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 March 31, 2001
or
[ ] TRANSITION REPORT pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition from ____________ to ___________
LANDAUER, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Commission File Number 1-9788
Delaware 06-1218089
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2 Science Road, Glenwood, Illinois 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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at May 14, 2001
-------------- ---------------------------
Common stock,
$.10 par value 8,684,352
PART I. FINANCIAL INFORMATION
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(000's)
ASSETS
------
March 31, Sept. 30,
2001 2000
---------- ----------
(Derived
(Unaudited) from audited
statements)
Current assets:
Cash and cash equivalents. . . . . . . . . . $ 2,216 $ 3,001
Short-term investments . . . . . . . . . . . 475 475
Accounts receivable, less allowances of
$341 at 3/31/01 and $385 at 9/30/00. . . . . 13,021 10,734
Inventories. . . . . . . . . . . . . . . . . 1,571 1,587
Prepaid expenses . . . . . . . . . . . . . . 414 308
Prepaid income taxes . . . . . . . . . . . . 265 849
---------- ----------
Total current assets . . . . . . . . . . . . 17,962 16,954
Property, plant and equipment, at cost . . . 33,519 32,198
Less: Accumulated depreciation
and amortization . . . . . . . . . . . . . 17,663 16,161
---------- ----------
Net property, plant and equipment. . . . . . 15,856 16,037
Cost of purchased businesses in excess of
net assets acquired. . . . . . . . . . . . . 3,924 4,021
Equity in joint venture. . . . . . . . . . . 3,254 3,550
Other assets . . . . . . . . . . . . . . . . 6,428 6,499
---------- ----------
$ 47,424 $ 47,061
========== ==========
The accompanying notes are an integral
part of these financial statements.
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Cont'd.)
(000's, except share amounts)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
March 31, Sept. 30,
2001 2000
---------- ----------
(Derived
(Unaudited) from audited
statements)
Current liabilities:
Accounts payable . . . . . . . . . . . . . . $ 438 $ 966
Deferred contract revenue. . . . . . . . . . 10,392 10,346
Dividend payable . . . . . . . . . . . . . . 3,039 3,031
Accrued compensation and related costs . . . 1,421 1,792
Accrued pension costs. . . . . . . . . . . . 1,691 1,531
Accrued taxes on income. . . . . . . . . . . 552 535
Accrued expenses . . . . . . . . . . . . . . 2,079 1,991
---------- ----------
Total current liabilities. . . . . . . . . . 19,612 20,192
Minority interest in subsidiary. . . . . . . 171 51
---------- ----------
Total liabilities. . . . . . . . . . . . . . 19,783 20,243
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 - 8,683,622 shares at 3/31/01
and 8,660,748 shares at 9/30/00. . . . . . . 868 866
Premium paid in on common stock. . . . . . . 8,902 8,752
Cumulative translation adjustments . . . . . (672) (372)
Retained earnings. . . . . . . . . . . . . . 18,543 17,572
---------- ----------
Total stockholders' investment . . . . . . . 27,641 26,818
---------- ----------
$ 47,424 $ 47,061
========== ==========
The accompanying notes are an integral
part of these financial statements.
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(000's, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
-------------------- --------------------
2001 2000 2001 2000
-------- -------- -------- --------
Net Revenues . . . . . . . . $ 13,833 $ 12,003 $ 26,562 $ 23,330
Cost and expenses:
Cost of revenues . . . . . . 4,796 4,161 9,568 8,267
Selling, general and
administrative . . . . . . 3,358 2,686 6,276 5,355
Impairment in value
of assets. . . . . . . . . -- 129 -- 520
-------- -------- -------- --------
8,154 6,976 15,844 14,142
-------- -------- -------- --------
Operating Income . . . . . . 5,679 5,027 10,718 9,188
Equity in income of
joint venture. . . . . . . 153 175 334 350
Other income, net. . . . . . 31 49 56 108
-------- -------- -------- --------
Income before income
taxes and minority
interest. . . . . . . . . . 5,863 5,251 11,108 9,646
Income taxes . . . . . . . . 2,116 1,947 4,042 3,552
-------- -------- -------- --------
Income before minority
interest . . . . . . . . . 3,747 3,304 7,066 6,094
Minority interest
therein. . . . . . . . . . 13 11 20 38
-------- -------- -------- --------
Net income . . . . . . . . . $ 3,734 $ 3,293 $ 7,046 $ 6,056
======== ======== ======== ========
Net income per common share:
Basic. . . . . . . . . . . . $ 0.43 $ 0.38 $ 0.81 $ 0.70
======== ======== ======== ========
Based on average
shares outstanding . . . . 8,679 8,661 8,672 8,651
======== ======== ======== ========
Diluted. . . . . . . . . . . $ 0.43 $ 0.38 $ 0.81 $ 0.70
======== ======== ======== ========
Based on average
shares outstanding . . . . 8,708 8,685 8,695 8,695
======== ======== ======== ========
The accompanying notes are an integral
part of these financial statements.
