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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
/ X / QUARTERLY REPORT pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended MARCH 31, 2005 or
/ / TRANSITION REPORT pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition from ____ to ____
LANDAUER, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Commission File Number 1-9788
Delaware 06-1218089
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2 Science Road, Glenwood, Illinois 60425
-----------------------------------------------------
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code (708) 755-7000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ].
Indicate by checkmark whether the registrant is an accelerated filer as
defined in Rule 12.b.2 of the Exchange Act Yes [ X ] No [ ].
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class May 6, 2005
------------------------------ ----------------
Common stock, $.10 par value 8,960,931
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LANDAUER, INC. AND SUBSIDIARIES
Condensed Consolidated Unaudited Balance Sheets
(000's, except share amounts)
ASSETS
------
March 31, September 30,
2005 2004
------------ -------------
Current assets:
Cash and cash equivalents. . . . . . $ 5,821 $ 7,979
Short-term investments . . . . . . . 522 616
Accounts receivable, net of
allowances of $422 and $460,
respectively . . . . . . . . . . . 17,913 15,060
Inventories. . . . . . . . . . . . . 3,120 3,206
Prepaid expenses . . . . . . . . . . 1,237 1,116
Prepaid income taxes . . . . . . . . 3,206 2,292
Deferred income taxes. . . . . . . . 21 21
-------- --------
Current assets . . . . . . . . 31,840 30,290
Property, plant and equipment,
at cost . . . . . . . . . . . . . . 42,851 41,021
Less: Accumulated depreciation
and amortization . . . . . . . . (24,590) (22,481)
-------- --------
Net property, plant and equipment. . 18,261 18,540
Goodwill & other intangible assets,
net of amortization. . . . . . . . . 19,309 19,493
Equity in joint venture. . . . . . . . 4,102 3,916
Dosimetry devices, net of
amortization of $5,415 at
03/31/05 and $4,447 at 09/30/04. . . 5,804 4,791
Other assets . . . . . . . . . . . . . 1,230 488
-------- --------
$ 80,546 $ 77,518
======== ========
The accompanying notes are an integral part of these financial statements.
LANDAUER, INC. AND SUBSIDIARIES
Condensed Consolidated Unaudited Balance Sheets (Continued)
(000's, except share amounts)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
March 31, September 30,
2005 2004
------------ -------------
Current liabilities:
Accounts payable . . . . . . . . . . $ 1,275 $ 1,306
Notes payable. . . . . . . . . . . . 4,933 5,262
Deferred contract revenue. . . . . . 12,521 12,554
Dividends payable. . . . . . . . . . 3,807 3,577
Accrued compensation and
related costs. . . . . . . . . . . 1,842 2,230
Accrued pension costs. . . . . . . . 616 834
Accrued taxes on income. . . . . . . 360 20
Deferred taxes . . . . . . . . . . . 94 94
Accrued expenses . . . . . . . . . . 2,506 2,399
-------- --------
Current liabilities . . . . . . 27,954 28,276
Non-current liabilities:
Pension and postretirement
obligation . . . . . . . . . . . . 4,786 3,845
Deferred income taxes. . . . . . . . 1,317 1,317
-------- --------
Non-current liabilities . . . . 6,103 5,162
Minority interest in subsidiary. . . . 44 83
-------- --------
Stockholders' investment:
Preferred stock, $.10 par value
per share - Authorized -
1,000,000 shares; Outstanding
- None . . . . . . . . . . . . . . -- --
Common stock, $.10 par value
per share - Authorized -
20,000,000 shares; Outstanding
- 8,958,547 shares at 03/31/05
and 8,945,665 shares at
9/30/04 . . . . . . . . . . . . . 896 895
Premium paid in on common
stock. . . . . . . . . . . . . . . 14,764 14,400
Cumulative translation
adjustments. . . . . . . . . . . . (131) (251)
Retained earnings. . . . . . . . . . 30,916 28,953
-------- --------
Total stockholders'
investment . . . . . . . . . 46,445 43,997
-------- --------
$ 80,546 $ 77,518
======== ========
The accompanying notes are an integral part of these financial statements.
LANDAUER, INC. AND SUBSIDIARIES
Condensed Consolidated Unaudited Statements of Income
(000's, except per share amounts)
Three Months Ended Six Months Ended
--------------------- ---------------------
March 31, March 31, March 31, March 31,
2005 2004 2005 2004
--------- --------- --------- ---------
Revenues, net of sales
allowance adjustments. . $ 19,706 $ 18,262 $ 38,031 $ 35,040
Costs and expenses:
Cost of revenues . . . . 7,262 6,365 14,356 12,503
Selling, general and
administrative . . . . 4,540 4,230 9,051 8,511
-------- -------- -------- --------
11,802 10,595 23,407 21,014
-------- -------- -------- --------
Operating income . . . . . 7,904 7,667 14,624 14,026
Equity in income of
joint venture. . . . . . 325 285 682 517
Other income (expense),
net. . . . . . . . . . . 7 33 (38) 68
-------- -------- -------- --------
Income before income
taxes and minority
interest . . . . . . . . 8,236 7,985 15,268 14,611
Income taxes . . . . . . . 3,072 3,020 5,658 5,501
-------- -------- -------- --------
Income before minority
interest . . . . . . . . 5,164 4,965 9,610 9,110
Minority interest
therein. . . . . . . . . 21 126 37 266
-------- -------- -------- --------
Net income . . . . . . . . $ 5,143 $ 4,839 $ 9,573 $ 8,844
======== ======== ======== ========
Net Income per common
share:
Basic. . . . . . . . . . $ 0.57 $ 0.54 $ 1.07 $ 1.00
======== ======== ======== ========
Based on average
shares outstanding . . 8,956 8,897 8,952 8,875
======== ======== ======== ========
Diluted. . . . . . . . . $ 0.57 $ 0.54 $ 1.06 $ 0.99
======== ======== ======== ========
Based on average
