10-Q

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 December 31, 2016

Commission file number 1-9788

LANDAUER, INC. (Exact Name of Registrant as Specified in Its Charter)
Delaware	06-1218089
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
2 Science Road, Glenwood, IL  60425 (Address of Principal Executive Offices and Zip Code)
Registrant’s Telephone Number, Including Area Code:  (708) 755-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [ X ]    No [    ]

Indicate by 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.

Large accelerated filer	[    ]	Accelerated filer	[ X ]
Non-accelerated filer	[    ]	Smaller reporting company	[    ]
(Do not check if a smaller reporting company)

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 February 3, 2017,9,622,159 shares of common stock, par value $0.10 per share, of the registrant were outstanding.

1

TABLE OF CONTENTS

PART I    FINANCIAL INFORMATION
Item 1.	Financial Statements
		Consolidated Balance Sheets (Unaudited)	3
		Consolidated Statements of Operations (Unaudited)	4
		Consolidated Statements of Comprehensive Income (Unaudited)	5
		Consolidated Statement of Stockholders’ Equity (Unaudited)	6
		Consolidated Statements of Cash Flows (Unaudited)	7
		Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		21
Item 4.	Controls and Procedures		22
PART II    OTHER INFORMATION
Item 1.	Legal Proceedings		23
Item 1A.	Risk Factors		23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		23
Item 3.	Defaults Upon Senior Securities		23
Item 4.	Mine Safety Disclosures		23
Item 5.	Other Information		23
Item 6.	Exhibits		24
SIGNATURE			25

2

PART I  FINANCIAL INFORMATION

Item 1.Financial Statements

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (Unaudited)

(Dollars in Thousands)	December 31, 2016		September 30, 2016
Assets
Cash and cash equivalents	$	12,442	$	13,285
Receivables, net of allowances of $1,313 at December 31, 2016 and $1,296 at September 30, 2016		32,482		31,998
Inventories		5,692		5,670
Deferred income tax assets - current		2,006		2,098
Prepaid income taxes		655		764
Prepaid expenses and other current assets		3,866		2,187
Total current assets		57,143		56,002
Property, plant and equipment, at cost		106,301		105,237
Less accumulated depreciation and amortization		(60,248)		(58,820)
Property, plant and equipment, net		46,053		46,417
Equity in joint ventures		24,956		26,174
Goodwill		33,335		33,807
Intangible assets, net of accumulated amortization of $11,699 at December 31, 2016 and $11,772 at September 30, 2016		9,003		9,297
Dosimetry devices, net of accumulated depreciation of $6,379 at December 31, 2016 and $6,197 at September 30, 2016		2,899		3,162
Deferred income tax assets		7,873		9,104
Other assets		6,490		6,853
Total assets	$	187,752	$	190,816
Liabilities
Accounts payable	$	2,450	$	3,012
Dividends payable		2,823		2,815
Deferred contract revenue		13,642		13,932
Accrued compensation and related costs		7,845		9,256
Accrued severance		122		302
Other accrued expenses		6,197		5,181
Total current liabilities		33,079		34,498
Long-term debt		107,600		109,100
Pension and postretirement obligations		24,874		24,833
Deferred income tax liabilities		103		86
Uncertain income tax liabilities		1,489		1,495
Other non-current liabilities		203		205
Total liabilities		167,348		170,217
Commitments and Contingencies
Stockholders' equity
Preferred stock, $0.10 par value per share, authorized 1,000,000 shares; none issued		-		-
Common stock, $0.10 par value per share, authorized 20,000,000 shares; 9,797,046 and 9,727,264 shares issued and outstanding at December 31, 2016 and September 30, 2016, respectively		980		973
Additional paid in capital		44,569		43,982
Accumulated other comprehensive loss		(17,534)		(15,266)
Accumulated deficit		(8,800)		(10,511)
Landauer, Inc. stockholders' equity		19,215		19,178
Noncontrolling interest		1,189		1,421
Total stockholders' equity		20,404		20,599
Total Liabilities and Stockholders' Equity	$	187,752	$	190,816

The accompanying notes are an integral part of these consolidated financial statements.

