrolling interest		178		159		357		289		200		157		557		446
Net income attributed to Landauer, Inc.	$	5,175	$	4,279	$	9,576	$	7,922	$	6,400	$	7,265	$	15,976	$	15,187

Net income per share attributable to Landauer, Inc. shareholders:
Basic	$	0.54	$	0.45	$	1.00	$	0.83	$	0.67	$	0.76	$	1.67	$	1.59
Weighted average basic shares outstanding		9,561		9,518		9,550		9,483		9,585		9,531		9,562		9,523

Diluted	$	0.54	$	0.45	$	0.99	$	0.83	$	0.66	$	0.76	$	1.66	$	1.58
Weighted average diluted shares outstanding		9,595		9,550		9,589		9,516		9,606		9,564		9,595		9,555

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



	Three Months Ended March 31, 2017						Six Months Ended March 31, 2017						Three Months Ended June 30, 2017						Nine Months Ended June 30, 2017
(Dollars in Thousands)	Landauer, Inc.		Noncontrolling Interest		Total		Landauer, Inc.		Noncontrolling Interest		Total		Landauer, Inc.		Noncontrolling Interest		Total		Landauer, Inc.		Noncontrolling Interest		Total
Net income	$	5,175	$	178	$	5,353	$	9,576	$	357	$	9,933	$	6,400	$	200	$	6,600	$	15,976	$	557	$	16,533
Other comprehensive income (loss):
Defined benefit pension and postretirement plans activity, net of taxes of ($71) and ($142), respectively		119		-		119		238		-		238
Defined benefit pension and postretirement plans activity, net of taxes of ($71) and ($213), respectively														119		-		119		357		-		357
Unrealized gains (losses) on available-for-sale securities, net of taxes of $0		-		-		-		-		-		-		-		-		-		-		-		-
Foreign currency translation adjustment, net of taxes of ($232) and $271, respectively		701		53		754		(1,686)		14		(1,672)
Foreign currency translation adjustment, net of taxes of ($73) and $343, respectively														815		(9)		806		(871)		5		(866)
Comprehensive income	$	5,995	$	231	$	6,226	$	8,128	$	371	$	8,499	$	7,334	$	191	$	7,525	$	15,462	$	562	$	16,024

	Three Months Ended March 31, 2016						Six Months Ended March 31, 2016						Three Months Ended June 30, 2016						Nine Months Ended June 30, 2016
(Dollars in Thousands)	Landauer, Inc.		Noncontrolling Interest		Total		Landauer, Inc.		Noncontrolling Interest		Total		Landauer, Inc.		Noncontrolling Interest		Total		Landauer, Inc.		Noncontrolling Interest		Total
Net income	$	4,279	$	159	$	4,438	$	7,922	$	289	$	8,211	$	7,265	$	157	$	7,422	$	15,187	$	446	$	15,633
Other comprehensive income:
Defined benefit pension and postretirement plans activity, net of taxes of ($76) and ($101), respectively		128		-		128		172		-		172
Unrealized losses on available-for-sale securities, net of taxes of ($22) and ($1), respectively		83		-		83		8		-		8
Foreign currency translation adjustment, net of taxes of ($519) and ($357), respectively		980		22		1,002		663		24		687
Defined benefit pension and postretirement plans activity, net of taxes of ($52) and ($153), respectively														85		-		85		257		-		257
Unrealized losses on available-for-sale securities, net of taxes of $35 and $34, respectively														(195)		-		(195)		(187)		-		(187)
Foreign currency translation adjustment, net of taxes of ($427) and ($784), respectively														793		3		796		1,456		27		1,483
Comprehensive income	$	5,470	$	181	$	5,651	$	8,765	$	313	$	9,078	$	7,948	$	160	$	8,108	$	16,713	$	473	$	17,186

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


	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		(Accumulated Deficit) 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		(Accumulated Deficit) Retained Earnings		Non- Controlling Interest		Total Stock- holders' Equity
September 30, 2016		9,727,264	$	973	$	43,982	$	(15,266)	$	(10,511)	$	1,421	$	20,599		9,727,264	$	973	$	43,982	$	(15,266)	$	(10,511)	$	1,421	$	20,599
Stock-based compensation arrangements		87,487		8		1,879		-		-		-		1,887		84,404		8		2,860		-		-		-		2,868
Dividends		-		-		-		-		(5,384)		(530)		(5,914)		-		-		-		-		(8,076)		(530)		(8,606)
Net income		-		-		-		-		9,576		357		9,933		-		-		-		-		15,976		557		16,533
Foreign currency translation adjustment, net of tax		-		-		-		(1,686)		-		14		(1,672)		-		-		-		(871)		-		5		(866)
Defined benefit pension and postretirement plans activity, net of tax		-		-		-		238		-		-		238		-		-		-		357		-		-		357
March 31, 2017		9,814,751	$	981	$	45,861	$	(16,714)	$	(6,319)	$	1,262	$	25,071
June 30, 2017																9,811,668	$	981	$	46,842	$	(15,780)	$	(2,611)	$	1,453	$	30,885

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



	Six Months Ended March 31,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016
Cash flows from operating activities:
Net income	$	9,933	$	8,211	$	16,533	$	15,633
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,352		5,661		8,047		8,461
Equity in income of joint ventures		(1,809)		(553)		(3,015)		(797)
Dividends from joint ventures		1,341		1,195		1,341		1,195
Stock-based compensation and related net tax benefits		1,456		1,144		2,449		2,048
Current and long-term deferred taxes, net		3,307		1,076		10,568		3,639
Gain on disposition of business						-		(3,904)
Loss on sale, disposal and abandonment of fixed assets		17		12		23		368
Gain on investments		(281)		(221)		(411)		(558)
Changes in operating assets and liabilities:
Increase in accounts receivable, net		(4,487)		(276)		(1,582)		(1,771)
Decrease in prepaid taxes		700		39
Increase in other operating assets, net		(1,065)		(842)
Decrease in accounts payable and other accrued liabilities		(1,248)		(2,779)
Increase in other operating liabilities, net		722		143
(Increase) decrease in prepaid taxes						(4,064)		39
Decrease (increase) in other operating assets, net						607		(298)
Increase (decrease) in accounts payable and other accrued liabilities						1,564		(1,083)
Decrease in other operating liabilities, net						(47)		(753)
Net cash provided by operating activities		13,938		12,810		32,013		22,219

