UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 2008
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.
------------------------------------------------------
(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
----------------------------------------------------
(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 a large accelerated filer,
an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definition of "large accelerated filer", "accelerated
filer" and "smaller reporting 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)
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act). Yes [ ] No [ X ]
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 July 30, 2008
---------------------------- ----------------------------
Common stock, $.10 par value 9,307,104
1
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(000's, except share amounts)
June 30, September 30,
2008 2007
-------- -------------
ASSETS
- ------
Current assets:
Cash and cash equivalents. . . . . . . . . $ 32,134 $ 21,069
Receivables, net of allowances of
$605 and $531, respectively. . . . . . . 22,830 19,750
Inventories. . . . . . . . . . . . . . . . 3,133 2,729
Prepaid expenses and
other current assets . . . . . . . . . . 1,450 1,112
Prepaid income taxes . . . . . . . . . . . 1,537 1,767
Deferred income taxes. . . . . . . . . . . 3,716 4,078
-------- --------
Current assets . . . . . . . . . . . . 64,800 50,505
Property, plant and equipment, at cost . . . . 53,580 50,738
Less: Accumulated depreciation
and amortization . . . . . . . . . . . . (36,768) (34,084)
-------- --------
Net property, plant and equipment. . . . . . . 16,812 16,654
Equity in joint venture. . . . . . . . . . . . 5,602 4,978
Goodwill . . . . . . . . . . . . . . . . . . . 13,447 13,364
Other intangible assets, net of
amortization of $3,899 and $3,521,
respectively . . . . . . . . . . . . . . . . 4,912 4,963
Dosimetry devices, net of amortization of
$10,830 and $9,392, respectively . . . . . . 4,833 5,345
Deferred income taxes. . . . . . . . . . . . . 380 333
Other assets . . . . . . . . . . . . . . . . . 1,411 1,198
-------- --------
$112,197 $ 97,340
======== ========
The accompanying notes are an integral part of these financial statements.
2
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited) (Cont'd.)
(000's, except share amounts)
June 30, September 30,
2008 2007
-------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable . . . . . . . . . . . . . $ 2,727 $ 1,682
Dividends payable. . . . . . . . . . . . . 4,670 4,375
Deferred contract revenue. . . . . . . . . 16,920 13,832
Accrued compensation and related
costs. . . . . . . . . . . . . . . . . . 3,648 3,725
Accrued pension and postretirement
costs. . . . . . . . . . . . . . . . . . 364 306
Other accrued expenses . . . . . . . . . . 4,290 4,047
-------- --------
Current liabilities. . . . . . . . . . 32,619 27,967
Non-current liabilities:
Pension and postretirement
obligations. . . . . . . . . . . . . . . 10,120 9,575
Other non-current liabilities. . . . . . . 603 -
-------- --------
Non-current liabilities. . . . . . . . 10,723 9,575
Minority interest in subsidiary. . . . . . 543 288
Stockholders' equity:
Preferred stock, $.10 par value
per share, authorized 1,000,000
shares; none issued. . . . . . . . . . . - -
Common stock, $.10 par value per
share, authorized 20,000,000
shares; 9,322,774 and 9,210,861
shares issued and outstanding
at June 30, 2008 and September 30,
2007, respectively . . . . . . . . . . . 932 921
Additional paid in capital . . . . . . . . 28,099 23,581
Accumulated other comprehensive
income (loss). . . . . . . . . . . . . . 410 (509)
Retained earnings. . . . . . . . . . . . . 38,871 35,517
-------- --------
Stockholders' equity . . . . . . . . . 68,312 59,510
-------- --------
$112,197 $ 97,340
======== ========
The accompanying notes are an integral part of these financial statements.
3
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
(000's, except per share amounts)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------- ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Revenues, net of sales
allowances . . . . . . . . $ 21,902 $ 20,589 $ 67,454 $ 62,382
Costs and expenses:
Cost of sales. . . . . . 6,929 6,596 21,645 20,817
Selling, general
and administrative . . 6,471 6,164 19,330 17,483
Impairment and
accelerated depre-
ciation charges. . . . - 2,357 376 2,357
-------- -------- -------- --------
13,400 15,117 41,351 40,657
-------- -------- -------- --------
Operating income . . . . . . 8,502 5,472 26,103 21,725
Equity in income of
joint venture. . . . . . . 405 426 1,153 1,113
Other income, net. . . . . . 228 223 765 588
-------- -------- -------- --------
Income before taxes. . . . . 9,135 6,121 28,021 23,426
Income taxes . . . . . . . . 3,214 2,193 10,259 8,652
-------- -------- -------- --------
Income before minority
interest . . . . . . . . . 5,921 3,928 17,762 14,774
Minority interest. . . . . . 128 21 263 68
-------- -------- -------- --------
Net income . . . . . . . . . $ 5,793 $ 3,907 $ 17,499 $ 14,706
======== ======== ======== ========
Net income per share:
Basic. . . . . . . . . . $ 0.63 $ 0.43 $ 1.90 $ 1.61
======== ======== ======== ========
Weighted average
basic shares
outstanding. . . . . . 9,244 9,146 9,209 9,116
======== ======== ======== ========
Diluted. . . . . . . . . $ 0.62 $ 0.42 $ 1.89 $ 1.60
======== ======== ======== ========
Weighted average
diluted shares
outstanding. . . . . . 9,307 9,208 9,273 9,186
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
4
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(000's)
Nine Months Ended
--------------------
June 30, June 30,
2008 2007
-------- --------
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . $ 17,499 $ 14,706
Adjustments to reconcile net income to
net cash provided by operating activities:
Asset impairment and accelerated
depreciation charges . . . . . . . . . . . . . 376 2,357
Depreciation . . . . . . . . . . . . . . . . . . 4,425 5,277
Amortization . . . . . . . . . . . . . . . . . . 490 479
