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, 1996 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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at May 13, 1996
--------------------------- ----------------------------
Common stock, $.10 par value 8,477,285
PART I. FINANCIAL INFORMATION
LANDAUER, INC.
Balance Sheets
(000's)
ASSETS
______
<TABLE>
<CAPTION>
March 31, Sept. 30,
1996 1995
----------- ----------
derived from
(unaudited)(audited statements)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,198 $ 1,915
Short-term investments 4,977 6,456
Accounts receivable
less allowances of
$135,000 at 3/31/96
and $151,000 at 9/30/95 7,914 6,972
Inventories 940 955
Prepaid expenses 140 280
Deferred taxes on income 746 746
------- -------
Total current assets 18,915 17,324
Property, plant and equipment, 17,505 16,858
at cost Less: Accumulated
depreciation and amortization 9,749 9,104
-------- --------
Net property, plant and equipment 7,756 7,754
Investment in U.S. Treasury Securities 2,961 3,978
Cost of purchased businesses in excess
of net assets acquired 2,863 2,946
Equity in Japanese joint venture 3,912 4,104
Other assets 2,519 2,643
--------- ---------
$ 38,926 $ 38,749
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
LANDAUER, INC.
Balance Sheets (Cont'd.)
(000's)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
________________________________________
<TABLE>
<CAPTION>
March 31, Sept. 30,
1996 1995
--------- ---------
derived from
(unaudited)(audited statements)
<S> <C> <C>
Current liabilities:
Accounts payable $ 404 $ 638
Deferred contract revenue 7,819 7,599
Dividend payable 2,331 2,119
Accrued compensation and related costs 941 1,098
Accrued pension costs 1,027 704
Accrued expenses 1,475 1,219
Accrued taxes on income 668 1,587
------- --------
Total current liabilities 14,665 14,964
------- --------
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 - 8,477,285 shares 848 848
Premium paid in on common stock 7,596 7,561
Cumulative translation adjustments 515 819
Retained earnings 15,302 14,557
-------- --------
Total stockholders' investment 24,261 23,785
-------- --------
$ 38,926 $ 38,749
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
LANDAUER, INC.
Statements of Income
(000's, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- ------------------
March 31, March 31, March 31, March 31,
1996 1995 1996 1995
-------- ------ ------ -------
<S> <C> <C> <C> <C>
Net revenues $ 9,492 $ 8,673 $ 18,178 $ 16,686
Costs and expenses:
Cost of revenues 2,733 2,501 5,416 4,918
Selling, general and
administrative 2,557 2,318 4,939 4,598
------ ------ ------ ------
5,290 4,819 10,355 9,516
------ ------ ------ ------
Operating income 4,202 3,854 7,823 7,170
Other income, net 408 347 803 642
------ ------ ------ ------
Income before income taxes 4,610 4,201 8,626 7,812
Income tax provision 1,708 1,566 3,218 2,917
------ ------ ------- -------
Net income $ 2,902 $ 2,635 $ 5,408 $ 4,895
======== ======== ======== ========
Net income per share $ .34 $ .31 $ .64 $ .58
======== ======== ======== ========
Average shares outstanding 8,477 8,477 8,477 8,477
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
LANDAUER, INC.
Statements of Cash Flows
(000's)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------
March 31, March 31,
1996 1995
--------- ---------
<S> <C> <C>
Net cash flow from operating activities:
Net income $ 5,408 $ 4,895
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization 1,263 1,174
Equity in net income of foreign affiliate (489) (375)
Compensatory effect of stock options 35 (294)
Decrease in deferred
income taxes 0 6
Increase in accounts receivable (952) (736)
Decrease (increase) in inventories 15 (76)
Decrease (increase) in prepaid expenses 140 (78)
Decrease (increase) in accounts payable (234) 108
Decrease in deferred contract revenue 220 615
Increase in accrued expenses (497) (540)
Net increase in other
non-current assets (263) (460)
------- -------
Net cash generated
from operating activities 4,646 4,239
Cash flow used by investing activities:
Purchases of U.S. Treasury Securities (3,004) --
Maturities of U.S. Treasury Securities 5,500 3,011
Acquisition of property, plant,
and equipment (794) (1,528)
------- --------
Net cash generated from (used by)
investing activities 1,702 1,483
Cash flow from financing activities:
Dividend received from foreign affiliate 386 349
Dividends paid (4,451) (3,984)
-------- --------
Net cash used by financing activities (4,065) (3,635)
-------- --------
Net increase in cash 2,283 2,087
Opening balance - cash and cash equivalents 1,915 2,178
-------- --------
Ending balance - cash and cash equivalents $ 4,198 $ 4,265
======== ========
Supplemental Disclosure of Cash Flow
Information:
Cash paid for income taxes $ 4,157 $ 2,975
======== ========
Supplemental Disclosure of Non-cash
Financing Activity: Dividend declared $ 2,331 $ 2,119
Foreign currency translation adjustment $ (304) $ 0
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
LANDAUER, INC.