Cash flows from investing activities:
Acquisition of property, plant and equipment		(4,557)		(4,278)		(6,989)		(6,845)
Payment of transaction expenses associated with divestiture of business		-		(472)
Proceeds from disposition of business						-		10,089
Other investing activities, net		(554)		(1,232)		(511)		551
Net cash used in investing activities		(5,111)		(5,982)
Net cash (used in) provided by investing activities						(7,500)		3,795

Cash flows from financing activities:
Long-term borrowings - loan		3,500		11,000		3,500		13,500
Long-term borrowings - repayment		(7,500)		(18,400)		(12,000)		(34,585)
Dividends paid to stockholders		(5,328)		(5,286)		(7,979)		(7,933)
Other financing activities, net		(72)		(155)		(231)		(417)
Net cash used in financing activities		(9,400)		(12,841)		(16,710)		(29,435)

Effects of foreign currency translation		163		(88)		(24)		82
Net decrease in cash and cash equivalents		(410)		(6,101)
Net increase (decrease) in cash and cash equivalents						7,779		(3,339)
Opening balance - cash and cash equivalents		13,285		15,314		13,285		15,314
Ending balance - cash and cash equivalents	$	12,875	$	9,213	$	21,064	$	11,975

Accrued capital spending included in accounts payable and other accrued liabilities	$	509	$	783	$	730	$	477

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

As used herein, the terms “Company,” “Landauer,” “we,” “us,” and “our” refer collectively to Landauer, Inc. and its subsidiaries through which its various businesses are conducted.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

The consolidated financial statements include the accounts of the Company, its subsidiaries and variable interest entities in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. Entities in which the Company does not have a controlling financial interest, but is considered to have significant influence, are accounted for on the equity method.

We believe that we have included all normal recurring adjustments necessary for a fair presentation of the results for the interim period. Operating results for the three and ~~six~~nine months ended ~~March 31~~June 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2017.

These 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, 2016 (the “Form 10-K”) and other financial information filed with the Securities and Exchange Commission (the “SEC”). The September 30, 2016 balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

The accounting policies followed by the Company are set forth in the Form 10-K, and there have been no changes to the accounting policies for the ~~six-month~~nine-month period ended ~~March 31,~~June 30, 2017.

In June 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance on accounting for share-based payments requiring a specific performance target to be achieved in order for employees to become eligible to vest in the awards when that performance target may be achieved after the requisite service period for the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period for which the requisite service has already been rendered. The Company adopted the updated standard in the first quarter of fiscal 2017 with no significant impact on its financial statements.

In April 2015, the FASB issued new guidance on a customer’s accounting for fees paid in a cloud computing arrangement (“CCA”). Under the new standard, customers will apply the same criteria as vendors to determine whether a CCA contains a software license or is solely a service contract. The Company adopted the updated standard prospectively in the first quarter of fiscal 2017 with no significant impact on its financial statements.

In May 2014, the FASB issued new guidance for recognizing revenue from contracts with customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. In July 2015, the FASB deferred the effective date of the new revenue standard by one year. Public companies would now be required to adopt the new guidance for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The FASB decided to allow earlier adoption of the new revenue standard, but not earlier than the original effective date. This guidance is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity. To date, the Company has formed a committee to evaluate the impact and is in the initial stages of evaluation.

In July 2015, the FASB issued new guidance on simplifying the measurement of inventory. This update requires a company to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for the Company in the first quarter of fiscal 2018 and should be applied prospectively with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position and liquidity.

In November 2015, the FASB issued new guidance on the presentation of deferred income taxes. This update requires a company to present deferred tax liabilities and assets as noncurrent in a classified statement of financial position rather than the current requirement to separate deferred income tax liabilities and assets into current and noncurrent amounts. This guidance is effective for the Company in the first quarter of fiscal 2018, with early adoption permitted. The Company does not expect the adoption of this guidance will have a material impact on its results of operations, financial position and liquidity.

In February 2016, the FASB issued new guidance on the accounting treatment for leases. This guidance will require all leases with durations greater than twelve months to be recognized on the balance sheet of the lessee. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. This guidance is effective for the Company in the first quarter of fiscal 2020, although early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity.

In March 2016, the FASB issued new guidance to improve the accounting for share-based payments. This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. The guidance also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for the Company in the first quarter of fiscal 2018, although early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity.

In June 2016, the FASB issued new guidance to introduce a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update is effective for the Company in the first quarter of fiscal 2020, although early adoption is permitted. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures.

In August 2016, the FASB issued an Accounting Standards Update (“ASU”) to provide cash flow statement guidance for certain cash receipts and payments, including (a) debt prepayment or extinguishment costs; (b) contingent consideration payments made after a business combination; (c) insurance settlement proceeds; (d) distributions from equity method investees; (e) beneficial interests in securitization transactions and (f) application of the predominance principle for cash receipts and payments with aspects of more than one class of cash flows. The update is effective for the Company in the first quarter of fiscal 2018. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures.

