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 JUNE 30, 2003
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 by check mark whether the registrant is an accelerated filer as
defined in Rule 12b.2 of the Exchange Act. 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 August 12, 2003
------------------------------ ------------------------------
Common stock, $.10 par value 8,839,332
1
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LANDAUER, INC. AND SUBSIDIARIES
Condensed Consolidated Unaudited Balance Sheets
(000's, except share amounts)
ASSETS
------
June 30, September 30,
2003 2002
-------- -------------
Current assets:
Cash and cash equivalents . . . . . $ 9,419 $ 7,627
Short-term investments. . . . . . . 339 317
Accounts receivable,
less allowances of $512
and $482. . . . . . . . . . . . . 15,259 13,620
Inventories . . . . . . . . . . . . 3,293 2,135
Prepaid expenses. . . . . . . . . . 4,991 3,131
-------- --------
Total current assets. . . . . 33,301 26,830
Property, plant and equipment,
at cost. . . . . . . . . . . . . . 40,341 37,504
Less: Accumulated depreciation
and amortization . . . . . . . . 23,820 19,325
-------- --------
Net property, plant and
equipment . . . . . . . . . . . . 16,521 18,179
Goodwill & other intangible
assets net of amortization. . . . 8,154 8,601
Equity in joint venture . . . . . . 2,909 2,806
Dosimetry devices, net of
amortization. . . . . . . . . . . 4,088 3,546
Other assets. . . . . . . . . . . . 223 295
-------- --------
$ 65,196 $ 60,257
======== ========
The accompanying notes are an integral
part of these financial statements.
2
LANDAUER, INC. AND SUBSIDIARIES
Condensed Consolidated Unaudited Balance Sheets (Cont'd.)
(000's, except share amounts)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
June 30, September 30,
2003 2002
-------- -------------
Current liabilities:
Accounts payable. . . . . . . . . . $ 1,742 $ 1,789
Deferred contract revenue . . . . . 13,326 11,885
Dividend payable. . . . . . . . . . 3,315 3,071
Accrued compensation and
related costs . . . . . . . . . . 1,345 2,505
Accrued pension costs . . . . . . . 2,282 1,922
Accrued taxes on income . . . . . . 2,432 1,753
Accrued expenses. . . . . . . . . . 2,869 2,264
-------- --------
Total current liabilities . . 27,311 25,189
Minority interest in subsidiary . . . 773 462
-------- --------
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 - 8,839,322 shares
at 6/30/03 and 8,775,337
shares at 9/30/02 . . . . . . . 884 878
Premium paid in on common stock . . 12,083 10,946
Cumulative translation
adjustments . . . . . . . . . . . (253) (855)
Retained earnings . . . . . . . . . 24,398 23,637
-------- --------
Total stockholders'
investment. . . . . . . . . 37,112 34,606
-------- --------
$ 65,196 $ 60,257
======== ========
The accompanying notes are an integral
part of these financial statements.
3
LANDAUER, INC. AND SUBSIDIARIES
Condensed Consolidated Unaudited Statements of Income
(000's, except per share amounts)
Three Months Ended Nine Months Ended
-------------------- --------------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
-------- -------- -------- --------
Net Revenues. . . . . . $ 15,925 $ 14,844 $ 48,162 $ 43,288
Cost and expenses:
Cost of revenues. . . 6,097 5,471 17,542 15,208
Selling, general and
administrative. . . 3,690 3,544 10,875 10,211
Impairment in value
of assets . . . . . -- -- 2,750 --
-------- -------- -------- --------
9,787 9,015 31,167 25,419
-------- -------- -------- --------
Operating Income. . . . 6,138 5,829 16,995 17,869
Gain recognized on
exchange of assets. . -- 786 -- 786
Equity in income of
joint venture . . . . 213 231 608 570
Other income, net . . . 42 24 102 99
-------- -------- -------- --------
Income before income
taxes and minority
interest. . . . . . . 6,393 6,870 17,705 19,324
Income taxes. . . . . . 2,367 2,510 6,550 7,174
-------- -------- -------- --------
Income before minority
interest. . . . . . . 4,026 4,360 11,155 12,150
Minority interest
therein . . . . . . . 198 126 488 143
-------- -------- -------- --------
Net income. . . . . . . $ 3,828 $ 4,234 $ 10,667 $ 12,007
======== ======== ======== ========
Net income per
common share:
Basic . . . . . . . . $ 0.43 $ 0.48 $ 1.21 $ 1.37
======== ======== ======== ========
Based on average
shares outstanding . 8,820 8,774 8,797 8,750
======== ======== ======== ========
Diluted . . . . . . . $ 0.43 $ 0.48 $ 1.20 $ 1.36
======== ======== ======== ========
Based on average
shares outstanding . 8,910 8,882 8,881 8,855
======== ======== ======== ========
The accompanying notes are an integral
part of these financial statements.
