UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2016
Commission file number 1-9788
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LANDAUER, INC. (Exact Name of Registrant as Specified in Its Charter) |
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Delaware |
06-1218089 |
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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2 Science Road, Glenwood, IL 60425 (Address of Principal Executive Offices and Zip Code) |
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Registrant’s Telephone Number, Including Area Code: (708) 755-7000 |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ X ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]
As of August 4, 2016, 9,603,864 shares of common stock, par value $0.10 per share, of the registrant were outstanding.
1
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PART I FINANCIAL INFORMATION |
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Item 1. |
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8 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
23 |
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Item 4. |
24 |
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PART II OTHER INFORMATION |
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Item 1. |
26 |
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Item 1A. |
26 |
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Item 2. |
26 |
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Item 3. |
26 |
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Item 4. |
26 |
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Item 5. |
26 |
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Item 6. |
27 |
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28 |
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2
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(Dollars in Thousands) |
June 30, 2016 |
September 30, |
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Assets |
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Cash and cash equivalents |
$ |
11,975 |
$ |
15,314 | ||
Receivables, net of allowances of $1,609 at June 30, 2016 and $1,556 at September 30, 2015 |
33,050 | 32,412 | ||||
Inventories |
5,820 | 7,035 | ||||
Deferred income tax assets - current |
4,983 | 4,871 | ||||
Prepaid expenses and other current assets |
2,122 | 2,121 | ||||
Total current assets |
57,950 | 61,753 | ||||
Property, plant and equipment, at cost |
108,233 | 104,322 | ||||
Less accumulated depreciation and amortization |
(62,097) | (57,955) | ||||
Property, plant and equipment, net |
46,136 | 46,367 | ||||
Equity in joint ventures |
25,330 | 24,010 | ||||
Goodwill |
33,704 | 35,072 | ||||
Intangible assets, net of accumulated amortization of $11,527 at June 30, 2016 and $38,662 at September 30, 2015 |
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9,857 |
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13,052 |
Dosimetry devices, net of accumulated depreciation of $6,029 at June 30, 2016 and $5,282 at September 30, 2015 |
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3,385 |
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3,562 |
Deferred income tax assets |
11,492 | 16,702 | ||||
Other assets |
6,816 | 8,226 | ||||
Total assets |
$ |
194,670 |
$ |
208,744 | ||
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Liabilities |
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Accounts payable |
$ |
2,931 |
$ |
5,773 | ||
Dividends payable |
2,780 | 2,684 | ||||
Deferred contract revenue |
14,213 | 13,904 | ||||
Accrued compensation and related costs |
8,547 | 8,603 | ||||
Accrued severance |
448 | 972 | ||||
Other accrued expenses |
8,114 | 6,557 | ||||
Total current liabilities |
37,033 | 38,493 | ||||
Long-term debt |
112,300 | 133,385 | ||||
Pension and postretirement obligations |
20,609 | 20,508 | ||||
Deferred income tax liabilities |
112 | 270 | ||||
Uncertain income tax liabilities |
1,499 | 2,310 | ||||
Other non-current liabilities |
249 | 1,451 | ||||
Total liabilities |
171,802 | 196,417 | ||||
Commitments and Contingencies |
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Stockholders' equity |
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Preferred stock, $0.10 par value per share, authorized 1,000,000 shares; none issued |
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Common stock, $0.10 par value per share, authorized 20,000,000 shares; 9,731,170 and 9,641,532 shares issued and outstanding at June 30, 2016 and September 30, 2015, respectively |
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973 |
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964 |
Additional paid in capital |
43,320 | 41,531 | ||||
Accumulated other comprehensive loss |
(12,215) | (13,741) | ||||
Accumulated deficit |
(10,401) | (17,559) | ||||
Landauer, Inc. stockholders' equity |
21,677 | 11,195 | ||||
Noncontrolling interest |
1,191 | 1,132 | ||||
Total stockholders' equity |
22,868 | 12,327 | ||||
Total Liabilities and Stockholders' Equity |
$ |
194,670 |
$ |
208,744 |
The accompanying notes are an integral part of these consolidated financial statements.
3
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
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Three Months Ended |
Nine Months Ended |
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(Dollars in Thousands, Except per Share) |
2016 |
2015 |
2016 |
2015 |
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Revenues: |
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Service revenues |
$ |
32,344 |
$ |
31,924 |
$ |
97,051 |
$ |
96,223 | ||||
Product revenues |
5,510 | 3,543 | 15,415 | 14,930 | ||||||||
Total revenues |
37,854 | 35,467 | 112,466 | 111,153 | ||||||||
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Costs and expenses: |
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Service costs |
16,032 | 15,531 | 48,708 | 47,323 | ||||||||
Product costs |
2,304 | 1,290 | 5,970 | 5,860 | ||||||||
Total cost of sales |
18,336 | 16,821 | 54,678 | 53,183 | ||||||||
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Gross profit |
19,518 | 18,646 | 57,788 | 57,970 | ||||||||
Selling, general and administrative |
11,805 | 13,535 | 36,606 | 41,088 | ||||||||
Operating income |
7,713 | 5,111 | 21,182 | 16,882 | ||||||||
Equity in income of joint ventures |
244 | 428 | 797 | 1,804 | ||||||||
Interest expense, net |
(703) | (1,080) | (2,765) | (2,997) | ||||||||
Other (expense) income, net |
3,550 | 158 | 3,493 | (76) | ||||||||
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Income before taxes |
10,804 | 4,617 | 22,707 | 15,613 | ||||||||
Income tax expense |
3,382 | 481 | 7,074 | 3,271 | ||||||||
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Net income |
7,422 | 4,136 | 15,633 | 12,342 | ||||||||
Less: Net income attributed to noncontrolling interest |
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157 |
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81 |
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446 |
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363 |
Net income attributed to Landauer, Inc. |
$ |
7,265 |
$ |
4,055 |
$ |
15,187 |
$ |
11,979 | ||||
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Net income per share attributable to Landauer, Inc. shareholders: |
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Basic |
$ |
0.76 |
$ |
0.42 |
$ |
1.59 |
$ |
1.26 | ||||
Weighted average basic shares outstanding |
9,531 | 9,509 | 9,523 | 9,476 | ||||||||
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Diluted |
$ |
0.76 |
$ |
0.42 |
$ |
1.58 |
$ |
1.25 | ||||
Weighted average diluted shares outstanding |
9,564 | 9,534 | 9,555 | 9,503 |
The accompanying notes are an integral part of these consolidated financial statements.
4
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Unaudited)
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Three Months Ended June 30, 2016 |
Nine Months Ended June 30, 2016 |
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(Dollars in Thousands) |
Landauer, Inc. |
Noncontrolling |
Total |
Landauer, Inc. |
Noncontrolling |
Total |
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Net income |
$ |
7,265 |
$ |
157 |
$ |
7,422 |
$ |
15,187 |
$ |
446 |
$ |
15,633 | ||||||
Other comprehensive income: |
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Defined benefit pension and postretirement plans activity, net of taxes of $52 and $153, respectively |
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85 |
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- |
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85 |
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257 |
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- |
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257 |
Unrealized gains (losses) on available-for-sale securities, net of taxes of $35 and $34, respectively |
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(195) |
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- |
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(195) |
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(187) |
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- |
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(187) |
Foreign currency translation adjustment, net of taxes of $427 and $784, respectively |
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793 |
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3 |
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796 |
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1,456 |
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27 |
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1,483 |
Comprehensive income |
$ |
7,948 |
$ |
160 |
$ |
8,108 |
$ |
16,713 |
$ |
473 |
$ |
17,186 | ||||||
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Three Months Ended June 30, 2015 |
Nine Months Ended June 30, 2015 |
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(Dollars in Thousands) |
Landauer, Inc. |
Noncontrolling |
Total |
Landauer, Inc. |
Noncontrolling |
Total |
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Net income |
$ |
4,055 |
$ |
81 |
$ |
4,136 |
$ |
11,979 |
$ |
363 |
$ |
12,342 | ||||||
Other comprehensive income: |
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Defined benefit pension and postretirement plans activity, net of taxes of $27 and $80, respecitvely |
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46 |
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- |
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46 |
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137 |
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- |
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137 |
Unrealized gains (losses) on available-for-sale securities, net of taxes of $9 |
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41 |
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- |
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41 |
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43 |
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- |
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43 |
Foreign currency translation adjustment, net of taxes of ($184) and $1,873, respectively |
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220 |
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7 |
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227 |
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(3,478) |
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(191) |
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(3,669) |
Comprehensive income |
$ |
4,362 |
$ |
88 |
$ |
4,450 |
$ |
8,681 |
$ |
172 |
$ |
8,853 |
The accompanying notes are an integral part of these consolidated financial statements.
5
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statement of Stockholders’ Equity (Unaudited)
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Landauer, Inc. Stockholders' Equity |
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(Dollars in Thousands) |
Common Stock Shares |
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Common Stock |
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Addi-tional Paid in Capital |
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Accumulated Other Compre-hensive (Loss) Income |
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(Accumulated Deficit) Retained Earnings |
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Non- Controlling Interest |
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Total Stock- holders' Equity |
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September 30, 2015 |
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9,641,532 |
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$ |
964 |
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$ |
41,531 |
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$ |
(13,741) |
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$ |
(17,559) |
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$ |
1,132 |
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$ |
12,327 |
Stock-based compensation arrangements |
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89,638 |
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9 |
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1,789 |
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- |
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- |
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- |
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1,798 |
Dividends |
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- |
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- |
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- |
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- |
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(8,029) |
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(414) |
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(8,443) |
Net income |
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- |
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- |
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- |
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- |
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15,187 |
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446 |
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15,633 |
Foreign currency translation adjustment, net of tax |
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- |
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- |
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- |
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1,456 |
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- |
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27 |
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1,483 |
Unrealized gains (losses) on available-for-sale securities, net of tax |
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- |
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- |
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- |
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(187) |
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- |
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- |
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(187) |
Defined benefit pension and postretirement plans activity, net of tax |
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- |
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- |
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- |
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257 |
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- |
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- |
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257 |
June 30, 2016 |
9,731,170 |
$ |
973 |
$ |
43,320 |
$ |
(12,215) |
$ |
(10,401) |
$ |
1,191 |
$ |
22,868 |
The accompanying notes are an integral part of these consolidated financial statements.