Equity in net income of joint venture. . . . . . (1,153) (1,113)
Dividends from joint venture . . . . . . . . . . 894 560
Stock-based compensation . . . . . . . . . . . . 1,193 580
Tax benefit from stock-based
compensation arrangements. . . . . . . . . . . 847 828
Excess tax benefit from stock-based
compensation arrangements. . . . . . . . . . . (673) (740)
Loss on sale and disposition of assets . . . . . 32 5
Increase in accounts receivable, net . . . . . . (2,441) (1,286)
Decrease (increase) in prepaid taxes . . . . . . 230 (2,654)
(Increase) decrease in other current assets. . . (410) 514
Increase in dosimetry devices at cost. . . . . . (1,102) (986)
Increase in other long-term assets . . . . . . . (659) (1,389)
Increase in accounts payable and other
current liabilities. . . . . . . . . . . . . . 884 638
Increase in deferred contract revenue. . . . . . 2,931 925
Other operating activities, net. . . . . . . . . 955 422
-------- --------
Net cash provided by operating activities. . . . 24,318 19,123
Cash flows used by investing activities:
Acquisition of businesses, net of
cash acquired. . . . . . . . . . . . . . . . . (498) -
Acquisition of property, plant and
equipment. . . . . . . . . . . . . . . . . . . (3,137) (5,398)
-------- --------
Net cash used by investing activities. . . . . . (3,635) (5,398)
Cash flows used by financing activities:
Payments on revolving credit facilities. . . . . - (1,717)
Dividends paid to minority interest. . . . . . . (167) (117)
Dividends paid to stockholders . . . . . . . . . (13,619) (12,795)
Proceeds from the exercise of
stock options. . . . . . . . . . . . . . . . . 3,222 2,450
Excess tax benefit from stock-based
compensation arrangements. . . . . . . . . . . 673 740
-------- --------
Net cash used by financing activities. . . . . . (9,891) (11,439)
Effects of foreign currency translation. . . . . 273 448
-------- --------
Net increase in cash and cash equivalents. . . . 11,065 2,734
Opening balance - cash and cash equivalents. . . 21,069 15,420
-------- --------
Ending balance - cash and cash equivalents . . . $ 32,134 $ 18,154
======== ========
The accompanying notes are an integral part of these financial statements.
5
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
June 30, 2008
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements reflect
the financial position of Landauer, Inc. and subsidiaries ("Landauer" or
"the Company") as of June 30, 2008 and September 30, 2007, and the
consolidated results of operations for each of the three and nine-month
periods ended June 30, 2008 and 2007, and cash flows for the nine-month
periods ended June 30, 2008 and 2007. In the opinion of management, the
accompanying unaudited consolidated financial statements contain all
adjustments necessary to present fairly the consolidated financial position
of the Company and its consolidated results of operations and cash flows.
Certain 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 and nine-month periods ended
June 30, 2008 and 2007 are not necessarily indicative of the results to be
expected for the full year. The September 30, 2007 balance sheet data was
derived from audited financial statements, but does not include all
disclosures required by accounting principles generally accepted in the
United States of America. Accordingly, these unaudited consolidated
financial statements and related notes should be read in conjunction with
the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended September 30, 2007.
The accounting policies followed by the Company are set forth in the
2007 Landauer Annual Report on Form 10-K. On October 1, 2007, the Company
adopted the provisions of FASB Interpretation No. 48, ACCOUNTING FOR
UNCERTAINTY IN INCOME TAXES ("FIN 48"). Refer to Note 2, "Income Taxes,"
of the consolidated financial statements for additional information.
The sources of revenues for the Company are radiation monitoring and
measurement services including other incidental services and the sale of
radiation monitoring products. The radiation monitoring and measurement
services provided by the Company to its customers are of a continuous
subscription nature. The Company views its business as services provided
to customers over a period of time and the wear period is the period over
which those services are provided. Badge production, wearing of badges,
badge analysis, and report preparation are integral to the benefit that the
Company provides to its customers. These services are provided to
customers on an agreed-upon recurring basis (monthly, bi-monthly or
quarterly) that the customer chooses for the wear period. Revenue is
recognized on a straight-line basis, adjusted for changes in pricing and
volume, over the wear period as the service is continuous and no other
discernible pattern of recognition is evident. Revenues are recognized
over the periods in which the customers wear the badges irrespective of
whether invoiced in advance or in arrears.
Other services incidental to monitoring and measurement augment the
basic services that the Company offers, providing administrative and
informational tools to customers for the management of their radiation
detection programs. Other service revenues are recognized upon delivery of
the reports to customers or as other such services are provided.
The Company sells radiation monitoring products to its customers,
principally InLightTM products, for their use in conducting radiation
measurements or managing radiation detection programs. Revenues from
product sales are generally recognized when shipped.
6
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited) (Cont'd.)
June 30, 2008
(2) INCOME TAXES
Effective October 1, 2007, the Company adopted the provisions of FASB
Interpretation No. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES ("FIN NO.
48"). FIN No. 48 clarifies the accounting for uncertainty in income taxes
by prescribing a recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN No. 48 also provides guidance on
de-recognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition.