shares outstanding . . 9,025 8,978 9,022 8,954
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
LANDAUER, INC. AND SUBSIDIARIES
Condensed Consolidated Unaudited Statements of Cash Flows
(000's, except per share amounts)
Six Months Ended
---------------------
March 31, March 31,
2005 2004
--------- ---------
Cash flows from operating activities:
Net Income . . . . . . . . . . . . . . . . . . $ 9,573 $ 8,844
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . 3,102 2,535
Amortization . . . . . . . . . . . . . . . . . 319 181
Bad debt expense . . . . . . . . . . . . . . . 56 93
Equity in net income of foreign affiliate. . . (682) (517)
Tax effect of stock options. . . . . . . . . . 166 645
Decrease (increase) in short-term
investments. . . . . . . . . . . . . . . . . 94 (38)
Increase in accounts receivable - net. . . . . (2,909) (1,525)
Decrease (increase) in inventory . . . . . . . 86 (50)
Increase in prepaid expenses . . . . . . . . . (1,035) (1,378)
Net increase in other assets . . . . . . . . . (2,242) (1,534)
(Decrease) increase in accounts payable. . . . (31) 498
(Decrease) increase in accrued liabilities . . (160) 239
Decrease in deferred contract revenue. . . . . (33) (320)
Increase in non-current liabilities. . . . . . 941 449
Increase in minority interest. . . . . . . . . 46 251
-------- --------
Net cash provided from operating activities. . . 7,291 8,373
Cash flows from investing activities:
Acquisition of property, plant
and equipment. . . . . . . . . . . . . . . . (1,830) (2,657)
Disposition of property, plant
and equipment. . . . . . . . . . . . . . . . -- 110
-------- --------
Net cash used by investing activities. . . . . . (1,830) (2,547)
Cash flows from financing activities:
Dividends paid to stockholders . . . . . . . . (7,381) (6,868)
Dividends paid to minority interest. . . . . . (85) (651)
Proceeds from the exercise of stock options. . 200 760
Advance from (repayment to) affiliate. . . . . -- 598
Payments on revolving credit facility. . . . . (564) --
-------- --------
Net cash used by financing activities. . . . . . (7,830) (6,161)
Effects of foreign currency translation. . . . 211 451
Net (decrease) increase in cash and
cash equivalents . . . . . . . . . . . . . . (2,158) 116
Opening balance - cash and cash equivalents. . 7,979 10,572
-------- --------
Ending balance - cash and cash equivalents . . $ 5,821 $ 10,688
======== ========
The accompanying notes are an integral part of these financial statements.
LANDAUER, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Unaudited Financial Statements
March 31, 2005
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements
reflect the financial position of Landauer, Inc. and subsidiaries ("Landauer"
or "the Company") as of March 31, 2005 and September 30, 2004, and the
condensed consolidated results of operations and cash flows for the three and
six-month periods ended March 31, 2005 and 2004. In the opinion of
management, the accompanying consolidated unaudited condensed financial
statements contain all adjustments necessary to present fairly the
consolidated financial position of Landauer as of March 31, 2005 and September
30, 2004, and the consolidated results of operations and cash flows for the
three and six-month periods ended March 31, 2005 and 2004.
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 six-month periods ended
March 31, 2005 and 2004 are not necessarily indicative of the results to be
expected for the full year.
The accounting policies followed by the Company are set forth in the
2004 Landauer Annual Report on Form 10-K. The only significant source of
revenues for the Company is radiation measuring and monitoring services
including other services incidental to measuring and monitoring. The services
provided by the Company to its customers are of a subscription nature and are
continuous. 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. Ancillary
service revenues are recognized upon delivery of the reports to customers or
as other such services are provided.
(2) CASH DIVIDENDS
On March 4, 2005, the Company declared a regular quarterly cash dividend
in the amount of $0.425 per share payable on April 8, 2005, to stockholders of
record on March 18, 2005. On November 12, 2004, the Company declared a
regular quarterly cash dividend in the amount of $0.425 per share payable on
January 17, 2005, to stockholders of record on December 17, 2004.
Regular quarterly cash dividends of $.40 per share ($1.60 annually) were
declared during fiscal 2004.
(3) COMPREHENSIVE INCOME
Comprehensive income is the total of net income and all other changes in
equity. The following table sets forth the Company's comprehensive income for
the three and six-month periods ended March 31, 2005 and 2004 (000's):
Three Months Ended Six Months Ended
--------------------- ---------------------
March 31, March 31, March 31, March 31,
2005 2004 2005 2004
--------- --------- --------- ---------
Net Income . . . . . . . . $ 5,143 $ 4,839 $ 9,573 $ 8,844
Other comprehensive
income - foreign
currency translation
adjustment . . . . . . . 636 242 120 451
-------- -------- -------- --------
Comprehensive income . . . $ 5,779 $ 5,081 $ 9,693 $ 9,295
======== ======== ======== ========
(4) EARNINGS PER SHARE
Earnings per share computations have been made in accordance with the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share." Basic earnings per share were computed by dividing net
income by the weighted average number of shares of common stock outstanding
during each period. Diluted earnings per share were computed by dividing net
income by the weighted average number of shares of common stock that would
have been outstanding assuming dilution during each period.