6
LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
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Nine Months Ended June 30, |
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(Dollars in Thousands) |
2016 |
2015 |
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Cash flows from operating activities: |
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Net income |
$ |
15,633 |
$ |
12,342 | ||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
8,461 | 9,274 | ||||
Equity in income of joint ventures |
(797) | (1,804) | ||||
Dividends from joint ventures |
1,195 | 1,144 | ||||
Stock-based compensation and related net tax benefits |
2,048 | 1,422 | ||||
Current and long-term deferred taxes, net |
3,639 | 769 | ||||
Gain on disposition of business |
(3,904) |
- |
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Loss on sale, disposal and abandonment of fixed assets |
368 | 142 | ||||
Gain on investments |
(558) | (159) | ||||
Changes in operating assets and liabilities: |
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(Increase) decrease in accounts receivable, net |
(1,771) | 4,393 | ||||
Decrease (increase) in prepaid taxes |
39 | (606) | ||||
Increase in other operating assets, net |
(298) | (594) | ||||
Decrease in accounts payable and other accrued liabilities |
(1,083) | (3,366) | ||||
Decrease in other operating liabilities, net |
(753) | (1,246) | ||||
Net cash provided by operating activities |
22,219 | 21,711 | ||||
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Cash flows from investing activities: |
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Acquisition of property, plant and equipment |
(6,845) | (6,224) | ||||
Proceeds from disposition of business |
10,089 |
- |
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Other investing activities, net |
551 | (467) | ||||
Net cash provided by (used in) investing activities |
3,795 | (6,691) | ||||
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Cash flows from financing activities: |
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Long-term borrowings - loan |
13,500 | 26,300 | ||||
Long-term borrowings - repayment |
(34,585) | (25,500) | ||||
Dividends paid to stockholders |
(7,933) | (13,237) | ||||
Other financing activities, net |
(417) | (462) | ||||
Net cash used in financing activities |
(29,435) | (12,899) | ||||
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Effects of foreign currency translation |
82 | (441) | ||||
Net (decrease) increase in cash and cash equivalents |
(3,339) | 1,680 | ||||
Opening balance - cash and cash equivalents |
15,314 | 6,761 | ||||
Ending balance - cash and cash equivalents |
$ |
11,975 |
$ |
8,441 | ||
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Accrued capital spending included in accounts payable and other accrued liabilities |
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$ |
477 |
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$ |
993 |
The accompanying notes are an integral part of these consolidated financial statements.
7
LANDAUER, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
June 30, 2016
(Dollars in Thousands)
(1)Basis of Presentation and Consolidation
As used herein, the terms “Company,” “Landauer,” “we,” “us,” and “our” refer collectively to Landauer, Inc. and its subsidiaries through which its various businesses are conducted.
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
The consolidated financial statements include the accounts of the Company, its subsidiaries and variable interest entities in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. Entities in which the Company does not have a controlling financial interest, but is considered to have significant influence, are accounted for on the equity method.
The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
We believe that we have included all normal recurring adjustments necessary for a fair presentation of the results for the interim period. Operating results for the three and nine month periods ended June 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2016.
These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015 (the “Form 10-K”) and other financial information filed with the Securities and Exchange Commission (the “SEC”). The September 30, 2015 balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP.
The accounting policies followed by the Company are set forth in the Form 10-K, and there have been no changes to the accounting policies for the nine month period ended June 30, 2016.
Disposition of Business
The Company divested its Medical Products business in May 2016 and received cash proceeds of approximately $10.1 million, net of cash assumed by the acquirer and net of cash paid for transaction expenses. The Company recognized a $3.9 million pre-tax gain on sale from the disposition of this business. The Company has evaluated whether this divestiture qualifies as a discontinued operation pursuant to FASB Accounting Standards Codification 205-20 “Discontinued Operations.” The Company has concluded that the divestiture of the Medical Products business does not represent a strategic shift and is not material to the Company’s financial results and is therefore not considered a discontinued operation.
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(2)Recent Accounting Pronouncements
Accounting Standards Not Yet Adopted
In May 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance for recognizing revenue from contracts with customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. In July 2015, the FASB deferred the effective date of the new revenue standard by one year. Public companies would now be required to adopt the new guidance for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The FASB decided to allow earlier adoption of the new revenue standard, but not earlier than the original effective date. This guidance is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity.
In June 2014, the FASB issued new guidance on accounting for share-based payments requiring a specific performance target to be achieved in order for employees to become eligible to vest in the awards when that performance target may be achieved after the requisite service period for the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period for which the requisite service has already been rendered. This guidance is effective for the Company in the first quarter of fiscal 2017. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity.
In April 2015, the FASB issued new guidance on the presentation of debt issuance costs. This update requires a company to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with the presentation of debt discounts. Currently, debt issuance costs are presented as a deferred asset. The recognition and measurement requirements will not change as a result of this guidance. The update requires retrospective application and represents a change in accounting principle. This guidance is effective for the Company in the first quarter of fiscal 2017, with early adoption permitted. The Company does not expect the adoption of this guidance will have a material impact on its results of operations, financial position and liquidity.
In July 2015, the FASB issued new guidance on simplifying the measurement of inventory. This update requires a company to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for the Company in the first quarter of fiscal 2018, and should be applied prospectively with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position and liquidity.
In November 2015, the FASB issued new guidance on the presentation of deferred income taxes. This update requires a company to present deferred tax liabilities and assets as noncurrent in a classified statement of financial position rather than the current requirement to separate deferred income tax liabilities and assets into current and noncurrent amounts. This guidance is effective for the Company in the first quarter of fiscal 2018, with early adoption permitted. The Company does not expect the adoption of this guidance will have a material impact on its results of operations, financial position and liquidity.
9
In February 2016, the FASB issued guidance on the accounting treatment for leases. This guidance will require all leases with durations greater than twelve months to be recognized on the balance sheet of the lessee. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. This guidance is effective for the Company in the first quarter of fiscal 2020, although early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity.
In March 2016, the FASB issued guidance on the accounting for equity method investments. This standard eliminates the requirement that when an existing cost method investment qualifies for the use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive income/(loss) (“AOCI”) will be recognized through earnings. The standard is effective for the Company in the first quarter of fiscal 2018, although early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity.
In March 2016, the FASB issued new guidance to improve the accounting for share-based payments. This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. The guidance also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for the Company in the first quarter of fiscal 2018, although early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity.
No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on the Consolidated Financial Statements.
(3)Fair Value Measurements
The Company estimates the fair value of assets and liabilities in accordance with the framework established by the authoritative guidance for fair value measurements. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety.
The three levels of the hierarchy are as follows:
· |
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. |
· |
Level 2 – Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. |
· |
Level 3 – Unobservable inputs for the asset or liability used to measure fair value that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. |
10
Financial assets measured at fair value on a recurring basis are summarized below:
|
||||||||
|
Fair Value Measurements at June 30, 2016 |
|||||||
(Dollars in Thousands) |
Level 1 |
Level 2 |
Level 3 |
|||||
Asset Category |
||||||||
Cash equivalents |
$ |
439 |
$ |
- |
$ |
- |
||
Mutual funds |
3,496 |
- |
- |
|||||
Available-for-sale securities |
- |
6 |
- |
|||||
Total financial assets at fair value |
$ |
3,935 |
$ |
6 |
$ |
- |
||
|
||||||||
|
Fair Value Measurements at September 30, 2015 |
|||||||
(Dollars in Thousands) |
Level 1 |
Level 2 |
Level 3 |
|||||
Asset Category |
||||||||
Cash equivalents |
$ |
272 |
$ |
- |
$ |
- |
||
Mutual funds |
3,237 |
- |
- |
|||||
Available-for-sale securities |
- |
1,763 |
- |
|||||
Total financial assets at fair value |
$ |
3,509 |
$ |
1,763 |
$ |
- |
Following is a description of each category in the fair value hierarchy and the financial assets and liabilities of the Company that were included in each category at June 30, 2016 and September 30, 2015, measured on a recurring basis.
The Level 1 financial assets were comprised of investments in trading securities, which are reported in other long-term assets. The investments are held in a Rabbi trust for benefits under the Company’s deferred compensation plan. Under the plan, participants designate investment options to serve as the basis for measurement of the notional value of their accounts. The investments include a money market fund and mutual funds that are publicly traded. The fair values of the shares or underlying securities of these funds are based on quoted market prices.
The Level 2 financial assets are long-term investments consisting primarily of fixed income mutual funds, classified as available-for-sale securities. These investments are reported in other long-term assets. The investments in fixed income mutual funds are valued based on the net asset value of the underlying securities as provided by the investment account manager. The investments are not restricted or subject to a lockup and may be redeemed on demand. Notice within a certain period of time prior to redemption is not required.
The Company’s long-term debt is classified as Level 2. The carrying amount of the Company’s long-term debt is the approximated fair value, as the stated interest rates were variable in relation to prevailing market rates.
The Company had no material assets or liabilities that were measured at fair value on a non-recurring basis during the nine months ended June 30, 2016 or fiscal year ended September 30, 2015. There were no transfers between fair value hierarchy levels during these periods.
11
(4)Income per Common Share
Basic net income per share was computed by dividing net income available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share was computed by dividing net income available to common stockholders for the period by the weighted average number of shares of common stock that would have been outstanding assuming dilution from stock-based compensation awards during the period.