In November 2016, the FASB issued amendments to current guidance related to the classification and presentation of changes in restricted cash in the Statement of Cash Flows. The update is effective for the Company in the first quarter of fiscal 2019, and early adoption is permitted. The Company is currently evaluating the impact that this update will have on its financial statements and related disclosures.

No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on the Consolidated Financial Statements.

The Company estimates the fair value of assets and liabilities in accordance with the framework established by the authoritative guidance for fair value measurements. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety.

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



	Fair Value Measurements at ~~March 31,~~June 30, 2017
(Dollars in Thousands)	Level 1		Level 2		Level 3
Asset Category
Cash equivalents	$	~~547~~554	$	-	$	-
Mutual funds		~~4,360~~4,397		-		-
Total financial assets at fair value	$	~~4,907~~4,951	$	-	$	-

	Fair Value Measurements at September 30, 2016
(Dollars in Thousands)	Level 1		Level 2		Level 3
Asset Category
Cash equivalents	$	453	$	-	$	-
Mutual funds		3,687		-		-
Total financial assets at fair value	$	4,140	$	-	$	-

Following is a description of each category in the fair value hierarchy and the financial assets and liabilities of the Company that were included in each category at ~~March 31,~~June 30, 2017 and September 30, 2016, measured on a recurring basis.

The Level 1 financial assets 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.

The Company’s long-term debt is classified as Level 2. The carrying amount of the Company’s long-term debt is the 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.



		Three Months Ended March 31,				Six Months Ended March 31,					Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands, Except per Share)	(Dollars in Thousands, Except per Share)	2017		2016		2017		2016		(Dollars in Thousands, Except per Share)	2017		2016		2017		2016
Basic Net Income per Share:
Net income attributed to Landauer, Inc.		$	5,175	$	4,279	$	9,576	$	7,922		$	6,400	$	7,265	$	15,976	$	15,187
Less: Income allocated to unvested restricted stock			15		21		38		39			15		20		53		59
Net income available to common stockholders		$	5,160	$	4,258	$	9,538	$	7,883		$	6,385	$	7,245	$	15,923	$	15,128
Basic weighted average shares outstanding			9,561		9,518		9,550		9,483			9,585		9,531		9,562		9,523
Net income per share - Basic		$	0.54	$	0.45	$	1.00	$	0.83		$	0.67	$	0.76	$	1.67	$	1.59

Diluted Net Income per Share:
Net income attributed to Landauer, Inc.		$	5,175	$	4,279	$	9,576	$	7,922		$	6,400	$	7,265	$	15,976	$	15,187
Less: Income allocated to unvested restricted stock			15		21		38		39			15		20		53		59
Net income available to common stockholders		$	5,160	$	4,258	$	9,538	$	7,883		$	6,385	$	7,245	$	15,923	$	15,128
Basic weighted average shares outstanding			9,561		9,518		9,550		9,483			9,585		9,531		9,562		9,523
Effect of dilutive securities			34		32		39		33			21		33		33		32
Diluted weighted averages shares outstanding			9,595		9,550		9,589		9,516			9,606		9,564		9,595		9,555
Net income per share - Diluted		$	0.54	$	0.45	$	0.99	$	0.83		$	0.66	$	0.76	$	1.66	$	1.58

Dividends paid per share		$	0.275	$	0.275	$	0.55	$	0.55		$	0.275	$	0.275	$	0.83	$	0.83

On ~~February 16,~~May 2, 2017, the Company declared a regular quarterly cash dividend in the amount of $0.275 per share. The dividends were paid on ~~April 4,~~July 6, 2017 to shareholders of record as of ~~March 17,~~June 16, 2017.

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



Pension Benefits	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Interest cost	$	353	$	393	$	705	$	785	$	352	$	392	$	1,057	$	1,177
Expected return on plan assets		(387)		(374)		(775)		(747)		(388)		(373)		(1,163)		(1,120)
Amortization of net loss		190		140		380		281		190		141		570		422
Net periodic benefit cost	$	156	$	159	$	310	$	319	$	154	$	160	$	464	$	479

Other Benefits	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Service cost	$	16	$	15	$	32	$	30	$	16	$	15	$	48	$	45
Interest cost		8		9		17		19		9		10		26		29
Amortization of net gain		-		(4)		-		(8)		-		(3)		-		(11)
Net periodic benefit cost	$	24	$	20	$	49	$	41	$	25	$	22	$	74	$	63

The Company, under the IRS minimum funding standards, has no required contributions to make to its defined benefit pension plan during fiscal 2017.

The Company sponsors a 401(k) retirement savings plan covering substantially all of the U.S. full-time employees in the Company’s Radiation Measurement segment as well as substantially all of the employees in the Company’s Medical Physics segment, and prior to its divestiture, the Medical Products segment. The Company also maintains a supplemental defined contribution plan for certain executives, which allows participating executives to make voluntary deferrals and provides for employer contributions at the discretion of the Company. Amounts expensed for Company contributions under these plans during the three months ended ~~March 31,~~June 30, 2017 and 2016 were ~~$488~~$483 and ~~$499,~~$494, respectively. Amounts expensed for Company contributions under these plans during the ~~six~~nine months ended ~~March 31,~~June 30, 2017 and 2016 were ~~$1,031~~$1,514 and ~~$918,~~$1,412, respectively.

Changes in the carrying amount of goodwill, by reportable segment, for the ~~six~~nine months ended ~~March 31,~~June 30, 2017 were as follows:



(Dollars in Thousands)	Radiation Measurement		Medical Physics		Total		Radiation Measurement		Medical Physics		Total

Balance as of September 30, 2016	$	11,196	$	22,611	$	33,807	$	11,196	$	22,611	$	33,807
Currency translation adjustment		(338)		-		(338)		109		-		109
Balance as of March 31, 2017	$	10,858	$	22,611	$	33,469
Balance as of June 30, 2017							$	11,305	$	22,611	$	33,916

The Company had no accumulated impairment losses as of ~~March 31,~~June 30, 2017 and September 30, 2016.



