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, 2001 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, 2002
---------------------------- --------------------------------
Common stock, $.10 par value 8,742,214
1
PART I. FINANCIAL INFORMATION
LANDAUER, INC.
CONSOLIDATED BALANCE SHEETS
(000's)
ASSETS
------
December 30, September 30,
2001 2001
------------ -------------
(Unaudited) (Derived from
audited
statements)
Current assets:
Cash and cash equivalents. . . . . . $ 7,569 $ 7,055
Short-term investments . . . . . . . 387 387
Accounts receivable, less
allowances of $354,000 at
12/31/01 and $368,000 at
9/30/01. . . . . . . . . . . . . . 12,270 11,713
Inventories. . . . . . . . . . . . . 1,864 1,693
Prepaid expenses . . . . . . . . . . 443 707
-------- --------
Total current assets . . . . . 22,533 21,555
Property, plant and equipment,
at cost. . . . . . . . . . . . . . . 36,213 35,417
Less: Accumulated depreciation
and amortization . . . . . . . . . . 19,692 18,917
-------- --------
Net property, plant and
equipment. . . . . . . . . . . . . . 16,521 16,500
Goodwill & other intangible assets
net of amortization. . . . . . . . . 6,538 6,573
Equity in joint venture. . . . . . . . 2,002 2,331
Dosimetry devices, net of
amortization . . . . . . . . . . . . 2,681 2,585
Other assets . . . . . . . . . . . . . 973 1,006
-------- --------
$ 51,248 $ 50,550
======== ========
The accompanying notes are an integral
part of these financial statements.
2
LANDAUER, INC.
CONSOLIDATED BALANCE SHEETS (CONT'D.)
(000's, except share amounts)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
December 30, September 30,
2001 2001
------------ -------------
(Unaudited) (Derived from
audited
statements)
Current liabilities:
Accounts payable . . . . . . . . . . $ 532 $ 627
Deferred contract revenue. . . . . . 11,096 10,890
Dividend payable . . . . . . . . . . 3,059 3,055
Accrued compensation and
related costs. . . . . . . . . . . 957 2,242
Accrued pension costs. . . . . . . . 1,980 1,831
Accrued taxes on income. . . . . . . 1,120 306
Accrued expenses . . . . . . . . . . 2,007 1,842
-------- --------
Total current liabilities. . . 20,751 20,793
Minority interest in subsidiary. . . . 115 114
-------- --------
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 - 8,739,333 shares
at 12/31/01 and 8,729,031
shares at 9/30/01 . . . . . . . . 874 873
Premium paid in on common
stock. . . . . . . . . . . . . . . 10,110 9,876
Cumulative translation
adjustments. . . . . . . . . . . . (999) (826)
Retained earnings . . . . . . . . . 20,397 19,720
-------- --------
Total stockholders'
investment . . . . . . . . . 30,382 29,643
-------- --------
$ 51,248 $ 50,550
======== ========
The accompanying notes are an integral
part of these financial statements.
3
LANDAUER, INC. AND SUBSIDIARIES
STATEMENTS OF INCOME
(000's, except per share amounts)
(Unaudited)
Three Months Ended
-----------------------------
December 31, December 31,
2001 2000
------------ ------------
Net revenues . . . . . . . . . . . . . $ 13,741 $ 12,729
Costs and expenses:
Cost of revenues . . . . . . . . . . 4,786 4,773
Selling, general and
administrative . . . . . . . . . . 3,179 2,917
-------- --------
7,965 7,690
-------- --------
Operating income . . . . . . . . . . . 5,776 5,039
Equity in income of joint venture. . . 165 181
Other income, net. . . . . . . . . . . 42 25
-------- --------
Income before income taxes and
minority interest. . . . . . . . . . 5,983 5,245
Income taxes . . . . . . . . . . . . . (2,246) (1,926)
-------- --------
Income before minority interest. . . . 3,737 3,319
Minority interest therein. . . . . . . (1) (7)
-------- --------
Net income . . . . . . . . . . . . . . $ 3,736 $ 3,312
======== ========
Net Income per common share:
Basic. . . . . . . . . . . . . . . . $ 0.43 $ 0.38
======== ========
Based on average shares outstanding. 8,734 8,664
======== ========
Diluted. . . . . . . . . . . . . . . $ 0.42 $ 0.38
======== ========
Based on average shares outstanding. 8,829 8,678
======== ========
The accompanying notes are an integral
part of these financial statements.