The following table sets forth the computation of net income per share:
|
||||||||||||
|
Three Months Ended June 30, |
Nine Months Ended June 30, |
||||||||||
(Dollars in Thousands, Except per Share) |
2016 |
2015 |
2016 |
2015 |
||||||||
Basic Net Income per Share: |
||||||||||||
Net income attributed to Landauer, Inc. |
$ |
7,265 |
$ |
4,055 |
$ |
15,187 |
$ |
11,979 | ||||
Less: Income allocated to unvested restricted stock |
20 | 20 | 59 | 67 | ||||||||
Net income available to common stockholders |
$ |
7,245 |
$ |
4,035 |
$ |
15,128 |
$ |
11,912 | ||||
Basic weighted average shares outstanding |
9,531 | 9,509 | 9,523 | 9,476 | ||||||||
Net income per share - Basic |
$ |
0.76 |
$ |
0.42 |
$ |
1.59 |
$ |
1.26 | ||||
|
||||||||||||
Diluted Net Income per Share: |
||||||||||||
Net income attributed to Landauer, Inc. |
$ |
7,265 |
$ |
4,055 |
$ |
15,187 |
$ |
11,979 | ||||
Less: Income allocated to unvested restricted stock |
20 | 20 | 59 | 67 | ||||||||
Net income available to common stockholders |
$ |
7,245 |
$ |
4,035 |
$ |
15,128 |
$ |
11,912 | ||||
Basic weighted average shares outstanding |
9,531 | 9,509 | 9,523 | 9,476 | ||||||||
Effect of dilutive securities |
33 | 25 | 32 | 27 | ||||||||
Diluted weighted averages shares outstanding |
9,564 | 9,534 | 9,555 | 9,503 | ||||||||
Net income per share - Diluted |
$ |
0.76 |
$ |
0.42 |
$ |
1.58 |
$ |
1.25 | ||||
|
||||||||||||
Dividends declared per share |
$ |
0.275 |
$ |
0.275 |
$ |
0.83 |
$ |
1.100 |
On May 12, 2016, the Company declared a regular quarterly cash dividend in the amount of $0.275 per share for the third quarter of fiscal 2016. The dividends were paid on July 5, 2016 to shareholders of record as of June 17, 2016.
12
(5)Employee Benefit Plans
The components of net periodic benefit cost for pension and other benefits were as follows:
|
|||||||||||
Pension Benefits |
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||
(Dollars in Thousands) |
2016 |
2015 |
2016 |
2015 |
|||||||
Interest cost |
$ |
392 |
$ |
364 |
$ |
1,177 |
$ |
1,092 | |||
Expected return on plan assets |
(373) | (396) | (1,120) | (1,188) | |||||||
Amortization of net loss |
141 | 85 | 422 | 253 | |||||||
Net periodic benefit cost |
$ |
160 |
$ |
53 |
$ |
479 |
$ |
157 | |||
|
|||||||||||
Other Benefits |
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||
(Dollars in Thousands) |
2016 |
2015 |
2016 |
2015 |
|||||||
Service cost |
$ |
15 |
$ |
13 |
$ |
45 |
$ |
38 | |||
Interest cost |
10 | 8 | 29 | 24 | |||||||
Amortization of net gain |
(3) | (12) | (11) | (36) | |||||||
Net periodic benefit cost |
$ |
22 |
$ |
9 |
$ |
63 |
$ |
26 |
The Company, under the IRS minimum funding standards, has no required contributions to make to its defined benefit pension plan during fiscal 2016.
The Company sponsors a 401(k) retirement savings plan covering substantially all of the U.S. full-time employees in the Company’s Radiation Measurement segment as well as substantially all of the employees in the Company’s Medical Physics and Medical Products segments, which provides for certain employer matching contributions. The Company also maintains a supplemental defined contribution plan for certain executives, which allows participating executives to make voluntary deferrals and provides for employer contributions at the discretion of the Company. Amounts expensed for Company contributions under these plans during the three months ended June 30, 2016 and 2015 were $494 and $500, respectively. Amounts expensed for Company contributions under these plans during the nine months ended June 30, 2016 and 2015 were $1,412 and $1,349, respectively.
(6)Goodwill and Intangible Assets
Changes in the carrying amount of goodwill, by reportable segment, for the nine months ended
2016 were as follows:
|
||||||||||||
(Dollars in Thousands) |
Radiation Measurement |
Medical |
Medical |
Total |
||||||||
Balance as of September 30, 2015 |
||||||||||||
Goodwill |
$ |
11,002 |
$ |
22,611 |
$ |
65,527 |
$ |
99,140 | ||||
Accumulated impairment losses |
- |
- |
(64,068) | (64,068) | ||||||||
Balance as of September 30, 2015 |
$ |
11,002 |
$ |
22,611 |
$ |
1,459 |
$ |
35,072 | ||||
Effects of foreign currency - Goodwill |
91 |
- |
(784) | (693) | ||||||||
Effects of foreign currency - Accumulated impairment losses |
|
|
- |
|
|
- |
|
|
769 |
|
|
769 |
Decrease related to dispositions - Goodwill |
- |
- |
(64,743) | (64,743) | ||||||||
Decrease related to dispositions - Accumulated impairment losses |
|
|
- |
|
|
- |
|
|
63,299 |
|
|
63,299 |
Balance as of June 30, 2016 |
||||||||||||
Goodwill |
$ |
11,093 |
$ |
22,611 |
$ |
- |
$ |
33,704 | ||||
Accumulated impairment losses |
- |
- |
- |
- |
||||||||
Balance as of June 30, 2016 |
$ |
11,093 |
$ |
22,611 |
$ |
- |
$ |
33,704 |
13
Intangible assets consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016 |
||||||||||
(Dollars in Thousands) |
|
Gross Carrying Amount |
|
Accumulated Amortization |
|
Net Carrying Amount |
|
Accumulated Intangibles Impairment Charge |
||||
Customer lists |
|
$ |
16,917 |
|
$ |
10,145 |
|
$ |
6,772 |
|
$ |
- |
Trademarks and tradenames |
|
|
133 |
|
|
- |
|
|
133 |
|
|
- |
Licenses and patents |
|
|
3,757 |
|
|
825 |
|
|
2,932 |
|
|
- |
Other intangibles |
|
|
577 |
|
|
557 |
|
|
20 |
|
|
- |
Intangible assets |
|
$ |
21,384 |
|
$ |
11,527 |
|
$ |
9,857 |
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2015 |
||||||||||
(Dollars in Thousands) |
|
Gross Carrying Amount |
|
Accumulated Amortization |
|
Net Carrying Amount |
|
Accumulated Intangibles Impairment Charge |
||||
Customer lists |
|
$ |
43,131 |
|
$ |
33,716 |
|
$ |
9,415 |
|
$ |
18,657 |
Trademarks and tradenames |
|
|
2,181 |
|
|
2,051 |
|
|
130 |
|
|
1,498 |
Licenses and patents |
|
|
5,825 |
|
|
2,338 |
|
|
3,487 |
|
|
665 |
Other intangibles |
|
|
577 |
|
|
557 |
|
|
20 |
|
|
- |
Intangible assets |
|
$ |
51,714 |
|
$ |
38,662 |
|
$ |
13,052 |
|
$ |
20,820 |
Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Intangible asset amortization expense was $453 and $1,576 for the three and nine months ended June 30, 2016, respectively, and was $560 and $1,681 for the three and nine months ended June 30, 2015, respectively.
(7)Accumulated Other Comprehensive Loss
Accumulated elements of other comprehensive loss, net of tax, are included in the stockholders’ equity section of the condensed consolidated balance sheets. Changes in each component for the nine months ended June 30 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands) |
Foreign Currency Translation Adjustments |
|
Unrealized Gains and Losses on Available-for-Sale Securities |
|
Pension and Postretirement Plans |
|
Comprehensive (Loss) Income |
||||
Balance at September 30, 2015 |
$ |
(5,468) |
|
$ |
259 |
|
$ |
(8,532) |
|
$ |
(13,741) |
Other comprehensive (loss) income before reclassifications |
|
1,456 |
|
|
147 |
|
|
- |
|
|
1,603 |
Amounts reclassified from accumulated other comprehensive (loss) income |
|
- |
|
|
(334) |
|
|
257 |
|
|
(77) |
Net current period other comprehensive (loss) income |
|
1,456 |
|
|
(187) |
|
|
257 |
|
|
1,526 |
Balance at June 30, 2016 |
$ |
(4,012) |
|
$ |
72 |
|
$ |
(8,275) |
|
$ |
(12,215) |
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands) |
Foreign Currency Translation Adjustments |
|
Unrealized Gains and Losses on Available-for-Sale Securities |
|
Pension and Postretirement Plans |
|
Comprehensive (Loss) Income |
||||
Balance at September 30, 2014 |
$ |
(2,493) |
|
$ |
166 |
|
$ |
(7,821) |
|
$ |
(10,148) |
Other comprehensive (loss) income before reclassifications |
|
(3,478) |
|
|
151 |
|
|
- |
|
|
(3,327) |
Amounts reclassified from accumulated other comprehensive (loss) income |
|
- |
|
|
(108) |
|
|
137 |
|
|
29 |
Net current period other comprehensive (loss) income |
|
(3,478) |
|
|
43 |
|
|
137 |
|
|
(3,298) |
Balance at June 30, 2015 |
$ |
(5,971) |
|
$ |
209 |
|
$ |
(7,684) |
|
$ |
(13,446) |
The tables below present the impact on net income of significant amounts reclassified out of each component of accumulated other comprehensive loss:
|
|||||||||||
Pension and Postretirement Plans (1) |
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||
(Dollars in Thousands) |
2016 |
2015 |
2016 |
2015 |
|||||||
Amortization of net loss |
$ |
137 |
$ |
73 |
$ |
410 |
$ |
217 | |||
Total before tax |
137 | 73 | 410 | 217 | |||||||
Provision for income taxes |
52 | 27 | 153 | 80 | |||||||
Total net of tax |
$ |
85 |
$ |
46 |
$ |
257 |
$ |
137 |
(1)These accumulated other comprehensive loss components are included in the computation of net periodic benefit costs (refer to Note 5 of the Notes to Consolidated Financial Statements for additional details regarding employee benefit plans).
|
|||||||||||
Unrealized Gains and Losses on Available-for-Sale Securities |
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||
(Dollars in Thousands) |
2016 |
2015 |
2016 |
2015 |
|||||||
Realized gains on available-for-sale securities into earnings (1) |
$ |
(288) |
|
$ |
- |
|
$ |
(393) |
|
$ |
(99) |
Total before tax |
(288) |
- |
(393) | (99) | |||||||
Provision for income taxes (2) |
(43) | 9 | (59) | 9 | |||||||
Total net of tax |
$ |
(245) |
$ |
9 |
$ |
(334) |
$ |
(108) |
(1)This amount is reported in Interest expense, net on the Consolidated Statements of Operations
(2)This amount is reported in Income tax expense on the Consolidated Statements of Operations
15
(8)Income Taxes
The effective tax rates for the three months ended June 30, 2016 and 2015 were 31.3% and 10.4%, respectively. The increase in the effective tax rate was primarily due to an overall increase in quarterly pre-tax book income relating to the sale of the Medical Products business which decreased the rate benefit for the realization of an unrecognized tax benefit. Also driving the rate increase was the mix of earnings between taxing jurisdictions. The effective tax rates for the nine months ended June 30, 2016 and 2015 were 31.2% and 21.0%, respectively. The increase in the effective tax rate was primarily due to higher permanent differences related to foreign dividends, the mix of earnings between jurisdictions with differing tax rates and increased pre-tax book income relating to the sale of the Medical Products business. The Company believes it is reasonably possible that $698 of unrecognized tax benefits will be realized in fiscal year 2017.
