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, 2010
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 has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(Section 232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post
such files). Yes [ ] 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 definitions 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 Exchange 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, 2010
---------------------------- ----------------------------
Common stock, $.10 par value 9,400,524
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,
2010 2009
-------- -------------
ASSETS
- ------
Current assets:
Cash and cash equivalents. . . . . . . . . $ 8,023 $ 36,493
Receivables, net of allowances of
$760 and $622, respectively. . . . . . . 23,334 20,663
Inventories. . . . . . . . . . . . . . . . 6,617 4,063
Prepaid expenses and
other current assets . . . . . . . . . . 2,238 2,599
Prepaid income taxes . . . . . . . . . . . 3,229 3,743
Deferred income taxes. . . . . . . . . . . 1,018 976
-------- --------
Current assets . . . . . . . . . . . 44,459 68,537
Property, plant and equipment, at cost . . . . 80,509 67,350
Less: Accumulated depreciation and
amortization . . . . . . . . . . . . . . (43,539) (41,199)
-------- --------
Net property, plant and equipment. . . . . . . 36,970 26,151
Equity in joint venture. . . . . . . . . . . . 7,711 7,421
Goodwill . . . . . . . . . . . . . . . . . . . 38,394 13,384
Intangible assets, net of amortization
of $5,256 and $4,595, respectively . . . . . 10,107 3,996
Dosimetry devices, net of amortization
of $12,863 and $11,614, respectively . . . . 5,187 4,583
Other assets . . . . . . . . . . . . . . . . . 1,375 1,133
-------- --------
Total Assets . . . . . . . . . . . . . . . . . $144,203 $125,205
======== ========
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,
2010 2009
-------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable . . . . . . . . . . . . . $ 4,239 $ 5,193
Dividends payable. . . . . . . . . . . . . 5,135 4,996
Deferred contract revenue. . . . . . . . . 15,599 15,632
Short-term debt. . . . . . . . . . . . . . 13,418 --
Accrued compensation and related costs . . 4,934 4,876
Other accrued expenses . . . . . . . . . . 5,203 6,178
-------- --------
Current liabilities. . . . . . . . . 48,528 36,875
Non-current liabilities:
Pension and postretirement obligations . . 8,656 8,238
Deferred income taxes. . . . . . . . . . . 7,056 4,608
Other non-current liabilities. . . . . . . 1,689 1,030
-------- --------
Non-current liabilities. . . . . . . 17,401 13,876
Stockholders' equity:
Landauer, Inc. 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;
9,452,650 and 9,381,098 shares
issued and outstanding at June 30,
2010 and September 30, 2009,
respectively . . . . . . . . . . . . . . 945 938
Additional paid in capital . . . . . . . . 32,547 30,834
Accumulated other comprehensive loss . . . (2,409) (515)
Retained earnings. . . . . . . . . . . . . 46,447 42,504
-------- --------
Total Landauer, Inc.
stockholders' equity . . . . . . . 77,530 73,761
Noncontrolling interest. . . . . . . . . . 744 693
-------- --------
Total equity . . . . . . . . . . . . 78,274 74,454
-------- --------
Total Liabilities and Stockholders' Equity . . $144,203 $125,205
======== ========
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,
------------------- -------------------
2010 2009 2010 2009
-------- -------- -------- --------
Net revenues . . . . . . . . $ 26,255 $ 23,468 $ 85,295 $ 70,860
Costs and expenses:
Cost of sales . . . . . . 10,188 7,874 32,163 23,393
Selling, general and
administrative. . . . . 8,085 6,612 24,297 19,793
Net defined benefit
plan curtailment
loss and transition
costs . . . . . . . . . -- -- -- 2,236
Acquisition and
reorganization costs. . 23 -- 1,683 489
-------- -------- -------- --------
18,296 14,486 58,143 45,911
-------- -------- -------- --------
Operating income . . . . . . 7,959 8,982 27,152 24,949
Equity in income of
joint venture. . . . . . . 317 383 1,224 1,282
Other (expense) income,
net. . . . . . . . . . . . (179) 76 (126) 446
-------- -------- -------- --------
Income before taxes. . . . . 8,097 9,441 28,250 26,677
Income taxes . . . . . . . . 1,791 2,800 8,806 8,353
-------- -------- -------- --------
Net income . . . . . . . . . 6,306 6,641 19,444 18,324
Less: Net income
attributed to noncon-
trolling interest. . . . . 126 95 326 208
-------- -------- -------- --------
Net income attributed to
Landauer, Inc. . . . . . . $ 6,180 $ 6,546 $ 19,118 $ 18,116
======== ======== ======== ========
Net income per share attri-
butable to Landauer, Inc.
shareholders:
Basic. . . . . . . . . $ 0.66 $ 0.70 $ 2.05 $ 1.95
======== ======== ======== ========
Weighted average
basic shares
outstanding. . . . . 9,325 9,304 9,302 9,279
======== ======== ======== ========
Diluted. . . . . . . . $ 0.66 $ 0.70 $ 2.04 $ 1.94
======== ======== ======== ========
Weighted average
diluted shares
outstanding. . . . . 9,365 9,347 9,341 9,326
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
4
<table>
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
and Comprehensive Income (Unaudited)
(000's, except share amounts)
<caption>
Landauer, Inc. Stockholders' Equity
------------------------------------------------------------
Accumu-
lated
Other
Addi- Compre- Total Compre-
Common tional hensive Non-con- Stock- hensive
Stock Common Paid In Income Retained trolling holders' Income
Shares Stock Capital (Loss) Earnings Interest Equity (Loss)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Balance
September 30,
2009 . . . . . . 9,381,098 $ 938 $ 30,834 $ (515) $ 42,504 $ 693 $ 74,454
Stock-based com-
pensation
arrangements . . 71,552 7 1,713 -- -- -- 1,720
Dividends. . . . . -- -- -- -- (15,175) (273) (15,448)
Net income . . . . -- -- -- -- 19,118 326 19,444 $ 19,444
Foreign currency
translation
adjustment . . . -- -- -- (1,848) -- (2) (1,850) (1,850)
Defined benefit
pension and
postretirement
plans activity . -- -- -- (46) -- -- (46) (46)
---------- -------- -------- -------- -------- -------- -------- --------
Comprehensive
Income . . . . . $ 17,548
========
Balance
June 30, 2010. . 9,452,650 $ 945 $ 32,547 $ (2,409) $ 46,447 $ 744 $ 78,274
========== ======== ======== ======== ======== ======== ========
<fn>
The accompanying notes are an integral part of these financial statements.
5
</table>
<table>
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
and Comprehensive Income (Unaudited) (Cont'd.)
(000's, except share amounts)
<caption>
Landauer, Inc. Stockholders' Equity
------------------------------------------------------------
Accumu-
lated
Other
Addi- Compre- Total Compre-
Common tional hensive Non-con- Stock- hensive
Stock Common Paid In Income Retained trolling holders' Income
Shares Stock Capital (Loss) Earnings Interest Equity (Loss)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Balance
September 30,
2008 . . . . . . 9,332,508 $ 933 $ 28,826 $ 289 $ 39,707 $ 545 $ 70,300
Adoption of new
postretirement
life insurance
arrangements
accounting
guidance . . . . -- -- -- -- (900) -- (900)
Stock-based
compensation
arrangements . . 53,680 6 1,912 -- -- -- 1,918
Dividends. . . . . -- -- -- -- (14,744) (151) (14,895)
Net income . . . . -- -- -- -- 18,116 208 18,324 $ 18,324
Foreign currency
translation
adjustment . . . -- -- -- 465 -- (20) 445 445
Defined benefit
pension and
postretirement
plans activity . -- -- -- (1,324) -- -- (1,324) (1,324)
---------- -------- -------- -------- -------- -------- -------- --------
Comprehensive
Income . . . . . $ 17,445
========
Balance June 30,
2009 . . . . . . 9,386,188 $ 939 $ 30,738 $ (570) $ 42,179 $ 582 $ 73,868
========== ======== ======== ======== ======== ======== ========
<fn>
The accompanying notes are an integral part of these financial statements.