4
LANDAUER, INC.
STATEMENTS OF CASH FLOWS
(000's)
(Unaudited)
Three Months Ended
-----------------------------
December 31, December 31,
2001 2000
------------ ------------
Cash flow from operating activities:
Net income . . . . . . . . . . . . . $ 3,736 $ 3,312
Non-cash expenses, revenues,
and gains reported in income
Depreciation and amortization. . . 1,102 1,117
Equity in income of joint venture. (165) (181)
-------- --------
937 936
-------- --------
Net decrease in other current
assets . . . . . . . . . . . . . . (466) (618)
Net decrease in current liabilities. (47) (455)
Net decrease due to exchange
rates. . . . . . . . . . . . . . . (172) (137)
Net (decrease) increase in net
long-term assets . . . . . . . . . (192) 9
-------- --------
(877) (1,201)
-------- --------
Net cash generated from
operating activities . . . . . . . . 3,796 3,047
Cash flow from investing activities:
Acquisition of property, plant
and equipment. . . . . . . . . . . (796) (1,057)
-------- --------
Net cash used by investing activities. (796) (1,057)
-------- --------
Cash flow from financing activities:
Exercise of stock options - net. . . 235 7
Dividend received from foreign
affiliate. . . . . . . . . . . . . 334 378
Dividends paid . . . . . . . . . . . (3,055) (3,031)
-------- --------
Net cash used by financing activities. (2,486) (2,646)
-------- --------
Net increase (decrease) in cash. . . . 514 (656)
Opening balance - cash and
cash equivalents . . . . . . . . . . 7,055 3,001
-------- --------
Ending balance - cash and
cash equivalents . . . . . . . . . . $ 7,569 $ 2,345
======== ========
Supplemental Disclosure of
Cash Flow Information:
Cash paid for income taxes . . . . . $ 1,348 $ 648
======== ========
Supplemental Disclosure of
Non-cash Financing Activity:
Dividend declared. . . . . . . . . . $ 3,059 $ 3,035
======== ========
The accompanying notes are an integral
part of these financial statements.
5
LANDAUER, INC.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 2001
(Unaudited)
(1) BASIS OF PRESENTATION
The accompanying consolidated unaudited condensed financial
statements reflect the financial position of Landauer, Inc. and
subsidiaries ("Landauer" or "the Company) as of December 31, 2001 and
September 30, 2001, and the consolidated results of operations and cash
flows for the three-month periods ended December 31, 2001 and 2000. 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, 2001 and
September 30, 2001, and the consolidated results of operations for the
three-month periods ended December 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 2001 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, 2001 and 2000 are not necessarily indicative of the results to
be expected for the full year.
(2) CASH DIVIDENDS
On December 21, 2001, the Company declared a regular quarterly cash
dividend in the amount of $.35 per share payable on January 18, 2002, to
stockholders of record on January 4, 2002.
Regular quarterly cash dividends of $.35 per share ($1.40 annually)
were declared during fiscal 2001.