The following table presents the weighted average number of shares of
common stock for the three and six-month periods ended March 31, 2005 and 2004
(000's):
Three Months Ended Six Months Ended
--------------------- ---------------------
March 31, March 31, March 31, March 31,
2005 2004 2005 2004
--------- --------- --------- ---------
Weighted average number
of shares of common
stock outstanding. . . . 8,956 8,897 8,952 8,875
Options issued to
executives &
directors. . . . . . . . 69 81 70 79
-------- -------- -------- --------
Weighted average number
of shares of common
stock assuming
dilution . . . . . . . . 9,025 8,978 9,022 8,954
======== ======== ======== ========
(5) STOCK-BASED COMPENSATION PLANS
The Company maintains stock option plans for key employees. It also
maintains a stock option plan for its non-employee directors. The Company
accounts for those plans under the recognition and measurement principles of
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees", and related Interpretations. Under APB Opinion No. 25,
no compensation cost is recognized except for performance based grants. Under
Statement of Financial Accounting Standard ("SFAS") No. 123, "Accounting for
Stock-Based Compensation", compensation costs are recognized based on the
fair-value method of the stock options granted which is calculated using
certain assumptions about future volatility and dividend growth. Had
compensation cost for these plans been determined consistent with SFAS No.
123, "Accounting for Stock-Based Compensation," the Company's net income and
earnings per share in each period would have been as follows (000's, except
per share data):
Three Months Ended Six Months Ended
--------------------- ---------------------
March 31, March 31, March 31, March 31,
2005 2004 2005 2004
--------- --------- --------- ---------
Net income,
as reported. . . . . . . $ 5,143 $ 4,839 $ 9,573 $ 8,844
Deduct: Total stock-
based employee
compensation expense
determined under
fair value based
method for all awards,
net of related tax
effects. . . . . . 56 351 1,348 540
-------- -------- -------- --------
Pro forma net income . . . $ 5,087 $ 4,488 $ 8,225 $ 8,304
======== ======== ======== ========
Earnings per share:
Basic - As Reported. . . $ 0.57 $ 0.54 $ 1.07 $ 1.00
======== ======== ======== ========
Basic - Pro Forma. . . . $ 0.57 $ 0.50 $ 0.92 $ 0.94
======== ======== ======== ========
Diluted - As Reported. . $ 0.57 $ 0.54 $ 1.06 $ 0.99
======== ======== ======== ========
Diluted - Pro Forma. . . $ 0.56 $ 0.50 $ 0.91 $ 0.93
======== ======== ======== ========
Proforma compensation expense in the first quarter of fiscal 2005
includes the effect of new options granted in October 2005, that vested upon
issuance.
On December 16, 2004, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-
Based Payment" ("SFAS 123R"). SFAS 123R eliminates the alternative of
applying the intrinsic value measurement provisions of Opinion 25 to stock
compensation awards issued to employees. Rather, the new standard requires
enterprises to measure the cost of employee services received in exchange for
an award of equity instruments based on the grant-date fair value of the
award. That cost will be recognized over the period during which an employee
is required to provide services in exchange for the award, known as the
requisite service period (usually the vesting period).
In April 2005, the SEC approved a new rule that delays the effective
date of SFAS 123R for public companies to annual, rather than interim, periods
that begin after June 15, 2005. Under the SEC's rule, SFAS 123R will be
effective for the Company beginning October 1, 2005. The Company is in the
process of assessing the impact of SFAS 123R on its consolidated financial
statements.
(6) NOTES PAYABLE
In April 2004, the Company negotiated a $25 million line of credit
provided by LaSalle Bank, ABN AMRO. The credit agreement was amended,
effective March 25, 2005, to extend the maturity date to March 25, 2006 and
reduce the aggregate loan commitment under the credit facility to $15 million,
with an option for the Company to increase to $25 million. The remaining
terms of the amended credit facility are consistent with the original credit
facility.
In April 2004, the Company borrowed $7,724,000 under this facility as
part of funding the acquisition of the remaining 49% minority interest in
LCIE-Landauer, Ltd. During the second quarter of fiscal 2005, the Company
made principal payments of $497,000 as well as an interest payment of
$110,000. Year to date the Company has made principal payments of $564,000
and interest payments of $145,000.
The outstanding balances under the line of $4,933,000 at March 31, 2005
and $5,262,000 at September 30, 2004 are denominated in euros and at March 31,
2005, bears interest at 3.42% until July 29, 2005, at which time the Company
will execute a new EURIBOR election notice and specify the interest period and
rate as permitted under the terms of the credit agreement. While the Company
expects to renew the credit facility at maturity, in the event it is not
renewed, it is expected that cash on hand, and cash flow from operations, and
the Company's borrowing capacity will be sufficient to satisfy the obligation.
The expectation is the Company will fund euro-based debt service payments from
the euro-denominated cash flows.
(7) PENSION AND POSTRETIREMENT MEDICAL BENEFIT EXPENSES
The components of net periodic benefit cost for pension and retiree
medical plans are as follows (000's):
Pension Benefits Other Benefits
-------------------- --------------------
Three Months Three Months
Ended March 31, Ended March 31,
-------------------- --------------------
2005 2004 2005 2004
-------- -------- -------- --------
Components of net
periodic benefit cost:
Service cost . . . . . . $ 268 $ 250 $ 26 $ 25
Interest cost. . . . . . 300 247 34 20
Expected return on
plan assets. . . . . . (200) (162) -- --
Amortization of
transition (asset)
obligation . . . . . . (1) (2) 5 6
Amortization of prior
service cost . . . . . 97 39 5 4
Recognized net
actuarial loss . . . . 21 30 20 3
-------- -------- -------- --------
Net periodic benefit
cost . . . . . . . . . $ 485 $ 402 $ 90 $ 58
======== ======== ======== ========
Pension Benefits Other Benefits
-------------------- --------------------
Six Months Six Months
Ended March 31, Ended March 31,
-------------------- --------------------
2005 2004 2005 2004
-------- -------- -------- --------
Components of net
periodic benefit cost:
Service cost . . . . . . $ 518 $ 465 $ 51 $ 46
Interest cost. . . . . . 547 473 54 36
Expected return on
plan assets. . . . . . (362) (302) -- --
Amortization of
transition (asset)
obligation . . . . . . (3) (4) 11 12
Amortization of prior
service cost . . . . . 136 78 9 8
Recognized net
actuarial loss . . . . 51 53 23 3
-------- -------- -------- --------
Net periodic benefit
cost . . . . . . . . . . $ 887 $ 763 $ 148 $ 105
======== ======== ======== ========
Landauer contributed $789,000 to its pension plan in fiscal 2005, the
maximum amount permitted under U.S. tax law. The Company made $250,000 in
pension contributions in the first fiscal quarter of 2005 and funded the
remaining $539,000 on April 20, 2005.