6
</table>
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(000's)
Nine Months Ended
June 30,
-------------------
2010 2009
-------- --------
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . $ 19,444 $ 18,324
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization. . . . . . . . . . 4,735 4,336
Equity in net income of joint venture. . . . . . (1,224) (1,282)
Dividends from joint venture . . . . . . . . . . 1,104 1,062
Stock-based compensation and related
net tax benefits . . . . . . . . . . . . . . . 1,596 1,554
Defined benefit plans curtailment loss . . . . . -- 1,350
Increase in accounts receivable, net . . . . . . (820) (4,740)
Decrease in prepaid taxes. . . . . . . . . . . . 430 3,081
Increase in dosimetry devices at cost. . . . . . (1,909) (1,342)
Decrease in accounts payable and
other accrued liabilities. . . . . . . . . . . (3,668) (696)
(Decrease) increase in deferred
contract revenue . . . . . . . . . . . . . . . (1,384) 1,270
Increase (decrease) in long-term pension
and postretirement obligations . . . . . . . . 396 (5,120)
Other operating activities, net. . . . . . . . . (1,154) 297
-------- --------
Net cash provided by operating activities. . . . 17,546 18,094
Cash flows used by investing activities:
Acquisition of businesses, net of cash
acquired . . . . . . . . . . . . . . . . . . . (32,014) --
Acquisition of property, plant and
equipment. . . . . . . . . . . . . . . . . . . (12,241) (5,931)
-------- --------
Net cash used by investing activities. . . . . . (44,255) (5,931)
Cash flows used by financing activities:
Net borrowings on revolving credit facility. . . 13,418 --
Dividends paid to stockholders . . . . . . . . . (15,036) (14,450)
Dividends paid to noncontrolling interest. . . . (273) (151)
Proceeds from the exercise of stock options. . . 571 590
Excess tax benefit from stock-based
compensation arrangements. . . . . . . . . . . 424 174
-------- --------
Net cash provided (used) by
financing activities . . . . . . . . . . . . . (896) (13,837)
Effects of foreign currency translation. . . . . (865) (8)
-------- --------
Net (decrease) increase in cash and
cash equivalents . . . . . . . . . . . . . . . (28,470) (1,682)
Opening balance - cash and cash equivalents. . . 36,493 33,938
-------- --------
Ending balance - cash and cash equivalents . . . $ 8,023 $ 32,256
======== ========
The accompanying notes are an integral part of these financial statements.
7
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
June 30, 2010
(Dollars in thousands)
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements reflect
the financial position of Landauer, Inc. and subsidiaries ("Landauer" or
"the Company"), including businesses acquired during fiscal 2010 as
described in Note 2, "Business Combinations". These unaudited interim
consolidated financial statements should be read in conjunction with the
audited consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended September 30, 2009
and other financial information filed with the Securities and Exchange
Commission (the "SEC").
In the opinion of management, the accompanying unaudited consolidated
financial statements include all adjustments necessary for a fair statement
of such financial statements. Certain reclassifications have been made in
the financial statements for comparative purposes. These reclassifications
have no effect on the results of operations or financial position.
The results of operations for the nine month periods ended June 30,
2010 and 2009 are not necessarily indicative of the results to be expected
for the full year. The September 30, 2009 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.
The accounting policies followed by the Company are set forth in the
Company's Annual Report on Form 10-K for the year ended September 30, 2009.
There have been no changes to the accounting policies for the three and
nine month periods ended June 30, 2010, and all companies acquired conform
to the Company's existing policies.
(2) BUSINESS COMBINATIONS
ACQUISITION OF GLOBAL PHYSICS SOLUTIONS, INC.
On November 9, 2009, Landauer, Inc. completed the acquisition of all
of the issued and outstanding capital stock of Global Physics Solutions,
Inc. ("GPS") for $22,000. Based in Texas, GPS is a nationwide service
provider of clinical physics support, equipment commissioning and
accreditation support, diagnostic equipment testing and educational
services. The Company completed the acquisition of GPS as a platform to
expand into the medical physics services market and reports the operating
results in the recently formed Medical Physics reporting segment.
The consideration transferred included amounts applied by Landauer at
the closing to repay all of the outstanding indebtedness of GPS. Landauer
also deposited $1,000 of the consideration transferred into an escrow
account to be held for a period of 18 months and applied to the settlement
of the GPS stockholders' indemnification obligations, if any, in connection
with the transaction. The Company funded the consideration transferred
through a combination of borrowings under its credit agreement and cash on
hand.
8
The following table summarizes the $22,000 of consideration
transferred to acquire GPS and the assets acquired and liabilities assumed
based on their fair values as of the date of the acquisition.
Current assets . . . . . . . . . . . . . . $ 804
Property, plant and equipment. . . . . . . 1,040
Intangible assets. . . . . . . . . . . . . 5,300
Goodwill . . . . . . . . . . . . . . . . . 17,553
Current liabilities. . . . . . . . . . . . (918)
Long-term liabilities. . . . . . . . . . . (250)
Long-term deferred taxes, net. . . . . . . (1,529)
--------
Total assets acquired and
liabilities assumed. . . . . . . . . . . $ 22,000
========
During the third fiscal quarter, the Company finalized accounting for
deferred taxes for GPS, which resulted in the decrease of net deferred
taxes and a corresponding adjustment to goodwill in the amount of $35. The
excess of the consideration transferred over the fair value of the net
tangible and intangible assets acquired resulted in goodwill of $17,553,
which is attributable primarily to the value of the acquired assembled
workforce and GPS' position as a leading provider in a large fragmented
growth market. The goodwill has been assigned to the newly formed Medical
Physics reporting segment. Approximately $4,230 of goodwill is expected to
be deductible for income tax purposes. The Company acquired a tradename in
the amount of $900 which has an indefinite life, and $4,400 of customer
relationships which are being amortized over 15 years.
The acquired business's revenues of $9,373 and net loss of $433 were
recognized in the Company's consolidated financial statements for the
period from November 1, 2009 to June 30, 2010. The revenues and results of
operations of GPS from November 1 to the date of acquisition, November 9,
were not material to the consolidated financial statements.
OTHER ACQUISITIONS
During fiscal 2010, the Company completed other various acquisitions
which are presented in the aggregate as they were not individually material
to the Company's Consolidated Financial Statements.
On November 2, 2009, Landauer completed the acquisition of all issued
and outstanding capital stock of Gammadata Metteknik AB ("GDM"), a Swedish
provider of radon measurement services. GDM is based near Stockholm,
Sweden and provides measurement services throughout the Scandinavian region
and Europe. The consideration transferred for GDM was $6,603. On
October 2, 2009, Landauer acquired the assets of a dosimetry service
provider in Sweden, now called Landauer Persondosimetri AB ("PDM"). The
consideration transferred for PDM was $1,085. These acquisitions are
consistent with the Company's strategy to expand into new international
markets, primarily by investing in or acquiring existing radiation
monitoring service providers with a prominent local presence. These
acquisitions are reported in the Radiation Monitoring reporting segment.
On June 1, 2010, Landauer acquired certain assets of Upstate Medical
Physics, Inc. ("UMP"), a New York company providing diagnostic medical
physics services, for consideration transferred of $2,231. This
acquisition is aligned with the Company's strategy to expand into the
medical physics services market and is reported in the Medical Physics
reporting segment.
9
The aggregate consideration transferred and the identifiable assets
acquired and liabilities assumed based on their fair values as of the date
of the acquisitions were as follows:
Total
--------
Current assets . . . . . . . . . . . . . . $ 2,088
Property, plant and equipment. . . . . . . 606
Intangible assets. . . . . . . . . . . . . 1,389
Goodwill . . . . . . . . . . . . . . . . . 8,092
Long-term deferred tax assets. . . . . . . 38
Current liabilities. . . . . . . . . . . . (2,157)
Other long-term liabilities. . . . . . . . (137)
--------
Total assets acquired and
liabilities assumed. . . . . . . . . . . $ 9,919
========
The excess of the consideration transferred over the fair value of
the net tangible and intangible assets acquired resulted in goodwill for
these acquisitions of $8,092, of which $6,760 and $1,332 has been assigned
to the Radiation Monitoring segment and the Medical Physics segment,
respectively. Approximately $434 of goodwill is expected to be deductible
for income tax purposes. The Company acquired customer lists, the fair
value of which was determined to be $1,389, which are being amortized over
15 years.
The acquired businesses contributed revenues of $3,909 and net income
of $965 to the Company for the period from their respective dates of
acquisition to June 30, 2010.