4
LANDAUER, INC. AND SUBSIDIARIES
Condensed Consolidated Unaudited Statements of Cash Flows
(000's, except per share amounts)
Nine Months Ended
--------------------
June 30, June 30,
2003 2002
-------- --------
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . $ 10,667 $ 12,007
Adjustments to reconcile net income to
net cash provided by operating activities:
Non-cash gain from exchange of assets . . . -- (786)
Asset impairment charge . . . . . . . . . . 2,750 --
Depreciation. . . . . . . . . . . . . . . . 3,537 3,019
Amortization. . . . . . . . . . . . . . . . 294 177
Bad debt expense. . . . . . . . . . . . . . 196 198
Equity in net income of foreign affiliate . (608) (570)
Tax effect of stock options . . . . . . . . 1,144 943
(Increase) decrease in short-term investments (22) 87
Increase in accounts receivable . . . . . . (1,669) (2,311)
Increase in allowance for doubtful accounts
net of bad debts. . . . . . . . . . . . . (166) (160)
Increase in prepaid expenses. . . . . . . . (1,860) (1,678)
Increase in inventory . . . . . . . . . . . (1,407) (190)
Net increase in other assets. . . . . . . . (1,643) (3,112)
(Decrease) increase in accounts payable . . (47) 836
Increase in accrued liabilities . . . . . . 350 377
Increase in deferred revenue. . . . . . . . 1,441 1,634
Increase in minority interest . . . . . . . 311 636
-------- --------
Net cash provided by
operating activities. . . . . . . . 13,268 11,107
Cash flows from investing activities:
Acquisition of property, plant and equipment (2,950) (3,102)
-------- --------
Net cash used by
investing activities. . . . . . . . (2,950) (3,102)
Cash flows from financing activities:
Dividend received from foreign affiliate. . 535 334
Dividend paid . . . . . . . . . . . . . . . (9,663) (9,175)
-------- --------
Net cash used by
financing activities. . . . . . . . (9,128) (8,841)
Effect of foreign currency translation. . . . 602 249
-------- --------
Net increase (decrease) in cash and
cash equivalents. . . . . . . . . . . . . . 1,792 (587)
Opening balance - cash and cash equivalents . 7,627 7,055
-------- --------
Ending balance - cash and cash equivalents. . $ 9,419 $ 6,468
======== ========
The accompanying notes are an integral
part of these financial statements.
5
LANDAUER, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - June 30, 2003
(Unaudited)
(1) BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements reflect the financial position of Landauer, Inc. and
Subsidiaries ("Landauer" or "the Company") as of June 30, 2003 and
September 30, 2002, and the condensed consolidated results of operations
and cash flows for the three-month and nine-month periods ended June 30,
2003 and 2002. 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 June 30, 2003 and September 30, 2002, and the consolidated results of
operations and cash flows for the three-month and nine-month periods ended
June 30, 2003 and 2002.
The accounting policies followed by the Company are set forth in
Note 1 to the Company's financial statements in the 2002 Landauer Annual
Report on Form 10-K.
Prior year amounts have been reclassified to conform to current year
presentation. These reclassifications have no effect on the results of
operations or financial position.
The results of operations for the three-month and nine-month periods
ended June 30, 2003 and 2002 are not necessarily indicative of the results
to be expected for the full year.
(2) CASH DIVIDENDS
On June 6, 2003, the Company declared a regular quarterly cash
dividend in the amount of $0.375 per share payable on July 11, 2003, to
stockholders of record on June 20, 2003. On March 7, 2003, the Company
declared a regular quarterly cash dividend in the amount of $ 0.375 per
share payable on April 11, 2003, to stockholders of record on March 21,
2003. On December 20, 2002, the Company declared a regular quarterly cash
dividend in the amount of $ 0.375 per share payable on January 17, 2003, to
stockholders of record on January 3, 2003.
Regular quarterly cash dividends of $0.35 per share ($1.40 annually)
were declared during fiscal 2002.
(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 and nine month periods ended June 30,
2003 and 2002 (000's):
Three Months Ended Nine Months Ended
-------------------- --------------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
-------- -------- -------- --------
Net income. . . . . . . $ 3,828 $ 4,234 $ 10,667 $ 12,007
Other comprehensive
income- Foreign
currency translation
adjustment . . . . . . 317 429 602 249
-------- -------- -------- --------
Comprehensive income. . $ 4,145 $ 4,663 $ 11,269 $ 12,256
======== ======== ======== ========
6
LANDAUER, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - June 30, 2003
(Cont'd.)