The Company's gross unrecognized tax benefits related to the adoption
of FIN No. 48 were $521,000. Of this amount, $392,000, net of federal
benefits, represents the portion that, if recognized, would impact the
Company's effective tax rate. The impact of the adoption of FIN No. 48 to
the balance of retained earnings was a decrease of $231,000.
The Company recognizes accrued interest and penalties related to
unrecognized tax benefits in income tax expense. As a result of the
adoption of FIN No. 48, the gross amount of interest accrued was $57,000
and the accrual for the potential payment of penalties was $44,000. The
accrued interest and penalties were included in the unrecognized tax
benefits.
As of June 30, 2008, the Company's U.S. income tax returns for 2005
and subsequent years remain subject to examination by the Internal Revenue
Service. The Company has no current on-going examination of any tax year
by the Internal Revenue Service. State income tax returns generally have
statute of limitations for periods between three and five years from the
date of filing. The state of Illinois began an income tax audit in the
second quarter of fiscal 2008 for the fiscal tax years ending September 30,
2004, 2005 and 2006. The audit was completed in April 2008 with no
significant adjustments. For the Company's major foreign jurisdictions,
its tax returns in the UK and France for fiscal years 2005, 2006 and 2007
remain open and subject to examination by taxing officials.
The Company currently does not anticipate that any material change in
the balance of gross unrecognized tax benefits will occur during the next
twelve months.
(3) IMPAIRMENT AND ACCELERATED DEPRECIATION CHARGES
As part of the IT initiative begun in fiscal 2007, management
completed an evaluation of the usefulness of investments made in legacy
information systems' hardware and software. During the third quarter of
fiscal 2007, approximately $2,185,000 was determined to be impaired and
approximately $690,000 of assets was subject to accelerated depreciation.
During fiscal 2008, the Company has recorded $376,000 of accelerated
depreciation relating to these assets. These assets were fully depreciated
as of March 31, 2008.
(4) CASH DIVIDENDS
On May 30, 2008, the Company declared a regular quarterly cash
dividend of $0.50 per share for the third quarter of fiscal 2008. The
dividends were paid on July 3, 2008, to shareholders of record on June 13,
2008. At June 30, 2008, there were accrued and unpaid dividends of
$4,670,000. Regular quarterly cash dividends of $0.475 per share, or $1.90
annually, were paid during fiscal 2007.
7
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited) (Cont'd.)
June 30, 2008
(5) COMPREHENSIVE INCOME
The components of accumulated other comprehensive income (loss)
included in the accompanying unaudited consolidated balance sheets at
June 30, 2008 and September 30, 2007 consist of net minimum pension
liability adjustments, impact of the adoption of SFAS No. 158 and
adjustments for net losses and prior service cost, and cumulative foreign
currency translation adjustments. The following table sets forth the
Company's comprehensive income and its components for the three and nine-
month periods ended June 30, 2008 and 2007 (000's):
Three Months Ended Nine Months Ended
June 30, June 30,
------------------- -------------------
2008 2007 2008 2007
-------- -------- -------- --------
Net income . . . . . . . . . $ 5,793 $ 3,907 $ 17,499 $ 14,706
Other comprehensive income:
Foreign currency trans-
lation adjustments . . . (220) 90 883 335
Defined benefit pension
and postretirement plans:
Amortization of prior
service cost . . . . . 11 - 29 -
Amortization of
net loss . . . . . . . (19) - 7 -
-------- -------- -------- --------
Comprehensive income . . . . $ 5,565 $ 3,997 $ 18,418 $ 15,041
======== ======== ======== ========
(6) INCOME PER COMMON 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, 2008 and 2007 (000's):
Three Months Ended Nine Months Ended
June 30, June 30,
------------------- -------------------
2008 2007 2008 2007
-------- -------- -------- --------
Weighted average number
of shares of common
stock outstanding. . . . . 9,244 9,146 9,209 9,116
Effect of dilutive
stock-based compensa-
tion awards. . . . . . . . 63 62 64 70
-------- -------- -------- --------
Weighted average number
of shares of common
stock assuming
dilution . . . . . . . . . 9,307 9,208 9,273 9,186
======== ======== ======== ========
8
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited) (Cont'd.)
June 30, 2008
(7) STOCK-BASED COMPENSATION
Stock-based compensation expense, primarily for grants of restricted
stock, totaled approximately $1,200,000 and $580,000 for the nine months
ended June 30, 2008 and 2007, respectively. The total income tax benefit
recognized in the consolidated statements of income related to expense for
stock-based compensation was approximately $481,000 and $233,000 during the
first three quarters of fiscal 2008 and 2007, respectively.
STOCK OPTIONS
No stock options have been granted in fiscal 2008 or 2007. Grants of
stock options in prior fiscal years were granted with an exercise price
equal to the market value of the stock on the date of grant. Expense
related to stock options issued to eligible employees and directors is
recognized ratably over the vesting period. Stock options generally vest
over a period of 0 to 4 years and have 10-year contractual terms. A
summary of stock option activity during the nine months ended June 30, 2008
is presented below:
Weighted-
Average
Weighted- Remaining
Number Average Contractual Aggregate
of Exercise Term Intrinsic
Options Price (Years) Value
-------- --------- ----------- ---------
Outstanding at
October 1, 2007. . . . 314,000 $43.07
Forfeited. . . . . . . . (1,000) 45.64
Exercised. . . . . . . . (123,000) 40.85
-------- ------
Outstanding at
June 30, 2008. . . . . 190,000 $44.46 6.2 $2,242,000
======== ======
Exercisable at
June 30, 2008. . . . . 190,000 $44.46 6.2 $2,242,000
======== ======
At June 30, 2008, all outstanding stock options were vested and
compensation expense related to stock options was recognized. The
intrinsic value of options exercised totaled approximately $1,630,000 and
$1,940,000 during the first three quarters of fiscal 2008 and 2007,
respectively. The total income tax benefit recognized in the consolidated
statements of income related to the exercise of stock options was
approximately $656,000 and $773,000 during the nine-month period ending
June 30, 2008 and 2007, respectively.