The May 2016 sale of the Medical Products business, comprised of IZI Medical Products, LLC (“IZI”) and Ilumark GmbH (“Ilumark”), resulted in an ordinary tax loss on the sale of IZI and a capital tax loss on the sale of Ilumark. The ordinary loss on IZI is largely driven by the loss on disposal of intangibles, which converted into a net operating loss carryforward of approximately $50.0 to $60.0 million ($17.5 to $21.0 million tax effected). The Company expects to fully utilize the net operating loss as an offset to future ordinary income. The sale of Ilumark generated an estimated capital loss carryforward of approximately $600 ($210 net of tax) which can be offset against future capital gains. The Company does not expect to have any significant capital gains in the next five years, the carryforward period for capital losses, and has recorded a valuation allowance through its third quarter of fiscal 2016 annual estimated tax rate.
(9)Segment Information
The Company is organized into three reportable business segments: Radiation Measurement, Medical Physics and Medical Products. As disclosed in Note 1 to the Consolidated Financial Statements, Medical Products was divested in May 2016 which resulted in a reduction in revenues and operating income for the three and nine month periods ended June 30, 2016 and the elimination of assets as of June 30, 2016 for the reportable segment. These segments reflect the manner in which the Company’s businesses are currently managed and represent an aggregation of services and products based on type of customer and how the businesses are marketed. For more information regarding the nature of the Company’s services and products, see Note 16 of the Notes to Consolidated Financial Statements in the Form 10-K.
The following tables summarize financial information for each reportable segment:
|
||||||||||||
|
Three Months Ended June 30, |
Nine Months Ended June 30, |
||||||||||
(Unaudited, Dollars in Thousands) |
2016 |
2015 |
2016 |
2015 |
||||||||
Revenues by segment: |
||||||||||||
Radiation Measurement |
$ |
27,492 |
$ |
24,143 |
$ |
77,716 |
$ |
77,880 | ||||
Medical Physics |
9,562 | 8,926 | 28,948 | 25,971 | ||||||||
Medical Products |
800 | 2,398 | 5,802 | 7,302 | ||||||||
Consolidated revenues |
$ |
37,854 |
$ |
35,467 |
$ |
112,466 |
$ |
111,153 | ||||
|
||||||||||||
|
Three Months Ended June 30, |
Nine Months Ended June 30, |
||||||||||
(Unaudited, Dollars in Thousands) |
2016 |
2015 |
2016 |
2015 |
||||||||
Operating income (loss) by segment: |
||||||||||||
Radiation Measurement |
$ |
10,294 |
$ |
7,604 |
$ |
29,161 |
$ |
26,402 | ||||
Medical Physics |
756 | 1,143 | 2,452 | 2,082 | ||||||||
Medical Products |
141 | 375 | 1,063 | 953 | ||||||||
Corporate |
(3,478) | (4,011) | (11,494) | (12,555) | ||||||||
Consolidated operating income |
$ |
7,713 |
$ |
5,111 |
$ |
21,182 |
$ |
16,882 |
16
(Dollars in Thousands) |
|
June 30, 2016 |
|
September 30, 2015 |
||
Segment assets: |
||||||
Radiation Measurement |
$ |
161,305 |
$ |
142,850 | ||
Medical Physics |
46,241 | 43,677 | ||||
Medical Products |
- |
48,308 | ||||
Eliminations |
(12,876) | (26,091) | ||||
Consolidated assets |
$ |
194,670 |
$ |
208,744 |
(10)Related Party Transactions
The Company has a minority interest in Yamasato, Fujiwara, Higa & Associates, Inc. doing business as Aquila. The Company provides dosimetry parts to Aquila for its military contract. The Company also has a 50% equity interest in Nagase-Landauer, Ltd. (“Nagase”), a radiation measurement company in Japan.
The sales to and purchases from Aquila were as follows:
|
||||||||||||
|
Three Months Ended June 30, |
Nine Months Ended June 30, |
||||||||||
(Dollars in Thousands) |
2016 |
2015 |
2016 |
2015 |
||||||||
Sales to Aquila |
$ |
2,653 |
$ |
1 |
$ |
3,067 |
$ |
3,674 | ||||
Purchases from Aquila |
201 | 165 | 405 | 196 |
Balance sheet items associated with Aquila were as follows:
|
||||||
(Dollars in Thousands) |
|
June 30, 2016 |
|
September 30, 2015 |
||
Amounts in accounts receivable |
$ |
4,318 |
$ |
2,795 | ||
Amounts in accounts payable |
492 | 284 |
The sales to and purchases from Nagase were as follows:
|
||||||||||||
|
Three Months Ended June 30, |
Nine Months Ended June 30, |
||||||||||
(Dollars in Thousands) |
2016 |
2015 |
2016 |
2015 |
||||||||
Sales to Nagase |
$ |
1,180 |
$ |
169 |
$ |
3,474 |
$ |
924 | ||||
Purchases from Nagase |
123 | 472 | 817 | 934 |
Balance sheet items associated with Nagase were as follows:
|
||||||
(Dollars in Thousands) |
|
June 30, 2016 |
|
September 30, 2015 |
||
Amounts in accounts receivable |
$ |
428 |
$ |
769 | ||
Amounts in accounts payable |
11 | 33 |
17
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the Company’s unaudited consolidated financial condition and results of operations should be read in conjunction with the annual audited consolidated financial statements and related notes thereto included in the Company’s Form 10-K. The following discussion includes forward-looking statements that involve certain risks and uncertainties. For additional information regarding forward-looking statements and risk factors, see “Forward-Looking Statements” herein and Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015.
The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Critical accounting policies are those that are most important to the portrayal of a company’s financial condition and results of operations, and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company bases its estimates, judgments and assumptions on historical experience and other relevant factors that are believed to be reasonable under the circumstances. In any given reporting period, the Company’s actual results may differ from the estimates, judgments and assumptions used in preparing the consolidated financial statements.
Results of Operations
Comparison of the third fiscal quarter ended June 30, 2016 and the third fiscal quarter ended June 30, 2015
Revenues for the third fiscal quarter of 2016 were $37.9 million, an increase of $2.4 million, or 6.8%, compared to revenues of $35.5 million for the third fiscal quarter of 2015. Revenues in the Radiation Measurement segment increased $3.4 million, which was primarily due to product sales to the military and the Company’s joint venture in Japan. Unfavorable foreign currency translation rates partially reduced revenues by $0.2 million. Revenues in the Medical Physics segment increased $0.7 million, due to increased imaging services. Revenues in the Medical Products segment decreased $1.6 million due to the divestiture of this business in May 2016.
Gross profit was 51.6% for the third fiscal quarter of 2016, compared with 52.6% for the third fiscal quarter of 2015. Gross profit decreased for the third fiscal quarter of 2016 as compared to the third fiscal quarter of 2015 due to an increase in personnel expenses in the Medical Physics segment.
Selling, general and administrative expenses for the third fiscal quarter of 2016 were $11.8 million, a decrease of $1.7 million, or 12.6%, compared with $13.5 million for the third fiscal quarter of 2015. Operating expenses in Corporate and the Radiation Measurement segment decreased $1.2 million primarily due to lower professional fees and due to the reduction in expenses resulting from the Radon divestiture during fiscal 2015. In addition, operating expenses in the Medical Products segment decreased $0.7 million due to the divestiture of the business in May 2016.
Operating income for the third fiscal quarter of 2016 was $7.7 million, compared with operating income of $5.1 million for the third fiscal quarter of 2015. Operating income increased due to gross profit on the higher product sales and due to the decrease in selling, general and administrative expenses.
Other income for the third fiscal quarter of 2016 includes a $3.9 million pre-tax gain on sale of the Medical Products business that was divested in May 2016 for net cash proceeds of $10.1 million.
18
The effective tax rates for the third fiscal quarter of 2016 and 2015 were 31.3% and 10.4%, respectively. The increase in the effective tax rate was primarily due to an overall increase in quarterly pre-tax book income relating to the sale of the Medical Products business which decreased the rate benefit for the realization of an unrecognized tax benefit. Also driving the rate was the mix of earnings between taxing jurisdictions.
Net income attributed to Landauer for the third fiscal quarter of 2016 was $7.3 million, compared with net income of $4.1 million in the third fiscal quarter of 2015. The increase in net income was driven by the gain on sale of the Medical Products business and stronger operating margins, partially offset by a higher effective tax rate.
Radiation Measurement Segment
Radiation Measurement revenues for the third fiscal quarter of 2016 were $27.5 million, an increase of $3.4 million, or 14.1%, compared with $24.1 million for the third fiscal quarter of 2015. During the third fiscal quarter of 2016, the Company was awarded a military order from the National Guard of the United States for the Radwatch personal in-field radiation monitoring system. Approximately $2.5 million of the increase in revenues resulted from the first shipment of products for the National Guard order and $0.8 million of the increase resulted from higher product sales to the Company’s joint venture in Japan. The growth in international revenues substantially offset the $0.8 million reduction in revenues resulting from the Radon business that was divested in September 2015.
Operating income for the third fiscal quarter of 2016 increased to $10.3 million from $7.6 million for the third fiscal quarter of 2015 due to the gross profit on the increased product sales and due to lower operating expenses. Personnel expenses have decreased as a result of the management restructuring in the fourth fiscal quarter of 2015.
Medical Physics Segment
Medical Physics revenues for the third fiscal quarter of 2016 were $9.6 million, an increase of $0.7 million, or 7.9%, compared with $8.9 million for the third fiscal quarter of 2015. Imaging services revenue increased by $0.5 million, or 19.2%, driven by higher demand for the Company’s solutions for The Joint Commission’s new Diagnostic Imaging requirements that became effective for hospitals and ambulatory care centers on July 1, 2015.