3

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Statements of Operations (Unaudited)

	Three Months Ended December 31,
(Dollars in Thousands, Except per Share)	2016		2015
Revenues:
Service revenues	$	32,749	$	31,545
Product revenues		4,823		4,985
Total revenues		37,572		36,530
Costs and expenses:
Service costs		15,978		16,178
Product costs		1,959		1,837
Total cost of sales		17,937		18,015
Gross profit		19,635		18,515
Selling, general and administrative expense		12,193		12,263
Operating income		7,442		6,252
Equity in income of joint ventures		636		301
Interest expense, net		(794)		(933)
Other (expense) income, net		(328)		(160)
Income before taxes		6,956		5,460
Income tax expense		2,376		1,687
Net income		4,580		3,773
Less:  Net income attributed to noncontrolling interest		179		130
Net income attributed to Landauer, Inc.	$	4,401	$	3,643
Net income per share attributable to Landauer, Inc. shareholders:
Basic	$	0.46	$	0.38
Weighted average basic shares outstanding		9,540		9,460
Diluted	$	0.46	$	0.38
Weighted average diluted shares outstanding		9,584		9,492

The accompanying notes are an integral part of theseconsolidated financial statements.

4

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended December 31, 2016
(Dollars in Thousands)	Landauer, Inc.		Noncontrolling Interest		Total
Net income	$	4,401	$	179	$	4,580
Other comprehensive income (loss):
Defined benefit pension and postretirement plans activity, net of taxes of ($71)		119		-		119
Unrealized gains (losses) on available-for-sale securities, net of taxes of $0		-		-		-
Foreign currency translation adjustment, net of taxes of $503		(2,387)		(39)		(2,426)
Comprehensive income	$	2,133	$	140	$	2,273
	Three Months Ended December 31, 2015
(Dollars in Thousands)	Landauer, Inc.		Noncontrolling Interest		Total
Net income	$	3,643	$	130	$	3,773
Other comprehensive income (loss):
Defined benefit pension and postretirement plans activity, net of taxes of ($25)		44		-		44
Unrealized losses on available-for-sale securities, net of taxes of $23		(75)		-		(75)
Foreign currency translation adjustment, net of taxes of $162		(317)		2		(315)
Comprehensive income	$	3,295	$	132	$	3,427

The accompanying notes are an integral part of theseconsolidated financial statements.

5

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity (Unaudited)

	Landauer, Inc. Stockholders' Equity
(Dollars in Thousands)	Common Stock Shares		Common Stock		Addi- tional Paid in Capital		Accumulated Other Compre-hensive (Loss) Income		(Accumulated Deficit) Retained Earnings		Non- Controlling Interest		Total Stock- holders' Equity
September 30, 2016		9,727,264	$	973	$	43,982	$	(15,266)	$	(10,511)	$	1,421	$	20,599
Stock-based compensation arrangements		69,782		7		587		-		-		-		594
Dividends		-		-		-		-		(2,690)		(372)		(3,062)
Net income		-		-		-		-		4,401		179		4,580
Foreign currency translation adjustment, net of tax		-		-		-		(2,387)		-		(39)		(2,426)
Defined benefit pension and postretirement plans activity, net of tax		-		-		-		119		-		-		119
December 31, 2016		9,797,046	$	980	$	44,569	$	(17,534)	$	(8,800)	$	1,189	$	20,404

The accompanying notes are an integral part of theseconsolidated financial statements.

6

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Cash flows from operating activities:
Net income	$	4,580	$	3,773
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,678		2,797
Equity in income of joint ventures		(636)		(301)
Dividends from joint ventures		-		1,195
Stock-based compensation and related net tax benefits		744		457
Current and long-term deferred taxes, net		1,752		632
Loss (gain) on sale, disposal and abandonment of fixed assets		17		(9)
Gain on investments		(58)		(190)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable, net		(892)		224
Decrease in prepaid taxes		106		40
Increase in other operating assets, net		(1,005)		(982)
Decrease in accounts payable and other accrued liabilities		(1,057)		(2,052)
Increase in other operating liabilities, net		261		357
Net cash provided by operating activities		6,490		5,941
Cash flows from investing activities:
Acquisition of property, plant and equipment		(1,877)		(1,534)
Payment of transaction expenses associated with divestiture of business		-		(472)
Other investing activities, net		(538)		(923)
Net cash used in investing activities		(2,415)		(2,929)
Cash flows from financing activities:
Long-term borrowings - loan		2,000		7,000
Long-term borrowings - repayment		(3,500)		(12,700)
Dividends paid to stockholders		(2,682)		(2,651)
Other financing activities, net		(368)		(156)
Net cash used in financing activities		(4,550)		(8,507)
Effects of foreign currency translation		(368)		(279)
Net decrease in cash and cash equivalents		(843)		(5,774)
Opening balance - cash and cash equivalents		13,285		15,314
Ending balance - cash and cash equivalents	$	12,442	$	9,540
Accrued capital spending included in accounts payable and other accrued liabilities	$	683	$	1,153