(8) ACQUISITION OF MINORITY INTEREST IN LCIE- LANDAUER, LTD.
In April 2004 Landauer, Inc. consummated an agreement with Bureau
Veritas ("BV") to acquire the 49% minority interest in LCIE-Landauer, Ltd.
owned by BV's subsidiary, Laboratoire Central Industries des Electriques
("LCIE"), for $10.4 million in cash. The purchase price was allocated to
identifiable intangible assets based on estimates of fair value as determined
by an independent third party valuation consultant. Substantially all of the
purchase price, plus deferred tax liabilities recorded, was allocated to
intangible assets including $3.9 million of customer lists (amortized over the
estimated useful life of 15 years) and goodwill of $7.9 million. Had the
acquisition occurred at the beginning of the periods presented, unaudited net
income of the Company on a proforma basis would have been as follows (000's,
except per share data):
Three months ended Six months ended
March 31, 2004 March 31, 2004
------------------ -----------------
Proforma Net Income . . . $ 4,892 $ 8,961
Diluted earnings
per share. . . . . . . . $ 0.54 $ 1.00
The unaudited proforma net income is for illustrative purposes only and
is not necessarily indicative of the financial results had the acquisition
actually occurred at the beginning of the periods presented.
Landauer funded the purchase price from a combination of working capital
funds ($2.7 million), and $7.7 million borrowed under a credit facility
obtained in April 2004. See Note 6 for additional information on the credit
facility.
(9) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In October 2004, the American Jobs Creation Act (the "Act") was signed
into law. The Act includes a temporary incentive for U.S. corporations to
repatriate accumulated income earned abroad by providing an 85 percent
dividends-received deduction for certain qualifying cash dividends received
from controlled foreign corporations. The Act also includes a deduction
related to U.S. manufacturing income of 3% of eligible income in 2005 and
2006. These deductions are subject to certain limitations and, as of today,
uncertainty remains as to how certain provisions of the Act will be
interpreted. Therefore, the Company is not yet in a position to determine
whether, and to what extent, it would repatriate unremitted foreign earnings
or deduct eligible manufacturing income. The Company expects to finalize its
analysis of these provisions by September 30, 2005. In December 2004, the FASB
issued FSP 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings
Repatriation Provision Within the American Jobs Creation Act of 2004." FSP
109-2 provides additional time to companies beyond the financial reporting
period of enactment to evaluate the effects of the Act on their plans for
repatriation of foreign earnings for purposes of applying SFAS 109,
"Accounting for Income Taxes." The Company is currently evaluating the
repatriation provisions of the Act, which if implemented by the Company would
affect the Company's tax provision and deferred tax assets and liabilities.
However, given the preliminary stage of the Company's evaluation, it is not
possible at this time to determine the amount that may be repatriated or the
related potential income tax effects of such repatriation.
In March 2005, the Financial Accounting Standards Board ("FASB") issued
Staff Position ("FSP") No. FIN 46(R)-5, "Implicit Variable Interests under
FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable
Interest Entities". FSP No. FIN 46(R)-5 clarifies that when applying the
variable interest consolidation model, a reporting enterprise should consider
whether it holds an implicit variable interest in a variable interest entity
(VIE) or potential VIE. For entities that have adopted FASB Interpretation
No. 46, the FSP is effective as of April 1, 2005. The Company has evaluated
FSP No. FIN 46(R)-5 and determined that the Staff Position has no impact on
its financial statements.
In March 2005, the FASB issued Interpretation ("FIN") No. 47,
"Accounting for Conditional Asset Retirement Obligations - an interpretation
of FASB Statement No. 143". FIN No. 47 clarifies the term conditional asset
retirement obligation as used in Statement of Financial Accounting Standards
("SFAS") No. 143, "Accounting for Asset Retirement Obligations", and requires
a liability to be recorded if the fair value of the obligation can be
reasonably estimated. The types of asset retirement obligations that are
covered by FIN No. 47 are those for which an entity has a legal obligation to
perform an asset retirement activity, however the timing and (or) method of
settling the obligation are conditional on a future event that may or may not
be within the control of the entity. FIN No. 47 also clarifies when an entity
would have sufficient information to reasonably estimate the fair value of an
asset retirement obligation. FIN No. 47 is effective for the Company no later
than the end of fiscal year 2006. The Company is in the process of assessing
the impact, if any, of FIN No. 47 on its consolidated financial statements.
In March 2005, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 107, which expresses views of the staff
regarding the interaction between SFAS 123R, "Share-Based Payment", and
certain SEC rules and regulations. SAB No. 107 also provides the Staff's
views regarding the valuation of share-based payment arrangements for public
companies. The Company will evaluate the requirements of SAB 107 in
connection with its adoption of SFAS 123R.
In April 2005, the SEC approved a new rule that delays the effective
date of SFAS 123R for public companies to annual, rather than interim, periods
that begin after June 15, 2005. Under the SEC's rule, SFAS 123R will be
effective for the Company beginning October 1, 2005. The Company is in the
process of assessing the impact of SFAS 123R on its consolidated financial
statements.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
- --------
Landauer is the leading provider of analytical services to determine
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, 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. The
majority of these services are provided to customers in the U.S., Japan,
France, the United Kingdom, Brazil, Canada and China.