UNAUDITED PROFORMA RESULTS
The following unaudited proforma summary presents consolidated
information of the Company as if these business combinations had occurred
as of the beginning of the respective periods.
Nine months ended June 30, 2010
--------------------------------
Landauer, Inc. Landauer, Inc.
Actual Proforma
-------------- --------------
Revenues . . . . . . . . . . . . . $ 85,295 $ 90,124
Net income attributed to
Landauer, Inc. . . . . . . . . . 19,118 20,221
Nine months ended June 30, 2009
--------------------------------
Landauer, Inc. Landauer, Inc.
Actual Proforma
-------------- --------------
Revenues . . . . . . . . . . . . . $ 70,860 $ 84,479
Net income attributed to
Landauer, Inc. . . . . . . . . . 18,116 18,561
The proforma results include: estimated interest expense in
connection with debt financing of the acquisitions; forfeiture of interest
income in the nine month period of fiscal 2009 as the cash balances on
which interest was earned were assumed to be used for acquisitions;
elimination of pretax acquisition and reorganization costs of $1,683 in the
nine month period of fiscal 2010; the estimated amortization of
intangibles; and the income tax impact of these adjustments. The unaudited
proforma information is not necessarily indicative of the results of
operations that would have been achieved if the acquisitions had been
effective as of the beginning of the periods presented.
10
(3) ACQUISITION AND REORGANIZATION COSTS
During the third quarter and first nine months of fiscal 2010, pretax
charges totaling $23 and $1,683, respectively, were recorded for
acquisition and reorganization costs in connection with the Company's
acquisitions as described in Note 2, "Business Combinations". These costs
were expensed as incurred in accordance with business combination
authoritative guidance adopted by the Company on October 1, 2009. Such
expenses were primarily for professional fees with accounting, financial,
legal and tax advisors to support the due diligence, transaction structure
and accounting for the acquisitions. In addition, the charges for the nine
month period included $250 in reorganization costs for severance to support
changes in selected roles in the GPS organization.
During the second quarter of fiscal 2009, the Company initiated a
management reorganization plan to strengthen selected roles in the
organization. As a result, in the first nine months of fiscal 2009, the
Company recognized reorganization costs, including severance, in the amount
of $489 associated with these management organizational changes.
(4) GOODWILL AND OTHER INTANGIBLE ASSETS
Changes in the carrying amount of goodwill, by reportable segment,
for the nine months ended June 30, 2010 were as follows:
Radiation Medical
Monitoring Physics Total
---------- ---------- ----------
Goodwill at September 30, 2009 . . $ 13,384 $ -- $ 13,384
Increase related to
acquisitions . . . . . . . . . . 6,760 18,884 25,644
Effects of foreign currency. . . . (634) -- (634)
-------- -------- --------
Goodwill at June 30, 2010. . . . . $ 19,510 $ 18,884 $ 38,394
======== ======== ========
June 30, September 30,
2010 2009
-------- -------------
Customer lists, net of amortiza-
tion of $4,284 and $3,636,
respectively . . . . . . . . . . . . . . $ 8,657 $ 3,576
Trademarks and tradenames. . . . . . . . . 1,017 112
Licenses and patents, net of amortiza-
tion of $416 and $402,
respectively . . . . . . . . . . . . . . 413 203
Other intangibles, net of amortization
of $557 for each June 30, 2010 and
September 30, 2009 . . . . . . . . . . . 20 105
-------- --------
Intangible assets. . . . . . . . . . . . . $ 10,107 $ 3,996
======== ========
The Company assumed customer lists and tradenames relating to the
business combinations completed during the first nine months of fiscal
2010. The net book value of the acquired customer lists and other
intangible assets was $6,400 at June 30, 2010. Refer to Note 2, "Business
Combinations" for further information. No impairment of goodwill or other
intangible assets was recorded as of June 30, 2010.
11
(5) INCOME TAXES
The effective tax rates for the three month periods ended June 30,
2010 and 2009 were 22.1% and 29.7%, respectively. The effective tax rates
for the nine month periods ended June 30, 2010 and 2009 were 31.2% and
31.3%, respectively. The third quarter and fiscal 2010 effective tax rate
decreases were due primarily to recognition of the benefit of prior year
deductions for domestic production activities not previously included on
the Company's Federal income tax returns, which was recorded in the third
quarter of fiscal 2010.
As of June 30, 2010, the total amount of gross unrecognized benefits
for uncertain tax positions, exclusive of penalties and interest, including
positions impacting only the timing of tax benefits was $967. The amount
of unrecognized tax benefits that, if recognized, would impact the
effective tax rate was $814, as of June 30, 2010. As of September 30,
2009, gross unrecognized tax benefits, exclusive of penalties and interest,
including positions impacting only the timing of tax benefits was $532.
The amount of unrecognized tax benefits at September 30, 2009 that, if
recognized, would impact the effective tax rate was $493. The Company
expects that its unrecognized tax benefits will change by an insignificant
amount during the next twelve months. The Company classifies interest and
penalties on tax uncertainties as a component of the provision of income
taxes. The total amount of interest and penalties accrued at September 30,
2009 was $54. The corresponding amount at June 30, 2010 was not materially
different from the amount as of September 30, 2009.
As of June 30, 2010, the Company's U.S. income tax returns for 2007
and subsequent years remained subject to examination by the Internal
Revenue Service ("IRS"). The Company is not currently under audit by the
IRS. The Company is under audit by various state jurisdictions. State
income tax returns generally have statute of limitations for periods
between three and five years from the date of filing. The Company's major
foreign jurisdiction, France, has its income tax returns for 2007 and
subsequent years subject to examination. The Company's French tax returns
are currently being examined by the French tax authorities. The other
foreign operations have statute of limitations for periods between two and
eight years and are not currently under audit.
(6) CASH DIVIDENDS
On May 28, 2010, the Company declared a regular quarterly cash
dividend in the amount of $0.5375 per share for the third quarter of fiscal
2010. The dividends were funded on July 2, 2010 and were paid to
shareholders of record as of June 11, 2010. During the first nine months
of fiscal 2010, the Company funded cash dividends of $15.0 million, or
$0.5375 per share for the first and second quarters of fiscal 2010 and
$0.525 per share for the fourth quarter of fiscal 2009. Regular quarterly
cash dividends of $0.525 per share, or $2.10 annually, were declared during
fiscal 2009.
Dividends on time based restricted share awards issued to employees
and non-employee directors are eligible for dividends at the same rate paid
to stockholders. The Company accrues for dividends on performance stock
awards, which will be paid upon the vesting of the related restricted
performance stock awards at September 30, 2011, assuming the performance
criteria set forth in the agreements relating to such awards are met.
12
(7) COMPREHENSIVE INCOME
The components of accumulated other comprehensive loss included in
the accompanying unaudited consolidated balance sheets at June 30, 2010 and
September 30, 2009 consist of defined benefit pension and postretirement
plan adjustments for net gains, losses and prior service costs, net defined
benefit plan curtailment loss, effects of adoption of new accounting
guidance 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, 2010 and
2009. All items are presented net of tax with the exception of the defined
benefit pension and postretirement plans activity.
Three Months Ended Nine Months Ended
June 30, June 30,
------------------- -------------------
2010 2009 2010 2009
-------- -------- -------- --------
Net income . . . . . . . . . $ 6,306 $ 6,641 $ 19,444 $ 18,324
Other comprehensive
income (loss):
Foreign currency
translation
adjustments. . . . . . (809) 1,315 (1,850) 445
Defined benefit pension
and postretirement
plans activity . . . . (15) (23) (46) (24)
Impact of curtailment. . -- -- -- (1,300)
-------- -------- -------- --------
Comprehensive income . . . . $ 5,482 $ 7,933 $ 17,548 $ 17,445
Comprehensive income
attributed to non-
controlling interest . . . (122) (141) (324) (188)
-------- -------- -------- --------
Comprehensive income
attributed to
Landauer, Inc. . . . . . . $ 5,360 $ 7,792 $ 17,224 $ 17,257
======== ======== ======== ========
(8) INCOME PER COMMON SHARE
Basic net income per share was computed by dividing net income
available to common stockholders for the period by the weighted average
number of shares of common stock outstanding during the period. Diluted
net income per share was computed by dividing net income available to
common stockholders for the period by the weighted average number of shares
of common stock that would have been outstanding assuming dilution from
stock-based compensation awards during the period.