	March 31, 2017						June 30, 2017
(Dollars in Thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer lists	$	16,691	$	10,637	$	6,054	$	17,108	$	11,237	$	5,871
Trademarks and tradenames		133		-		133		133		-		133
Licenses and patents		3,465		866		2,599		3,508		910		2,598
Other intangibles		557		557		-		557		557		-
Intangible assets	$	20,846	$	12,060	$	8,786	$	21,306	$	12,704	$	8,602

Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Intangible asset amortization expense was ~~$385~~$388 and ~~$771~~$1,159 for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2017, respectively, and was ~~$568~~$453 and ~~$1,123~~$1,576 for the three and ~~six~~nine months ended ~~March 31,~~June 30, 2016, respectively.

Accumulated elements of other comprehensive loss, net of tax, are included in the stockholders’ equity section of the condensed consolidated balance sheets. Changes in each component for the ~~six~~nine months ended ~~March 31,~~June 30, 2017 and 2016 are as follows:



(Dollars in Thousands)	Foreign Currency Translation Adjustments		Unrealized Gains and Losses on Available-for-Sale Securities		Pension and Postretirement Plans		Comprehensive (Loss) Income		Foreign Currency Translation Adjustments		Unrealized Gains and Losses on Available-for-Sale Securities		Pension and Postretirement Plans		Comprehensive (Loss) Income
Balance at September 30, 2016	$	(4,696)	$	-	$	(10,570)	$	(15,266)	$	(4,696)	$	-	$	(10,570)	$	(15,266)
Other comprehensive (loss) income before reclassifications		(1,686)		-		-		(1,686)
Amounts reclassified from accumulated other comprehensive (loss) income		-		-		238		238
Other comprehensive loss before reclassifications										(871)		-		-		(871)
Amounts reclassified from accumulated other comprehensive income										-		-		357		357
Net current period other comprehensive (loss) income		(1,686)		-		238		(1,448)		(871)		-		357		(514)
Balance at March 31, 2017	$	(6,382)	$	-	$	(10,332)	$	(16,714)
Balance at June 30, 2017									$	(5,567)	$	-	$	(10,213)	$	(15,780)



(Dollars in Thousands)	Foreign Currency Translation Adjustments		Unrealized Gains and Losses on Available-for-Sale Securities		Pension and Postretirement Plans		Comprehensive (Loss) Income		Foreign Currency Translation Adjustments		Unrealized Gains and Losses on Available-for-Sale Securities		Pension and Postretirement Plans		Comprehensive (Loss) Income
Balance at September 30, 2015	$	(5,468)	$	259	$	(8,532)	$	(13,741)	$	(5,468)	$	259	$	(8,532)	$	(13,741)
Other comprehensive (loss) income before reclassifications		663		97		-		760
Other comprehensive income before reclassifications										1,456		147		-		1,603
Amounts reclassified from accumulated other comprehensive (loss) income		-		(89)		172		83		-		(334)		257		(77)
Net current period other comprehensive (loss) income		663		8		172		843		1,456		(187)		257		1,526
Balance at March 31, 2016	$	(4,805)	$	267	$	(8,360)	$	(12,898)
Balance at June 30, 2016									$	(4,012)	$	72	$	(8,275)	$	(12,215)

The tables below present the impact on net income of significant amounts reclassified out of each component of accumulated other comprehensive loss:



Pension and Postretirement Plans (1)	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Amortization of net loss	$	190	$	204	$	380	$	273	$	190	$	137	$	570	$	410
Total before tax		190		204		380		273		190		137		570		410
Provision for income taxes		71		76		142		101		71		52		213		153
Total net of tax	$	119	$	128	$	238	$	172	$	119	$	85	$	357	$	257

(1)These accumulated other comprehensive loss components are 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).



Unrealized Gains and Losses on Available-for-Sale Securities	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Realized gains on available-for-sale securities into earnings (1)	$	-	$	-	$	-	$	(105)	$	-	$	(288)	$	-	$	(393)
Total before tax		-		-		-		(105)		-		(288)		-		(393)
Provision for income taxes (2)		-		-		-		(16)		-		(43)		-		(59)
Total net of tax	$	-	$	-	$	-	$	(89)	$	-	$	(245)	$	-	$	(334)

(1)This amount is reported in Interest Expense, net on the Consolidated Statements of Operations

(2)This amount is reported in Income Tax Expense (Benefit) on the Consolidated Statements of Operations

The effective tax rates for the three months ended ~~March 31,~~June 30, 2017 and 2016 were ~~36.6%~~27.5% and ~~31.1%~~31.3%, respectively. The ~~increase~~decrease in the effective tax rate was primarily due to the mix of taxable earnings between jurisdictions with differing tax rates and the release of uncertain tax ~~law changes that impacted the prior year.~~positions relative to pretax earnings. The effective tax rates for the ~~six~~nine months ended ~~March 31,~~June 30, 2017 and 2016 were ~~35.5%~~32.5% and ~~31.0%~~31.2%, respectively. The increase in the effective tax rate was primarily due to the mix of earnings between jurisdictions with differing tax rates and tax law changes that impacted the timing of recognition of certain credits in the prior year. The Company believes it is reasonably possible that ~~$570~~$135 of unrecognized tax benefits will be realized in fiscal year ~~2017.~~2018.