Substantially all of the Company's revenues are realized from radiation
monitoring services and other services incidental to radiation dose
measurement. The Company enters into agreements with customers to provide
them with radiation monitoring services, generally for a twelve-month period;
these agreements have a high degree of renewal. Relationships with customers
are stable and recurring, and the Company provides them with on-going
services. As part of its services, the Company provides radiation detection
badges, which are produced and owned by the Company, to its customers. Raw
material components related to the production of radiation detection badges
are included in inventories. Finished badges are included in dosimetry
devices in the consolidated balance sheet. The customers wear the badges for
a period selected by the customers ("wear period"), which is usually one, two,
or three months in duration. At the end of the wear period, the badges are
returned to the Company for analysis. The Company analyzes the badges that
have been worn and provides its customers with a report indicating their
radiation exposures. The Company recycles the badges for reuse, while also
producing new replacement badges on a continual basis. Additional reporting
and other radiation measurement and management services are provided to
customers at their option ("ancillary services").
Landauer's InLightTM dosimetry system, introduced in late fiscal 2003,
provides smaller in-house and commercial laboratories with the ability to
offer a complete radiation monitoring service using optically stimulated
luminescence ("OSL") technology. The system is based on the Company's
propriety technology and instruments and dosimetry devices developed by
Matsushita Industrial Equipment Company and allows customers the flexibility
to tailor their precise dosimetry needs. InLight services may involve a
customer acquiring or leasing dosimetry reading equipment from the Company.
Landauer's operations include services for the measurement and
monitoring of radon gas (referred to as "sales of radon kits") and services
related to the remediation of radon gas, which require the customer to deploy
a radon detector and return the detector to the Company's laboratories for
dose determination and reporting. The Company may assist with remediation
services on properties where radon measurements exceed a specified threshold.
InLight and radon services represent less than 5% of consolidated
revenues.
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 addition, the Company
has been developing 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.
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.
The services provided by the Company to its customers are ongoing and
are of a subscription nature. As such, revenues are recognized in the periods
in which such services are rendered irrespective of whether invoiced in
advance or in arrears. Given the subscription nature of Landauer's services,
quarterly revenues are fairly consistent. During the second quarter of each
fiscal year, however, the Company provides the additional services of
reporting annual radiation dose summaries that generate increased revenues.
The introduction of the Company's InLight product line may introduce some
variability in quarter-to-quarter revenue comparisons given the nature of
purchase cycles associated with sales of radiation dose measurement
instruments and detectors.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Landauer's cash provided from operating activities for the six months
ended March 31, 2005 and 2004 amounted to $7,291,000 and $8,373,000,
respectively. The decrease in cash provided from operating activities was
driven by increases in operating assets, primarily accounts receivable and
other assets, as a result of increased revenues. Acquisitions of property,
plant and equipment were $1,830,000 and $2,657,000, respectively for the six
months ended March 31, 2005 and 2004. The Company's financing activities are
comprised of credit facility activities and payments of cash dividends to
shareholder and minority partners, offset partially by proceeds from the
exercise of stock options.
The Company has long-term liabilities in the amount of $6,103,000 and
$5,162,000 at March 31, 2005 and September 30, 2004, respectively, and its
requirement for cash flows to support investing activities is generally
limited. Capital expenditures for the balance of fiscal 2005 are expected to
amount to approximately $4,800,000 principally for the acquisition of
equipment to support the Company's introduction of the InLight service line,
introduction of new services, and the development of supporting software
systems, and computer hardware. The Company anticipates that funds for these
capital improvements will be provided from operations. As described in Note 6
to the financial statements, the Company borrowed under its credit facility,
which expires in March 2006. In April 2004, the Company borrowed under this
facility as part of funding the acquisition of the remaining 49% minority
interest in LCIE-Landauer Ltd. The borrowings are classified as current
liabilities and are denominated in euros, which is the functional currency of
LCIE-Landauer, Ltd. The credit facility permits borrowing up to a maximum of
$15,000,000. In the opinion of management, cash flows from operations and the
Company's borrowing capacity under its line of credit 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 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
$12,521,000 and $12,554,000, respectively, as of March 31, 2005 and September
30, 2004. While these amounts represent approximately 45% of current
liabilities, such amounts generally do not represent a cash requirement.
All customers are invoiced in accordance with the Company's standard
terms, with payment due thirty days from date of invoice. Considering the
Company's invoicing practices and that a significant portion of the Company's
revenues are subject to health care industry reimbursement cycles, the average
days of sales outstanding for the Company have ranged from 43 to 78 days over
the course of fiscal 2004 and fiscal 2005 year to date.
RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 2005
- ----------------------------------------------------------
Revenues for the second quarter of fiscal 2005 were $19,706,000, a 7.9%
increase compared to revenues of $18,262,000 for the same quarter in fiscal
2004. Higher domestic radiation monitoring activities represented
approximately $700,000 of revenue growth for the quarter, where higher
pricing, increased ancillary service revenues and modest unit gains were
realized. Growth in international revenues, representing approximately
$350,000 of revenue growth over the prior year, resulted from a mix of
increased business activity in Europe, Asia and Brazil and a weaker U.S.
dollar. The balance of revenue growth was attributable to sales of InLight
products and services in the U.S. and abroad.
Gross margins were 63.1% of revenues for the second quarter of fiscal
2005, lower than the 65.1% reported for the same period in fiscal 2004. Cost
of revenues was approximately $900,000 or 14.1% higher than fiscal 2004.
Direct labor costs exceeded the prior year by $82,000 as a result of wage
increases and currency impact; direct materials were $166,000 higher
attributable to InLight sales activity as well as currency related cost
increases. Factors contributing to higher overhead costs include increases in
outside services primarily related to information technology projects,
$154,000; depreciation expense, $164,000; and higher international costs,
$242,000, impacted by the weakened U.S. dollar particularly in relation to the
euro.