(4) EARNINGS PER SHARE
Earnings per share computations have been made in accordance with the
provisions of SFAS No. 128, "Earnings Per Share." Basic earnings per share
were computed by dividing net income by the weighted average number of
shares of common stock outstanding during each period. Diluted earnings per
share were computed by dividing net income by the weighted average number
of shares of common stock that would have been outstanding assuming
dilution during each period.
The following table presents the weighted average number of shares of
common stock for the three and nine month periods ended June 30, 2003 and
2002 (000's):
Three Months Ended Nine Months Ended
-------------------- --------------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
-------- -------- -------- --------
Weighted average number
of shares of common
stock outstanding. . . 8,820 8,774 8,797 8,750
Options issued to
executives . . . . . . 90 108 84 105
-------- -------- -------- --------
Weighted average number
of shares of common
stock assuming
dilution. . . . . . . 8,910 8,882 8,881 8,855
======== ======== ======== ========
(5) STOCK-BASED COMPENSATION
The Company maintains stock option plans for key employees
("Employees' Plan"). It also maintains a stock option plan for its non-
employee directors. The Company accounts for those plans under the
recognition and measurement principles of APB Opinion No. 25, "Accounting
for Stock Issued to Employees", and related Interpretations. In December
2002, the Financial Accounting Standards Board ("FASB") issued Financial
Accounting Standard ("FAS") No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - an amendment of FASB Statement
No. 123." FAS No. 148 requires disclosure in both annual and quarterly
financial statements about the method of accounting for stock-based
employee compensation, and the effect of the method used on reported
results. Had compensation cost for these plans been determined consistent
with FASB Statements No. 123, "Accounting for Stock-Based Compensation,"
the Company's net income and earnings per share in each period would have
been as follows (000's except per share data):
7
LANDAUER, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - June 30, 2003
(Cont'd.)
Three Months Ended Nine Months Ended
-------------------- --------------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
-------- -------- -------- --------
Net income, as
reported. . . . . . . $ 3,828 $ 4,234 $ 10,667 $ 12,007
Deduct: Total stock-based
employee compensation
expense determined
under fair value based
method for all awards,
net of related tax
effects . . . . . . . 56 27 167 81
-------- -------- -------- --------
Pro forma net income. . $ 3,772 $ 4,207 $ 10,500 $ 11,926
======== ======== ======== ========
Earnings per share:
Basic - As Reported . $ 0.43 $ 0.48 $ 1.21 $ 1.37
======== ======== ======== ========
Basic - Pro Forma . . $ 0.43 $ 0.48 $ 1.19 $ 1.36
======== ======== ======== ========
Diluted - As Reported $ 0.43 $ 0.48 $ 1.20 $ 1.36
======== ======== ======== ========
Diluted - Pro Forma . $ 0.42 $ 0.47 $ 1.18 $ 1.35
======== ======== ======== ========
Because the FASB Statement No. 123 method of accounting has not been
applied to options granted prior to October 1, 1996, the resulting pro
forma compensation cost may not be representative of that to be expected in
future years.
(6) ASSET IMPAIRMENT
The Company recorded a non-cash pre-tax charge of $2,750,000, or
$0.19 per diluted share (with income taxes calculated at a marginal rate of
39.7%) for the fiscal quarter ended March 31, 2003, to recognize an
impairment in the value of assets for the Aurion product line. The
financial results for Aurion have not been significant for any period
presented. Based on the estimated identifiable cash flows from this
service offering the impairment charge represents the Company's entire
investment in the Aurion-related assets and includes software and other
fixed assets, licenses, and badge components.
Following a period of product introduction, marketing efforts and an
analysis of second quarter results, it was determined that spending
constraints placed on targeted customers by health care cost pressures and
state and local government budget deficits had significantly reduced the
future net cash flows expected to be realized from Aurion. The Company
will continue servicing current customers through the term of their
agreement and will discontinue marketing to new customers. The Company
will consider alternative uses, if any, for the technology.
8
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION &
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Landauer's cash flow from operating activities for the nine months
ended June 30, 2003 and 2002 amounted to $13,268,000 and $11,107,000,
respectively. Acquisitions of property, plant and equipment amounted to
$2,950,000 and $3,102,000, respectively, for fiscal 2003 and 2002. 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 2003 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 service
offerings, 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 are invoiced for services in advance. Such advance
billings amounted to $13,326,000 and $11,885,000, respectively, as of June
30, 2003 and September 30, 2002, and are included in the balance sheet
under the caption deferred contract revenue. While these amounts included
in deferred contract revenue represent almost one-half of current
liabilities, such amounts generally do not represent a cash requirement.
