SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended December 31, 2000
or
[ ] TRANSITION REPORT pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition from __________ to __________
Commission File Number 1-9788
LANDAUER, INC.
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(Exact name of registrant as specified in its charter)
Delaware 06-1218089
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2 Science Road, Glenwood, Illinois 60425
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(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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at February 13, 2001
- ---------------------------- --------------------------------
Common stock, $.10 par value 8,680,889
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PART I. FINANCIAL INFORMATION
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(000's)
ASSETS
------
December 31, September 30,
2000 2000
------------ -------------
(Derived from
audited
(Unaudited) statements)
Current assets:
Cash and cash equivalents. . . . . . . . . $ 2,345 $ 3,001
Short-term investments . . . . . . . . . . 475 475
Accounts receivable, less allowances
of $418,000 at December 31, 2000
and $385,000 at September 30, 2000 . . . 12,280 10,734
Inventories. . . . . . . . . . . . . . . . 1,400 1,587
Prepaid expenses . . . . . . . . . . . . . 434 308
Prepaid income taxes . . . . . . . . . . . -- 849
-------- --------
Total current assets . . . . . . . . 16,934 16,954
Property, plant and equipment,
at cost . . . . . . . . . . . . . . . . . 33,255 32,198
Less: Accumulated depreciation
and amortization . . . . . . . . . . . 16,908 16,161
-------- --------
Net property, plant and equipment. . . . 16,347 16,037
Cost of purchased businesses in
excess of net assets acquired. . . . . 3,972 4,021
Equity in joint venture. . . . . . . . . 3,163 3,550
Other assets . . . . . . . . . . . . . . 6,364 6,499
-------- --------
$ 46,780 $ 47,061
======== ========
The accompanying notes are an integral part of these financial statements.
2
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Cont'd.)
(000's)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
December 31, September 30,
2000 2000
------------ -------------
(Derived from
audited
(Unaudited) statements)
Current liabilities:
Accounts payable . . . . . . . . . . . . . $ 509 $ 966
Deferred contract revenue. . . . . . . . . 10,725 10,346
Dividend payable . . . . . . . . . . . . . 3,035 3,031
Accrued compensation and related costs . . 915 1,792
Accrued pension costs. . . . . . . . . . . 1,579 1,531
Accrued taxes on income. . . . . . . . . . 949 535
Accrued expenses . . . . . . . . . . . . . 2,045 1,991
-------- --------
Total current liabilities. . . . . . 19,757 20,192
Minority interest in subsidiary. . . . . . . 58 51
-------- --------
Stockholders' investment:
Preferred stock, $.10 par value
per share -
Authorized - 1,000,000 shares
Outstanding - None . . . . . . . . . . . -- --
Common stock, $.10 par value
per share -
Authorized - 20,000,000 shares
Outstanding - 8,671,889 shares at
December 31, 2000 and 8,660,748
shares at September 30, 2000 . . . . . . 867 866
Premium paid in on common stock. . . . . . 8,758 8,752
Cumulative translation adjustments . . . . (509) (372)
Retained earnings. . . . . . . . . . . . . 17,849 17,572
-------- --------
Total stockholders' investment . . . 26,965 26,818
-------- --------
$ 46,780 $ 47,061
======== ========
The accompanying notes are an integral part of these financial statements.
3
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(000's, except per share amounts)
(Unaudited)
Three Months Ended
----------------------------
December 31, December 31,
2000 2000
------------ -------------
Net revenues . . . . . . . . . . . . . . . . $ 12,729 $ 11,327
Costs and expenses:
Cost of revenues . . . . . . . . . . . . . 4,773 4,107
Selling, general and administrative. . . . 2,917 2,668
Impairment in value of assets. . . . . . . -- 391
-------- --------
7,690 7,166
-------- --------
Operating income . . . . . . . . . . . . . . 5,039 4,161
Equity in income of joint venture. . . . . . 181 175
Other income, net. . . . . . . . . . . . . . 25 59
-------- --------
Income before income taxes and
minority interest. . . . . . . . . . . . . 5,245 4,395
Income taxes . . . . . . . . . . . . . . . . (1,926) (1,605)
-------- --------
Income before minority interest. . . . . . . 3,319 2,790
Minority interest therein. . . . . . . . . . (7) (27)
-------- --------
Net income . . . . . . . . . . . . . . . . . $ 3,312 $ 2,763
======== ========
Net Income per common share:
Basic. . . . . . . . . . . . . . . . . . . $ 0.38 $ 0.32
======== ========
Based on average shares outstanding. . . . 8,664 8,658
======== ========
Diluted. . . . . . . . . . . . . . . . . . $ 0.38 $ 0.32
======== ========
Based on average shares outstanding. . . . 8,678 8,704
======== ========
The accompanying notes are an integral part of these financial statements.