Operating income for the third fiscal quarter of 2016 was $0.8 million, compared to $1.1 million for the third fiscal quarter of 2015. The decrease in operating income was primarily due to an increase in personnel expenses.
Medical Products Segment
Medical Products revenues decreased to $0.8 million for the third fiscal quarter of 2016 from $2.4 million for the third fiscal quarter of 2015 as a result of the divestiture that occurred in May 2016.
Medical Products operating income decreased to $0.1 million for the third fiscal quarter of 2016 from $0.4 million for the third fiscal quarter of 2015 due to the May 2016 divestiture.
Corporate Selling, General and Administrative Expenses
Corporate selling, general and administrative expenses for the third fiscal quarter of 2016 were $3.5 million, a decrease of $0.5 million, or 12.5%, compared to $4.0 million for the third fiscal quarter of 2015. The decrease was due to lower professional fees.
19
Comparison of the nine months ended June 30, 2016 and the nine months ended June 30, 2015
Revenues for the first nine months of fiscal 2016 were $112.5 million, an increase of $1.3 million, or 1.2%, compared to revenues of $111.2 million for the first nine months of fiscal 2015. Revenues in the Radiation Measurement segment decreased $0.2 million, which was primarily due to the Radon business that was divested in September 2015, resulting in a $3.9 million reduction in revenues. In addition, unfavorable foreign currency translation rates reduced revenues by $2.0 million. Domestic Radiation Measurement services revenues increased 2.5% and product sales to the Company’s joint venture in Japan increased $2.4 million, partially offsetting the impact of the Radon business divestiture and the foreign currency rates. Revenues in the Medical Physics segment increased $2.9 million, due primarily to increased imaging services. Revenues in the Medical Products segment decreased $1.5 million due to the divestiture of this business during May 2016.
Gross profit was 51.4% for the first nine months of fiscal 2016, compared with 52.2% for the first nine months of fiscal 2015. Gross profits in the Radiation Measurement segment have increased to 62.1% for the first nine months of fiscal 2016 from 61.5% for the first nine months of fiscal 2015. However, consolidated gross profits have decreased due to the growth in Medical Physics revenues which realize lower gross profits than Radiation Measurement.
Selling, general and administrative expenses for the first nine months of fiscal 2016 were $36.6 million, a decrease of $4.5 million, or 10.9%, compared with $41.1 million for the first nine months of fiscal 2015. Operating expenses in Corporate and the Radiation Measurement segment decreased $3.5 million primarily due to professional fees and due to the reduction in expenses resulting from the Radon business divestiture. Operating expenses in the Medical Products segment decreased $0.8 million due to the divestiture of this business during May 2016.
Operating income for the first nine months of fiscal 2016 was $21.2 million, compared with operating income of $16.9 million for the first nine months of fiscal 2015. Operating income increased due to the $4.5 million decrease in selling, general and administrative expenses.
Equity in income of joint ventures for the first nine months of fiscal 2016 was $0.8 million compared with $1.8 million for the first nine months of fiscal 2015. Product sales by our joint venture, Aquila, were impacted by the timing of military sales. In addition, equity in income of joint ventures decreased due to lower profit on product sales to our joint venture in Japan.
Other income for the third fiscal quarter of 2016 includes a $3.9 million pre-tax gain on sale of the Medical Products business that was divested in May 2016 for net cash proceeds of $10.1 million.
The effective tax rates for the first nine months of fiscal 2016 and 2015 were 31.2% and 21.0%, respectively. The increase in the effective tax rate was primarily due to higher permanent differences related to foreign dividends, the mix of earnings between jurisdictions with differing tax rates and increased pre-tax book income relating to the sale of the Medical Products business.
Net income attributed to Landauer for the first nine months of fiscal 2016 was $15.2 million, an increase of $3.2 million, or 26.7%, from $12.0 million in the first nine months of fiscal 2015. The increase in net income was driven by the gain on sale of the Medical Products business and stronger operating margins, partially offset by a higher effective tax rate.
20
Radiation Measurement Segment
Radiation Measurement revenues for the first nine months of fiscal 2016 were $77.7 million, a decrease of $0.2 million, or 0.3%, compared with $77.9 million for the first nine months of fiscal 2015. The decrease in revenues was primarily due to the Radon business that was divested in September 2015, resulting in a $3.9 million reduction in revenues. In addition, unfavorable foreign currency translation rates reduced revenues by $2.0 million. Domestic Radiation Measurement services revenues increased 2.5% and product sales to the Company’s joint venture in Japan increased $2.4 million, partially offsetting the impact of the Radon business divestiture and the foreign currency rates.
Operating income for the first nine months of fiscal 2016 was $29.2 million compared with operating income of $26.4 million for the first nine months of fiscal 2015. Operating income increased due to lower selling, general and administrative expenses.
Medical Physics Segment
Medical Physics revenues for the first nine months of fiscal 2016 were $28.9 million, an increase of $2.9 million, or 11.2%, compared with $26.0 million for the first nine months of fiscal 2015. Imaging services revenue increased by $2.0 million, or 27.4%, driven by higher demand for the Company’s solutions for The Joint Commission’s new Diagnostic Imaging requirements that became effective for hospitals and ambulatory care centers on July 1, 2015.
Operating income for the first nine months of fiscal 2016 was $2.5 million, compared to $2.1 million for first nine months of fiscal 2015. The increase in operating income was primarily due to the gross profit on the increased sales.
Medical Products Segment
Medical Products revenues decreased to $5.8 million for the first nine months of fiscal 2016 from $7.3 million for the first nine months of fiscal 2015 as a result of the divestiture that occurred in May 2016.
Medical Products had operating income of $1.1 million for the first nine months of fiscal 2016 versus operating income of $0.9 million for the first nine months of fiscal 2015.
Corporate Selling, General and Administrative Expenses
Corporate selling, general and administrative expenses for the first nine months of fiscal 2016 were $11.5 million, a decrease of $1.1 million, or 8.7%, compared to $12.6 million for the first nine months of fiscal 2015. The decrease was due to lower professional fees, including audit and legal fees.
21
Liquidity and Capital Resources
The Company’s principal source of liquidity is operating cash flows supplemented by borrowings under its credit facility. The Company’s cash-generating capability is one of its fundamental strengths and provides it with substantial financial flexibility in meeting operating and investing needs.
The following table sets forth a summary of the Company’s cash flows:
|
|||||
|
Nine Months Ended June 30, |
||||
(Dollars in Thousands) |
2016 |
2015 |
|||
Net cash provided by (used in): |
|||||
Operating activities |
$ |
22,219 |
$ |
21,711 | |
Investing activities |
3,795 | (6,691) | |||
Financing activities |
(29,435) | (12,899) | |||
Effect of foreign currency translation |
82 | (441) | |||
Net (decrease) increase in cash and cash equivalents |
$ |
(3,339) |
$ |
1,680 |
Cash provided by operating activities for the first nine months of fiscal 2016 was $22.2 million, an increase of $0.5 million over the same fiscal period in 2015. The increase was primarily due to lower spending on selling, general and administrative expenses.
Cash provided by investing activities for the first nine months of fiscal 2016 was $3.8 million, an increase of $10.5 million over the same fiscal period of 2015. The increase was primarily due to the proceeds received of $10.1 million from the disposition of the Medical Products business.
Cash used in financing activities for the first nine months of fiscal 2016 was $29.4 million, an increase of $16.5 million over the same fiscal period of 2015. The increase was primarily due to higher net repayments of debt facilitated by the cash proceeds received from the disposition of the Medical Products and Radon businesses. In addition, the Company expects to pay down debt over the next four to five years as it realizes its $17.5 million to $21.0 million cash tax benefit resulting from the disposal of the Medical Products business. As of June 30, 2016, the Company had $62.7 million of unused availability under its current $175.0 million credit facility, which the Company believes provides adequate liquidity to meet its current and anticipated obligations. During the first nine months of fiscal 2016 and 2015, the Company paid cash dividends of $7.9 million and $13.2 million, respectively. The Company reduced its dividend payment from $0.55 per share to $0.275 per share during the third fiscal quarter of 2015.
The Company expects to meet short-term liquidity requirements (including capital expenditures) through net cash from operating activities and cash on hand. The Company was in compliance with all covenants under the credit facility as of June 30, 2016. The Company intends to use excess cash to continue to pay down the long-term debt balance. The debt facility expires August 2, 2018.
Recent Accounting Pronouncements
See Note 2 to the Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q.
Contractual Obligations
There have been no material changes, outside of the ordinary course of business, in the Company’s outstanding contractual obligations since the end of fiscal year 2015 through June 30, 2016.
22
Forward-Looking Statements
Certain matters contained in this report constitute forward-looking statements that are based on certain assumptions and involve certain risks and uncertainties. These include the following, without limitation: assumptions, risks and uncertainties associated with the Company’s future performance; the Company’s development and introduction of new technologies in general; the ability to protect and utilize the Company’s intellectual property; events or circumstances which result in an impairment of assets, including but not limited to, goodwill and identifiable intangible assets; continued customer acceptance of the InLight technology; the adaptability of optically stimulated luminescence (“OSL”) technology to new platforms and formats; military and other government funding for the purchase of certain of the Company’s equipment and services; the impact on sales and pricing of certain customer group purchasing arrangements; changes in spending or reimbursement for medical products or services; the costs associated with the Company’s research and business development efforts; the usefulness of older technologies and related licenses and intellectual property; the effectiveness of and costs associated with the Company’s IT platform enhancements and investments in cyber security enhancements; the anticipated results of operations of the Company and its subsidiaries or joint ventures; valuation of the Company’s long-lived assets or reporting units relative to future cash flows; changes in pricing of services and products; changes in postal and delivery practices; the Company’s business plans; anticipated revenue and cost growth; the ability to integrate the operations of acquired businesses and to realize the expected benefits of acquisitions; the risks associated with conducting business internationally; costs incurred for potential acquisitions or similar transactions; other anticipated financial events; the effects of changing economic and competitive conditions, including instability in capital markets which could impact availability of short and long-term financing; the timing and extent of changes in interest rates; the level of borrowings; foreign exchange rates; government regulations; accreditation requirements; changes in the trading market that affect the costs of obligations under the Company’s benefit plans; and pending accounting pronouncements. These assumptions may not materialize to the extent assumed, and risks and uncertainties may cause actual results to be different from what is anticipated today. These risks and uncertainties also may result in changes to the Company’s business plans and prospects, and could create the need from time to time to write down the value of assets or otherwise cause the Company to incur unanticipated expenses. Additional information may be obtained by reviewing the information set forth in Item 1A. “Risk Factors” and Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” of the Company’s Annual Report on Form 10-K for the year ended September 30, 2015 and information contained in other reports filed by the Company, from time to time, with the SEC. The Company does not undertake, and expressly disclaims, any duty to update any forward-looking statement whether as a result of new information, future events or changes in the Company’s expectations, except as required by law.