Notes to Financial Statements - March 31, 1996
(Unaudited)
(1) Basis of Presentation
_____________________
The accompanying unaudited condensed financial statements reflect the
financial position of Landauer, Inc. ("Landauer") as of March 31, 1996 and
September 30, 1995, the results of operations for the three-month and six-
month periods ended March 31, 1996 and 1995 and cash flows for the six-
month periods ended March 31, 1996 and 1995. In the opinion of management,
the accompanying unaudited condensed financial statements contain all
adjustments necessary to present fairly the financial position of Landauer
as of March 31, 1996 and September 30, 1995, and the results of operations
for the three-month and six-month periods ended March 31, 1996 and 1995,
and cash flows for the six-month periods ended March 31, 1996 and 1995.
The accounting policies followed by the Company are set forth in Note
1 to the Company's financial statements in the 1995 Landauer Annual Report
on Form 10-K, which is incorporated by reference.
The results of operations for the three-month and six-month periods
ended March 31, 1996 and 1995 are not necessarily indicative of the results
to be expected for the full year.
(2) Cash Dividends
______________
On March 13, 1996, the Company declared a regular quarterly cash
dividend in the amount of $.275 per share payable on April 11, 1996, to
stockholders of record on March 28, 1996. On November 9, 1995, the Company
declared a regular quarterly cash dividend in the amount of $.275 per share
payable on January 11, 1996, to stockholders of record on December 29,
1995.
Regular quarterly cash dividends of $.25 per share ($1.00 annually)
were declared during fiscal 1995.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
_______________________________
Landauer s cash flow from operating activities for the six months
ended March 31, 1996 and 1995 amounted to $4,646,000 and $4,239,000,
respectively. Investing activities for the first half of fiscal 1996 and
1995 resulted in a net decrease in investments in principally U.S. Treasury
securities of $3,011,000 and $2,496,000, respectively. Offsetting these
were acquisitions of property, plant and equipment in the amount of
$794,000 and $1,528,000, respectively. The Company s financing activities
were limited to payments of cash dividends, offset by foreign dividends
received from Nagase-Landauer, Ltd., our Japanese joint venture.
LANDAUER, INC.
Management's Discussion and Analysis of Financial Condition
and Results of Operations (Cont d.)
The Company has no long-term liabilities and its requirement for cash
flow to support investing activities is generally limited. Capital
expenditures for the balance of fiscal 1996 are expected to amount to
$1,300,000, principally for the development of computer hardware and
software systems and the acquisition of equipment to support growth,
technology enhancements and cost reductions. The Company anticipates that
funds for these capital improvements will be provided from operations.
The Company presently maintains no external sources of liquidity, and,
in the opinion of management, resources are adequate for projected
operations and capital spending programs, as well as continuation of the
regular cash dividend program.
Landauer requires limited working capital for its operations since
many of its customers pay for services in advance. Such advance payments
amounted to $7,819,000 and $7,599,000, respectively, as of March 31, 1996
and September 30, 1995, and are included in deferred contract revenue.
While these amounts represent approximately one-half of current
liabilities, such amounts do not represent a cash requirement.
Results of Operations
_____________________
Revenues for the quarter ended March 31, 1996 were 9% higher compared
with the same quarter a year ago. The increase in revenues was
attributable to gains in the Company s traditional radiation dosimetry
business and growth in radon protection plan services. Gross margins were
71.2% of the revenues for the second quarter of fiscal 1996 and fiscal
1995.