9
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited) (Cont'd.)
June 30, 2008
RESTRICTED SHARE AWARDS
Restricted share awards consist of performance shares and time vested
restricted stock. Performance shares represent a right to receive shares
of common stock upon satisfaction of performance goals or other specified
metrics. Restricted stock represents a right to receive shares of common
stock upon the passage of a specified period of time. The fair value of
performance shares and restricted stock granted under the Company's 2005
Long-Term Incentive Plan is based on the average of the Company's high and
low stock prices on the date of grant. With the adoption of the Company's
Long-Term Incentive Plan in February 2008, the fair value of performance
shares and restricted stock granted under the new plan is based on the
Company's closing stock price on the date of grant. Compensation expense
for performance shares is recorded ratably over the vesting period,
assuming that achievement of performance goals is deemed probable.
Compensation expense for restricted stock is recognized ratably over the
vesting period. The per share weighted average fair value of restricted
shares, including restricted stock and performance shares, granted during
the nine months ended June 30, 2008 and 2007 was $50.85 and $49.28,
respectively.
Restricted stock issued to eligible employees and directors under the
Company's Long-Term Incentive Plans vests, to date, over a period from 6
months to 5 years, and performance shares contingently vest over various
periods, depending on the nature of the performance goal. Restricted share
transactions during the nine months ended June 30, 2008 were as follows:
Number of Weighted-
Restricted Average
Share Fair
Awards Value
---------- ----------
Outstanding at October 1, 2007 . . . . . . 42,000 $48.41
Granted. . . . . . . . . . . . . . . . . . 31,000 50.85
Vested . . . . . . . . . . . . . . . . . . (13,000) 48.61
------- ------
Outstanding at June 30, 2008 . . . . . . . 60,000 $49.61
======= ======
At June 30, 2008, unrecognized compensation expense related to
restricted share awards totaled approximately $1,500,000 and is expected to
be recognized over a weighted average period of 1.2 years. The total fair
value of shares vested during the nine-month period ended June 30, 2008 and
2007 were $615,000 and $87,000, respectively.
(8) CREDIT FACILITY
In October 2007, the Company negotiated a credit facility, which
expires on October 31, 2009. The credit facility permits borrowing up to
$15,000,000. To date, no borrowings have been made under this facility.
The Company's previous line of credit was repaid in the second quarter of
fiscal 2007 and was not renewed.
10
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited) (Cont'd.)
June 30, 2008
(9) PENSION AND POSTRETIREMENT MEDICAL BENEFIT EXPENSES
The components of net periodic benefit cost for pension and retiree
medical plans were as follows (000's):
Pension Other
Benefits Benefits
-------------- -------------
Three Months Ended
June 30,
------------------------------
2008 2007 2008 2007
------ ------ ------ ------
Service cost . . . . . . . . . . . . . . $ 256 $ 277 $ 1 $ 18
Interest cost. . . . . . . . . . . . . . 351 307 4 18
Expected return on plan assets . . . . . (216) (185) - -
Amortization of transition asset . . . . - (1) - -
Amortization of prior service cost
(credit) . . . . . . . . . . . . . . . 38 36 (27) (28)
Amortization of net loss . . . . . . . . 3 4 (22) 11
Special termination benefits (1) . . . . - 47 - -
------ ------ ------ ------
Net periodic benefit cost. . . . . . . . $ 432 $ 485 $ (44) $ 19
====== ====== ====== ======
Pension Other
Benefits Benefits
-------------- -------------
Nine Months Ended
June 30,
------------------------------
2008 2007 2008 2007
------ ------ ------ ------
Service cost . . . . . . . . . . . . . . $ 805 $ 866 $ 31 $ 41
Interest cost. . . . . . . . . . . . . . 1,010 902 46 57
Expected return on plan assets . . . . . (644) (563) - -
Amortization of transition asset . . . . - (4) - -
Amortization of prior service cost
(credit) . . . . . . . . . . . . . . . 112 111 (83) (84)
Amortization of net loss . . . . . . . . 7 36 - 49
Special termination benefits (1) . . . . - 94 - -
------ ------ ------ ------
Net periodic benefit cost. . . . . . . . $1,290 $1,442 $ (6) $ 63
====== ====== ====== ======
(1) Represents benefit costs arising from the early retirement of
the Company's former chief financial officer.
In accordance with funding requirements to make quarterly payments
for the 2008 plan year, Landauer contributed $148,000 to its pension plan
in the quarter ending June 30, 2008. The Company contributed $94,000 in
May 2008 to the pension plan to fulfill its final funding requirements for
the 2007 plan year.
11
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited) (Cont'd.)
June 30, 2008
(10) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements." SFAS No. 157 defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements.