Item 3.quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk, including changes in foreign currency exchange rates and is subject to interest rate risk related to borrowings under its existing credit facility. These risks are set forth in Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015. The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year through June 30, 2016.
23
Item 4.Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of June 30, 2016, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal executive officer and principal financial officer, respectively), of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended.
Based upon that evaluation, our CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as a result of the previously reported material weaknesses that existed in our internal control over financial reporting described below.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In prior filings, we identified and reported material weaknesses in the Company’s internal control over financial reporting, which still exist as of June 30, 2016, due to continued remediation and testing procedures. In response to the identified material weaknesses, our management, with oversight from our audit committee, has dedicated significant resources to improve our control environment and to remedy the identified material weaknesses.
We believe that we have designed and implemented the appropriate controls to fully remediate the remaining material weaknesses. However, the Company is required to demonstrate the effectiveness of the new processes for a sufficient period of time. Therefore, until the actions set forth below, including the efforts to implement and test the necessary control activities we identify, are fully completed, the following material weaknesses will continue to exist.
Control Environment - We did not maintain an effective control environment as we did not maintain a sufficient complement of personnel with an appropriate level of knowledge of accounting, experience and training commensurate with our financial reporting requirements. Additionally, we did not consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives. These material weaknesses contributed to the following control deficiencies, each of which is considered to be a material weakness:
· |
IT general controls and segregation of duties: We did not design and maintain processes and procedures that restrict access to key financial systems and records to appropriate users and evaluate whether appropriate segregation of duties is maintained. Specifically, certain personnel had access to financial application, programs and data beyond that needed to perform their individual job responsibilities without independent monitoring. With the IT general controls environment ineffective, manual reviews of the completeness and accuracy of reports supporting transaction processing (and, correspondingly, supporting the controls over transaction processing) are not sufficiently designed and implemented. |
24
Remediation Activities: We have improved our IT general controls and segregation of duties. We have adopted a new global IT general controls framework, and have implemented this new framework domestically. We have begun to implement this new framework in our European entities. In addition, we have removed access to financial application programs and data beyond that needed for certain personnel to perform their individual job responsibilities.
Risk Assessment - We did not design and implement effective risk assessment with regard to our processes and procedures commensurate with our financial reporting requirements. Specifically, we did not design and implement controls in response to risks of misstatement of the financial statements. This material weakness contributed to the following control deficiencies, each of which is considered to be a material weakness:
· |
Revenue: We did not maintain controls that were adequately designed, documented and executed to support the accurate and timely reporting of revenue and the related receivables. Specifically, we did not design and maintain effective controls to evaluate whether revenue was recognized in accordance with agreed-upon terms and conditions, including customer order entry, pricing, customer acceptance provisions, and recorded in the proper period. |
Remediation Activities: We have improved our controls to ensure the accurate and timely reporting of revenue and the related receivables, including the following:
· |
Implemented procedures to identify and evaluate customer contracts with nonstandard terms; |
· |
Implemented quarterly processes to ensure the proper cut-off of revenue recognition; |
· |
Implemented standard terms and conditions; |
· |
Designed and implemented pricing compliance templates for custom quotes and new customers; |
· |
Enhanced procedures to comply with pricing pursuant to group purchasing organization contracts; |
· |
Established a methodology and process to estimate a reserve for credit memos; and |
· |
Enhanced calculations to improve the accuracy of deferred revenue estimates. |
We commenced a formal risk assessment during fiscal 2015 to assess risks and identify, design, implement, and re-evaluate our control activities and completed the risk assessment as of September 30, 2015.
The risk assessment and revenue material weaknesses also resulted in revisions to second and third quarter fiscal 2014, annual fiscal 2014 and first quarter fiscal 2015 financial statement disclosures related to sales to its equity investees. Management has determined that these revisions, first disclosed in the second quarter of fiscal 2015, are additional effects of the material weaknesses related to risk assessment and revenue described above.
Notwithstanding the identified material weaknesses, management believes the consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in conformity with U.S. GAAP.
Changes in Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting that occurred during the third quarter of fiscal 2016 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
25
PART II OTHER INFORMATION
The Company is a party, from time to time, to various legal proceedings, lawsuits and other claims arising in the ordinary course of its business. The Company does not believe that any such litigation pending as of June 30, 2016, if adversely determined, would have a material effect on its business, financial position, results of operations, or cash flows.
Information regarding risk factors is set forth in Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015. The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year through June 30, 2016
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
The Company’s purchases of its equity securities from the end of the preceding fiscal year through June 30, 2016 includes the deemed surrender of existing shares of Landauer common stock to the Company by stock-based compensation plan participants to satisfy the exercise price or tax liability of employee stock awards at the time of exercise or vesting. These surrendered shares are not part of any publicly announced share repurchase program.
Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs |
|||||
October 1 - October 31, 2015 |
608 |
$ |
39.58 |
- |
- |
||||
November 1 - November 30, 2015 |
278 | 40.83 |
- |
- |
|||||
December 1 - December 31, 2015 |
433 | 37.01 |
- |
- |
|||||
Quarter ended December 31, 2015 |
1,319 |
$ |
39.00 |
- |
- |
||||
January 1 - January 31, 2016 |
- |
$ |
- |
- |
- |
||||
February 1 - February 29, 2016 |
342 | 29.12 |
- |
- |
|||||
March 1 - March 31, 2016 |
- |
- |
- |
- |
|||||
Quarter ended March 31, 2016 |
342 |
$ |
29.12 |
- |
- |
||||
April 1 - April 30, 2016 |
1,157 |
$ |
33.35 |
- |
- |
||||
May 1 - May 31, 2016 |
1,206 | 35.05 |
- |
- |
|||||
June 1 - June 30, 2016 |
- |
- |
- |
- |
|||||
Quarter ended June 30, 2016 |
2,363 |
$ |
34.22 |
- |
- |
Item 3.Defaults Upon Senior Securities
Not Applicable
Item 4.Mine Safety Disclosures
Not Applicable
Not Applicable
26
31.1* |
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Certification of Michael P. Kaminski, President and Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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31.2* |
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Certification of Daniel J. Fujii, Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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32.1* |
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Certification of Michael P. Kaminski, President and Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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32.2* |
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Certification of Daniel J. Fujii, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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101.INS** |
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XBRL INSTANCE FILE |
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101.SCH** |
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XBRL SCHEMA FILE |
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101.CAL** |
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XBRL CALCULATION FILE |
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101.DEF** |
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XBRL DEFINITION FILE |
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101.LAB** |
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XBRL LABEL FILE |
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101.PRE** |
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XBRL PRESENTATION FILE |
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* |
Filed herewith |
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** |
Furnished with the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016. |
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27
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.