In fiscal year 2017, the Company is organized into two reportable business segments: Radiation Measurement and Medical Physics. As disclosed in the Form 10-K for the fiscal period ended September 30, 2016, the Medical Products business was divested in May 2016; accordingly, there were no reportable revenues and operating income for the three and ~~six~~nine month periods ended ~~March 31,~~June 30, 2017 for that reportable segment. These segments reflect the manner in which the Company’s businesses are currently managed and represent an aggregation of services and products based on type of customer and how the businesses are marketed. For more information regarding the nature of the Company’s services and products, see Note 16 of the Notes to Consolidated Financial Statements in the Form 10-K.

The following tables summarize financial information for each reportable segment:



	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Revenues by segment:
Radiation Measurement	$	28,692	$	25,520	$	56,324	$	50,224	$	29,594	$	27,492	$	85,918	$	77,716
Medical Physics		10,430		10,033		20,370		19,386		10,294		9,562		30,664		28,948
Medical Products		-		2,529		-		5,002		-		800		-		5,802
Consolidated revenues	$	39,122	$	38,082	$	76,694	$	74,612	$	39,888	$	37,854	$	116,582	$	112,466

	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Operating income (loss) by segment:
Radiation Measurement	$	11,409	$	9,969	$	22,641	$	18,867	$	12,138	$	10,294	$	34,779	$	29,161
Medical Physics		672		918		1,351		1,696		789		756		2,140		2,452
Medical Products		-		432		-		922		-		141		-		1,063
Corporate		(4,272)		(4,102)		(8,741)		(8,016)		(4,344)		(3,478)		(13,085)		(11,494)
Consolidated operating income	$	7,809	$	7,217	$	15,251	$	13,469	$	8,583	$	7,713	$	23,834	$	21,182


(Dollars in Thousands)	March 31, 2017		September 30, 2016		June 30, 2017		September 30, 2016
Segment assets:
Radiation Measurement	$	159,090	$	160,560	$	165,720	$	160,560
Medical Physics		44,311		43,174		48,081		43,174
Eliminations		(12,893)		(12,918)		(15,635)		(12,918)
Consolidated assets	$	190,508	$	190,816	$	198,166	$	190,816

The Company has a minority interest in Yamasato, Fujiwara, Higa & Associates, Inc. doing business as Aquila. The Company provides dosimetry parts to Aquila for its military contract. The Company also has a 50% equity interest in Nagase-Landauer, Ltd. (“Nagase”), a radiation measurement company in Japan.



	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Sales to Aquila	$	2,933	$	18	$	5,501	$	414	$	3,347	$	2,653	$	8,848	$	3,067
Purchases from Aquila		30		214		104		204		128		201		232		405



(Dollars in Thousands)	March 31, 2017		September 30, 2016		June 30, 2017		September 30, 2016
Amounts in accounts receivable	$	4,069	$	1,910	$	3,439	$	1,910
Amounts in accounts payable		114		320		193		320



	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016		2017		2016		2017		2016
Sales to Nagase	$	1,002	$	1,196	$	2,243	$	2,294	$	961	$	1,180	$	3,204	$	3,474
Purchases from Nagase		319		99		629		694		58		123		687		817



(Dollars in Thousands)	March 31, 2017		September 30, 2016		June 30, 2017		September 30, 2016
Amounts in accounts receivable	$	294	$	288	$	117	$	288
Amounts in accounts payable		52		23		5		23

On July 13, 2017, the Company entered into a Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”) that amends and restates in its entirety the Amended and Restated Credit Agreement dated as of August 2, 2013, as amended by the First Amendment to Amended and Restated Credit Agreement dated as of June 30, 2014 (the “Existing Credit Agreement”).

The Amended Credit Agreement replaced the Existing Credit Agreement that contained substantially similar terms but decreased the revolving loan facility amount from $175.0 million to $125.0 million and extended the maturity date from August 2, 2018 to July 13, 2022. The Amended Credit Agreement also added Landauer Europe as a borrower entity.

Similar to the Existing Credit Agreement, the Amended Credit Agreement contains customary representations and covenants, including financial covenants that the Company will maintain a fixed charge coverage ratio and leverage ratio within certain levels as defined in the Amended Credit Agreement.

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

The following discussion and analysis of the Company’s unaudited consolidated financial condition and results of operations should be read in conjunction with the annual audited consolidated financial statements and related notes thereto included in the Company’s Form 10-K. 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 the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016.

The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Critical accounting policies are those that are most important to the portrayal of a company’s financial condition and results of operations 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. The Company bases its 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, the Company’s actual results may differ from the estimates, judgments and assumptions used in preparing the consolidated financial statements.

Comparison of the ~~second~~third fiscal quarter ended ~~March 31,~~June 30, 2017 and the ~~second~~third fiscal quarter ended ~~March 31,~~June 30, 2016

Revenues for the ~~second~~third fiscal quarter of 2017 were ~~$39.1~~$39.9 million, an increase of ~~$1.0~~$2.0 million, or ~~2.6%~~5.3%, compared to revenues of ~~$38.1~~$37.9 million for the ~~second~~third fiscal quarter of 2016. Revenues in the Radiation Measurement segment increased ~~$3.2~~$2.1 million, which was primarily due to higher domestic service revenues and product sales to the military. Revenues in the Medical Physics segment increased ~~$0.4~~$0.7 million, due to increased imaging services. Revenues in the Medical Products segment decreased ~~$2.5~~$0.8 million due to the divestiture of this business in May 2016.

Gross profit was ~~51.9%~~52.9% for the ~~second~~third fiscal quarter of 2017, ~~which is unchanged from~~compared with 51.6% for the ~~second~~third fiscal quarter of 2016. Gross profit increased for the third fiscal quarter of 2017 as compared to the third fiscal quarter of 2016 due to the increase in domestic service revenues and product sales to the military.

