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 December 31, 1997 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 February 13,1998
--------------------------- -------------------------------
Common stock, $.10 par value 8,609,299
PART I. FINANCIAL INFORMATION
LANDAUER, INC.
Balance Sheets
(000's)
ASSETS
- -----------
Dec. 31, Sept. 30,
1997 1997
-------- ---------
(Derived from
audited
(Unaudited) statements)
Current assets:
Cash and cash equivalents $ 5,819 $ 1,860
Short-term investments 5,933 8,381
Accounts receivable, less allowances of
$236,000 at 12/31/97 and $219,000 at 9/30/97 9,598 8,568
Inventories 1,275 1,108
Prepaid expenses 192 96
Deferred taxes on income 1,318 1,318
-------- --------
Total current assets 24,135 21,331
Property, plant and equipment, at cost 19,960 19,412
Less: Accumulated depreciation
and amortization 12,130 11,681
-------- --------
Net property, plant and equipment 7,830 7,731
Investment in U.S. Treasury Securities 4,973 4,969
Cost of purchased businesses in excess of
net assets acquired 2,570 2,612
Equity in Japanese joint venture 3,630 4,133
Other assets 2,866 2,959
-------- --------
$ 46,004 $ 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
- -----------------------------------------
Dec. 31, Sept. 30,
1997 1997
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(Derived from
audited
(Unaudited) statements)
Current liabilities:
Accounts payable $ 1,239 $ 573
Deferred contract revenue 8,833 8,710
Dividend payable 2,781 2,551
Accrued compensation and related costs 1,377 1,534
Accrued pension costs 727 627
Accrued taxes on income 1,713 2,288
Accrued expenses 2,692 832
---------- ----------
Total current liabilities 19,362 17,115
Stockholders' investment:
Preferred stock, $.10 par value per share -
Authorized - 1,000,000 shares
Outstanding - None -- --
Common stock, $.10 par value per share -
Authorized - 20,000,000 shares
Outstanding - 8,556,325 shares at 12-31-97
and 8,504,091 shares at 9-30-97 856 850
Premium paid in on common stock 7,980 7,860
Cumulative translation adjustments (417) (59)
Retained earnings 18,223 17,969
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Total stockholders' investment 26,642 26,620
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$ 46,004 $ 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
------------------
Dec. 31, Dec. 31,
1997 1996
-------- --------
Net revenues $ 10,328 $ 9,147
Costs and expenses:
Cost of revenues 3,294 2,892
Selling, general and administrative 2,656 2,337
-------- --------
5,950 5,229
-------- --------
Operating income 4,378 3,918
Other income, net 393 374
-------- --------
Income before income taxes 4,771 4,292
Income tax provision 1,735 1,527
-------- --------
Net Income $ 3,036 $ 2,765
======== ========
Net income per share $ .36 $ .33
======== ========
Average shares outstanding 8,522 8,477
======== ========
The accompanying notes are an integral part of these financial
statements.
LANDAUER, INC.
Statements of Cash Flows
(000's)
(Unaudited)
Three Months Ended
------------------
Dec. 31, Dec. 31,
1997 1996
-------- --------
Net cash flow from operating activities:
Net income $ 3,036 $ 2,765
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 718 666
Equity in net income of foreign affiliate (186) (189)
Compensatory effect of stock options 126 33
Increase in accounts receivable (1,028) (486)
Increase in inventories (167) (139)
Increase in prepaid expenses (96) (31)
Increase (decrease) in accounts payable 666 (76)
Increase (decrease) in deferred contract revenue 123 (17)
Increase in accrued expenses 1,228 950
Increase in net long-term assets (134) (457)
------- -------
Net cash generated from operating activities 4,286 3,019
Cash flow from investing activities:
Purchases of U.S. Treasury Securities (1,970) (3,497)
Maturities of U.S. Treasury Securities 4,414 1,961
Acquisition of property,plant,and equipment (548) (472)
------- -------
Net cash provided by (used in) investing
activities 1,896 (2,008)
Cash flow from financing activities:
Dividend received from foreign affiliate 326 356
Dividends paid (2,551) (2,331)
------- -------
Net cash used in financing activities (2,225) (1,975)
------- -------
Net increase (decrease) in cash 3,957 (964)
Opening balance - cash and cash equivalents 1,860 3,359
------- -------
Ending balance - cash and cash equivalents $ 5,817 $ 2,395
======= =======
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $ 964 $ 223
======= =======
Supplemental Disclosure of Non-cash Financing Activity:
Dividend declared $ 2,781 $ 2,543
======== ========
Foreign currency translation adjustment $ (358) $ 132
======== ========
The accompanying notes are an integral part of these financial
statements.