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(000's)
(Unaudited)
Six Months Ended
March 31,
-----------------------
2001 2000
-------- --------
Cash flow from operating activities:
Net income . . . . . . . . . . . . . . . . $ 7,046 $ 6,056
Non-cash expenses, revenues, and gains
reported in income
Depreciation and amortization. . . . . . 2,250 2,182
Equity in income of joint venture. . . . (334) (350)
Exercise of stock options - net. . . . . 151 41
-------- --------
2,067 1,873
-------- --------
Net increase in other current assets . . . . (1,776) (957)
Net increase (decrease) in current
liabilities. . . . . . . . . . . . . . . . (483) 1,022
Net increase (decrease) due to
exchange rates . . . . . . . . . . . . . . (300) 180
Net increase in net long-term assets . . . . (330) (996)
-------- --------
(2,889) (751)
-------- --------
Net cash generated from operating
activities . . . . . . . . . . . . . . . . 6,224 7,178
Cash flow from investing activities:
Acquisition of property, plant
and equipment. . . . . . . . . . . . . . (1,321) (1,753)
-------- --------
Net cash used by investing activities. . . . (1,321) (1,753)
Cash flow from financing activities:
Dividend received from foreign
affiliate. . . . . . . . . . . . . . . . 378 400
Dividends paid . . . . . . . . . . . . . . (6,066) (6,054)
-------- --------
Net cash used by financing activities. . . . (5,688) (5,654)
-------- --------
Net decrease in cash . . . . . . . . . . . . (785) (229)
Opening balance -
cash and cash equivalents. . . . . . . . . 3,001 4,845
-------- --------
Ending balance -
cash and cash equivalents. . . . . . . . . $ 2,216 $ 4,616
======== ========
Supplemental Disclosure of Cash
Flow Information:
Cash paid for income taxes . . . . . . . . $ 3,409 $ 2,348
======== ========
Supplemental Disclosure of
Non-cash Financing Activity:
Dividend declared. . . . . . . . . . . . . $ 3,039 $ 3,031
======== ========
The accompanying notes are an integral
part of these financial statements.
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements - March 31, 2001
(Unaudited)
(1) BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements reflect the
financial position of Landauer, Inc. and Subsidiaries ("Landauer" or "the
Company") as of March 31, 2001 and September 30, 2000, and the consolidated
results of operations for the three-month and six-month periods ended
March 31, 2001 and 2000 and consolidated cash flows for the six-month
periods ended March 31, 2001 and 2000. In the opinion of management, the
accompanying unaudited condensed consolidated financial statements contain
all adjustments necessary to present fairly the consolidated financial
position of Landauer as of March 31, 2001 and September 30, 2000, and the
consolidated results of operations for the three-month and six-month
periods ended March 31, 2001 and 2000, and cash flows for the six-month
periods ended March 31, 2001 and 2000.
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 statements for
comparative purposes. These reclassifications have no effect on the
results of operations or financial position.
The results of operations for the three-month and six-month periods
ended March 31, 2001 and 2000 are not necessarily indicative of the results
to be expected for the full year.
(2) CASH DIVIDENDS
On March 9, 2001, the Company declared a regular quarterly cash
dividend in the amount of $ .35 per share payable on April 13, 2001, to
stockholders of record on March 23, 2001. On December 22, 2000, the
Company declared a regular quarterly cash dividend in the amount of $ .35
per share payable on January 18, 2001, 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's
comprehensive income for the three and six month periods ended March 31,
2001 and 2000 (000's):
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements - March 31, 2001 (Cont'd.)