The accompanying notes are an integral part of theseconsolidated financial statements.

7

LANDAUER, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

December 31, 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 quarterended December 31, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2017. 

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, 2016 (the “Form 10-K”) and other financial information filed with the Securities and Exchange Commission (the “SEC”).  The September 30, 2016 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 three month period ended December 31, 2016.

8

(2)Recent Accounting Pronouncements

Accounting Standards Adopted

In June 2014, the Financial Accounting Standards Board (“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.  The Company adopted the updated standard in the first quarter of fiscal 2017 with no significant impact on its financial statements.

In April 2015, the FASB issued new guidance on a customer’s accounting for fees paid in a cloud computing arrangement (CCA). Under the new standard, customers will apply the same criteria as vendors to determine whether a CCA contains a software license or is solely a service contract.  The Company adopted the updated standard prospectively in the first quarter of fiscal 2017 with no significant impact on its financial statements.

Accounting Standards Not Yet Adopted

In May 2014, the 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.  To date, the Company has formed a committee to evaluate the impact and are in the initial stages of evaluation.

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.

9

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.

In June 2016, the FASB issued new guidance to introduce a new model for recognizing credit losses on financialinstruments based on an estimate of current expected credit losses. The update replaces the incurred loss impairmentmethodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of abroader range of reasonable and supportable information to inform credit loss estimates. The update is effective for theCompany in the first quarter of fiscal 2020, although early adoption is permitted. The Company is currently evaluatingthe effect that this update will have on its financial statements and related disclosures.

In August 2016, the FASB issued an ASU to provide cash flow statement guidance for certain cash receipts and payments, including (a) debt prepayment or extinguishment costs; (b) contingent consideration payments made after a business combination; (c) insurance settlement proceeds; (d) distributions from equity method investees; (e) beneficial interests in securitization transactions and (f) application of the predominance principle for cash receipts and payments with aspects of more than one class of cash flows. The update is effective for the Company in the first quarter of fiscal2018. The Company is currently evaluating the effect that this update will have on its financial statements and relateddisclosures.

In November 2016, the FASB issued amendments to current guidance related to the classification and presentation of changes in restricted cash in the Statement of Cash Flows.  The update is effective for the Company in the first quarter of fiscal 2019, and early adoption is permitted.  The Company is currently evaluating the impact that this update will have on its financial statements and related disclosures.

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.

10

(3)Fair Value Measurements

The Company estimatesthe 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 orliabilitiesthat 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 liabilityor indirectly observable through corroboration with observable market data. 

· Level 3 – Unobservable inputs for the asset or liability used to measure fair value thatreflectthe Company’sown assumptions about the assumptions market participants would use in pricing the asset or liability.

Financial assets measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at December 31, 2016
(Dollars in Thousands)	Level 1		Level 2		Level 3
Asset Category
Cash equivalents	$	536	$	-	$	-
Mutual funds		4,163		-		-
Total financial assets at fair value	$	4,699	$	-	$	-
	Fair Value Measurements at September 30, 2016
(Dollars in Thousands)	Level 1		Level 2		Level 3
Asset Category
Cash equivalents	$	453	$	-	$	-
Mutual funds		3,687		-		-
Total financial assets at fair value	$	4,140	$	-	$	-

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 atDecember 31, 2016 and September 30, 2016, 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.

11

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.