LANDAUDER, INC.
Notes to Financial Statements - December 31, 1997
(Unaudited)
(1) Basis of Presentation
---------------------
The accompanying unaudited condensed financial statements reflect
the financial position of Landauer, Inc. ("Landauer") as of December 31,
1997 and September 30, 1997, and the results of operations and cash flows
for the three-month periods ended December 31, 1997 and 1996. 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 December 31, 1997 and September 30,
1997, and the results of operations for the three-month periods ended
December 31, 1997 and 1996.
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 periods ended
December 31, 1997 and 1996 are not necessarily indicative of the results
to be expected for the full year.
(2) Cash Dividends
--------------
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 18, 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 three months
ended December 31, 1997 and 1996 amounted to $4,286,000 and $3,019,000,
respectively. Investing activities for the three months ended December
31, 1997 and 1996 resulted in net maturities of U.S. Treasury securities
of $2,444,000 in fiscal 1998 and net purchases of U.S. Treasury
securities of $1,536,000 in fiscal 1997. Offsetting these were
acquisitions of property, plant and equipment in the amount of $548,000
and $472,000, 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 $5,000,000, 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 $8,833,000 and $8,710,000, respectively, as of December 31,
1997 and September 30, 1997, and are included in deferred contract
revenue. While these amounts represent more than one-half of current
liabilities, such amounts generally do not represent a cash requirement.
Results of Operations
- ---------------------
Revenues for the quarter ended December 31, 1997 were 13% 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 first fiscal quarter were
68.1% of the revenues compared to 68.4% for the same period in fiscal
1997. The decrease in margins was primarily attributable to higher costs
associated with Year 2000 remediation efforts, which are accounted for as
a cost of revenues.
Selling, general and administrative expenses were slightly higher
in the current quarter as a percent of revenues at 25.7% compared to
25.5% for the first quarter of fiscal 1997. As a result, operating
income for the first fiscal quarter of 1998 was 42.4% of revenues
compared to 42.8% for the same period last year. Income before income
taxes was 46.2% of revenues for the quarter just ended compared to 46.9%
for the first fiscal quarter of 1997.
The effective tax rate for the Company during the first quarter of
fiscal 1998 was higher at 36.4% compared with 35.6% for the same period
last year. Resulting net income of $3,036,000 for the first fiscal
quarter of 1998 was 10% higher than $2,765,000 reported in fiscal 1997.
Income per share for the quarter was $.36 versus $.33 for the first
fiscal quarter of 1997.
LANDAUER, INC.
Management's Discussion and Analysis of Financial Condition
and Results of Operations (Cont'd.)
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 4, 1998, the shareholders
voted to re-elect Gary D. Eppen, Marvin G. Schorr and Michael D. Winfield
as directors for three-year terms. Voting for all nominees were
6,765,995 shares (representing 79.6% of total shares outstanding), and
votes for 53,081 shares were withheld from all nominees. Continuing as
directors are Thomas M. Fulton, Robert J. Cronin, Richard R. Risk, Paul
B. Rosenberg and Herbert Roth, Jr.
The shareholders also voted to reappoint Arthur Andersen LLP as
the Company's auditors for the following year, with 6,776,511 shares
(79.7% of total shares outstanding) voting for, 19,224 shares against,
and 23,527 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: February 13, 1998
/s/ James M. O'Connell
- -----------------------------
James M. O'Connell
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
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