4
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(000's)
(Unaudited)
Three Months Ended
----------------------------
December 31, December 31,
2000 2000
------------ -------------
Cash flow from operating activities:
Net income . . . . . . . . . . . . . . . . $ 3,312 $ 2,763
Non-cash expenses, revenues,
and gains reported in income
Depreciation and amortization. . . . . . 1,117 1,293
Equity in income of joint venture. . . . (181) (175)
-------- --------
936 1,118
-------- --------
Net increase (decrease) in
other current assets . . . . . . . . . (618) 1,034
Net (decrease) in current
liabilities. . . . . . . . . . . . . . (448) (745)
Net increase (decrease) due to
exchange rates . . . . . . . . . . . . (137) 71
Net increase (decrease) in
net long-term assets . . . . . . . . . 2 (631)
-------- --------
(1,201) (271)
-------- --------
Net cash generated from
operating activities . . . . . . . . . 3,047 3,610
Cash flow from investing activities:
Disposition of investments . . . . . . . . -- 301
Acquisitions of investments. . . . . . . . -- (321)
Investment in Brazilian subsidiary . . . . -- 32
Acquisition of property, plant
and equipment. . . . . . . . . . . . . . (1,057) (750)
-------- --------
Net cash used (provided) by
investing activities . . . . . . . . . (1,057) (738)
Cash flow from financing activities:
Exercise of stock options - net. . . . . . 7 36
Dividend received from foreign affiliate . 378 360
Dividends paid . . . . . . . . . . . . . . (3,031) (3,023)
-------- --------
Net cash used by financing activities. . (2,646) (2,627)
-------- --------
Net increase (decrease) in cash. . . . . (656) 245
Opening balance - cash and
cash equivalents . . . . . . . . . . . . . 3,001 4,524
-------- --------
Ending balance - cash and cash equivalents . $ 2,345 $ 4,769
======== ========
Supplemental Disclosure of Cash Flow
Information:
Cash paid for income taxes . . . . . . . . $ 648 $ 48
======== ========
Supplemental Disclosure of Non-cash
Financing Activity:
Dividend declared. . . . . . . . . . . . $ 3,035 $ 3,031
======== ========
The accompanying notes are an integral part of these financial statements.
5
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements - December 31, 2000
(Unaudited)
(1) BASIS OF PRESENTATION
The accompanying consolidated unaudited condensed financial
statements reflect the financial position of Landauer, Inc. ("Landauer") as
of December 31, 2000 and September 30, 2000, and the results of operations
and cash flows for the three-month periods ended December 31, 2000 and
1999. In the opinion of management, the accompanying consolidated
unaudited condensed financial statements contain all adjustments necessary
to present fairly the financial position of Landauer as of December 31,
2000 and September 30, 2000, and the results of operations for the three-
month periods ended December 31, 2000 and 1999.
The accounting policies followed by the Company are set forth in
Note 1 to the Company's financial statements in the 2000 Landauer Annual
Report on Form 10-K, which is incorporated by reference.
Certain reclassifications have been made in the statement for
comparative purposes. These reclassifications have no effect on the
results of operation or financial position.
The results of operations for the three-month periods ended
December 31, 2000 and 1999 are not necessarily indicative of the results to
be expected for the full year.
(2) CASH DIVIDENDS
On December 22, 2000, the Company declared a regular quarterly cash
dividend in the amount of $.35 per share payable on January 18, 2000, to
stockholders of record on January 4, 2001.
Regular quarterly cash dividends of $.35 per share ($1.40 annually)
were declared during fiscal 2000.
(3) COMPREHENSIVE INCOME
Comprehensive income is the total of net income and all other
nonowner changes in equity. The following table sets forth Company'
comprehensive income for the three month period ended December 31, 2000 and
1999 (000's):
Three Months Ended
December 31,
--------------------
2000 1999
------ ------
Net Income . . . . . . . . . . . . . . . . $3,312 $2,763
Other comprehensive income-foreign
currency translation adjustment. . . . . (137) 71
------ ------
Comprehensive income . . . . . . . . . . . $3,175 $2,834
====== ======
6
LANDAUER, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
Landauer's cash flow from operating activities for the three months
ended December 31, 2000 and 1999 amounted to $3,047,000 and $3,610,000,
respectively. Investing activities for the three months ended December 31,
1999 included a $32,000 investment in the Brazilian subsidiary.