SFAS No. 157 applies under other accounting pronouncements that require or
permit fair value measurements. SFAS No. 157 is effective for the Company
for fiscal year 2009. FSP SFAS No. 157-2 delays the effective date of SFAS
No. 157 by one year for nonfinancial assets and nonfinancial liabilities
that are recognized or disclosed at fair value in the financial statements
on a nonrecurring basis. FSP SFAS No. 157-1 amends SFAS No. 157 to exclude
leasing transactions covered by SFAS No. 13. The Company is currently
evaluating the impact of SFAS No. 157 to its financial position, results of
operations and financial disclosures.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities, including an
Amendment of FASB Statement No. 115." SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at
fair value on an instrument-by-instrument basis, with unrealized gains and
losses related to these financial instruments reported in earnings at each
subsequent reporting date. SFAS No. 159 also establishes presentation and
disclosure requirements to facilitate comparisons between companies that
choose different measurement attributes for similar assets and liabilities.
SFAS No. 159 is effective for the Company for fiscal year 2009. The
Company is currently evaluating the impact of SFAS No. 159 to its financial
position, results of operations and financial disclosures.
In March 2007, the FASB ratified the Emerging Issues Task Force
(EITF) Issue No. 06-10, "Accounting for the Deferred Compensation and
Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life
Insurance Arrangements." The EITF affirmed as a final consensus that an
employer should recognize a liability for the postretirement benefit
related to a collateral assignment split-dollar life insurance arrangement.
The Issue is effective for the Company for fiscal year 2009, including
interim periods within the fiscal year. The Company is currently
evaluating the impact of Issue No. 06-10 to its financial position, results
of operations and financial disclosures.
In December 2007, the FASB issued SFAS No. 141R, "Business
Combinations," and SFAS No. 160 "Noncontrolling Interests in Consolidated
Financial Statements." These standards aim to improve, simplify, and
converge internationally the accounting for and reporting of business
combinations and noncontrolling interests in consolidated financial
statements. The provisions of SFAS No. 141R and SFAS No. 160 are
effective, and should be applied prospectively, for the Company beginning
in fiscal 2010. The Company will apply SFAS No. 141R for any business
combinations beginning in fiscal 2010. The Company is currently evaluating
the impact of SFAS No. 160 to its financial position, results of operations
and financial disclosures.
In April 2008, the FASB issued Staff Position No. FAS 142-3,
"Determination of the Useful Life of Intangible Assets" (FSP No. 142-3).
The FSP amends the factors that should be considered in developing renewal
or extension assumptions used to determine the useful life of a recognized
intangible asset under FASB Statement No. 142, "Goodwill and Other
Intangible Assets." Additionally, the FSP requires disclosures regarding
the extent to which the expected future cash flows associated with
intangible assets are affected by the entity's intent and/or ability to
renew or extend the arrangement. FSP No. 142-3 is effective for the
Company beginning with its quarter ending December 31, 2009. The Company
has evaluated FSP No. 142-3 and does not expect it to have a material
impact on its financial position, results of operations and financial
disclosures.
12
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited) (Cont'd.)
June 30, 2008
In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of
Generally Accepted Accounting Principles." SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the
principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with US generally
accepted accounting principles. SFAS No. 162 is effective 60 days
following the SEC's approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, "The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles." The Company
does not expect SFAS No. 162 to change its current accounting and reporting
practices or materially impact its consolidated financial statements.
In June 2008, the FASB issued FSP No. EITF 03-6-1, "Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities." The FSP clarifies that outstanding unvested
share-based payment awards that contain nonforfeitable rights to dividends
or dividend equivalents are participating securities and need to be
included in the computation of earnings per share under the two-class
method. FSP No. 03-6-1 is effective for fiscal years beginning after
December 15, 2008. The Company does not expect FSP No. 03-6-1 to have a
material impact on its financial position, results of operations and
financial disclosures.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
- --------
Landauer is a leading provider of analytical services and products to
determine occupational and environmental radiation exposure. For over 50
years, the Company has provided comprehensive radiation dosimetry services
to hospitals, medical and dental offices, universities, national
laboratories, nuclear facilities and other industries in which radiation
poses a potential threat to employees. Landauer's services include the
manufacture of various types of radiation detection monitors, the
distribution and collection of the monitors to and from clients, and the
analysis and reporting of exposure findings. These services are provided
to approximately 69,000 customers representing approximately 1.5 million
individuals in the U.S., Japan, France, the United Kingdom, Brazil, Canada,
China, Australia, Mexico and other countries. In addition to providing
analytical services, the Company may lease or sell dosimetry detectors and
reading equipment to large customers that want to manage their own
dosimetry programs, or into smaller international markets in which it is
not economical to establish a direct service.
Landauer operates a mature business, and growth in numbers of
customers is modest. In recent years, the Company's strategy has been to
expand into new international markets, primarily by partnering with
existing dosimetry service providers with a prominent local presence. In
fiscal 2007 and 2008, Landauer expanded into Australia and Mexico,
respectively. In addition, the Company has developed new platforms and
formats for its OSL technology, such as InLight, to gain access to markets
where the Company previously did not have a significant presence, such as
smaller in-house and commercial laboratories, homeland security and the
military. Revenue growth in recent years has occurred as a result of
increased prices for certain services, entry into new markets through joint
ventures and acquisitions, modest unit growth, and new ancillary services
and products. The Company believes pricing in the domestic service market
has become more competitive and opportunities to continue to obtain regular
price increases from its customers may be more limited in the future.
13
RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2008
- ---------------------------------------------------------
Revenues for the third quarter of fiscal 2008 were $21,902,000, a
6.4% increase compared to revenues of $20,589,000 for the same quarter in
fiscal 2007. Domestic revenue for the quarter increased $170,000, or 1.1%,
driven primarily by InLight equipment sales. International revenue
increased $1,143,000 or 24.2%, supported by growth in volume in most
regions, favorable currency exchange rates, which contributed approximately
$630,000 of the increase, and the inclusion of the results from a new
56.25% owned subsidiary in Mexico.