Selling, general and administrative expenses in the second quarter of
fiscal 2005 were $310,000 or 7.3% higher versus a year ago primarily due to
increases of $145,000 for market research; $51,000 for employment fees;
$55,000 for professional fees including Sarbanes Oxley Section 404 compliance;
and $66,000 for the amortization of intangibles associated with the
acquisition of the balance of LCIE-Landauer. Resulting operating income for
the quarter ended March 31, 2005 was $7,904,000, an increase of 3.1% compared
with $7,667,000 reported in the same quarter a year ago.
Net other income for the quarter was slightly higher than a year ago,
reflecting increased earnings of Nagase-Landauer, Ltd., the Company's joint
venture in Japan, offset by higher net interest expense.
The effective income tax rate for the second quarter of fiscal 2005 was
slightly lower at 37.3% than the prior year at 37.8%. Minority interest in
net income of the Company's subsidiaries declined by $105,000 compared with a
year ago as a result of the acquisition of the remaining interest in LCIE-
Landauer. Resulting net income for the second quarter amounted to $5,143,000,
or $0.57 per diluted share, compared with $4,839,000, or $0.54 per diluted
share, for the same quarter in fiscal 2004.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 2005
- -------------------------------------------------------------
Revenues for the first six months of the fiscal year were $38,031,000,
or 8.5% higher than revenues of $35,040,000 for the same period in fiscal
2004. Domestic revenue growth, representing approximately $1,325,000 of the
increase, resulted from improved pricing and modestly higher volume for
radiation measurement and ancillary services. Growth in international
revenues, representing approximately $750,000 of revenue growth over the prior
year, resulted from higher pricing, increased international business activity
and a continued weaker U.S. dollar. The balance of revenue growth for the
first six months of fiscal 2005, or approximately $900,000, was attributable
to sales of InLight products and services in the U.S. and abroad.
Gross margins for the first six months of fiscal 2005 were 62.3% of
revenues, lower than the 64.3% reported for the same period in fiscal 2004.
Cost of revenues increased $1,853,000 or 14.8% from the same period in the
prior year. Direct labor costs exceeded the prior year by $132,000 as a
result of wage increases and currency impact. Direct materials were $350,000
higher attributable to InLight sales activity as well as currency translation.
Overhead costs rose both domestically and internationally primarily due to
increases in outside services related to information technology projects,
$327,000; depreciation expense, $318,000; and higher international costs,
$477,000, impacted by the closing of a facility in France, a weakened U.S.
dollar particularly in relation to the euro, and conversions to InLight
technology.
Selling, general and administrative expenses for the first six months of
fiscal 2005 were $540,000 higher, or 6.3% higher than a year ago. The year to
date increase in selling, general, and administrative expenses relates to
incentive compensation, increased employment fees, professional fees including
Sarbanes Oxley Section 404 compliance, amortization, and international
expenses. Resulting operating income for the first six months of fiscal 2005
was $14,624,000 compared with $14,026,000 for the same period in fiscal 2004.
Net other income for the first half of fiscal 2005 was $59,000 higher
than a year ago, reflecting higher earnings of the Company's joint venture in
Japan, offset by higher net interest costs.
The effective tax rate of 37.1% for the six month period compares with
37.6% for the first half of fiscal 2004. Minority interest was $229,000 lower
than prior year, reflecting the acquisition of the minority interest in LCIE-
Landauer. Resulting net income for the first half of fiscal 2005 was
$9,573,000, or $1.06 per diluted share, compared with $8,844,000, or $0.99 per
diluted share, for the same period in fiscal 2004.
OUTLOOK
- -------
Management's fiscal 2005 business plan anticipates aggregate revenue
growth for the year to be in the range of 7 - 8%. The Company's traditional
domestic and international revenue sources are expected to grow at a rate of
5.5 - 6.5% with sales for the InLight service line contributing to the balance
of revenue growth. Sources of domestic revenue growth are expected to include
pricing, moderate unit growth and increased sales of ancillary services.
Pricing and increased unit volume are expected to contribute to international
revenue growth in fiscal 2005, although currency exchange rates may impact
results reported in U.S. dollars. Costs and operating expenses for fiscal
2005 are expected to grow at a rate slightly higher than revenues. Net other
income in fiscal 2005 is anticipated to be comparable to the year just ended
and minority interest should further decline, as a result of the elimination
of minority interest in LCIE-Landauer. The effective income tax rate for
fiscal 2005 is expected to be comparable to fiscal 2004 at 37.4%. Based on
the preceding estimates, resulting net income for fiscal 2005 is currently
anticipated to be higher by 6 - 8% compared with fiscal 2004.
FORWARD LOOKING STATEMENTS
- --------------------------
Certain of the statements made herein (including, in particular, the
statements made under the caption "Outlook" above) constitute forward looking
statements that are based on certain assumptions and involve certain risks and
uncertainties, including, introduction and customer acceptance of the InLight
technology, the adaptability of optically stimulated luminescence ("OSL")
technology to new platforms and formats, the cost associated with the
Company's research and business development efforts, the usefulness of older
technologies, the anticipated results of operations of the Company and its
subsidiaries or ventures, the valuation of the Company's long lived assets or
business units relative to future cash flows, changes in pricing for the
Company's services, changes in postal and delivery costs and 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 and currency translations, government regulations,
accreditation requirements, and pending accounting pronouncements. Such
assumptions may not materialize to the extent assumed and such risks and
uncertainties may cause actual results to differ from anticipated results.