Effective October 1, 2009, the Company adopted authoritative guidance
which requires that unvested stock-based compensation awards that contain
non-forfeitable rights to dividends be treated as participating securities
and included in the computation of earnings per share pursuant to the
two-class method. The Company's time vested restricted stock is a
participating security. The guidance was applied retrospectively to all
periods presented. Undistributed net income allocated to unvested
restricted stock was not material for the three or nine month periods ended
June 30, 2010 and 2009. The following table sets forth the computation of
net income per share for the three and nine month periods ended June 30,
2010 and 2009:
13
Three Months Ended Nine Months Ended
June 30, June 30,
------------------- -------------------
2010 2009 2010 2009
-------- -------- -------- --------
BASIC NET INCOME PER SHARE
Net income attributed to
Landauer, Inc. . . . . . $ 6,180 $ 6,546 $ 19,118 $ 18,116
Less: Income allocated
to unvested restricted
stock. . . . . . . . . . 25 24 66 58
-------- -------- -------- --------
Net income available
to common stock-
holders. . . . . . . . $ 6,155 $ 6,522 $ 19,052 $ 18,058
-------- -------- -------- --------
Basic weighted
averages shares
outstanding. . . . . . 9,325 9,304 9,302 9,279
-------- -------- -------- --------
Net income per share
- Basic. . . . . . . . $ 0.66 $ 0.70 $ 2.05 $ 1.95
======== ======== ======== ========
DILUTED NET INCOME PER SHARE
Net income attributed to
Landauer, Inc. . . . . . $ 6,180 $ 6,546 $ 19,118 $ 18,116
Less: Income allocated
to unvested restricted
stock. . . . . . . . . . 25 24 66 58
-------- -------- -------- --------
Net income available to
common stockholders. . . $ 6,155 $ 6,522 $ 19,052 $ 18,058
-------- -------- -------- --------
Basic weighted averages
shares outstanding . . . 9,325 9,304 9,302 9,279
Effect of dilutive
securities . . . . . . . 40 43 39 47
-------- -------- -------- --------
Diluted weighted
averages shares
outstanding. . . . . . . 9,365 9,347 9,341 9,326
-------- -------- -------- --------
Net income per share
- Diluted. . . . . . . . $ 0.66 $ 0.70 $ 2.04 $ 1.94
======== ======== ======== ========
(9) CREDIT FACILITY
In October 2007, the Company negotiated a credit facility, which
originally had an expiration date of October 31, 2009 and permitted
borrowings up to $15,000. In June 2009, the Company executed a first
amendment to its credit agreement. The first amendment, among other
changes to the original terms, increased the aggregate amount of funds
available to $30,000 subject, with respect to amounts borrowed in excess of
$20,000, to certain criteria outlined in the credit agreement. In February
2010, the Company executed a second amendment to its credit agreement. The
amendment, among other changes to the original terms, extended the maturity
date to February 12, 2012, added Global Physics Solutions, Inc. as a
borrower, added a prepayment penalty equal to 1.0% should the Company
voluntarily terminate the facility prior to February 12, 2011, and modified
the interest rate on outstanding amounts from either LIBOR plus 2.9% or the
bank's prime rate plus 0.47% to either LIBOR plus 2.1% or the bank's prime
rate minus 0.28%.
14
In connection with its fiscal 2010 first quarter acquisitions, the
Company borrowed $18,000 under the credit agreement. At June 30, 2010 the
applicable interest rate was 2.475% per annum. Interest expense in the
first nine months of fiscal 2010 was $270.
In addition, the Company must maintain a fixed charge coverage ratio,
as calculated pursuant to the terms of the amended credit agreement, as of
the end of each calendar quarter of not less than 1.35 to 1.00, and a
funded debt to earnings before interest, taxes and depreciation and
amortization ("EBITDA") ratio less than or equal to 1.5 to 1.00. As of
June 30, 2010, the Company was in compliance with the covenants contained
in the credit agreement. The debt is classified as current as the
agreement contains a subjective acceleration clause and there exists an
arrangement where the Company draws upon or pay downs on the credit
facility on a daily basis based on its cash needs. As of June 30, 2010,
the Company had reduced the $18,000 borrowed during the first quarter of
fiscal 2010 by $4,582 with cash flow from operations.
(10) STOCK-BASED COMPENSATION
Stock-based compensation expense for restricted share awards totaled
$1,101 and $1,363 for the nine months ended June 30, 2010 and 2009,
respectively. The total income tax benefit recognized in the consolidated
statements of income related to expense for stock-based compensation was
$398 and $492 during the first nine months of fiscal 2010 and 2009,
respectively.
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 was based on the average of the Company's high and
low stock prices on the date of grant. Since the adoption of the Company's
Incentive Compensation Plan in February 2008, the fair value of performance
shares and restricted stock granted under the new plan has been based on
the Company's closing stock price on the grant date. 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, 2010 and 2009 was $61.64 and $59.65,
respectively.
Restricted stock issued to date to eligible employees and directors
vests 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, 2010 were as follows:
Number of
Restricted Weighted-
Share Average
Awards Fair
(000's) Value
---------- ----------
Outstanding at October 1, 2009 . . . . 72 $ 59.89
Granted. . . . . . . . . . . . . . . . 53 61.64
Vested . . . . . . . . . . . . . . . . (3) 52.25
----- -------
Outstanding at June 30, 2010 . . . . . 122 $ 60.83
===== =======
15
As of June 30, 2010, unrecognized compensation expense related to
restricted share awards totaled approximately $4,180 and is expected to be
recognized over a weighted average period of 1.82 years. The total fair
value of shares vested during the nine month periods ended June 30, 2010
and 2009 was $148 and $531, respectively.
STOCK OPTIONS
The Company has not granted stock options subsequent to fiscal 2005.
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, 2010
is presented below:
Weighted-
Average
Weighted- Remaining
Number of Average Contractual Aggregate
Options Exercise Term Intrinsic
(000's) Price (Years) Value
---------- ---------- ----------- ----------
Outstanding at
October 1, 2009. . 139 $ 45.06
Exercised. . . . . . (46) 41.55
----- -------
Outstanding at
June 30, 2010. . . 93 $ 45.10 4.4 $ 1,468
===== ======= ===== =======
Exercisable at
June 30, 2010. . . 93 $ 45.10 4.4 $ 1,468
===== ======= ===== =======
As of June 30, 2010, all outstanding stock options were vested and
compensation expense related to stock options was recognized in prior
fiscal years. The intrinsic value of options exercised totaled $1,062 and
$401 during the first nine months of fiscal 2010 and 2009, respectively.
The total income tax benefit recognized in the consolidated statements of
income related to the exercise of stock options was $384 and $145 during
the nine month periods ending June 30, 2010 and 2009, respectively.
(11) EMPLOYEE BENEFIT PLANS
The components of net periodic benefit cost for pension and retiree
medical plans were as follows:
Pension Benefits Other Benefits
---------------- --------------
Three Months Ended June 30,
------------------------------------------
2010 2009 2010 2009
-------- -------- -------- --------
Service cost . . . . . . . . $ -- $ -- $ 13 $ 10
Interest cost. . . . . . . . 359 355 16 17
Expected return on
plan assets. . . . . . . . (322) (246) -- --
Amortization of prior
service cost (credit). . . -- -- (28) (28)
Amortization of net
loss . . . . . . . . . . . 13 2 -- 3
-------- -------- -------- --------
Net periodic benefit cost. . $ 50 $ 111 $ 1 $ 2
======== ======== ======== ========
16
Pension Benefits Other Benefits
---------------- --------------
Nine Months Ended June 30,
------------------------------------------
2010 2009 2010 2009
-------- -------- -------- --------
Service cost . . . . . . . . $ -- $ 977 $ 38 $ 31
Interest cost. . . . . . . . 1,078 1,065 47 51
Expected return on
plan assets. . . . . . . . (964) (738) -- --
Amortization of prior
service cost (credit). . . -- 45 (83) (83)
Amortization of net
loss . . . . . . . . . . . 37 6 -- 8
Curtailment loss . . . . . . -- 1,125 -- --
-------- -------- -------- --------
Net periodic benefit
cost . . . . . . . . . . . $ 151 $ 2,480 $ 2 $ 7
======== ======== ======== ========
During the second quarter of fiscal 2009, the Company redesigned its
retirement benefit plans for U.S. salaried employees to reflect a change in
philosophy from a defined benefit structure to a defined contribution
structure. In conjunction with the changes, the Company recognized a
one-time net curtailment loss, in accordance with authoritative guidance,
in the amount of $1,125. Additionally, the Company made contributions to
its defined benefit pension plan to fund the remainder of the plan's
current unfunded balance. The plan changes and increased funding has
resulted in a decrease of fiscal 2010 benefit costs compared to the prior
year. The Company, under IRS minimum funding standards, is not required to
make contributions to its defined benefit pension plan during fiscal 2010.
