SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
/X/ QUARTERLY REPORT pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1998 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
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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 August 10, 1998
--------------------------- -------------------------------
Common stock, $.10 par value 8,609,299
PART I. FINANCIAL INFORMATION
LANDAUER, INC.
Balance Sheets
(000's)
ASSETS
- -----------
June 30, Sept. 30,
1998 1997
-------- ---------
(Derived from
audited
(Unaudited) statements)
Current assets:
Cash and cash equivalents $ 6,858 $ 1,860
Short-term investments 1,993 8,381
Accounts receivable, less allowances of
$182,000 at 6/30/98 and $219,000 at 9/30/97 10,854 8,568
Inventories 1,370 1,108
Prepaid expenses 140 96
Deferred taxes on income 1,318 1,318
-------- --------
Total current assets 22,533 21,331
Property, plant and equipment, at cost 24,184 19,412
Less: Accumulated depreciation
and amortization 12,751 11,681
-------- --------
Net property, plant and equipment 11,433 7,731
Investment in U.S. Treasury Securities 3,987 4,969
Cost of purchased businesses in excess of
net assets acquired 2,487 2,612
Equity in Japanese joint venture 2,841 4,133
Other assets 2,863 2,959
-------- --------
$ 46,144 $ 43,735
======== ========
The accompanying notes are an integral part of these financial
statements.
LANDAUER, INC.
Balance Sheets (Cont'd.)
(000's)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
- -----------------------------------------
June 30, Sept. 30,
1998 1997
-------- ---------
(Derived from
audited
(Unaudited) statements)
Current liabilities:
Accounts payable $ 619 $ 573
Deferred contract revenue 9,817 8,710
Dividend payable 2,798 2,551
Accrued compensation and related costs 1,724 1,534
Accrued pension costs 862 627
Accrued taxes on income 411 832
Accrued expenses 2,288 2,288
---------- ----------
Total current liabilities 18,519 17,115
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 - 8,609,299 shares at 6-30-98
and 8,504,091 shares at 9-30-97 861 850
Premium paid in on common stock 8,471 7,860
Cumulative translation adjustments (729) (59)
Retained earnings 19,022 17,969
---------- ----------
Total stockholders' investment 27,625 26,620
---------- ----------
$ 46,144 $ 43,735
========== ==========
The accompanying notes are an integral part of these financial
statements.
LANDAUER, INC.
Statements of Income
(000's, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------- -------------------
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
-------- -------- ------- -------
Net Revenues $ 10,653 $ 9,984 $ 31,946 $ 29,572
Cost and expenses:
Cost of revenues 3,314 3,140 9,781 9,035
Selling, general and
administrative 2,804 2,781 8,433 7,918
-------- -------- ------- -------
6,118 5,921 18,214 16,953
-------- -------- ------- -------
Operating Income 4,535 4,063 13,732 12,619
Other income and expense, net 357 378 1,133 1,135
-------- -------- ------- -------
Income before income taxes 4,892 4,441 14,865 13,754
Income taxes 1,794 1,581 5,434 4,946
-------- -------- ------- -------
Net income $ 3,098 $ 2,860 $ 9,431 $ 8,808
======== ======== ======== ========
Income per common share $ 0.36 $ 0.34 $ 1.10 $ 1.04
======== ======== ======== ========
Average shares outstanding 8,609 8,482 8,578 8,479
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
LANDAUER, INC.
Statements of Cash Flows
(000's)
(Unaudited)
Nine Months Ended
-------------------------
June 30, June 30,
1998 1997
-------- --------
Net cash flow from operating activities:
Net income $ 9,431 $ 8,808
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 2,141 1,937
Equity in net income of foreign affiliate (525) (561)
Compensatory effect of stock options 622 176
Increase in accounts receivable (2,291) (1,058)
Increase in inventories (262) (294)
(Increase) decrease in prepaid expenses (44) 82
Increase (decrease) in accounts payable 46 (75)
Increase in deferred contract revenue 1,107 10
Decrease in accrued expenses 4 151
Increase in net long-term assets (598) (820)
------- -------
Net cash generated from operating activities 9,631 8,356
Cash flow from investing activities:
Purchases of U.S. Treasury Securities (2,953) (1,038)
Maturities of U.S. Treasury Securities 10,323 956
Acquisition of property, plant, and equipment (5,025) (1,139)
------- -------
Net cash provided by (used in ) investing
activities 2,345 (1,221)
Cash flow from financing activities:
Dividend received from foreign affiliate 1,152 356
Dividends paid (8,130) (7,417)
------- -------
Net cash used in financing activities (6,978) (7,061)
------- -------
Net increase in cash 4,998 74
Opening balance - cash and cash equivalents 1,860 3,359
------- -------
Ending balance - cash and cash equivalents $ 6,858 $ 3,433
======= =======
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $ 4,423 $ 5,647
======= =======
Supplemental Disclosure of Non-cash Financing Activity:
Dividend declared $ 2,798 $ 2,545
======== ========
Foreign currency translation adjustment $ (670) $ (85)
======== ========
The accompanying notes are an integral part of these financial
statements.