(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 December 31,
(Dollars in Thousands, Except per Share)	2016		2015
Basic Net Income per Share:
Net income attributed to Landauer, Inc.	$	4,401	$	3,643
Less:  Income allocated to unvested restricted stock		23		18
Net income available to common stockholders	$	4,378	$	3,625
Basic weighted average shares outstanding		9,540		9,460
Net income per share - Basic	$	0.46	$	0.38
Diluted Net Income per Share:
Net income attributed to Landauer, Inc.	$	4,401	$	3,643
Less:  Income allocated to unvested restricted stock		23		18
Net income available to common stockholders	$	4,378	$	3,625
Basic weighted average shares outstanding		9,540		9,460
Effect of dilutive securities		44		32
Diluted weighted averages shares outstanding		9,584		9,492
Net income per share - Diluted	$	0.46	$	0.38
Dividends paid per share	$	0.275	$	0.275

On November 30, 2016, the Company declared a regular quarterly cash dividend in the amount of $0.275 per share. The dividends were paid on January 3, 2017 to shareholders of record as of December  16, 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 December 31,
(Dollars in Thousands)	2016		2015
Interest cost	$	352	$	392
Expected return on plan assets		(388)		(373)
Amortization of net loss		190		141
Net periodic benefit cost	$	154	$	160
Other Benefits	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Service cost	$	16	$	15
Interest cost		9		10
Amortization of net gain		-		(4)
Net periodic benefit cost	$	25	$	21

The Company, under the IRS minimum funding standards, has no required contributions to make to its defined benefit pension plan during fiscal 2017.

The Company sponsors a 401(k) retirement savings plan covering substantially all of the U.S. full-time employeesin the Company’s Radiation Measurement segment as well as substantially all of the employees in the Company’s Medical Physics segment, and prior to its divestiture, the Medical Products segment.  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 endedDecember 31, 2016 and 2015 were $543 and $419, respectively.

(6)Goodwill and Intangible Assets

Changes in the carrying amount of goodwill, by reportable segment, for the threemonths ended December 31, 2016 were as follows:

(Dollars in Thousands)	Radiation Measurement		Medical Physics		Total
Balance as of September 30, 2016	$	11,196	$	22,611	$	33,807
Currency translation adjustment		(472)		-		(472)
Balance as of December 31, 2016	$	10,724	$	22,611	$	33,335

The Company hadno accumulated impairment losses as of December 31, 2016 and September 30,2016.

13

Intangible assets consisted of the following: 

	December 31, 2016
(Dollars in Thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer lists	$	16,578	$	10,319	$	6,259
Trademarks and tradenames		133		-		133
Licenses and patents		3,434		823		2,611
Other intangibles		557		557		-
Intangible assets	$	20,702	$	11,699	$	9,003

	September 30, 2016
(Dollars in Thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer lists	$	16,982	$	10,436	$	6,546
Trademarks and tradenames		133		-		133
Licenses and patents		3,397		779		2,618
Other intangibles		557		557		-
Intangible assets	$	21,069	$	11,772	$	9,297

Identifiable intangible assets with finite lives are amortized over their estimated useful lives.  Intangible asset amortization expense was $386 and $555for the three months ended December 31, 2016 and 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 threemonths ended December 31, 2016 and 2015are 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, 2016	$	(4,696)	$	-	$	(10,570)	$	(15,266)
Other comprehensive (loss) income before reclassifications		(2,387)		-		-		(2,387)
Amounts reclassified from accumulated other comprehensive (loss) income		-		-		119		119
Net current period other comprehensive (loss) income		(2,387)		-		119		(2,268)
Balance at December 31, 2016	$	(7,083)	$	-	$	(10,451)	$	(17,534)

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, 2015	$	(5,468)	$	259	$	(8,532)	$	(13,741)
Other comprehensive (loss) income before reclassifications		(317)		14		-		(303)
Amounts reclassified from accumulated other comprehensive (loss) income		-		(89)		44		(45)
Net current period other comprehensive (loss) income		(317)		(75)		44		(348)
Balance at December 31, 2015	$	(5,785)	$	184	$	(8,488)	$	(14,089)

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 December 31,
(Dollars in Thousands)	2016		2015
Amortization of net loss	$	190	$	69
Total before tax		190		69
Provision for income taxes		71		25
Total net of tax	$	119	$	44

(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 December 31,
(Dollars in Thousands)	2016		2015
Realized gains on available-for-sale securities into earnings (1)	$	-	$	(105)
Total before tax		-		(105)
Provision for income taxes (2)		-		(16)
Total net of tax	$	-	$	(89)

(1)This amount is reported in Interest Expense, net on the Consolidated Statements of Operations

(2)This amount is reported in Income Tax Expense (Benefit)on the Consolidated Statements of Operations

15

(8)Income Taxes

The effective tax rates for the three months ended December 31, 2016 and 2015 were 34.2% and 30.9%, respectively. The increase in the effective tax rate was primarily due to the mix of taxable earnings between jurisdictions and tax law changes that impacted the prior year.  The Company believes it is reasonably possible that $563of unrecognized tax benefits will be realized in fiscal year 2017.