As part of the fiscal 2009 redesign, the Company's 401(k) Retirement
Savings Plan was amended to enhance the Company's matching contribution,
along with certain other changes. The Company also adopted a new
supplemental defined contribution plan for certain executives, which allows
participating executives to make voluntary deferrals and provides for
employer contributions at the discretion of the Company. During the first
quarter of fiscal 2010, the Company made contributions to these plans in a
combined amount of approximately $250 for the fiscal 2009 year. No Company
contributions were made during the second or third quarters of fiscal 2010.
(12) SEGMENT INFORMATION
In connection with the acquisition of GPS, during the first quarter
of fiscal 2010, the Company began to operate in two reportable segments,
Radiation Monitoring and Medical Physics. Historically the Company
operated in the Radiation Monitoring segment exclusively. The factors for
determining the reportable segments include the products and services
offered combined with the nature of the individual business activities, as
well as key financial information reviewed by management.
The Radiation Monitoring segment provides analytical services to
determine occupational and environmental radiation exposure. These
services are provided internationally primarily to hospitals, medical and
dental offices, universities, national laboratories, and nuclear
facilities. Radiation Monitoring activities include the manufacture of
various types of radiation detection monitors, the distribution and
collection of the monitors to and from customers, and the analysis and
reporting of exposure findings. In addition to providing analytical
services, the Radiation Monitoring segment leases or sells dosimetry
detectors and reading equipment.
17
The Medical Physics segment provides therapeutic and diagnostic
physics services and educational services to domestic hospitals and
radiation therapy centers. Service offerings include clinical physics
support, equipment commissioning, accreditation support, imaging equipment
testing and educational services. These professional services are provided
to customers on-site by skilled physicists.
The Company evaluates performance of the individual segments based
upon, among other metrics, segment operating income or loss. Segment
operating income or loss is segment revenue less segment cost of sales and
segment selling, general and administrative expense. Given the recent
addition of the Medical Physics segment, the Company currently does not
perform allocations between the segments. Corporate expenses for shared
functions, including corporate management, corporate finance and human
resources, are recognized in the Radiation Monitoring segment where they
have historically been reported. In addition, acquisition and
reorganization costs are not allocated to the segments. Information about
net other income, including interest income and expense, and income taxes
is not provided at the segment level. As the operational integration
activities of the Medical Physics segment progress, including transaction
processing, human resources and benefits administration, and sales and
marketing activities, the Company expects to reevaluate the allocation of
costs if or when these costs become material.
The following tables summarize financial information for each
reportable segment:
Three Months Ended June 30, 2010
--------------------------------------
Radiation Medical
Monitoring Physics Consolidated
---------- ---------- ------------
Revenues . . . . . . . . . . . . $ 22,299 $ 3,956 $ 26,255
Operating Income (Loss). . . . . 7,961 (2) 7,959
Depreciation and Amortization. . 1,502 170 1,672
Capital Expenditures for
Property, Plant and
Equipment. . . . . . . . . . . 3,110 126 3,236
Three Months Ended June 30, 2009
--------------------------------------
Radiation Medical
Monitoring Physics Consolidated
---------- ---------- ------------
Revenues . . . . . . . . . . . . $ 23,468 $ -- $ 23,468
Operating Income (Loss). . . . . 8,982 -- 8,982
Depreciation and Amortization. . 1,474 -- 1,474
Capital Expenditures for
Property, Plant and
Equipment. . . . . . . . . . . 3,494 -- 3,494
18
Nine Months Ended June 30, 2010
--------------------------------------
Radiation Medical
Monitoring Physics Consolidated
---------- ---------- ------------
Revenues . . . . . . . . . . . . $ 75,757 $ 9,538 $ 85,295
Operating Income (Loss). . . . . 27,746 (594) 27,152
Depreciation and Amortization. . 4,316 419 4,735
Capital Expenditures for
Property, Plant and
Equipment. . . . . . . . . . . 11,977 264 12,241
Nine Months Ended June 30, 2009
--------------------------------------
Radiation Medical
Monitoring Physics Consolidated
---------- ---------- ------------
Revenues . . . . . . . . . . . . $ 70,860 $ -- $ 70,860
Operating Income (Loss). . . . . 24,949 -- 24,949
Depreciation and Amortization. . 4,336 -- 4,336
Capital Expenditures for
Property, Plant and
Equipment. . . . . . . . . . . 5,931 -- 5,931
June 30, September 30,
2010 2009
-------- -------------
Segment Assets:
Radiation Monitoring . . . . . . . . . $115,685 $125,205
Medical Physics. . . . . . . . . . . . 28,518 --
-------- --------
Total Assets . . . . . . . . . . . . . . . $144,203 $125,205
======== ========
(13) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 2009, the Financial Accounting Standards Board ("FASB")
approved amended guidance for determining whether an entity is a variable
interest entity ("VIE"). The guidance requires an enterprise to perform an
analysis to determine whether a company's variable interest gives it a
controlling financial interest in a VIE. A company would be required to
assess whether it has the power to direct the activities of a VIE that most
significantly impact the entity's economic performance and the obligation
to absorb losses of the entity or the right to receive benefits from the
entity. In addition, ongoing reassessments of whether an enterprise is the
primary beneficiary of a VIE and additional disclosures about an
enterprise's involvement in VIEs are required. The new guidance is
effective for fiscal years beginning on or after November 15, 2009. The
Company is currently evaluating the impact of this new guidance to its
financial position, results of operations and financial disclosures.
In September 2009, the FASB approved the issuance of new guidance for
arrangements with multiple deliverables and arrangements that include
software elements. By providing another alternative for determining the
selling price of deliverables, the new guidance will allow companies to
allocate arrangement consideration in multiple deliverable arrangements in
a manner that better reflects the transaction's economics and will often
result in earlier revenue recognition. In addition, the residual method of
allocating arrangement consideration is no longer permitted under the new
guidance. The new guidance for arrangements that include software elements
removes non-software components of tangible products and certain software
components of tangible products from the scope of existing software revenue
19
guidance, resulting in the recognition of revenue similar to that for other
tangible products. The new guidance requires expanded qualitative and
quantitative disclosures. The new guidance is effective for fiscal years
beginning on or after June 15, 2010. The guidance may be applied either
prospectively from the beginning of the fiscal year for new or materially
modified arrangements or retrospectively. The Company is currently
evaluating the impact of this new guidance to its financial position,
results of operations and financial disclosures.
(14) RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
Effective October 1, 2009, the Company adopted guidance that amends
the accounting for business combinations, and the accounting and reporting
for a noncontrolling interest in a subsidiary. The amended guidance aims to
improve, simplify, and converge internationally the accounting for and
reporting of business combinations and noncontrolling interests in
consolidated financial statements. The Company applied the amended guidance
for business combinations to its fiscal 2010 acquisitions. Refer to
Note 2, "Business Combinations", for additional disclosures regarding the
business combinations. Upon adoption of the guidance for a noncontrolling
interest, the Company reclassified amounts formerly presented as minority
interest to noncontrolling interest as a separate component of stockholders
equity in the consolidated balance sheets and as net income attributable to
noncontrolling interest in the consolidated statements of income.
(15) NET DEFINED BENEFIT PLAN CURTAILMENT LOSS AND TRANSITION COSTS
During the second quarter of fiscal 2009, the Board of Directors
approved changes to the Company's retirement benefit plans. The objective
of the changes was to transition from a defined benefit philosophy for
retirement benefits to a defined contribution approach. In connection with
the redesign of its retirement benefit plans, the Company recognized
charges of $2,236 during its second fiscal quarter of 2009. The charges
included a one-time net curtailment loss, in accordance with authoritative
guidance, in the amount of $1,125. In addition, the charge also included
costs of $1,111 related to the transition of the contractual retirement
benefit obligation of the Company's Chief Executive Officer to a defined
contribution obligation and professional fees directly associated with the
benefit plan transitions.