Selling, general and administrative expenses for the ~~second~~third fiscal quarter of 2017 were $12.5 million, compared to expenses of $11.8 million for the ~~same amount as the second~~third fiscal quarter of 2016. ~~Operating~~Corporate and Radiation Measurement operating expenses increased by $1.1 million, partially offset by a $0.4 million decrease in the Medical Products segment ~~decreased $1.1 million~~ due to the divestiture of the business in May ~~2016, offset by a $0.6 million increase in Corporate and Radiation Measurement expenses and a $0.5 million increase in Medical Physics expenses.~~2016. Corporate and Radiation Measurement operating expenses increased ~~$0.6~~$1.1 million primarily due to a $0.6 million increase in professional fees and a $0.3 million increase in selling and marketing ~~expenses and $0.3 million of proxy contest expenses for the 2017 Annual Meeting of Stockholders. The increase in operating expenses in Medical Physics was driven by an increase in personnel~~ expenses.

Operating income for the ~~second~~third fiscal quarter of 2017 was ~~$7.8~~$8.6 million, compared with operating income of ~~$7.2~~$7.7 million for the ~~second~~third fiscal quarter of 2016. Operating income increased primarily due ~~primarily~~ to the gross profit on the higher domestic service revenues and military sales.

The effective tax rates for the ~~second~~third fiscal quarter of 2017 and 2016 were ~~36.6%~~27.5% and ~~31.1%~~31.3%, respectively. The ~~increase~~decrease in the effective tax rate was primarily due to the mix of taxable earnings between jurisdictions with differing tax rates and the release of uncertain tax ~~law changes that impacted the timing of recognition of certain credits in the prior year.~~positions relative to pretax earnings.

Net income attributed to Landauer for the ~~second~~third fiscal quarter of 2017 was ~~$5.2~~$6.4 million, compared with net income of ~~$4.3~~$7.3 million in the ~~second~~third fiscal quarter of 2016. The ~~increase~~decrease in net income was driven by the $3.9 million pre-tax gain on sale of the Medical Products business that was divested in May 2016, partially offset by stronger operating margins, ~~and~~ higher equity earnings from joint ventures ~~partially offset by~~and a ~~higher~~lower effective tax ~~rate.~~rate in the third fiscal quarter of 2017.

Radiation Measurement revenues for the ~~second~~third fiscal quarter of 2017 were ~~$28.7~~$29.6 million, an increase of ~~$3.2~~$2.1 million, or ~~12.5%~~7.6%, compared with ~~$25.5~~$27.5 million for the ~~second~~third fiscal quarter of 2016. The growth in revenues was primarily due to higher domestic service revenues and increased product sales to the military. During the third fiscal quarter of 2016, the Company was awarded a military order from the National Guard of the United States for the Radwatch personal in-field radiation monitoring system. Approximately ~~$2.9~~$0.7 million of the increase in revenues resulted from the shipment of products for the National Guard order. The Company completed its final shipment for the National Guard order during the third fiscal quarter of 2017. While the Company is continuing to pursue orders for its Radwatch products, there are currently no open contracts or purchase orders for military products. International revenues increased $0.5 million.

Operating income for the ~~second~~third fiscal quarter of 2017 increased to ~~$11.4~~$12.1 million from ~~$10.0~~$10.3 million for the ~~second~~third fiscal quarter of 2016 due to the gross profit on the ~~increased product sales.~~higher revenues.

Medical Physics revenues for the ~~second~~third fiscal quarter of 2017 were ~~$10.4~~$10.3 million, an increase of ~~$0.4~~$0.7 million, or ~~4.0%~~7.3%, compared with ~~$10.0~~$9.6 million for the ~~second~~third fiscal quarter of 2016. ~~Imaging~~Therapy services revenue increased $0.7 million, or 13.1%, and imaging services revenue increased by ~~$0.6~~$0.5 million, or ~~18.8%~~15.0%, driven by higher demand for the Company’s solutions for The Joint Commission’s new Diagnostic Imaging requirements that became effective for hospitals and ambulatory care centers on July 1, 2015.

Operating income for the ~~second~~third fiscal quarter of 2017 was ~~$0.7~~$0.8 million, ~~compared to $0.9 million for~~unchanged from the ~~second~~third fiscal quarter of 2016. ~~The decrease in operating income was primarily due to an increase in personnel expenses.~~

Medical Products revenues decreased ~~$2.5~~$0.8 million as a result of the divestiture that occurred in May 2016.

Medical Products operating income decreased ~~$0.4~~$0.1 million due to the May 2016 divestiture.

Corporate selling, general and administrative expenses for the ~~second~~third fiscal quarter of 2017 were $4.3 million, an increase of ~~$0.2~~$0.8 million, or ~~4.9%~~22.9%, compared to ~~$4.1~~$3.5 million for the ~~second~~third fiscal quarter of 2016. The increase was due to ~~a $0.3 million~~an increase in ~~proxy expenses for~~professional fees in the ~~2017 Annual Meeting~~third fiscal quarter of ~~Stockholders.~~2017.

Comparison of the ~~six~~nine months ended ~~March 31,~~June 30, 2017 and the ~~six~~nine months ended ~~March 31,~~June 30, 2016

Revenues for the first ~~six~~nine months of fiscal 2017 were ~~$76.7~~$116.6 million, an increase of ~~$2.1~~$4.1 million, or ~~2.8%~~3.6%, compared to revenues of ~~$74.6~~$112.5 million for the first ~~six~~nine months of fiscal 2016. Revenues in the Radiation Measurement segment increased ~~$6.1~~$8.2 million, which was primarily due to product sales to the military and growth in international revenues. Revenues in the Medical Physics segment increased ~~$1.0~~$1.8 million, due to increased imaging services. Revenues in the Medical Products segment decreased ~~$5.0~~$5.8 million due to the divestiture of this business in May 2016.