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LANDAUER, INC. |
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(Registrant) |
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Date: August 8, 2016 |
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/s/ Daniel J. Fujii |
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Daniel J. Fujii |
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Chief Financial Officer |
28
CERTIFICATION
I, Michael P. Kaminski, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of Landauer, Inc. (the “Registrant”); |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. |
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d)Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5. |
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
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Date: August 8, 2016 |
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/s/ Michael P. Kaminski |
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Michael P. Kaminski |
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President and Chief Executive Officer |
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CERTIFICATION
I, Daniel J. Fujii, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of Landauer, Inc. (the “Registrant”); |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. |
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
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Date: August 8, 2016 |
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/s/ Daniel J. Fujii |
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Daniel J. Fujii |
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Chief Financial Officer |
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Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Landauer, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael P. Kaminski, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
i. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
ii.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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Date: August 8, 2016 |
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/s/ Michael P. Kaminski |
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Michael P. Kaminski |
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President and Chief Executive Officer |
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Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Landauer, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel J. Fujii, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
i.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
ii.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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Date: August 8, 2016 |
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/s/ Daniel J. Fujii |
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Daniel J. Fujii |
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Chief Financial Officer |
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Document And Entity Information - shares |
9 Months Ended | |
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Jun. 30, 2016 |
Aug. 04, 2016 |
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Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2016 | |
Entity Registrant Name | LANDAUER INC | |
Trading Symbol | ldr | |
Entity Central Index Key | 0000825410 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 9,603,864 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Sep. 30, 2015 |
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Consolidated Balance Sheets [Abstract] | ||
Receivables, allowances | $ 1,609 | $ 1,556 |
Intangible assets, accumulated amortization | 11,527 | 38,662 |
Dosimetry devices, accumulated depreciation | $ 6,029 | $ 5,282 |
Preferred stock, par value | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 9,731,170 | 9,641,532 |
Common stock, shares outstanding | 9,731,170 | 9,641,532 |
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Revenues: | ||||
Service revenues | $ 32,344 | $ 31,924 | $ 97,051 | $ 96,223 |
Product revenues | 5,510 | 3,543 | 15,415 | 14,930 |
Total revenues | 37,854 | 35,467 | 112,466 | 111,153 |
Costs and expenses: | ||||
Service costs | 16,032 | 15,531 | 48,708 | 47,323 |
Product costs | 2,304 | 1,290 | 5,970 | 5,860 |
Total cost of sales | 18,336 | 16,821 | 54,678 | 53,183 |
Gross profit | 19,518 | 18,646 | 57,788 | 57,970 |
Selling, general, and administrative | 11,805 | 13,535 | 36,606 | 41,088 |
Operating income | 7,713 | 5,111 | 21,182 | 16,882 |
Equity in income of joint ventures | 244 | 428 | 797 | 1,804 |
Interest expense, net | (703) | (1,080) | (2,765) | (2,997) |
Other (expense) income, net | 3,550 | 158 | 3,493 | (76) |
Income before taxes | 10,804 | 4,617 | 22,707 | 15,613 |
Income tax expense | 3,382 | 481 | 7,074 | 3,271 |
Net income | 7,422 | 4,136 | 15,633 | 12,342 |
Less: Net income attributed to noncontrolling interest | 157 | 81 | 446 | 363 |
Net income attributed to Landauer, Inc. | $ 7,265 | $ 4,055 | $ 15,187 | $ 11,979 |
Net income per share attributable to Landauer, Inc. shareholders: | ||||
Basic | $ 0.76 | $ 0.42 | $ 1.59 | $ 1.26 |
Weighted average basic shares outstanding | 9,531 | 9,509 | 9,523 | 9,476 |
Diluted | $ 0.76 | $ 0.42 | $ 1.58 | $ 1.25 |
Weighted average diluted shares outstanding | 9,564 | 9,534 | 9,555 | 9,503 |
Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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Consolidated Statements Of Comprehensive Income [Abstract] | ||||
Defined benefit pension and postretirement plans activity, tax | $ 52 | $ 27 | $ 153 | $ 80 |
Unrealized gains/(losses) on available-for-sale securities, tax | 35 | 9 | 34 | 9 |
Foreign currency translation adjustment, tax | $ 427 | $ (184) | $ 784 | $ 1,873 |
Consolidated Statement Of Stockholders' Equity - 9 months ended Jun. 30, 2016 - USD ($) $ in Thousands |
Common Stock [Member] |
Additional Paid In Capital [Member] |
Accumulated Other Comprehensive (Loss) Income [Member] |
(Accumulated Deficit) Retained Earnings [Member] |
Non-Controlling Interest [Member] |
Total |
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Balance at Sep. 30, 2015 | $ 964 | $ 41,531 | $ (13,741) | $ (17,559) | $ 1,132 | $ 12,327 |
Balance, shares at Sep. 30, 2015 | 9,641,532 | 9,641,532 | ||||
Stock-based compensation arrangements | $ 9 | 1,789 | $ 1,798 | |||
Stock-based compensation arrangements, shares | 89,638 | |||||
Dividends | (8,029) | (414) | (8,443) | |||
Net income | 15,187 | 446 | 15,633 | |||
Foreign currency translation adjustment, net of tax | 1,456 | 27 | 1,483 | |||
Unrealized gains (losses) on available-for-sale securities, net of tax | (187) | (187) | ||||
Defined benefit pension and postretirement plans activity, net of taxes | 257 | 257 | ||||
Balance at Jun. 30, 2016 | $ 973 | $ 43,320 | $ (12,215) | $ (10,401) | $ 1,191 | $ 22,868 |
Balance, shares at Jun. 30, 2016 | 9,731,170 | 9,731,170 |
Basis Of Presentation And Consolidation |
9 Months Ended |
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Jun. 30, 2016 | |
Basis Of Presentation And Consolidation [Abstract] | |
Basis Of Presentation And Consolidation | (1)Basis of Presentation and Consolidation As used herein, the terms “Company,” “Landauer,” “we,” “us,” and “our” refer collectively to Landauer, Inc. and its subsidiaries through which its various businesses are conducted. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The consolidated financial statements include the accounts of the Company, its subsidiaries and variable interest entities in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. Entities in which the Company does not have a controlling financial interest, but is considered to have significant influence, are accounted for on the equity method. The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We believe that we have included all normal recurring adjustments necessary for a fair presentation of the results for the interim period. Operating results for the three and nine month periods ended June 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2016. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015 (the “Form 10-K”) and other financial information filed with the Securities and Exchange Commission (the “SEC”). The September 30, 2015 balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The accounting policies followed by the Company are set forth in the Form 10-K, and there have been no changes to the accounting policies for the nine month period ended June 30, 2016. Disposition of Business The Company divested its Medical Products business in May 2016 and received cash proceeds of approximately $10.1 million, net of cash assumed by the acquirer and net of cash paid for transaction expenses. The Company recognized a $3.9 million pre-tax gain on sale from the disposition of this business. The Company has evaluated whether this divestiture qualifies as a discontinued operation pursuant to FASB Accounting Standards Codification 205-20 “Discontinued Operations.” The Company has concluded that the divestiture of the Medical Products business does not represent a strategic shift and is not material to the Company’s financial results and is therefore not considered a discontinued operation.
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Recent Accounting Pronouncements |
9 Months Ended |
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Jun. 30, 2016 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements |
(2)Recent Accounting Pronouncements Accounting Standards Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance for recognizing revenue from contracts with customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. In July 2015, the FASB deferred the effective date of the new revenue standard by one year. Public companies would now be required to adopt the new guidance for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The FASB decided to allow earlier adoption of the new revenue standard, but not earlier than the original effective date. This guidance is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity. In June 2014, the FASB issued new guidance on accounting for share-based payments requiring a specific performance target to be achieved in order for employees to become eligible to vest in the awards when that performance target may be achieved after the requisite service period for the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period for which the requisite service has already been rendered. This guidance is effective for the Company in the first quarter of fiscal 2017. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity. In April 2015, the FASB issued new guidance on the presentation of debt issuance costs. This update requires a company to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with the presentation of debt discounts. Currently, debt issuance costs are presented as a deferred asset. The recognition and measurement requirements will not change as a result of this guidance. The update requires retrospective application and represents a change in accounting principle. This guidance is effective for the Company in the first quarter of fiscal 2017, with early adoption permitted. The Company does not expect the adoption of this guidance will have a material impact on its results of operations, financial position and liquidity. In July 2015, the FASB issued new guidance on simplifying the measurement of inventory. This update requires a company to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for the Company in the first quarter of fiscal 2018, and should be applied prospectively with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position and liquidity. In November 2015, the FASB issued new guidance on the presentation of deferred income taxes. This update requires a company to present deferred tax liabilities and assets as noncurrent in a classified statement of financial position rather than the current requirement to separate deferred income tax liabilities and assets into current and noncurrent amounts. This guidance is effective for the Company in the first quarter of fiscal 2018, with early adoption permitted. The Company does not expect the adoption of this guidance will have a material impact on its results of operations, financial position and liquidity. In February 2016, the FASB issued guidance on the accounting treatment for leases. This guidance will require all leases with durations greater than twelve months to be recognized on the balance sheet of the lessee. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. This guidance is effective for the Company in the first quarter of fiscal 2020, although early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity. In March 2016, the FASB issued guidance on the accounting for equity method investments. This standard eliminates the requirement that when an existing cost method investment qualifies for the use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive income/(loss) (“AOCI”) will be recognized through earnings. The standard is effective for the Company in the first quarter of fiscal 2018, although early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity. In March 2016, the FASB issued new guidance to improve the accounting for share-based payments. This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. The guidance also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for the Company in the first quarter of fiscal 2018, although early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity. No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on the Consolidated Financial Statements.
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Fair Value Measurements |
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Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | (3)Fair Value Measurements The Company estimates the fair value of assets and liabilities in accordance with the framework established by the authoritative guidance for fair value measurements. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety. The three levels of the hierarchy are as follows:
Financial assets measured at fair value on a recurring basis are summarized below:
Following is a description of each category in the fair value hierarchy and the financial assets and liabilities of the Company that were included in each category at June 30, 2016 and September 30, 2015, measured on a recurring basis. The Level 1 financial assets were comprised of investments in trading securities, which are reported in other long-term assets. The investments are held in a Rabbi trust for benefits under the Company’s deferred compensation plan. Under the plan, participants designate investment options to serve as the basis for measurement of the notional value of their accounts. The investments include a money market fund and mutual funds that are publicly traded. The fair values of the shares or underlying securities of these funds are based on quoted market prices. The Level 2 financial assets are long-term investments consisting primarily of fixed income mutual funds, classified as available-for-sale securities. These investments are reported in other long-term assets. The investments in fixed income mutual funds are valued based on the net asset value of the underlying securities as provided by the investment account manager. The investments are not restricted or subject to a lockup and may be redeemed on demand. Notice within a certain period of time prior to redemption is not required. The Company’s long-term debt is classified as Level 2. The carrying amount of the Company’s long-term debt is the approximated fair value, as the stated interest rates were variable in relation to prevailing market rates. The Company had no material assets or liabilities that were measured at fair value on a non-recurring basis during the nine months ended June 30, 2016 or fiscal year ended September 30, 2015. There were no transfers between fair value hierarchy levels during these periods.
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Income Per Common Share |
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Income Per Common Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Per Common Share | (4)Income per Common Share Basic net income per share was computed by dividing net income available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share was computed by dividing net income available to common stockholders for the period by the weighted average number of shares of common stock that would have been outstanding assuming dilution from stock-based compensation awards during the period. The following table sets forth the computation of net income per share:
On May 12, 2016, the Company declared a regular quarterly cash dividend in the amount of $0.275 per share for the third quarter of fiscal 2016. The dividends were paid on July 5, 2016 to shareholders of record as of June 17, 2016.
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Employee Benefit Plans |
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Employee Benefit Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | (5)Employee Benefit Plans The components of net periodic benefit cost for pension and other benefits were as follows:
The Company, under the IRS minimum funding standards, has no required contributions to make to its defined benefit pension plan during fiscal 2016. The Company sponsors a 401(k) retirement savings plan covering substantially all of the U.S. full-time employees in the Company’s Radiation Measurement segment as well as substantially all of the employees in the Company’s Medical Physics and Medical Products segments, which provides for certain employer matching contributions. The Company also maintains a supplemental defined contribution plan for certain executives, which allows participating executives to make voluntary deferrals and provides for employer contributions at the discretion of the Company. Amounts expensed for Company contributions under these plans during the three months ended June 30, 2016 and 2015 were $494 and $500, respectively. Amounts expensed for Company contributions under these plans during the nine months ended June 30, 2016 and 2015 were $1,412 and $1,349, respectively.
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Goodwill And Intangible Assets |
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Goodwill And Intangible Assets | (6)Goodwill and Intangible Assets Changes in the carrying amount of goodwill, by reportable segment, for the nine months ended 2016 were as follows:
Intangible assets consisted of the following:
Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Intangible asset amortization expense was $453 and $1,576 for the three and nine months ended June 30, 2016, respectively, and was $560 and $1,681 for the three and nine months ended June 30, 2015, respectively.