20
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Landauer is a leading provider of analytical services to measure
occupational and environmental radiation exposure. For over 50 years, the
Company has provided complete 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 customers, and the analysis and reporting of exposure
findings. These services are provided to approximately 67,000 customers
representing approximately 1.6 million individuals in the U.S., Japan,
France, the United Kingdom, Brazil, Canada, China, Australia, Mexico,
Sweden 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. Through its Global Physics Solutions, Inc. ("GPS")
subsidiary, which was acquired in November 2009, the Company provides
therapeutic and diagnostic physics services and educational services to the
domestic medical physics community.
Landauer's radiation monitoring business is 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 addition, the Company has been developing new platforms and
formats for its OSL technology, such as InLight<registered trademark>, to
gain access to markets where the Company previously did not have a
significant presence, such as smaller in-house and commercial laboratories,
nuclear power facilities, tactical military monitoring and hospitals to
support monitoring of patient exposure to radiation. Revenue growth in
recent years has occurred as a result of entry into new markets through
joint ventures and acquisitions, modest unit growth, sale of InLight
equipment and badges, and new ancillary services and products. Pricing in
the domestic market has become more competitive and opportunities to obtain
regular price increases from its customers may be more limited in the
future. The continued economic downturn and uncertain impact of healthcare
reform has resulted in increased pricing pressure with the Company's new
healthcare customer base, which is expected to continue into the future.
On November 9, 2009, the Company completed the acquisition of GPS.
Based in Texas, with operations throughout the Midwest and Texas, GPS is
the leading nationwide provider of medical physics services to hospitals
and radiation therapy centers. Medical physics services is a large
fragmented market. Market growth is expected to be driven by: the
utilization of radiation in the provision of healthcare; trends towards
outsourcing of services in healthcare settings; and, a tightening domestic
supply of qualified medical physicists. The Company reports the operating
results in the recently formed Medical Physics reporting segment. Also, in
November 2009, Landauer completed the acquisition of Gammadata Metteknik AB
("GDM"), a Swedish provider of radon measurement services. GDM is based
near Stockholm, Sweden and provides measurement services throughout the
Scandinavian region and Europe. In October 2009, Landauer acquired a
dosimetry service in Sweden, now called Landauer Persondosimetri AB
("PDM"). The acquisitions of GDM and PDM are reported in the Radiation
Monitoring reporting segment. In June 2010, Landauer completed the
acquisition of the assets of Upstate Medical Physics, a provider of
diagnostic physics services in upstate New York. This acquisition is
reported in the Medical Physics reporting segment.
21
RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2010
In connection with the acquisition of GPS, during the first quarter
of fiscal 2010, the Company began to operate in two reportable segments,
Radiation Monitoring and Medical Physics. Historically the Company
operated in the Radiation Monitoring segment exclusively. The Company
evaluates performance of the individual segments based upon, among other
metrics, segment operating earnings or loss. Segment operating income or
loss is segment revenue less segment cost of sales and segment selling,
general and administrative expenses. Given the recent addition of the
Medical Physics segment, the Company currently does not perform allocations
between the segments. Corporate expenses for shared functions, including
corporate management, corporate finance and human resources, are recognized
in the Radiation Monitoring segment where they have historically been
reported. The Company anticipates, as it progresses along the integration
of among other areas: transaction processing, human resources and benefits
administration and business development activities, the degree of expense
allocation between the segments may change. See Note 12, "Segment
Information", for additional information on the Company's reportable
segments.
Current year segment performance is discussed with the consolidated
results of operations due to the lack of comparability for the new Medical
Physics segment.
Revenues for the third quarter of fiscal 2010 were $26.3 million, an
increase of $2.8 million, or 11.9% compared to revenues of $23.5 million
for the same quarter in fiscal 2009. The increase in revenue was driven by
the contribution from the Medical Physics segment of $4.0 million offset by
a decline in the Radiation Monitoring segment of $1.2 million, or 5.0%.
The Radiation Monitoring segment revenue decline was driven primarily by a
planned change in the supply relationship between Landauer and Nagase
Landauer, the Company's unconsolidated joint venture in Japan, of $1.7
million, offset by contributions from GDM and PDM of $0.7 million. With
the conversion of Nagase Landauer's customer base from Luxel to the InLight
technology, the venture will no longer be purchasing service badges. The
historical Luxel badge revenue will be partially offset by a royalty
arrangement, resulting in no corresponding impact on net income. Without
the impact of the Nagase Landauer change and contribution of acquired
companies, Radiation Monitoring revenue declined $0.2 million, with organic
international growth offset by declines in InLight equipment placements.
Cost of sales for the third quarter of fiscal 2010 was $10.2 million,
an increase of $2.3 million, or 29.4% compared with cost of sales of $7.9
million for the same quarter in fiscal 2009. The addition of the Medical
Physics segment contributed $2.9 million of the increase in cost of sales.
Gross margins were 61.2% of revenues for the third quarter of fiscal 2010,
compared with the 66.4% reported for the same period in fiscal 2009. The
decline in gross margin rate is primarily a result of revenue mix due to
the increased contribution of lower margin Medical Physics revenue, which
had a gross margin of 25.6%.
Selling, general and administrative expense for the third quarter of
fiscal 2010 was $8.1 million, an increase of $1.5 million, or 22.3%,
compared with expense of $6.6 million for the third quarter of fiscal 2009.
The increase in selling, general and administrative costs was driven by the
addition of the Medical Physics segment of $1.0 million and $0.5 million,
or 6.9%, increase in the Radiation Monitoring segment related primarily to
costs of GDM and PDM, which were acquired during the first quarter.
Operating income for the quarter ended June 30, 2010 was $8.0
million, a decline of 11.4% compared with $9.0 million reported in the same
quarter in fiscal 2009. For the fiscal 2010 third quarter, the Medical
Physics segment was breakeven, and the Radiation Monitoring segment had
operating income of $8.0 million. The decline compared to the third
quarter of fiscal 2009 was due to the impact of prior year non-recurring
revenue.
22
Net other income, including equity in income of joint venture, for
the quarter was $0.3 million lower than a year ago, reflecting primarily
increased interest expense on outstanding borrowings to support the
acquisitions completed during the first quarter and an increase in
recognized foreign currency losses.
The effective income tax rates for the third quarter of fiscal 2010
and 2009 were 22.1% and 29.7%, respectively. The reduction is due
primarily to recognition of the benefit of prior year deductions for
domestic production activities not included previously on the Company's
Federal income tax returns. The Company's Federal benefit for
manufacturing in the U.S. for fiscal 2009 was $318. Based upon this
benefit, the Company plans to amend its fiscal 2007 and 2008 Federal income
tax returns and estimates an approximate benefit of $242, which was
recorded in the third quarter of fiscal 2010.
Resulting net income for the quarter ended June 30, 2010 amounted to
$6.2 million, or $0.66 per diluted share, compared with $6.5 million, or
$0.70 per diluted share, for the same quarter in fiscal 2009.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 2010
Revenues for the first nine months of the fiscal year were $85.3
million, a 20.4% increase compared to revenues of $70.9 million for the
same period in fiscal 2009. The increase in revenue was driven by the
contribution from the Medical Physics segment of $9.5 million and growth in
the Radiation Monitoring segment of $4.9 million, or 6.9%. Domestic
Radiation Monitoring revenue declined for the first nine months of the
fiscal year by $0.3 million and international Radiation Monitoring revenue
increased $5.2 million, or 29.1% driven by: contributions from GDM and PDM
of $3.7 million, the impact of the strengthening of most foreign currencies
against the dollar of $1.0 million and organic growth in most regions.
Included in domestic Radiation Monitoring revenue were InLight
equipment sales to the Canadian government agency responsible for
occupational monitoring and radiation emergency preparedness for the
citizens of Canada. During fiscal 2009, the Company executed a multi-year
contract valued at approximately $8.0 million, which represents an estimate
of purchases over the contract term with commitments to be established
annually and subject to annual funding by the Canadian government. During
the first nine months of fiscal 2010, the Company recognized revenue of
$3.1 million under the agreement, compared with $2.7 million recognized
during the first nine months of fiscal 2009.