(9)Segment Information

In fiscal year 2017, the Company is organized into two reportable business segments: Radiation Measurement and Medical Physics.  As disclosed in the Form 10-K for the fiscal period ended September 30, 2016, the Medical Products business was divested in May 2016; accordingly, there were no reportable revenues and operating income for the three month period ended December 31, 2016for that 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 December 31,
(Unaudited, Dollars in Thousands)	2016		2015
Revenues by segment:
Radiation Measurement	$	27,632	$	24,704
Medical Physics		9,940		9,353
Medical Products		-		2,473
Consolidated revenues	$	37,572	$	36,530
	Three Months Ended December 31,
(Unaudited, Dollars in Thousands)	2016		2015
Operating income (loss) by segment:
Radiation Measurement	$	11,232	$	8,898
Medical Physics		679		778
Medical Products		-		490
Corporate		(4,469)		(3,914)
Consolidated operating income	$	7,442	$	6,252

(Dollars in Thousands)	December 31, 2016		September 30, 2016
Segment assets:
Radiation Measurement	$	157,499	$	160,560
Medical Physics		43,460		43,174
Eliminations		(13,207)		(12,918)
Consolidated assets	$	187,752	$	190,816

16

(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 December 31,
(Dollars in Thousands)	2016		2015
Sales to Aquila	$	2,568	$	396
Purchases from Aquila		74		(10)

Balance sheet items associated with Aquila were as follows:

(Dollars in Thousands)	December 31, 2016		September 30, 2016
Amounts in accounts receivable	$	2,888	$	1,910
Amounts in accounts payable		394		320

The sales to and purchases from Nagase were as follows:

	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Sales to Nagase	$	1,241	$	1,098
Purchases from Nagase		310		595

Balance sheet items associated with Nagase were as follows:

(Dollars in Thousands)	December 31, 2016		September 30, 2016
Amounts in accounts receivable	$	334	$	288
Amounts in accounts payable		41		23

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, 2016.

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 firstfiscal quarter ended December 31, 2016 and the firstfiscal quarter ended December 31, 2015

Revenues for the first fiscal quarter of 2017 were $37.6 million, an increase of $1.1 million, or 3.0%, compared to revenues of $36.5 million for thefirst fiscal quarter of 2016.  Revenues in the Radiation Measurement segment increased $2.9 million, which was primarily due to product sales to the military and growth in international revenues.  Revenues in the Medical Physics segment increased $0.6 million, due to increased imaging services.  Revenues in the Medical Products segment were $0.0 million, a decrease of $2.5 million due to the divestiture of this business in May 2016.

Gross profit was 52.3% for the first fiscal quarter of 2017, compared with 50.7% for the first fiscal quarter of 2016.   Gross profitincreased for the first fiscal quarter of 2017 as compared to the first fiscal quarter of 2016due primarily to the increase in product sales to the military.

Selling, general and administrative expenses for the first fiscal quarter of 2017 were $12.2 million, a decrease of $0.1 million, or 0.8%, compared with $12.3 million for the first fiscal quarter of 2016.  Operating expenses in the Medical Products segment decreased $1.1 million, partially offset by a $0.8 million increase in Corporate and Radiation Measurement expenses and a $0.2 million increase in Medical Physics expenses.  Operating expenses in the Medical Products segment decreased $1.1 million due to the divestiture of the business in May 2016.  Operating expenses in Corporate and the Radiation Measurement segment increased $0.8 million primarily due to a $0.3 million increase in research and development expenses for the Verifii digital dosimetry platform and a $0.2 million increase in proxy expenses for the 2017 Annual Meeting of Stockholders.  The increase in operating expenses in Medical Physics was driven by an increase in personnel expenses.