LANDAUDER, INC.
Notes to Financial Statements - June 30, 1998
(Unaudited)
(1) Basis of Presentation
---------------------
The accompanying unaudited condensed financial statements reflect
the financial position of Landauer, Inc. ("Landauer") as of June 30, 1998
and September 30, 1997, and the results of operations and cash flows for
the three-month and nine-month periods ended June 30, 1998 and 1997. 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 June 30, 1998 and September 30,
1997, and the results of operations for the three-month and nine-month
periods ended June 30, 1998 and 1997, and cash flows for the nine-month
periods ended June 30, 1998 and 1997.
The accounting policies followed by the Company are set forth in
Note 1 to the Company's financial statements in the 1997 Landauer Annual
Report on Form 10-K, which is incorporated by reference.
The results of operations for the three-month and nine-month
periods ended June 30, 1998 and 1997 are not necessarily indicative of
the results to be expected for the full year.
(2) Cash Dividends
--------------
On June 4, 1998, the Company declared a regular quarterly cash
dividend in the amount of $.32 1/2 per share payable on July 2, 1998, to
stockholders of record on June 18, 1998. On March 6, 1998, the Company
declared a regular quarterly cash dividend in the amount of $.32 1/2 per
share payable on April 3, 1998, to stockholders of record on March 20,
1998. On November 6, 1997, the Company declared a regular quarterly cash
dividend in the amount of $.32 1/2 per share payable on January 2, 1998,
to stockholders of record on December 19, 1997.
Regular quarterly cash dividends of $.30 per share ($1.20 annually)
were declared during fiscal 1997.
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 nine months
ended June 30, 1998 and 1997 amounted to $4,998,000 and $74,000,
respectively. Investing activities for the nine months ended June 30,
1998 and 1997 resulted in net maturities of U.S. Treasury securities of
$7,370,000 in fiscal 1998 and net purchases of U.S. Treasury securities
of $82,000 in fiscal 1998. Offsetting these were acquisitions of
property, plant and equipment in the amount of $5,025,000 and $1,139,000,
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 1998 are expected to amount to
approximately $2,000,000, principally for the acquisition of equipment to
support the company's introduction of the Luxel product line, the
development of supporting software systems, and computer hardware. The
Company anticipates that funds for these capital improvements will be
provided from operations.
The Company presently maintains 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 $9,817,000 and $8,710,000, respectively, as of June 30, 1998
and September 30, 1997, 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 June 30, 1998 were 7% higher
compared with the same quarter a year ago. The increase in revenues was
primarily attributable to gains in the Company's traditional radiation
dosimetry business. Gross margins for the third fiscal quarter were
68.9% of revenues compared to 68.5% for the same period in fiscal 1997.
The increase in margins was primarily attributable to a price increase
effective April 1, 1998
Selling, general and administrative expenses were slightly lower in
the current quarter as a percent of revenues at 26.3% compared to 27.9%
for the third quarter of fiscal 1997. As a result operating income for
the third fiscal quarter of 1998 was 42.6% of revenues compared to 40.7%
for the same period last year. Income before income taxes was 45.9% of
revenues for the quarter just ended, compared to 44.5% for the third
fiscal quarter of 1997.
The effective tax rate for the Company during the third quarter of
fiscal 1998 was 36.7% compared with 35.6% for the same period last year.
Resulting net income of $3,098,000 for the third fiscal quarter of 1998
was 8% higher than $2,860,000 reported in fiscal 1997. Income per share
for the quarter was $.36 versus $.34 for the third fiscal quarter of
1997.
Revenues for the nine months ended June 30, 1998, were 8% higher
compared with the first nine months of fiscal 1997. The increase in
revenues was attributable to higher pricing in the Company's traditional
radiation dosimetry business, as well as higher international sales.
Gross margins for the first nine months of fiscal 1998 were 69.4% of
revenues, the same as last year.
LANDAUER, INC.
Management's Discussion and Analysis of Financial Condition
and Results of Operations (Cont'd.)
Selling, general and administrative expenses were slightly lower
for the first nine months as a percent of revenues at 26.4% compared to
26.8% for the first nine months of 1997. As a result, operating income
for first nine months of 1998 was 43% of revenues compared to 42.7% for
the same period last year. Income before income taxes at 46.5% of
revenues for the first nine months was comparable to a year ago.
The effective tax rate for the Company during the first nine months
of fiscal 1998 was 36.6% compared with 36.0% for the first nine months of
1998. Resulting net income of $9,431,000 for the first nine months of
1998 was 7% higher than $8,808,000 reported in fiscal 1997. Income per
share thus far in fiscal 1998 was $1.10 versus $1.04 for the same period
in fiscal 1997.
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 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: August 10, 1998
/s/ James M. O'Connell
- -------------------------------
James M. O'Connell
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
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