Cost of sales for the first nine months of fiscal 2010 was $32.2
million, an increase of $8.8 million or 37.5%, compared with cost of sales
of $23.4 million for the same period in fiscal 2009. The addition of the
Medical Physics segment contributed $7.2 million of the increase in cost of
sales. Gross margins were 62.3% of revenues for the first nine months of
fiscal 2010, compared with the 67.0% reported for the same period in fiscal
2009. The decline in gross margin rate is primarily a result of revenue
mix due to the increased contribution of lower margin Medical Physics
revenue, which had a gross margin of 24.2%.
Selling, general and administrative expense for the first nine months
of fiscal 2010 was $24.3 million, an increase of $4.5 million, or 22.8%,
compared with expense of $19.8 million reported for the same period in
fiscal 2009. The increase in selling general and administrative costs was
driven by the addition of the Medical Physics segment of $2.9 million and
$1.6 million, or 8.1%, increase in the Radiation Monitoring segment. The
primary factors contributing to the increase in selling, general and
administrative expense for the Radiation Monitoring segment include: $0.9
million related to GDM and PDM, which were acquired during the first
quarter, and $0.3 million from the impact of the strengthening of most
foreign currencies against the dollar as well as increased costs of
international operations.
23
In conjunction with the acquisition activity for the first nine
months of fiscal 2010, the Company incurred $1.7 million ($1.3 million,
after-tax) of acquisition and reorganization costs. The costs included
approximately $1.4 million primarily for professional fees with accounting,
financial, legal and tax advisors to support the due diligence, transaction
structure and accounting for the acquisitions. Additionally there were
reorganization charges of $0.3 million for severance costs to support
changes in selected roles in the GPS organization.
During the second quarter of fiscal 2009, the Board of Directors
approved changes to the Company's retirement benefit plans to transition
from a defined benefit philosophy for retirement benefits to a defined
contribution approach. As a result of the changes, the Company recognized
$2.2 million ($1.5 million after-tax) of non-recurring pension curtailment
and transition costs. In addition, the Company initiated a management
reorganization plan to strengthen selected roles in the organization. As a
result, the Company recognized $0.5 million ($0.3 million after-tax) of
non-recurring reorganization charges during the second fiscal quarter of
2009.
Resulting operating income for the nine months ended June 30, 2010
was $27.2 million, an increase of 8.8% compared with $24.9 million reported
in the same period in fiscal 2009. For nine months ended June 30, 2010,
the Medical Physics segment had an operating loss of $0.6 million, and the
Radiation Monitoring segment had operating income of $27.8 million.
Net other income, including equity in income of joint venture, for
the first nine months was $0.6 million lower than a year ago, primarily
reflecting increased interest expense on outstanding borrowings to support
the acquisitions completed during the first fiscal quarter and a reduction
in recognized foreign currency gains.
The effective income tax rate for the first nine months of fiscal
2010 and fiscal 2009 were 31.2% and 31.3%, respectively.
Resulting net income for the nine months ended June 30, 2010 amounted
to $19.1 million, or $2.04 per diluted share, compared with $18.1 million,
or $1.94 per diluted share, for the same period in fiscal 2009. Excluding
the effect of acquisition and reorganization costs of $1.7 million ($1.3
million, after-tax), net income for the first nine months ended June 30,
2010 was $20.4 million, or $2.18 per diluted share. Excluding the effect
of the pension curtailment and transition costs and the reorganization
charges of $2.7 million ($1.8 million after-tax), net income for the first
nine months of fiscal 2009 was $19.9 million, or $2.14 per diluted share.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities for the first nine months of
fiscal 2010 was $17.5 million compared to $18.1 million in the first nine
months of fiscal 2009. The decline is due primarily to the reduction in
the benefit from prepaid taxes, and other timing related changes in the
components of working capital.
During the 2007 fiscal year, the Company initiated a project to
replace its information technology systems. The project has extended beyond
its initial timeline and planned costs due to increased customization of
the software to capture the unique business requirements of the Company.
The total project cost was estimated to be approximately $29.0 million to
$31.0 million with targeted completion during calendar 2010. The Company
currently is pursuing a three phase implementation to effectively manage
the transition of its customer relationships and financial reporting
systems. The phased implementation will extend the project timeline and
increase the estimated costs. The Company currently is evaluating the
impact of such phased implementation on the timing and estimated costs of
the project.
24
Investing activities included $32.0 million for acquisitions, as
described in Note 2, "Business Combinations". In addition, the Company had
acquisitions of property, plant and equipment in the amounts of $12.2
million and $5.9 million for the nine months ended June 30, 2010 and 2009,
respectively. Approximately $4.7 million of the increase was capital
spending for the Company's systems initiative. Capital expenditures for
the remainder of fiscal 2010 are expected to be approximately $3.0 million
to $4.0 million. The Company anticipates that funds for these capital
improvements will be provided from operations.
The Company's financing activities were comprised primarily of
borrowings to support acquisitions and the payments of cash dividends to
shareholders. During the first nine months of fiscal 2010, the Company
funded cash dividends of $15.0 million, or $0.5375 per share for the first
and second quarters of fiscal 2010 and $0.525 per share for the fourth
quarter of fiscal 2009. During the first nine months of fiscal 2009, the
Company paid cash dividends of $14.5 million. Such amounts have been
provided from operations.
In connection with its fiscal 2010 first quarter acquisitions, the
Company borrowed $18.0 million under its credit agreement. As described in
Note 9, "Credit Facility", to the financial statements, the Company amended
its credit agreement in June 2009, which originally had an expiration date
of October 31, 2009 and permitted borrowings up to $15.0 million. The
amendment, among other changes to the original terms, extended the maturity
date to June 16, 2011 and increased the aggregate amount of funds available
to $30.0 million subject, with respect to amounts borrowed in excess of
$20.0 million, to certain criteria outlined in the credit agreement. In
February 2010, the Company executed a second amendment to its loan
agreement. The amendment, among other changes to the original terms,
extended the maturity date to February 12, 2012, added Global Physics
Solutions, Inc. as a borrower, added a prepayment penalty equal to 1.0%
should the Company voluntarily terminate the facility prior to February 12,
2011, and modified the interest rate on outstanding amounts from either
LIBOR plus 2.9% or the bank's prime rate plus 0.47% to either LIBOR plus
2.1% or the bank's prime rate minus 0.28%. Under the credit agreement, the
Company elects to pay an annualized interest rate based on LIBOR plus 2.9%,
rather than the agreement's alternative rate of prime plus 0.47%. At June
30, 2010 the applicable interest rate was 2.475% per annum. In addition,
the Company must maintain a fixed charge coverage ratio, as calculated
pursuant to the terms of the amended credit agreement, as of the end of
each calendar quarter of not less than 1.35 to 1.00, and a funded debt to
EBITDA ratio less than or equal to 1.5 to 1.00. As of June 30, 2010, the
Company was in compliance with the covenants contained in the credit
agreement. The debt is classified as current as the agreement contains a
subjective acceleration clause and there exists an arrangement where the
Company draws upon or pay downs on the credit facility on a daily basis
based on its cash needs. The Company projects currently to retire the debt
from cash provided by operations within the next twelve months. As of
June 30, 2010, the Company had reduced the $18.0 million borrowed during
the first quarter of fiscal 2010 by $4.6 million.
In the opinion of management, cash flows from operations and the
Company's borrowing capacity under its credit facility are adequate for
projected operations and capital spending programs, as well as continuation
of the regular cash dividend program. From time to time, the Company may
have the opportunity to make investments for acquisitions or other
purposes, and borrowings can be made under the current credit facility to
fund such investments.
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
$15.6 million for both periods ending June 30, 2010 and September 30, 2009.
While these amounts represent approximately 32.1% and 42.4% of current
liabilities as of June 30, 2010 and September 30, 2009, respectively, such
amounts do not represent a cash obligation.
25
Landauer offers radiation monitoring services in Australia, Brazil,
Canada, China, France, Japan, Mexico, Sweden and the United Kingdom. The
Company's operations in these markets generally do not depend on
significant capital resources.