Such risks and uncertainties may also result in changes to the Company's
business 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 Company's Annual Report on Form 10-K for the year ended September 30, 2004
and other reports filed by the Company from time to time with the Securities
and Exchange Commission.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
- -----------------------------------------
In October 2004, the American Jobs Creation Act (the "Act") was signed
into law. The Act includes a temporary incentive for U.S. corporations to
repatriate accumulated income earned abroad by providing an 85 percent
dividends-received deduction for certain qualifying cash dividends received
from controlled foreign corporations. The Act also includes a deduction
related to U.S. manufacturing income of 3% of eligible income in 2005 and
2006. These deductions are subject to certain limitations and, as of today,
uncertainty remains as to how certain provisions of the Act will be
interpreted. Therefore, the Company is not yet in a position to determine
whether, and to what extent, it would repatriate unremitted foreign earnings
or deduct eligible manufacturing income. The Company expects to finalize its
analysis of these provisions by September 30, 2005. In December 2004, the FASB
issued FSP 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings
Repatriation Provision Within the American Jobs Creation Act of 2004." FSP
109-2 provides additional time to companies beyond the financial reporting
period of enactment to evaluate the effects of the Act on their plans for
repatriation of foreign earnings for purposes of applying SFAS 109,
"Accounting for Income Taxes." The Company is currently evaluating the
repatriation provisions of the Act, which if implemented by the Company would
affect the Company's tax provision and deferred tax assets and liabilities.
However, given the preliminary stage of the Company's evaluation, it is not
possible at this time to determine the amount that may be repatriated or the
related potential income tax effects of such repatriation.
In March 2005, the Financial Accounting Standards Board ("FASB") issued
Staff Position ("FSP") No. FIN 46(R)-5, "Implicit Variable Interests under
FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable
Interest Entities". FSP No. FIN 46(R)-5 clarifies that when applying the
variable interest consolidation model, a reporting enterprise should consider
whether it holds an implicit variable interest in a variable interest entity
(VIE) or potential VIE. For entities that have adopted FASB Interpretation
No. 46, the FSP is effective as of April 1, 2005. The Company has evaluated
FSP No. FIN 46(R)-5 and determined that the Staff Position has no impact on
its financial statements.
In March 2005, the FASB issued Interpretation ("FIN") No. 47,
"Accounting for Conditional Asset Retirement Obligations - an interpretation
of FASB Statement No. 143". FIN No. 47 clarifies the term conditional asset
retirement obligation as used in Statement of Financial Accounting Standards
("SFAS") No. 143, "Accounting for Asset Retirement Obligations", and requires
a liability to be recorded if the fair value of the obligation can be
reasonably estimated. The types of asset retirement obligations that are
covered by FIN No. 47 are those for which an entity has a legal obligation to
perform an asset retirement activity, however the timing and (or) method of
settling the obligation are conditional on a future event that may or may not
be within the control of the entity. FIN No. 47 also clarifies when an entity
would have sufficient information to reasonably estimate the fair value of an
asset retirement obligation. FIN No. 47 is effective for the Company no later
than the end of fiscal year 2006. The Company is in the process of assessing
the impact, if any, of FIN No. 47 on its consolidated financial statements.
In March 2005, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 107, which expresses views of the staff
regarding the interaction between SFAS 123R, "Share-Based Payment", and
certain SEC rules and regulations. SAB No. 107 also provides the Staff's
views regarding the valuation of share-based payment arrangements for public
companies. The Company will evaluate the requirements of SAB 107 in
connection with its adoption of SFAS 123R.
In April 2005, the SEC approved a new rule that delays the effective
date of SFAS 123R for public companies to annual, rather than interim, periods
that begin after June 15, 2005. Under the SEC's rule, SFAS 123R will be
effective for the Company beginning October 1, 2005. The Company is in the
process of assessing the impact of SFAS 123R on its consolidated financial
statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
SIGNIFICANT RISK FACTORS
- ------------------------
The Company's business and operations are subject to certain risks and
uncertainties, including:
FOREIGN CURRENCY EXCHANGE AND INTEREST RATE RISKS
- -------------------------------------------------
The Company is exposed to market risk, including changes in foreign
currency exchange rates and interest rates. As discussed in Note 1 to the
financial statements in the Company's Annual Report on Form 10-K, "Summary of
Significant Accounting Policies" to the consolidated financial statements, the
financial statements of the Company's non-U.S. subsidiaries are remeasured
into U.S. dollars using the U.S. dollar as the functional currency. To date,
the market risk associated with foreign currency exchange rates has not been
material in relation to the Company's financial position, results of
operations, or cash flows. These risks could increase, however, as the Company
expands in international markets. The Company does not have any significant
trade accounts receivable, trade accounts payable, or commitments in a
currency other than that of the reporting unit's functional currency. As such,
the Company does not currently use derivative financial instruments to manage
the exposure in its non-U.S. operations.
RELIANCE UPON SINGLE MANUFACTURING FACILITY
- -------------------------------------------
Landauer, Inc. conducts its primary manufacturing and laboratory
processing operations from a single facility in Glenwood, Illinois. In
addition, the Company performs significant functions for some of its
international operations from the Glenwood facility. If the Company were to
lose availability of its primary facility due to fire, natural disaster or
other disruptions, the Company's operations could be significantly impaired.
Although the Company maintains business interruption insurance, there can be
no assurance that the proceeds of such insurance would be sufficient to offset
any loss the Company might incur or that the Company would be able to retain
its customer base if operations were so disrupted.
SINGLE SOURCE FOR CRYSTAL MATERIALS
- -----------------------------------
Crystal material is a key component in Landauer's OSL technology. The
Company operates a single crystal manufacturing facility in Stillwater,
Oklahoma that currently supplies all OSL crystal radiation measurement
material used by the Company. If the Company were to lose availability of its
Stillwater facility due to a fire, natural disaster or other disruptions, such
loss could have a material adverse effect on the Company and its operations.
Although multiple sources for raw crystal material exists, there can be no
assurance that the Company could secure another source to produce finished
crystal materials to Landauer's specification in the event of a disruption at
the Stillwater facility.