Gross profit was ~~52.1%~~52.4% for the first ~~six~~nine months of fiscal 2017, compared with ~~51.3%~~51.4% for the first ~~six~~nine months of fiscal 2016. Gross profit increased for the first ~~six~~nine months of 2017 as compared to the first ~~six~~nine months of fiscal 2016 due primarily to the increase in product sales to the military.

Selling, general and administrative expenses for the first ~~six~~nine months of fiscal 2017 were ~~$24.7~~$37.2 million, ~~a decrease~~an increase of ~~$0.1~~$0.6 million, or ~~0.4%~~1.6%, compared with ~~$24.8~~$36.6 million for the first ~~six~~nine months of fiscal 2016. Operating expenses in the Medical Physics segment increased $0.6 million, driven by an increase in personnel expenses. Operating expenses in the Medical Products segment decreased ~~$2.2~~$2.6 million due to the divestiture of the business in May 2016, ~~partially~~ offset by a ~~$1.5~~$2.6 million increase in Corporate and Radiation Measurement ~~expenses and a $0.6 million increase in Medical Physics~~ expenses. Corporate and Radiation Measurement operating expenses increased ~~$1.5~~$2.6 million primarily due to a $0.6 million increase in selling and marketing expenses, $0.5 million of proxy contest expenses for the 2017 Annual Meeting of Stockholders, a ~~$0.3~~$0.4 million increase in research and development expenses for the Verifii digital dosimetry platform ~~a $0.3 million increase in selling and marketing expenses~~ and a ~~$0.3~~$0.4 million increase in stock-based compensation expense. ~~The increase in operating expenses in Medical Physics was driven by an increase in personnel expenses.~~

Operating income for the first ~~six~~nine months of 2017 was ~~$15.3~~$23.8 million, compared with operating income of ~~$13.5~~$21.2 million for the first ~~six~~nine months of 2016. Operating income increased due primarily to the gross profit on the higher military sales. In addition, the Company successfully appealed the real estate taxes for fiscal 2011 and 2012, and as a result, is expected to receive a $0.6 million refund.

The effective tax rates for the first ~~six~~nine months of fiscal 2017 and fiscal 2016 were ~~35.5%~~32.5% and ~~31.0%~~31.2%, respectively. The increase in the effective tax rate was primarily due to the mix of taxable earnings between jurisdictions and tax law changes that impacted the timing of recognition of certain credits in the prior year.

Net income attributed to Landauer for the first ~~six~~nine months of fiscal 2017 was ~~$9.6~~$16.0 million, compared with net income of ~~$7.9~~$15.2 million in the first ~~six~~nine months of 2016. The increase in net income was driven by stronger operating margins, partially offset by a higher effective tax rate.

Radiation Measurement revenues for the first ~~six~~nine months of fiscal 2017 were ~~$56.3~~$85.9 million, an increase of ~~$6.1~~$8.2 million, or ~~12.2%~~10.6%, compared with ~~$50.2~~$77.7 million for the first ~~six~~nine months of fiscal 2016. The growth in revenues was primarily due to product sales to the military and higher international revenues. During the third fiscal quarter of 2016, the Company was awarded a military order from the National Guard of the United States for the Radwatch personal in-field radiation monitoring system. Approximately ~~$5.1~~$5.8 million of the increase in revenues resulted from the shipment of products for the National Guard order. The Company completed its final shipment for the National Guard order during the third fiscal quarter of 2017. International revenues increased ~~$0.5~~$1.0 million due primarily to higher product sales.

Operating income for the first ~~six~~nine months of fiscal 2017 increased to ~~$22.6~~$34.8 million from ~~$18.9~~$29.2 million for the first ~~six~~nine months of fiscal 2016 due to the gross profit on the increased product sales and due to the refund of real estate taxes for fiscal 2011 and 2012.

Medical Physics revenues for the first ~~six~~nine months of fiscal 2017 were ~~$20.4~~$30.7 million, an increase of ~~$1.0~~$1.8 million, or ~~5.2%~~6.2%, compared with ~~$19.4~~$28.9 million for the first ~~six~~nine months of fiscal 2016. Imaging services revenue increased by ~~$1.2~~$1.7 million, or ~~19.7%~~18.3%, driven by higher demand for the Company’s solutions for The Joint Commission’s new Diagnostic Imaging requirements that became effective for hospitals and ambulatory care centers on July 1, 2015.

Operating income for the first ~~six~~nine months of fiscal 2017 was ~~$1.4~~$2.1 million, compared to ~~$1.7~~$2.5 million for the first ~~six~~nine months of fiscal 2016. The decrease in operating income was primarily due to an increase in personnel expenses.

Medical Products revenues decreased ~~$5.0~~$5.8 million as a result of the divestiture that occurred in May 2016.

Medical Products operating income decreased ~~$0.9~~$1.1 million due to the May 2016 divestiture.

Corporate selling, general and administrative expenses for the first ~~six~~nine months of fiscal 2017 were ~~$8.7~~$13.1 million, an increase of ~~$0.7~~$1.6 million, or ~~8.7%~~13.9%, compared to ~~$8.0~~$11.5 million for the first ~~six~~nine months of fiscal 2016. The increase was primarily due to a $0.5 million increase in proxy expenses for the 2017 Annual Meeting of Stockholders as well as a ~~$0.3~~$0.4 million increase in stock-based compensation expense.

The Company’s principal source of liquidity is operating cash flows supplemented by borrowings under its credit facility. The Company’s cash-generating capability is one of its fundamental strengths and provides it with substantial financial flexibility in meeting operating and investing needs.