Operating income for the first fiscal quarter of 2017 was $7.4 million, compared with operating income of $6.2 million for the first fiscal quarter of 2016.  Operating income increased due primarily to the gross profit on the higher military sales.  In addition, the Company successfully appealed the real estate taxes for fiscal 2011 and 2012, and as a result, is expected to receive a $0.6 million refund.

18

The effective tax rates for the first fiscal quarter of 2017 and 2016 were 34.2% and 30.9%, respectively.  The increase in the effective tax rate was primarily due to the mix of taxable earnings between jurisdictions and tax law changes that impacted the prior year.

Net income attributed to Landauer for the first fiscal quarter of 2017 was $4.4 million, compared with net income of $3.6 million in the first fiscal quarter of 2016.  The increase in net income was driven by stronger operating margins, partially offset by a higher effective tax rate.

Radiation Measurement Segment

Radiation Measurement revenues for the firstfiscal quarter of 2017 were $27.6 million, an increase of $2.9 million, or 11.7%, compared with $24.7 million for the firstfiscal quarter of 2016.  The growth in revenues was primarily due to product sales to the military and higher international revenues.  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 $2.2 million of the increase in revenues resulted from the shipment of products for the National Guard order.  International revenues increased $0.5 million due primarily to higher product sales.

Operating income for the firstfiscal quarter of 2017 increased to $11.2 million from $8.9 million for the firstfiscal quarter of 2016 due to the gross profit on the increased product sales and due to the refund of real estate taxes for fiscal 2011 and 2012.

Medical Physics Segment

Medical Physics revenues for the firstfiscal quarter of 2017 were $10.0 million, an increase of $0.6 million, or 6.4%, compared with $9.4 million for the firstfiscal quarter of 2016.  Imaging services revenue increased by $0.6 million, or 20.7%, 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 firstfiscal quarter of 2017 was $0.7 million, compared to $0.8 million for the firstfiscal quarter of 2016.  The decrease in operating income was primarily due to an increase in personnel expenses.

Medical Products Segment

Medical Products revenues decreased to  $0.0 million for the firstfiscal quarter of 2017from  $2.5 million for the firstfiscal quarter of 2016 as a result of the divestiture that occurred in May 2016. 

Medical Products operating income decreased to $0.0 million for the firstfiscal quarter of 2017 from $0.5 million for the firstfiscal quarter of 2016 due to the May 2016 divestiture.

Corporate Selling, General and Administrative Expenses

Corporate selling, general and administrative expenses for the firstfiscal quarter of 2017 were $4.5million, anincrease of $0.6 million, or 15.4%, compared to $3.9 million for the firstfiscal quarter of 2016.  The increase was due to a $0.3 million increase in stock compensation expense as well as a $0.2 million increase in proxy expenses for the 2017 Annual Meeting of Stockholders.

19

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:

	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Net cash provided by (used in):
Operating activities	$	6,490	$	5,941
Investing activities		(2,415)		(2,929)
Financing activities		(4,550)		(8,507)
Effect of foreign currency translation		(368)		(279)
Net decrease in cash and cash equivalents	$	(843)	$	(5,774)

Cash provided by operating activities for the first threemonths of fiscal 2017 was $6.5 million, anincrease of $0.6 million over the same fiscal period in 2016.  The increase was primarily due tolower spending in professional service fees compared to the prior year.

Cash used ininvesting activities for the first threemonths of fiscal 2017 was $2.4 million, a change of $0.5 million over the same fiscal period of 2016.  The change was primarily due to transaction expenses related to the disposition of the Radon business which were paid in fiscal 2016.

Cash used in financing activities for the first threemonths of fiscal 2017 was $4.6 million, a change of $3.9 million over the same fiscal period of 2016.  The change was primarily due to lower net repayments of debt compared to the prior year.  In addition, the Company expects to pay down debt over the next four to five years as it realizes a cash tax benefit of approximately $16.0 million resulting from the disposal of the Medical Products business.  As of December 31, 2016, the Company had $32.4 million of unused availability under its current $140.0 million credit facility, which the Company believes provides adequate liquidity to meet its current and anticipated obligations.

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 ofDecember 31, 2016.  The Company currently 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 2016 through December 31, 2016.