(3) COMPREHENSIVE INCOME
Comprehensive income is the total of net income and all other
nonowner changes in equity. The following table sets forth the Company's
comprehensive income for the three month period ended December 31, 2001 and
2000 (000's):
Three Month Ended
December 31,
--------------------
2001 2000
-------- --------
Net Income . . . . . . . . . . . . . . . . $ 3,736 $ 3,312
Other comprehensive income-
foreign currency translation adjustment. (173) (137)
-------- --------
Comprehensive income . . . . . . . . . . . $ 3,563 $ 3,175
======== ========
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, 2001 and 2000 amounted to $3,796,000 and $3,047,000,
respectively. Acquisitions of property, plant and equipment were $796,000
and $1,057,000, 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 2002 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, 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 $11,096,000 and $10,890,000, respectively, as of December 31,
2001 and September 30, 2001, 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, 2001 were 8.0% 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 65.2%
of revenues compared to 62.5% for the same period in fiscal 2001. The
increase in margins was primarily attributable to a $225,000 writedown of
inventories in the prior year related to Nagase Landauer's more rapid
conversion to Luxel. Absent the inventory charge, costs rose 5% and the
Company's rate of gross margin improved slightly compared with a year ago.
Selling, general and administrative (S, G & A) expenses in the first
quarter of fiscal 2002 were 9% greater than a year ago due to expenditures
to develop new markets and products as well as higher employee costs.
First quarter S, G & A expenses as a percentage of revenue were comparable
to the same period last year. Operating income for the first quarter of
fiscal 2002 was 42.0% of revenues compared with 39.6% of revenues for the
same period last year. Income before income taxes and minority interest
was 43.5% of revenues for the quarter just ended compared to 41.2% for the
first fiscal quarter of 2001.
The effective tax rate for the Company during the first quarter of
fiscal 2002 was 37.5% compared with 36.7% for the same period last year.
Resulting net income of $3,736,000 for the first fiscal quarter of 2002
compared with $3,312,000 reported in fiscal 2001. Diluted income per share
for the current quarter was $0.42 versus $0.38 for the first fiscal quarter
of 2001.
7
LANDAUER, INC AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONT'D)
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
- -----------------------------------------
In June 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" (SFAS 142), which addresses financial accounting and
reporting for acquired goodwill and other intangible assets. The Company is
required to adopt the provisions of SFAS on October 1, 2002, but has
elected to exercise the option of adopting early, as of October 1, 2001.
Under SFAS 142, goodwill and certain other intangible assets will no longer
be systematically amortized, but instead will be reviewed for impairment
each year and written down and charged to results of operations when their
carrying amount exceeds their estimated fair value. The Financial Standards
Accounting Board recognizes that the fair value based impairment test can
be a time consuming process and, as such, SFAS No. 142 allows companies six
months from the date of adoption to determine if there is going to be an
impairment, and twelve months from the date of adoption to finalize the
impairment calculation and disclose the amount of the impairment, if any.
Accordingly, the Company has stopped amortization of goodwill effective
October 1, 2001. However, goodwill amortization continues to be presented
in the December 31, 2000 Statement of Income. Had the provisions of SFAS
No. 142 been applied for the three months ended December 31, 2000, the
Company's net income would have been $56,000 higher or about $0.006 per
diluted share.
FORWARD-LOOKING STATEMENTS
- --------------------------
Certain of the statements made herein constitute forward looking
statements that are based on certain assumptions and involve certain risks
and uncertainties, including assumptions and risks associated with the
Company's introduction of new technology, the adaptability of OSL to new
platforms and new formats, the usefulness of older technologies, the cost
associated with the Company's business development and research efforts,
the anticipated results of operations of the Company, the Company's market
position, the Company's business plans, the risks associated with
conducting business internationally, other anticipated financial events,
the effects of changing economic and competitive conditions, foreign
exchange risks, government regulations and changes in postal and delivery
practices. Such assumptions may not materialize to the extent assumed and
such risks and uncertainties may cause actual results to differ from
anticipated results. Additional information may be obtained by reviewing
the Company's reports filed from time to time with the SEC.
8
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
None.
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.
9
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: February 13, 2002
/s/ James M. O'Connell
------------------------------
James M. O'Connell
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
10