Selling, general and administrative expenses were slightly higher for
the current quarter as a percent of revenues at 26.9% compared to 26.7% for
the second quarter of fiscal 1996. The increase reflected higher research
and general and administrative expenses. As a result, operating income for
the second fiscal quarter of 1996 was 44.3% of revenues compared to 44.4%
for the same period last year. Income before income taxes was 48.6% of the
revenues for the quarter just ended compared to 48.4% for the second fiscal
quarter of 1995.
The effective tax rate for the Company during the second quarter of
fiscal 1996 was 37.0% compared with 37.3% for the same period last year.
Resulting net income of $2,902,000 for the second fiscal quarter of 1996
was more than 10% higher than $2,635,000 reported in fiscal 1995. Income
per share for the quarter was $.34 versus $.31 for the second fiscal
quarter of 1995.
LANDAUER, INC.
Management's Discussion and Analysis of Financial Condition
and Results of Operations (Cont d.)
Revenues for the six months ended March 31, 1996, were 9% higher
compared with the first six months of fiscal 1995. The increase in
revenues was attributable to gains in the Company s traditional radiation
dosimetry business and growth in radon protection plan services. Gross
margins for the first half of fiscal 1996 were 70.2% of revenues compared
with 70.5% a year ago. The decrease in gross margins was principally
attributable to higher overhead costs compared with a year ago.
Selling, general, and administrative expenses were lower for the first
half of fiscal 1996 as a percent of revenues at 27.2% compared to 27.6% for
the first half of fiscal 1995. The decrease primarily reflected a lower
growth rate in selling expenses compared with a year ago. Operating income
for the first half of fiscal 1996 was 43.0% of revenues comparable to the
same period last year. Income before income taxes was 47.5% of revenues
for the six months just ended, compared with 46.8% for the same period in
fiscal 1995.
The effective tax rate for the Company during the first half of fiscal
1996 and 1995 was 37.3%. Resulting net income of $5,408,000 for the first
six months of 1996 was more than 10% higher than $4,895,000 reported in
fiscal 1995. Income per share thus far in fiscal 1996 was $.64 versus $.58
for the same period in fiscal 1995.
LANDAUER, INC.
March 31, 1996
PART II. OTHER INFORMATION
Item 2. Legal Proceedings
_________________
Landauer is involved in various legal proceedings but believes that
these matters will be resolved without a material effect on its financial
position.
Item 4. Submission of Matters to a Vote of Security Holders
___________________________________________________
At its Annual Meeting held on February 7, 1996, the shareholders voted
to re-elect Richard H. Leet and C. Vincent Vappi as directors for three-
year terms. Voting for all nominees were 6,950,676 shares (representing
82.0% of total shares outstanding), and votes for 96,488 shares were
withheld from all nominees. Continuing as directors are Gary D. Eppen,
Thomas M. Fulton, Paul B. Rosenberg, Herbert Roth, Jr., Marvin G. Schorr,
and Michael D. Winfield.
Shareholders voted to approve the 1996 Equity Plan with 6,292,442
shares (representing 74.2% of total shares outstanding) voting for the
proposal, 286,545 against, and 473,708 abstaining.
The shareholders also voted to reappoint Arthur Andersen LLP as the
Company s auditors for the following year, with 7,035,365 shares (83.0% of
total shares outstanding) voting for, 8,623 shares against, and 8,708
shares abstaining.
Item 6. Exhibits and Reports on Form 8-K
________________________________
(a) No exhibits are filed with this report.
(b) There were no reports on Form 8-K during the quarter for which
this report is
filed.
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 10, 1996
/s/ James M. O Connell
_______________________________
James M. O'Connell
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000825410
<NAME> LANDAUER, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 4,198
<SECURITIES> 4,977
<RECEIVABLES> 8,049
<ALLOWANCES> 135
<INVENTORY> 940
<CURRENT-ASSETS> 18,915
<PP&E> 17,505
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<TOTAL-ASSETS> 38,926
<CURRENT-LIABILITIES> 14,665
<BONDS> 0
<COMMON> 848
0
0
<OTHER-SE> 23,413
<TOTAL-LIABILITY-AND-EQUITY> 38,926
<SALES> 18,178
<TOTAL-REVENUES> 18,178
<CGS> 5,416
<TOTAL-COSTS> 5,416
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 8,626
<INCOME-TAX> 3,218
<INCOME-CONTINUING> 5,408
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,408
<EPS-PRIMARY> .64
<EPS-DILUTED> .64
</TABLE>