Acquisitions of property, plant and equipment were $1,057,000 and $750,000,
respectively for fiscal 2000 and 1999. The Company's financing activities
were limited to payments of cash dividends, offset by foreign dividends
received from Nagase-Landauer, Ltd., our Japanese joint venture.
The Company has no long-term liabilities and its requirement for cash
flow to support investing activities is generally limited. Capital
expenditures for the balance of fiscal 2001 are expected to amount to
approximately $4,100,000, principally for the acquisition of equipment to
support the Company's introduction of the Luxel product line, the
development of supporting software systems, and computer hardware. The
Company anticipates that funds for these capital improvements will be
provided from operations.
The Company presently maintains external sources of liquidity in the
form of a $5 million line of credit with its bank. In the opinion of
management, resources are adequate for projected operations and capital
spending programs, as well as continuation of the regular cash dividend
program.
Landauer requires limited working capital for its operations since
many of its customers pay for services in advance. Such advance payments
amounted to $10,725,000 and $10,346,000, respectively, as of December 31,
2000 and September 30, 2000, and are included in deferred contract revenue.
While these amounts represent more than one-half of current liabilities,
such amounts generally do not represent a cash requirement.
RESULTS OF OPERATIONS
Revenues for the quarter ended December 31, 2000 were 12.4% higher
compared with the same quarter a year ago. The increase in revenues was
primarily attributable to gains in the Company's traditional radiation
dosimetry business. Gross margins for the first fiscal quarter were 62.5%
of revenues compared to 63.7% for the same period in fiscal 2000. The
decrease in margins was primarily attributable to a $225,000 writedown of
inventories related to a more rapid conversion to Luxel, especially in
Japan where Nagase-Landauer expects to complete its changeover six months
early.
Selling, general and administrative expenses were moderately lower in
the current quarter as a percent of revenues at 22.9% compared to 23.6% for
the first quarter of fiscal 2000. Additionally, at December 31, 1999, the
Company recognized $391,000 of expenses in the quarter related to
technologies replaced by Luxel. As a result, operating income for the
first fiscal quarter of 2000 was 39.6% of revenues compared to 36.7% for
the same period last year. Income before income taxes and minority
interest was 41.2% of revenues for the quarter just ended compared to 38.8%
for the first fiscal quarter of 2000.
7
LANDAUER, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations (Cont'd.)
The effective tax rate for the Company during the first quarter of
fiscal 2001 was 36.7% compared with 36.5% for the same period last year.
Resulting net income of $3,312,000 for the first fiscal quarter of 2001
compared with $2,763,000 reported in fiscal 2000.
Diluted income per share for the current quarter was $.38 versus $.32 for
the first fiscal quarter of 2000.
FORWARD-LOOKING STATEMENTS
Certain matters contained in this report are forward-looking
statements, including, without limitation, statements concerning the
development and introduction of new technologies, pending accounting
announcements and competitive conditions. The word "believe", "expect",
"anticipate", and "estimate" and other similar expressions generally
identify forward-looking statements. All forward-looking statements
contained herein are based largely on the Company's current expectations
and are subject to a number of risks and uncertainties that could cause
actual results to differ materially from the forward-looking statements.
PART II. OTHER INFORMATION
ITEM 2. LEGAL PROCEEDINGS
Landauer is involved in various legal proceedings but believes that
these matters will be resolved without a material effect on its financial
position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At its Annual Meeting held on February 7, 2001, the shareholders
voted to elect Dr. Gary D. Eppen and Michael D. Winfield as directors for
three-year terms. Voting for all nominees were 7,442,469 shares
(representing 85.9% of total shares outstanding), and votes for 63,779
shares were withheld from all nominees. Continuing as directors are Robert
J. Cronin, Thomas M. Fulton, Brent A. Latta, Richard R. Risk and Paul B.
Rosenberg.
The shareholders voted to reappoint Arthur Andersen LLP as the
Company's auditors for the following year, with 7,239,223 shares (83.5% of
total shares outstanding) voting for, 20,786 shares against, and 246,358
shares abstaining.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are filed with this report.
(b) There were no reports on Form 8-K during the quarter for which
this report is filed.
8
SIGNATURES
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.
Date: February 13, 2001
LANDAUER, INC.
/s/ James M. O'Connell
----------------------------
James M. O'Connell
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
10