The cost of sales for the third quarter of fiscal 2008 were
$6,929,000, an increase of $333,000 or 5.0%, compared with cost of sales of
$6,596,000 for the same quarter in fiscal 2007. Gross margins were 68.4%
of revenues for the third quarter of fiscal 2008, compared with the 68.0%
reported for the same period in fiscal 2007. The improvement is primarily
a result of increased revenues without a corresponding increase to the
fixed cost structure, as well as lower depreciation expense as assets have
become fully depreciated.
Selling, general and administrative expenses for the third quarter of
fiscal 2008 were $6,471,000, an increase of $307,000 or 5.0%, compared with
expense of $6,164,000 for the third quarter of fiscal 2007. Factors
contributing to the increase in selling, general and administrative costs
include $382,000 for incentive compensation programs, and $248,000 for
foreign operations, primarily related to changes in currency rates. These
increases were partially offset by $393,000 in reduced expense spending for
our ongoing IT and business process reengineering project.
As part of the IT initiative begun in fiscal 2007, management
completed an evaluation of the usefulness of investments made in legacy
information systems' hardware and software. Of these assets, $3.5 million
were determined to be either impaired or subject to accelerated
depreciation. This resulted in a fiscal 2007 third quarter charge of
$2,357,000 ($1,414,000, after-tax), of which $2,185,000 was for impaired
assets.
Resulting operating income for the quarter ended June 30, 2008 was
$8,502,000, an increase of 55.4% compared with $5,472,000 reported in the
same quarter a year ago.
Net other income, including equity in income of joint venture, for
the quarter was $16,000 lower than a year ago, primarily reflecting lower
net interest income and lower earnings from Nagase Landauer. The effective
income tax rate for the third quarter of fiscal 2008 was 35.2% compared
with the prior year at 35.8%. Resulting net income for the quarter ended
June 30, 2008 amounted to $5,793,000, or $0.62 per diluted share, compared
with $3,907,000, or $0.42 per diluted share, for the same quarter in fiscal
2007. The impact of the asset impairment and accelerated depreciation
charges decreased diluted earnings per share by $0.15 in the fiscal 2007
third quarter.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 2008
- -------------------------------------------------------------
Revenues for the first nine months of the fiscal year were
$67,454,000 an 8.1% increase compared to revenues of $62,382,000 for the
same period in fiscal 2007. Domestic revenue growth was $1,681,000 or
3.5%, primarily from increases in InLight equipment sales. International
revenue increased $3,391,000, or 24.7%, supported by growth in volume in
most regions, led by InLight badges and equipment, favorable currency
exchange rates, which contributed approximately $1,850,000 of the increase,
and the inclusion of the results from a new 56.25% owned subsidiary in
Mexico.
14
The domestic InLight equipment sales increase was driven primarily by
a sale to the Canadian government agency responsible for occupational
monitoring and radiation emergency preparedness for the citizens of Canada.
The Company completed a $2,000,000 contract during the quarter ended
March 31, 2008 with the agency, under which $1,850,000 of product was
delivered. Approximately, $1,100,000 of the product delivered requires
additional processing by Landauer to be fully utilized for its intended
purpose. Per the terms of the agreement, the Canadian agency has the
option to obtain additional processing of the dosimetry materials from the
Company or to exchange the materials for finished product. Consistent with
the Staff Accounting Bulletin No. 104 "Revenue Recognition," the Company
recorded $1,100,000 of deferred revenue related to the portion of the sale
that requires additional performance by the Company. During the third
quarter of fiscal 2008, the Company did not recognize any of the deferred
revenue as no additional performance had occurred. The contract also
contains terms for other services, such as training. Revenues for those
services will be recognized as they are provided.
The cost of sales for the first nine months of fiscal 2008 were
$21,645,000, an increase of $828,000 or 4.0%, compared with cost of sales
of $20,817,000 for the same period in fiscal 2007. Gross margins were
67.9% of revenues for the first nine months of fiscal 2008, compared with
the 66.6% reported for the same period in fiscal 2007. The improvement is
primarily a result of increased revenues without a corresponding increase
to the fixed cost structure, as well as lower depreciation expense as
assets have become fully depreciated, for the nine months ended June 30,
2008.
Selling, general and administrative expenses for the first nine
months of fiscal 2008 were $19,330,000, an increase of $1,847,000 or 10.6%,
compared with expense of $17,483,000 for the same period in fiscal 2007.
Factors contributing to the increase in selling, general and administrative
costs include: $566,000 for sales and marketing resources; $853,000 for
incentive compensation programs; and $671,000 for foreign operations,
primarily related to changes in currency rates and the addition of the new
majority-owned subsidiary in Mexico. These increases were partially offset
by $263,000 in reduced expense spending for our ongoing IT and business
process reengineering project.
Operating income for the nine months ended June 30, 2008 was
$26,103,000, an increase of $4,378,000, or 20.2% compared with $21,725,000
in the same period a year ago. The prior year operating income was
impacted by the asset impairment and accelerated depreciation charges
discussed above in the results of operations for the quarter ended June 30,
2008.
Net other income, including equity in income of joint venture, for
the first nine months of fiscal 2008 was $217,000 higher than a year ago,
primarily reflecting higher net interest income. The effective income tax
rate for the first nine months of fiscal 2008 was 36.6% compared with the
prior year at 36.9%. Resulting net income for the nine months ended June
30, 2008 amounted to $17,499,000 or $1.89 per diluted share, compared with
$14,706,000 or $1.60 per diluted share, for the same period in fiscal 2007.