The services provided by the Company to its Customers are ongoing and
are of a subscription nature. As such, revenues are recognized in the
periods in which such services are rendered irrespective of whether
invoiced in advance or in arrears. All customers are invoiced in
accordance with the Company's standard terms, with payment due thirty days
from date of invoice. Inasmuch as the majority of the Company's revenues
are realized from the health care industry, the average days of sales
outstanding range from 43 to 80 days.
RESULTS OF OPERATIONS
QUARTERLY RESULTS
Revenues for the quarter ended June 30, 2003 were 7.3% higher
compared with the same quarter a year ago. Revenue growth for the current
quarter occurred as a result of currency gains and higher volume from LCIE-
Landauer's operations in France and the U.K., higher domestic pricing for
the Company's products and services and slightly higher unit demand. Cost
of revenues for the current quarter was 11% higher than for the same period
a year ago. Higher costs resulted from a weaker U.S. dollar compared with
currencies in most countries where the Company operates, increased costs
associated with LCIE-Landauer, higher insurance costs for property/casualty
coverage and medical claims. Gross margins were 61.7% of revenues for the
third quarter of fiscal 2003, compared to 63.1% for the same period in
2002; the decreased gross margin is primarily attributable to higher cost
of revenues in France as well as increased domestic employee benefit costs,
particularly pension and medical.
9
Selling, general and administrative expenses were slightly lower in
the second quarter as a percent of revenues at 23.2% versus 23.9% for the
third quarter of fiscal 2002. While expenses related to LCIE-Landauer
increased, and selling and research and development expenses were higher,
these were largely offset by lower incentive compensation expenses.
Operating income was 38.5 % of revenues compared to 39.3% for the same
period last year. During the third quarter of fiscal 2002, the Company
recognized a $786,000 pre-tax gain arising from the exchange of a portion
of its U.K. business for a controlling interest in LCIE-Landauer; this gain
was included in the other income section of the income statement. Income
before taxes and minority interest was 40.1% of the revenues for the
quarter just ended compared to 46.3% for the third fiscal quarter of 2002.
The effective tax rate for the Company during the second quarter of
fiscal 2003 was 37.0% compared with 36.5% for the third quarter of fiscal
2002. Resulting net income was $3,828,000 for the third fiscal quarter of
2003, compared with $4,234,000 in the same quarter reported in fiscal 2002.
Diluted income per share for the current quarter was $ 0.43 versus $ 0.48
for fiscal 2002.
NINE MONTHS RESULTS
Revenues for the nine months ended June 30, 2003, were $48,162,000 or
11.3% greater than $43,288,000 reported for the same period in fiscal 2002.
Revenue growth resulted from the consolidation of the European operations
and from core radiation dosimetry services where the Company realized
higher pricing and slightly increased unit volume. Gross margins for the
first half of fiscal 2003 were 63.6% of revenues, or slightly lower than
the 64.9% reported a year ago as a result of lower margins for LCIE-
Landauer.
Selling, general, and administrative expenses in the first nine
months of fiscal 2003 were 6.5% higher than a year ago, due to higher
European operating expenses and domestic selling and research and
development costs, offset by lower incentive compensation expenses.
Selling, general, and administrative expenses were 22.6% of revenues for
the first nine months of fiscal 2003 compared to 23.6% for the first nine
months of fiscal 2002. Operating income for the first nine months of
fiscal 2003 was 35.3% of revenues compared with 41.3% for the same period
last year; operating income was impacted by the $2,750,000 non-cash
impairment charge that was reported in the second fiscal quarter. Income
before taxes and minority interest was 36.8% of revenues for the nine
months just ended compared to 44.6% of revenues for the same period in
fiscal 2002.
The effective tax rate for the Company during the first nine months
of fiscal 2003 was 37.0% compared with 37.1% a year ago. Resulting net
income of $10,667,000 for the first nine months of 2003 compares with net
income of $12,007,000 reported in fiscal 2002. Diluted income per share
for the first nine months of fiscal 2003 was $1.20, compared to $1.36 in
the first nine months of 2002.