The Company is exposed to market risk, including changes in foreign
currency exchange rates. The financial statements of the Company's
non-U.S. subsidiaries are remeasured into U.S. dollars using the U.S.
dollar as the reporting currency. The market risk associated with foreign
currency exchange rates has historically been immaterial in relation to the
Company's financial position, results of operations, and cash flows.
OUTLOOK FOR BALANCE OF FISCAL 2010
When the Company initially issued annual guidance in December 2009,
the Company anticipated purchase commitments with the U.S. Military in the
second half of the 2010 fiscal year, which to date have not occurred.
Although the Company continues to build strong relationships with the U.S.
Military, there has been an unforeseen delay in the decision making process
to fund multimillion dollar initiatives using Landauer technology. As the
Company moves through its fiscal fourth quarter, it is still pursuing these
initiatives, but visibility on funding is limited at this point. If
funding does not occur in the fourth quarter, the Company's full-year
results will be below the bottom end of its original guidance range.
Previously, Landauer anticipated fiscal 2010 aggregate revenue growth
for the year to be in the range of 25 to 30 percent and a net income
increase in the range of 4 to 8 percent, excluding the after-tax impact of
acquisition and reorganization costs of $1.3 million in fiscal 2010 and the
fiscal 2009 after tax impact of pension curtailment and transition costs
and reorganization costs of $1.8 million.
If the military sales outlined above do not materialize this fiscal
year, Landauer's aggregate revenue growth for fiscal 2010 is anticipated to
be in the range of 18 to 22 percent, with acquisitions expected to
contribute the majority of the growth. Net income is anticipated to be in
the range of a decline of 2 percent to an increase of 2 percent, excluding
the after tax impact of acquisition and reorganization costs, of $1.3
million, in fiscal 2010 and the fiscal 2009 after tax impact of pension
curtailment and transition costs and reorganization costs of $1.8 million.
This forecast includes expense spending of $1.5 to $2.5 million to support
the Company's systems initiative.
USE OF NON-GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") FINANCIAL
MEASURES
In evaluating the Company's financial performance and outlook,
management uses adjusted net income and adjusted diluted earnings per
share, which are non-GAAP measures. Management believes that such
measures, as supplements to net income, diluted earnings per share and
other GAAP measures, are useful indicators for investors. These useful
indicators can help readers gain a meaningful understanding of the
Company's core operating results and future prospects without the effect of
non-cash or other one-time items and the Company's ability to generate cash
flows from operations that are available for taxes, capital expenditures,
and to repay debt. Investors should recognize that these non-GAAP measures
might not be comparable to similarly titled measures of other companies.
These measures should be considered in addition to, and not as a substitute
for or superior to, any measure of performance, cash flows or liquidity
prepared in accordance with accounting principles generally accepted in the
United States.
26
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; continued
customer acceptance of the InLight technology; the adaptability of
optically stimulated luminescence (OSL) technology to new platforms and
formats; government funding for the purchase of certain of the Company's
equipment and services; the impact on sales and pricing of certain customer
group purchasing arrangements; the costs associated with the company's
research and business development efforts; the usefulness of older
technologies; the effectiveness of and costs associated with the Company's
IT platform enhancements; 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; changes in postal and delivery
practices; the company's business plans; anticipated revenue and cost
growth; the ability to integrate the operations of acquired businesses and
to realize the expected benefits of acquisitions; the risks associated with
conducting business internationally; costs incurred for potential
acquisitions or similar transactions; other anticipated financial events;
the effects of changing economic and competitive conditions; foreign
exchange rates; government regulations; accreditation requirements; changes
in the trading market that affect the cost of obligations under the
Company's benefit plans; 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, 2009 and other reports filed by the Company, from
time to time, with the SEC.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 2009, the Financial Accounting Standards Board ("FASB")
approved amended guidance for determining whether an entity is a variable
interest entity ("VIE"). The guidance requires an enterprise to perform an
analysis to determine whether a company's variable interest gives it a
controlling financial interest in a VIE. A company would be required to
assess whether it has the power to direct the activities of a VIE that most
significantly impact the entity's economic performance and the obligation
to absorb losses of the entity or the right to receive benefits from the
entity. In addition, ongoing reassessments of whether an enterprise is the
primary beneficiary of a VIE and additional disclosures about an
enterprise's involvement in VIEs are required. The new guidance is
effective for fiscal years beginning on or after November 15, 2009. The
Company is currently evaluating the impact of this new guidance to its
financial position, results of operations and financial disclosures.
In September 2009, the FASB approved the issuance of new guidance for
arrangements with multiple deliverables and arrangements that include
software elements. By providing another alternative for determining the
selling price of deliverables, the new guidance will allow companies to
allocate arrangement consideration in multiple deliverable arrangements in
a manner that better reflects the transaction's economics and will often
result in earlier revenue recognition. In addition, the residual method of
allocating arrangement consideration is no longer permitted under the new
guidance. The new guidance for arrangements that include software elements
removes non-software components of tangible products and certain software
components of tangible products from the scope of existing software revenue
27
guidance, resulting in the recognition of revenue similar to that for other
tangible products. The new guidance requires expanded qualitative and
quantitative disclosures. The new guidance is effective for fiscal years
beginning on or after June 15, 2010. The guidance may be applied either
prospectively from the beginning of the fiscal year for new or materially
modified arrangements or retrospectively. The Company is currently
evaluating the impact of this new guidance to its financial position,
results of operations and financial disclosures.
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
Effective October 1, 2009, the Company adopted guidance that amends
the accounting for business combinations, and the accounting and reporting
for a noncontrolling interest in a subsidiary. The amended guidance aims to
improve, simplify, and converge internationally the accounting for and
reporting of business combinations and noncontrolling interests in
consolidated financial statements. The Company applied the amended guidance
for business combinations to its fiscal 2010 first quarter acquisitions of
GPS, GDM and PDM. Refer to Note 2, "Business Combinations", for additional
disclosures regarding the business combinations. Upon adoption of the
guidance for a noncontrolling interest, the Company reclassified amounts
formerly presented as minority interest to noncontrolling interest as a
separate component of stockholders equity in the consolidated balance
sheets and as net income attributable to noncontrolling interest in the
consolidated statements of income.
CRITICAL ACCOUNTING POLICIES
The critical accounting policies followed by the Company are set
forth in Item 7 "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and in "Summary of Significant
Accounting Policies" in the Notes to Consolidated Financial Statements of
the Company's Annual Report on Form 10-K for the year ended September 30,
2009. The Company believes that at June 30, 2010, there have been no
material changes to this information.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The Company is exposed to market risk, including changes in foreign
currency exchange rates. These risks are set forth in Item 7A
"Quantitative and Qualitative Disclosures About Market Risk" of the
Company's Annual Report on Form 10-K for the year ended September 30, 2009.
The Company believes there have been no material changes in the information
provided from the end of the preceding fiscal year through June 30, 2010.
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. Management's assessment excluded acquisitions
made by Landauer, Inc. during the first nine months of fiscal 2010, as
outlined in Note 2, "Business Combinations". The exclusion of these
acquired businesses is in accordance with the SEC's general guidance that
an assessment of a recently acquired business may be omitted from
management's scope in the year of acquisition. Based upon that evaluation,
the Company's CEO and CFO concluded that the Company's disclosure controls
and procedures as of June 30, 2010 were effective.
28
The fiscal 2010 acquisitions contributed approximately 25.9% and
15.6%, respectively, of consolidated total assets and consolidated total
net revenues of the Company as of and for the nine month period ended
June 30, 2010.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is in the process of integrating operations and internal
controls and procedures of the acquisitions. The Company intends to extend
its Section 404 compliance program under the Sarbanes-Oxley Act of 2002 and
the applicable rules and regulations under such Act to include acquisitions
by September 30, 2010. There were no other changes in the Company's
internal control over financial reporting that occurred during the
quarterly period ended June 30, 2010 that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.
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, 2010, 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 "Risk
Factors" of the Company's Annual Report on Form 10-K for the year ended
September 30, 2009. The Company believes there have been no material
changes from the risk factors previously disclosed in the Company's Annual
Report on Form 10-K for the year ended September 30, 2009.
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
29
SIGNATURE
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 6, 2010
/s/ Jonathon M. Singer
--------------------------------------
Jonathon M. Singer
Senior Vice President, Treasurer,
Secretary and Chief Financial Officer
(Principal Financial and
Accounting Officer)
30