TECHNOLOGY
- ----------
Landauer's technological expertise has been an important factor in its
growth. The Company regularly pursues product improvements to maintain its
technical position. The development and introduction of new technologies, the
adaptability of OSL to new platforms and new formats, the usefulness of older
technologies as well as the introduction of new technologies by the
competition present various risks to the Company's business. The failure or
lack of market acceptance of a new technology or the inability to respond to
market requirements for new technology could adversely affect the Company's
operations or reputation with customers. The cancellation of technology
projects or the cessation of use of an existing technology can result in
write-downs and charges to the Company's earnings. In the normal course of its
business, Landauer must record and process significant amounts of data quickly
and accurately and relies on various computer and telecommunications equipment
and software systems. Any failure of such equipment or systems could adversely
affect the Company's operations.
INTERNATIONAL OPERATIONS POSE RISKS
- -----------------------------------
Landauer conducts business in numerous international markets such as
Japan, France, the United Kingdom, Brazil, Canada and China. Foreign
operations are subject to a number of special risks, including among others,
currency exchange rate fluctuations; disruption in relations; political and
economic unrest; trade barriers; exchange controls; expropriation; and changes
in laws and policies, including those governing foreign owned operations.
GOVERNMENT REGULATIONS
- ----------------------
Regulation, present and future, is a constant factor affecting the
Company's business. The radiation monitoring industry is subject to federal
and state governmental regulation. Unknown matters, new laws and regulations,
or stricter interpretations of existing laws or regulations may materially
affect Landauer's business or operations in the future and/or could increase
the cost of compliance.
Many of the Company's technology based services must comply with various
national and international standards that are used by regulatory and
accreditation bodies for approving such services and products. Changes in
these standards and accreditation requirements can result in the Company
having to incur costs to adapt its offerings and procedures. Such adaptations
may introduce quality assurance issues during transition that need to be
addressed to ensure timely and accurate analyses and data reporting.
Additionally, changes affecting radiation protection practices, including new
understandings of the hazards of radiation exposure and amended regulations,
may impact how the Company's services are used by its customers and may in
some circumstances cause the Company to alter its products and delivery of its
services.
COMPETITION
- -----------
The Company competes on the basis of advanced technologies, competent
execution of these technologies, the quality, reliability and price of its
services and its prompt and responsive performance. In much of the world,
radiation monitoring activities are conducted by a combination of private
entities and governmental agencies. The Company's primary competitor in the
United States is large and has substantial resources. The Company also faces
competitive pressures from a number of smaller competitors.
COMPLIANCE WITH SECTION 404 OF THE SARBANES-OXLEY ACT
- -----------------------------------------------------
The Company is in the process of documenting and testing its internal
control procedures in order to satisfy the requirements of Section 404 of the
Sarbanes-Oxley Act, that requires annual management assessments of the effec-
tiveness of internal controls over financial reporting and an attestation
report by our independent registered public accounting firm. At this time,
due to the ongoing evaluation and testing, no assurance can be given that
there may not be internal control deficiencies that would be required to be
reported. Compliance with the requirements of Section 404 of the Sarbanes-
Oxley Act will also increase the Company's overhead costs in 2005 and future
years.
ITEM 4. 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"), of the effectiveness of the design and operation of
the Company's disclosure controls and procedures as defined in Rule 13a-15(e)
under the Securities and Exchange Act of 1934, as amended. Based on that
evaluation, the Company's management, including the CEO and CFO, concluded
that the Company's disclosure controls and procedures as of March 31, 2005
were effective. There have been no changes in the Company's internal control
over financial reporting that occurred during the period ended March 31, 2005
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 to various legal proceedings, lawsuits and other
claims arising in the ordinary course of its business. The Company does not
believe that such litigation, if adversely determined, would have a material
effect on its business, financial position, results of operations, or cash
flow.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At its Annual Meeting held on February 3, 2005, the shareholders voted
to elect Robert J. Cronin, Brent A. Latta and Richard R. Risk as directors for
three-year terms. The voting for each of the nominees was as follows:
For Withheld
--------- --------
Mr. Cronin 7,776,483 270,818
Mr. Latta 7,757,200 290,101
Mr. Risk 7,804,375 242,926
The shareholders voted to reappoint PricewaterhouseCoopers LLP as the
Company's auditors for the following year, with 7,898,147 shares (88.2% of
total shares outstanding) voting for, 117,234 shares voting against and 31,918
shares abstaining.
The shareholders voted on a proposal related to the Company's 2005 Long-
Term Incentive Plan ("the Plan"). The Plan was initially approved by the
Board of Directors on November 12, 2004 subject to shareholder approval. The
Plan was approved by shareholders with 5,669,843 shares (63.3% of total shares
outstanding) voting for, 935,849 shares voted against, 68,677 shares voted to
abstain, and 1,372,932 were not voted.
The additional directors for the current year are Michael D. Winfield,
Thomas M. White, E. Gail de Planque, Gary D. Eppen, and Stephen C. Mitchell.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
On February 8, 2005, Landauer filed a report on Form 8-K related to the
approval of its 2005 Long-Term Incentive Plan and establishment of its
structure for compensating the Company's non-employee directors.
On April 6, 2005, Landauer filed a report on Form 8-K related to the
amendment of its existing credit agreement with LaSalle Bank N.A. dated
April 13, 2004.
On April 25, 2005, Landauer filed a report on Form 8-K related to its
earnings for the second fiscal quarter ended March 31, 2005.
Exhibit 31.1 Rule 13a-14(a)/15d-14(a), Certification
of Chief Executive Officer
Exhibit 31.2 Rule 13a-14(a)/15d-14(a), Certification
of Chief Financial Officer
Exhibit 32.1 Section 1350 Certification of
Chief Executive Officer
Exhibit 32.2 Section 1350 Certification of
Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LANDAUER, INC.
Date: May 6, 2005
/s/ James M. O'Connell
------------------------------
James M. O'Connell
Vice President and Treasurer
(Principal Financial and
Accounting Officer)