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
10
extent assumed and such risks and uncertainties may cause actual results to
differ from anticipated results. Such risks and uncertainties may also
result in changes to the Company's business plan and prospects and could
create the need from time to time to write down the value of the assets or
otherwise cause the Company to incur unanticipated expenses. Additional
information may be obtained by reviewing the Company's reports filed from
time to time with the SEC.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In January 2003, the FASB issued Interpretation No. 46,
"Consolidation of Variable Interest Entities, an Interpretation of
Accounting Research Bulletin ("ARB") No. 51," ("FIN 46"). FIN 46 clarifies
the application of ARB No. 51, "Consolidated Financial Statements," to
certain entities in which equity investors do not have the characteristics
of a controlling financial interest or do not have sufficient equity at
risk for the entity to finance its activities without additional
subordinated financial support from other parties. The consolidation
requirements of FIN 46 apply immediately to variable interest entities
created after January 31, 2003, and to existing variable interest entities
in the interim period beginning after June 15, 2003. The Company believes
it has no material interests in variable interest entities that will
require disclosure or consolidation under FIN 46.
The FASB's Emerging Issues Task Force (EITF) Issue No. 00-21,
"Accounting for Revenue Arrangements with Multiple Deliverables," provides
guidance for the accounting treatment by a vendor for arrangements under
which the vendor will perform multiple revenue-generating activities (i.e.,
revenue-generating activities that involve more than one deliverable - or
unit of accounting - in circumstances where the delivery of those units
takes place in different accounting periods). The EITF concluded that
revenue arrangements with multiple deliverables should be divided into
separate units of accounting if the deliverables in the arrangement meet
the separation criteria set forth in Issue No. 00-21. The arrangement's
consideration should be allocated among the separate units of accounting
based on their relative fair values (or as otherwise provided, allocated
using the "residual method"). The amount allocable to a delivered unit(s)
is limited to the amount that is not contingent upon the delivery of
additional units or meeting other specified performance conditions.
Finally, applicable revenue recognition criteria should be considered
separately for separate units of accounting. The guidance in this Issue is
applicable to all revenue arrangements entered into in fiscal periods
beginning after June 15, 2003, with early adoption permitted, due to
implementation and timing concerns. The Company is reviewing the EITF
Issue No. 00-21 to determine its impact, if any on future reporting
periods.
In April 2003, FASB issued SFAS No. 149, "Amendment of Statement 133
on Derivative Instruments and Hedging Activities," which amends and
clarifies accounting for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging
activities under Statement 133. The implementation of FAS No. 149 is
effective (1) for contracts entered into or modified after June 30, 2003,
with certain exceptions, and (2) for hedging relationships designated after
June 30. The Company is reviewing SFAS No. 149 to determine its impact, if
any, on future reporting periods.
In May 2003, FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity,"
which changes the accounting for mandatorily redeemable shares, put
options, forward purchase contracts and obligations that can be settled
with shares. FAS 150 is generally effective for all financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at
the beginning of the first interim period beginning after June 15, 2003.
The Company is reviewing SFAS No. 150 to determine its impact, if any, on
any future reporting periods.
11
ITEM 3. QUANTITATIVE & QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company is exposed to market risk, including changes in foreign
currency exchange rates and interest rates. As discussed in Note 1 to the
financial statements in the Annual Report on Form 10-K, "Summary of
Significant Accounting Policies" to the consolidated financial statements,
the financial statements of the Company's non-U.S. subsidiaries are
remeasured into U.S. dollars using the U.S. dollar as the functional
currency. The market risk associated with foreign currency exchange rates
is not material in relation to the Company's financial position, results of
operations, or cash flows. The Company does not have any significant trade
accounts receivable, trade accounts payable, commitments or borrowings in a
currency other than that of the reporting units functional currency. As
such, the Company does not use derivative financial instruments to manage
the exposure in its non-U.S. operations.
ITEM 4. CONTROLS AND PROCEDURES
As of June 30, 2003, an evaluation was performed under the
supervision and with the participation of the Company's management,
including the Chief Executive Officer ("CEO") and the Chief Financial
Officer ("CFO"), of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on that evaluation, the
Company's management, including the CEO and CFO, concluded the Company's
disclosure controls and procedures as of June 30, 2003 were effective in
ensuring information required to be disclosed in this Quarterly Report on
Form 10-Q was recorded, processed, summarized and reported on a timely
basis. There have been no changes in the Company's internal control over
financial reporting that occurred during the quarter ended June 30, 2003
that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.
12
PART II. OTHER INFORMATION
ITEM 1. 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
Exhibit 31.1 Rule 13a-14(a)/15d-14(a), Certification
of Chief Executive Officer
Exhibit 31.2 Rule 13a-14(a)/15d-14(a), Certification
of Chief Financial Officer
Exhibit 32.1 Section 1350 Certification of
Chief Executive Officer
Exhibit 32.2 Section 1350 Certification of
Chief Financial Officer
13
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: August 12, 2003
/s/ James M. O'Connell
----------------------------
James M. O'Connell
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
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