Three Months Ended Six Months Ended
March 31, March 31,
-------------------- --------------------
2001 2000 2001 2000
-------- -------- -------- --------
Net income . . . . . . . . . $ 3,734 $ 3,293 $ 7,046 $ 6,056
Other comprehensive income-
Foreign currency
translation adjustment . . (163) 62 (300) 180
-------- -------- -------- --------
Comprehensive income . . . . $ 3,571 $ 3,355 $ 6,746 $ 6,236
======== ======== ======== ========
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 six months
ended March 31, 2001 and 2000 amounted to $6,224,000 and $7,178,000,
respectively. Acquisitions of property, plant and equipment amounted to
$1,321,000 and $1,753,000, respectively for fiscal 2001 and 2000. 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 $2,500,000 principally for the acquisition of equipment to
support the Company's Luxel product line, introduction of new products, 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 $10,392,000 and $10,346,000, respectively, as of March 31, 2001
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 March 31, 2001 were 15.2% higher
compared with the same quarter a year ago. The increase in revenues was
primarily attributable to higher pricing for the Company's products and
services, increased unit demand principally resulting from the recent
acquisition of another dosimetry service provider, and stronger demand in
the Company's Homebuyer's Preferred unit. Gross margins were 65.3% of
revenues for the second quarter of fiscal 2001, which was comparable with
the same period in 2000.
Selling, general and administrative expenses were slightly higher in
the second quarter as a percent of revenues at 24.3% versus 23.5% for the
second quarter of fiscal 2000 as a result of consulting fees related to the
Company's technology and business development initiatives, and higher
employee and amortization costs. Prior year selling, general and
administrative expenses were impacted by the final portion of the non-cash
asset impairment charge in the amount of $129,000 related to the Company's
discontinuation of older radiation measurement technologies. As a result,
operating income for the second quarter of 2001 was 41.1% of revenues
compared to 41.9% for the same period last year. Income before taxes and
minority interest was 42.4% of the revenues for the quarter just ended
compared to 43.7% for the second fiscal quarter of 2000.
The effective tax rate for the Company during the second quarter of
fiscal 2001 was 36.1% compared with 37.1% for the second quarter of fiscal
2000. Resulting net income of $3,734,000 for the second fiscal quarter of
2001 compared with $3,293,000 reported in fiscal 2000. Diluted income per
share for the current quarter was $ .43 versus $ .38 for fiscal 2000.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONT'D)
Revenues for the six months ended March 31, 2001, were 13.9% higher
compared with the first six months of fiscal 2000. The increase in
revenues was attributable to higher pricing for the Company's products and
services, increased unit demand principally resulting from the recent
acquisition of better dosimetry service provider, and stronger demand in
the Company's Homebuyer's Preferred unit. Gross margins for the first half
of fiscal 2000 were 64.0% of revenues, consistent with 64.6% a year ago.
Selling, general, and administrative expenses were 23.6% of revenues
for the first half of fiscal 2001 compared to 23.0% for the first half of
fiscal 2000. The prior year-to-date earnings were impacted by $520,000 of
the asset impairment charges. Operating income for the first half of
fiscal 2001 was 40.4% of revenues compared with 39.4% for the same period
last year; absent the asset impairment charges operating income was 41.6%
of revenues in the prior year. Income before income taxes and minority
interest was 41.8% of revenues for the six months just ended compared to
41.3% of revenues for the same period in fiscal 2000.
The effective tax rate for the Company during the first half of
fiscal 2000 was 36.4% compared with 36.8% a year ago. Resulting net income
of $7,046,000 for the first six months of 2001 exceeded earnings of
$6,056,000 reported in fiscal 2000. Diluted income per share for the first
half of fiscal 2001 was $ .81, compared to $ .70 in the first fiscal half
of 2000; absent the asset impairment charges, fiscal 2000 earnings would
have been $.74 per diluted share.
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 re-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.
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.
LANDAUER, INC.
Date: May 14, 2001
/s/ James M. O'Connell
--------------------------------
James M. O'Connell
Vice President and Treasurer
(Principal Financial and
Accounting Officer)