The impact of the asset impairment and accelerated depreciation charges
decreased diluted earnings per share by $0.15 for the nine months ended
June 30, 2007.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Landauer generated $11,065,000 in cash during the nine months ended
June 30, 2008, resulting in cash on hand of $32,134,000 at June 30, 2008.
Cash flows provided by operating activities for the first nine months
of fiscal 2008 were $24,318,000, an increase of $5,195,000, or 27.2%, from
fiscal 2007. The increase is due primarily to an increase in net income,
dividends received from Nagase-Landauer, Ltd., and contribution from the
change in the components of working capital.
15
Investing activities included acquisitions of property, plant and
equipment in the amounts of $3,137,000 and $5,398,000 for the nine months
ended June 30, 2008 and 2007, respectively. In addition, Landauer invested
$498,000 in the nine months ended June 30, 2008 for our acquisition of
56.25% ownership in the new subsidiary in Mexico. Fiscal 2008 capital
expenditures through June 30, 2008, in connection with our project to re-
engineer various business processes and to replace certain of the Company's
information technology systems have approximated $1,600,000. The Company
has been advised by third-party vendors for the project that they have
incurred significant cost overruns. The Company is currently engaged in
discussions with these vendors to determine which portion of additional
project costs will be paid by the Company, and which portion of such costs
are the responsibility of such vendors under the terms of the project
agreements. Excluding additional project costs that may be paid by the
Company, capital expenditures for the remainder of fiscal 2008 are expected
to be approximately $2,000,000 to $3,000,000, principally for the
development and implementation of supporting software systems. The Company
anticipates that funds for all of these capital improvements will be
provided from operations.
The Company's financing activities were comprised of payments of cash
dividends to shareholders and minority partners, offset partially by
proceeds from the exercise of stock options. During the first nine months
of fiscal 2008 and 2007, the Company paid cash dividends of $13,619,000 or
$0.50 per share, and $12,795,000 or $0.475 per share, respectively. Such
amounts have been provided from operations.
The Company maintained a credit facility, which expired in March
2007. In October 2007, the Company negotiated a new credit facility, which
expires on October 31, 2009. The new credit facility permits borrowing up
to $15,000,000 and is described in Note 8, "Credit Facility," of the
consolidated financial statements.
Landauer requires limited working capital for its operations since
many of its customers pay for services in advance. Such advance payments,
reflected on the balance sheet as "Deferred Contract Revenue", amounted to
$16,920,000 and $13,832,000, respectively, as of June 30, 2008 and
September 30, 2007. While these amounts represent approximately 52% and
49% of current liabilities, respectively, as of June 30, 2008 and
September 30, 2007, such amounts do not represent a cash obligation.
All customers are invoiced in accordance with the Company's standard
terms, with payment generally due thirty days from date of invoice.
Reflecting the Company's invoicing practices and that a significant portion
of the Company's revenues are subject to health care industry reimbursement
cycles, the days of sales outstanding for the Company averaged
approximately 90 to 95 days over the course of the nine months ending
June 30, 2008 and 2007.
Landauer also offers radiation monitoring services in the United
Kingdom, Canada, Japan, Brazil, Mexico, China, Australia and France. The
Company's operations in these markets generally do not depend on
significant capital resources.
OUTLOOK FOR BALANCE OF FISCAL 2008
- ----------------------------------
Landauer's business plan for fiscal 2008 forecasted aggregate revenue
growth for the year to be in the range of 4 - 5%. The Company planned a
net income increase in the range of 6 - 8% excluding the $2,875,000
($1,725,000, after tax at a marginal rate of 40%) impact of the fiscal 2007
accelerated depreciation and impairment charges. Based upon the
performance in the first nine months of the fiscal year and anticipated
performance for the remainder of the year, the Company anticipates that
performance for the full fiscal year 2008 is likely to equate to the upper
end of the planned ranges for revenue and net income.
16
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. These include the following, without limitation:
assumptions, risks and uncertainties associated with the Company's
development and introduction of new technologies in general; introduction
and customer acceptance of the InLight technology; the adaptability of
optically stimulated luminescence (OSL) technology to new platforms and
formats, such as Luxel<registered trademark>+; the costs associated with
the Company's research and business development efforts; the costs
associated with and the effectiveness of changes and upgrades to the
Company's information systems; the usefulness of older technologies; the
anticipated results of operations of the Company and its subsidiaries or
ventures; valuation of the Company's long-lived assets or business units
relative to future cash flows; changes in pricing of products and services;
the ability of the Company's products and services to meet or exceed
accreditation requirements; changes in postal and delivery practices; the
Company's business plans; anticipated revenue and cost growth; the risks
associated with conducting business internationally; other anticipated
financial events; the effects of changing economic and competitive
conditions; foreign exchange rates; government regulations; accreditation
requirements; 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 anticipated results. 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" and
information contained in the Company's Annual Report on Form 10-K for the
year ended September 30, 2007 and other reports filed by the Company, from
time to time, with the SEC.
RECENT ACCOUNTING PRONOUNCEMENTS
- --------------------------------
In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements." SFAS No. 157 defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements.