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Accumulated Other Comprehensive Loss |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | (7)Accumulated Other Comprehensive Loss Accumulated elements of other comprehensive loss, net of tax, are included in the stockholders’ equity section of the condensed consolidated balance sheets. Changes in each component for the nine months ended June 30 are as follows:
The tables below present the impact on net income of significant amounts reclassified out of each component of accumulated other comprehensive loss:
(1)These accumulated other comprehensive loss components are included in the computation of net periodic benefit costs (refer to Note 5 of the Notes to Consolidated Financial Statements for additional details regarding employee benefit plans).
(1)This amount is reported in Interest expense, net on the Consolidated Statements of Operations (2)This amount is reported in Income tax expense on the Consolidated Statements of Operations
|
Income Taxes |
9 Months Ended |
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Jun. 30, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | (8)Income Taxes The effective tax rates for the three months ended June 30, 2016 and 2015 were 31.3% and 10.4%, respectively. The increase in the effective tax rate was primarily due to an overall increase in quarterly pre-tax book income relating to the sale of the Medical Products business which decreased the rate benefit for the realization of an unrecognized tax benefit. Also driving the rate increase was the mix of earnings between taxing jurisdictions. The effective tax rates for the nine months ended June 30, 2016 and 2015 were 31.2% and 21.0%, respectively. The increase in the effective tax rate was primarily due to higher permanent differences related to foreign dividends, the mix of earnings between jurisdictions with differing tax rates and increased pre-tax book income relating to the sale of the Medical Products business. The Company believes it is reasonably possible that $698 of unrecognized tax benefits will be realized in fiscal year 2017. The May 2016 sale of the Medical Products business, comprised of IZI Medical Products, LLC (“IZI”) and Ilumark GmbH (“Ilumark”), resulted in an ordinary tax loss on the sale of IZI and a capital tax loss on the sale of Ilumark. The ordinary loss on IZI is largely driven by the loss on disposal of intangibles, which converted into a net operating loss carryforward of approximately $50.0 to $60.0 million ($17.5 to $21.0 million tax effected). The Company expects to fully utilize the net operating loss as an offset to future ordinary income. The sale of Ilumark generated an estimated capital loss carryforward of approximately $600 ($210 net of tax) which can be offset against future capital gains. The Company does not expect to have any significant capital gains in the next five years, the carryforward period for capital losses, and has recorded a valuation allowance through its third quarter of fiscal 2016 annual estimated tax rate.
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Segment Information |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | (9)Segment Information The Company is organized into three reportable business segments: Radiation Measurement, Medical Physics and Medical Products. As disclosed in Note 1 to the Consolidated Financial Statements, Medical Products was divested in May 2016 which resulted in a reduction in revenues and operating income for the three and nine month periods ended June 30, 2016 and the elimination of assets as of June 30, 2016 for the reportable segment. These segments reflect the manner in which the Company’s businesses are currently managed and represent an aggregation of services and products based on type of customer and how the businesses are marketed. For more information regarding the nature of the Company’s services and products, see Note 16 of the Notes to Consolidated Financial Statements in the Form 10-K. The following tables summarize financial information for each reportable segment:
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Related Party Transactions |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | (10)Related Party Transactions The Company has a minority interest in Yamasato, Fujiwara, Higa & Associates, Inc. doing business as Aquila. The Company provides dosimetry parts to Aquila for its military contract. The Company also has a 50% equity interest in Nagase-Landauer, Ltd. (“Nagase”), a radiation measurement company in Japan. The sales to and purchases from Aquila were as follows:
Balance sheet items associated with Aquila were as follows:
The sales to and purchases from Nagase were as follows:
Balance sheet items associated with Nagase were as follows:
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Fair Value Measurements (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets Measured At Fair Value On A Recurring Basis |
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Income Per Common Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Per Common Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation Of Net Income (Loss) Per Share |
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Employee Benefit Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Net Periodic Benefit Costs |
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Goodwill And Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes In The Carrying Amount Of Goodwill, By Reportable Segment |
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Other Intangible Assets |
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Accumulated Other Comprehensive Loss (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes In Each Component Of AOCI |
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Summary Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss) |
(1)These accumulated other comprehensive loss components are included in the computation of net periodic benefit costs (refer to Note 5 of the Notes to Consolidated Financial Statements for additional details regarding employee benefit plans).
(1)This amount is reported in Interest expense, net on the Consolidated Statements of Operations (2)This amount is reported in Income tax expense on the Consolidated Statements of Operations
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information For Each Reportable Segment |
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Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Related Party Transactions |
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Basis Of Presentation And Consolidation (Narrative) (Details) - Disposal Group, Not Discontinued Operations [Member] - Medical Products [Member] $ in Millions |
1 Months Ended |
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May 31, 2016
USD ($)
| |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Gross cash proceeds | $ 10.1 |
Pre-tax gain on sale from the disposition | $ 3.9 |
Fair Value Measurements (Narrative) (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
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Jun. 30, 2016 |
Sep. 30, 2015 |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfers between fair value hierarchy levels | $ 0 | $ 0 |
Fair Value, Measurements, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets & liabilities | $ 0 | $ 0 |
Fair Value Measurements (Financial Assets Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Sep. 30, 2015 |
---|---|---|
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 439 | $ 272 |
Mutual funds | 3,496 | 3,237 |
Total financial assets at fair value | 3,935 | 3,509 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 6 | 1,763 |
Total financial assets at fair value | $ 6 | $ 1,763 |
Income Per Common Share (Narrative) (Details) |
9 Months Ended |
---|---|
Jun. 30, 2016
$ / shares
| |
Income Per Common Share [Abstract] | |
Date declared | May 12, 2016 |
Dividends declared | $ 0.275 |
Date paid | Jul. 05, 2016 |
Date of record | Jun. 17, 2016 |
Income Per Common Share (Computation Of Net Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Income Per Common Share [Abstract] | ||||
Net income attributed to Landauer, Inc. | $ 7,265 | $ 4,055 | $ 15,187 | $ 11,979 |
Less: Income allocated to unvested restricted stock | 20 | 20 | 59 | 67 |
Net income available to common stockholders | $ 7,245 | $ 4,035 | $ 15,128 | $ 11,912 |
Basic weighted average shares outstanding | 9,531 | 9,509 | 9,523 | 9,476 |
Net income per share - Basic | $ 0.76 | $ 0.42 | $ 1.59 | $ 1.26 |
Effect of dilutive securities | $ 33 | $ 25 | $ 32 | $ 27 |
Diluted weighted averages shares outstanding | 9,564 | 9,534 | 9,555 | 9,503 |
Net income per share - Diluted | $ 0.76 | $ 0.42 | $ 1.58 | $ 1.25 |
Dividends paid per share | $ 0.275 | $ 0.275 | $ 0.83 | $ 1.100 |
Employee Benefit Plans (Narrative) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Employee Benefit Plans [Abstract] | ||||
Employer contribution for pension plan during 2016 | $ 0 | |||
Employer contribution for defined contribution plans | $ 494,000 | $ 500,000 | $ 1,412,000 | $ 1,349,000 |
Employee Benefit Plans (Schedule Of Net Periodic Benefit Costs) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 392 | $ 364 | $ 1,177 | $ 1,092 |
Expected return on plan assets | (373) | (396) | (1,120) | (1,188) |
Amortization of net gain (loss) | 141 | 85 | 422 | 253 |
Net periodic benefit cost | 160 | 53 | 479 | 157 |
Other Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 15 | 13 | 45 | 38 |
Interest cost | 10 | 8 | 29 | 24 |
Amortization of net gain (loss) | (3) | (12) | (11) | (36) |
Net periodic benefit cost | $ 22 | $ 9 | $ 63 | $ 26 |
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Goodwill And Intangible Assets [Abstract] | ||||
Amortization expense | $ 453 | $ 560 | $ 1,576 | $ 1,681 |
Accumulated Other Comprehensive Loss (Summary Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Provision for income taxes | $ 52 | $ 27 | $ 153 | $ 80 | |||||||
Total net of tax | (85) | (46) | (257) | (137) | |||||||
Total net of tax | (195) | 41 | (187) | 43 | |||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Pension And Postretirement Plans [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Amortization of net loss | [1] | 137 | 73 | 410 | 217 | ||||||
Total before tax | [1] | 137 | 73 | 410 | 217 | ||||||
Provision for income taxes | [1] | 52 | 27 | 153 | 80 | ||||||
Total net of tax | [1] | 85 | 46 | 257 | 137 | ||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains and Losses on Available-for-Sale Securities [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Realized gains on available-for-sale securities into earnings | [2] | (288) | (393) | (99) | |||||||
Total before tax | (288) | (393) | (99) | ||||||||
Provision for income taxes | [3] | (43) | 9 | (59) | 9 | ||||||
Total net of tax | $ (245) | $ 9 | $ (334) | $ (108) | |||||||
|
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
May 31, 2016 |
|
Income Taxes [Line Items] | |||||
Effective tax rate | 31.30% | 10.40% | 31.20% | 21.00% | |
Unrecognized tax benefits and related interest and penalties expected to reverse within the next | $ 698 | $ 698 | |||
Capital loss carryforward | $ 600,000 | ||||
Capital loss carryforward tax effected | 210,000 | ||||
Minimum [Member] | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforward | 50,000 | ||||
Operating loss carryforward tax effected | 17,500 | ||||
Maximum [Member] | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforward | 60,000 | ||||
Operating loss carryforward tax effected | $ 21,000 |
Related Party Transactions (Narrative) (Details) |
Jun. 30, 2015 |
---|---|
Nagase-Landauer, Ltd. [Member] | |
Related Party Transaction [Line Items] | |
Equity interest | 50.00% |
Related Party Transactions (Schedule Of Related Party Transactions) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Sep. 30, 2015 |
|
Aquila [Member] | |||||
Related Party Transaction [Line Items] | |||||
Sales to related party | $ 2,653 | $ 1 | $ 3,067 | $ 3,674 | |
Purchases from related party | 201 | 165 | 405 | 196 | |
Amounts in accounts receivable | 4,318 | 4,318 | $ 2,795 | ||
Amounts in accounts payable | 492 | 492 | 284 | ||
Nagase-Landauer, Ltd. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Sales to related party | 1,180 | 169 | 3,474 | 924 | |
Purchases from related party | 123 | $ 472 | 817 | $ 934 | |
Amounts in accounts receivable | 428 | 428 | 769 | ||
Amounts in accounts payable | $ 11 | $ 11 | $ 33 |
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