	Six Months Ended March 31,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016
Net cash provided by (used in):
Operating activities	$	13,938	$	12,810	$	32,013	$	22,219
Investing activities		(5,111)		(5,982)		(7,500)		3,795
Financing activities		(9,400)		(12,841)		(16,710)		(29,435)
Effect of foreign currency translation		163		(88)		(24)		82
Net decrease in cash and cash equivalents	$	(410)	$	(6,101)
Net increase (decrease) in cash and cash equivalents					$	7,779	$	(3,339)

Cash provided by operating activities for the first ~~six~~nine months of fiscal 2017 was ~~$13.9~~$32.0 million, an increase of ~~$1.1~~$9.8 million over the same fiscal period in 2016. The increase was primarily due to ~~lower spending~~growth in ~~professional service fees and~~radiation measurement revenues, lower cash interest payments on long-term borrowings ~~compared to the prior year.~~and favorable changes in working capital accounts, including accounts receivable, other operating assets, accounts payable and other operating liabilities.

Cash used in investing activities for the first ~~six~~nine months of fiscal 2017 was ~~$5.1~~$7.5 million, a change of ~~$0.9~~$11.3 million over the same fiscal period of 2016. The change was primarily due to ~~transaction expenses~~the cash proceeds received in fiscal 2016 related to the disposition of the ~~Radon~~Medical Products business ~~which were paid~~ in ~~fiscal~~May 2016.

Cash used in financing activities for the first ~~six~~nine months of fiscal 2017 was ~~$9.4~~$16.7 million, a change of ~~$3.4~~$12.7 million over the same fiscal period of 2016. The ~~change was primarily due to lower~~ net repayments of debt ~~compared~~were higher in the prior year due to the ~~prior year. In addition, the Company expects to pay down debt over the next four to five years as it realizes a~~ cash ~~tax benefit of approximately $16.0 million resulting~~proceeds received from the ~~disposal~~disposition of the Medical Products business. As of March 31, 2017, the Company had $34.9 million of unused availability under its current $140.0 million credit facility, which the Company believes provides adequate liquidity to meet its current and anticipated obligations. in May 2016.

The Company expects to meet short-term liquidity requirements (including capital expenditures) through net cash from operating activities and cash on hand.

The Amended Credit Agreement replaced the Existing Credit Agreement that contained substantially similar terms but decreased the revolving loan facility amount to $125.0 million and extended the maturity date to July 13, 2022. The Company currently has $24.0 million of unused availability under its Amended Credit Agreement and believes the credit facility provides adequate liquidity to meet its current and anticipated obligations.

The Company was in compliance with all covenants under the ~~credit facility~~Existing Credit Facility Agreement as of ~~March 31,~~June 30, 2017. The Company currently intends to use excess cash to continue to pay down the long-term debt ~~balance. The debt facility expires August 2, 2018.~~ balance of the Amended Credit Agreement.

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

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 2016 through ~~March 31,~~June 30, 2017.

Certain matters contained in this report 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 and products in general; the ability to protect and utilize the Company’s intellectual property; events or circumstances which result in an impairment of assets; 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 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 and investments in cyber security enhancements; the anticipated results of operations of the Company and its subsidiaries or joint ventures; valuation of the Company’s long-lived assets or reporting 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” of the Company’s Annual Report on Form 10-K for the year ended September 30, 2016 and information contained in 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.

The Company is exposed to market risk, including changes in foreign currency exchange rates and is subject to interest rate risk related to borrowings under its existing credit facility. 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, 2016. The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year through ~~March 31,~~June 30, 2017.

As of ~~March 31,~~June 30, 2017, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and 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 controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended.

Based upon that evaluation, our CEO and CFO concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level for the purpose of ensuring that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) accumulated and communicated to management including the CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting that occurred during the ~~second~~third quarter of fiscal 2017 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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 ~~March 31,~~June 30, 2017, if adversely determined, would have a material effect on its business, financial position, results of operations, or cash flows.

Information regarding risk factors is set forth in Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016. The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year through ~~March 31,~~June 30, 2017.

The Company’s purchases of its equity securities from the end of the preceding fiscal year through ~~March 31,~~June 30, 2017 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, 2016	149	$	43.89	-	-	149	$	43.89	-	-
November 1 - November 30, 2016	-		-	-	-	-		-	-	-
December 1 - December 31, 2016	-		-	-	-	-		-	-	-
Quarter ended December 31, 2016	149	$	43.89	-	-	149	$	43.89	-	-
January 1 - January 31, 2017	375	$	50.30	-	-	375	$	50.30	-	-
February 1 - February 28, 2017	-		-	-	-	-		-	-	-
March 1 - March 31, 2017	-		-	-	-	-		-	-	-
Quarter ended March 31, 2017	375	$	50.30	-	-	375	$	50.30	-	-
April 1 - April 30, 2017						376	$	48.81	-	-
May 1 - May 31, 2017						-		-	-	-
June 1 - June 30, 2017						-		-	-	-
Quarter ended June 30, 2017						376	$	48.81	-	-

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.

		Cer
10		~~Support~~Second Amended and Restated Credit Agreement, dated ~~January 10,~~as of July 13, 2017, byamong Landauer, Inc., Global Physics Solutions, Inc. and ~~among~~Landauer Europe, Ltd, as borrowers, BMO Harris Bank N.A., as administrative agent, and the ~~Registrant and Gilead Capital LP, Gilead Capital GP LCC and Jeffrey A. Strong is~~lenders party thereto incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed ~~January 12,~~July 18, 2017

31.1		Certification of Michael P. Kaminski, President and Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Daniel J. Fujii, Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Michael P. Kaminski, 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 Daniel J. Fujii, 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

8
		LANDAUER, INC.
		(Registrant)

Date: ~~May 9,~~August 8, 2017		/s/ Daniel J. Fujii
		Daniel J. Fujii
		Chief Financial Officer