SFAS No. 157 applies under other accounting pronouncements that require or
permit fair value measurements. SFAS No. 157 is effective for the Company
for fiscal year 2009. FSP SFAS No. 157-2 delays the effective date of SFAS
No. 157 by one year for nonfinancial assets and nonfinancial liabilities
that are recognized or disclosed at fair value in the financial statements
on a nonrecurring basis. FSP SFAS No. 157-1 amends SFAS No. 157 to exclude
leasing transactions covered by SFAS No. 13. The Company is currently
evaluating the impact of SFAS No. 157 to its financial position, results of
operations and financial disclosures.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities, including an
Amendment of FASB Statement No. 115." SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at
fair value on an instrument-by-instrument basis, with unrealized gains and
losses related to these financial instruments reported in earnings at each
subsequent reporting date. SFAS No. 159 also establishes presentation and
disclosure requirements to facilitate comparisons between companies that
choose different measurement attributes for similar assets and liabilities.
SFAS No. 159 is effective for the Company for fiscal year 2009. The
Company is currently evaluating the impact of SFAS No. 159 to its financial
position, results of operations and financial disclosures.
17
In March 2007, the FASB ratified the Emerging Issues Task Force
(EITF) Issue No. 06-10, "Accounting for the Deferred Compensation and
Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life
Insurance Arrangements." The EITF affirmed as a final consensus that an
employer should recognize a liability for the postretirement benefit
related to a collateral assignment split-dollar life insurance arrangement.
The Issue is effective for the Company for fiscal year 2009, including
interim periods within the fiscal year. The Company is currently
evaluating the impact of Issue No. 06-10 to its financial position, results
of operations and financial disclosures.
In December 2007, the FASB issued SFAS No. 141R, "Business
Combinations," and SFAS No. 160 "Noncontrolling Interests in Consolidated
Financial Statements." These standards aim to improve, simplify, and
converge internationally the accounting for and reporting of business
combinations and noncontrolling interests in consolidated financial
statements. The provisions of SFAS No. 141R and SFAS No. 160 are
effective, and should be applied prospectively, for the Company beginning
in fiscal 2010. The Company will apply SFAS No. 141R for any business
combinations beginning in fiscal 2010. The Company is currently evaluating
the impact of SFAS No. 160 to its financial position, results of operations
and financial disclosures.
In April 2008, the FASB issued Staff Position No. FAS 142-3,
"Determination of the Useful Life of Intangible Assets" (FSP No. 142-3).
The FSP amends the factors that should be considered in developing renewal
or extension assumptions used to determine the useful life of a recognized
intangible asset under FASB Statement No. 142, "Goodwill and Other
Intangible Assets." Additionally, the FSP requires disclosures regarding
the extent to which the expected future cash flows associated with
intangible assets are affected by the entity's intent and/or ability to
renew or extend the arrangement. FSP No. 142-3 is effective for the
Company beginning with its quarter ending December 31, 2009. The Company
has evaluated FSP No. 142-3 and does not expect it to have a material
impact on its financial position, results of operations and financial
disclosures.
In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of
Generally Accepted Accounting Principles." SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the
principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with US generally
accepted accounting principles. SFAS No. 162 is effective 60 days
following the SEC's approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, "The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles." The Company
does not expect SFAS No. 162 to change its current accounting and reporting
practices or materially impact its consolidated financial statements.
In June 2008, the FASB issued FSP No. EITF 03-6-1, "Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities." The FSP clarifies that outstanding unvested
share-based payment awards that contain nonforfeitable rights to dividends
or dividend equivalents are participating securities and need to be
included in the computation of earnings per share under the two-class
method. FSP No. 03-6-1 is effective for fiscal years beginning after
December 15, 2008. The Company does not expect FSP No. 03-6-1 to have a
material impact on its financial position, results of operations and
financial disclosures.
18
CRITICAL ACCOUNTING POLICIES
- ----------------------------
The critical accounting policies followed by the Company are set
forth in Item 7 and "Summary of Significant Accounting Policies" in the
Notes to Consolidated Financial Statements of the 2007 Landauer Annual
Report on Form 10-K. The Company believes that at June 30, 2008, there
have been no material changes to this information, except for the adoption
of the provisions of FASB Interpretation No. 48, ACCOUNTING FOR UNCERTAINTY
IN INCOME TAXES ("FIN 48"). For additional information refer to Note 2,
"Income Taxes," of the consolidated financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risks, including changes in foreign
currency exchange rates. These risks are set forth in Item 7A of the 2007
Landauer Annual Report on Form 10-K. The Company believes there have been
no material changes in such information provided from the end of the
preceding fiscal year through June 30, 2008.
ITEM 4. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
- ----------------------------------
As of the end of the period covered by this report, 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") (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 Rule 13(a)-15(e) and 15d-15(e) under the Securities and Exchange
Act of 1934, as amended. Based upon that evaluation, the Company's CEO and
CFO concluded that the Company's disclosure controls and procedures as of
June 30, 2008 were effective.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
- ----------------------------------------------------
There have been no changes in the Company's internal control over
financial reporting that occurred during the period ended June 30, 2008
that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.
19
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
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 June 30, 2008, if adversely determined, would have a material
effect on its business, financial position, results of operations, or cash
flows.
ITEM 1A. RISK FACTORS
Information regarding risk factors are set forth in Item 1A of the
2007 Landauer Annual Report on Form 10-K. There have been no material
changes from the risk factors previously disclosed in the Company's fiscal
2007 Form 10-K.
ITEM 6. EXHIBITS
Exhibit 31.1 Certification of William E. Saxelby, President and
Chief Executive Officer, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2 Certification of Jonathon M. Singer, Chief
Financial Officer, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1 Certification of William E. Saxelby, 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
Exhibit 32.2 Certification of Jonathon M. Singer, Chief
Financial Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
20
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 7, 2008
/s/ Jonathon M. Singer
----------------------------------
Jonathon M. Singer
Senior Vice President, Finance,
Secretary, Treasurer, and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
21