20

Forward-Looking Statements

Certain matters contained in this reportconstitute 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 technologiesand products in general; the ability to protect and utilize the Company’s intellectual property; events or circumstances which result in an impairment of 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 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’sAnnualReportonForm 10-K for the year ended September 30, 2016and 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, 2016.  The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year throughDecember 31, 2016.

21

Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As ofDecember 31, 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 effective at a reasonable assurance level for the purpose of ensuring that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) accumulated and communicated to management including the CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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 firstquarter of fiscal 2017 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

22

PART II  OTHER INFORMATION

Item 1.Legal Proceedings

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 December 31, 2016, if adversely determined, would have a material effect on its business, financial position, results of operations, or cash flows.

Item 1A.Risk Factors

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, 2016.  The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year throughDecember 31, 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 throughDecember 31, 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, 2016	149	$	43.89	-	-
November 1 - November 30, 2016	-		-	-	-
December 1 - December 31, 2016	-		-	-	-
Quarter ended December 31, 2016	149	$	43.89	-	-

Item 3.Defaults Upon Senior Securities

Not Applicable 

Item 4.Mine Safety Disclosures

Not Applicable 

Item 5.Other Information

Not Applicable

23

Item 6.Exhibits

		Cer
10		Support Agreement, dated January 10, 2017, by and among the Registrant and Gilead Capital LP, Gilead Capital GP LCC and Jeffrey A. Strong is incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 12, 2017.
10.2*		Landauer, Inc. 2016 Incentive Compensation Plan, reflecting all amendments through December 13, 2016
31.1*		Certification of Michael P. Kaminski, President and Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Daniel J. Fujii, Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		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
32.2*		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
101.INS**		XBRL INSTANCE FILE
101.SCH**		XBRL SCHEMA FILE
101.CAL**		XBRL CALCULATION FILE
101.DEF**		XBRL DEFINITION FILE
101.LAB**		XBRL LABEL FILE
101.PRE**		XBRL PRESENTATION FILE
	*	Filed herewith
	**	Furnished with the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2016.

Exhibit 10.2 listed above is a management contract or compensatory plan or arrangement.

24

SIGNATURE

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.

8
	LANDAUER, INC.
	(Registrant)
Date:  February9, 2017	/s/ Daniel J. Fujii
	Daniel J. Fujii
	Chief Financial Officer

25

EX-10.2

Exhibit 10.2

LANDAUER, INC.

2016 INCENTIVE COMPENSATION PLAN

I.  INTRODUCTION

1.1Purposes.  The purposes of the Landauer, Inc. 2016 Incentive Compensation Plan (this “Plan”) are (i) to align the interests of the Company’s stockholders and the recipients of awards under this Plan by increasing the proprietary interest of such recipients in the Company’s growth and success, (ii) to advance the interests of the Company by attracting and retaining directors, officers and other employees and (iii) to motivate such persons to act in the best interests of the Company’s stockholders.  For purposes of this Plan, references to employment by the Company shall also mean employment by a Subsidiary.

1.2Certain Definitions.

“Agreement” shall mean the written agreement evidencing an award hereunder between the Company and the recipient of such award.

“Board” shall mean the Board of Directors of the Company.

“Cash Performance Award” shall mean a right to receive, contingent upon the attainment of specified Performance Measures within a specified Performance Period, a specified cash amount or, in lieu thereof, shares of Common Stock having a Fair Market Value equal to such cash amount.

“Cause” shall mean any willful act of dishonesty, conviction of a felony, significant activities harmful to the reputation or business of the Company, refusal to perform or substantial disregard of duties properly assigned or significant violation of any statutory or common law duty of loyalty to the Company, in each case as determined by not less than two‑thirds of the members of the Board.

“Change in Control” shall have the meaning set forth in Section  6.8(b).

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Committee designated by the Board, consisting of three or more members of the Board, each of whom shall be (i) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m) of the Code and (iii) “independent” within the meaning of the rules of the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, within the meaning of the rules of the principal national stock exchange on which the Common Stock is then traded. 

“Common Stock” shall mean the common stock, par value $.10 per share, of the Company.

 “Company” shall mean Landauer, Inc., a Delaware corporation, or any successor thereto.

“Disability” shall mean the inability of the holder of an award to perform the essential functions such holder’s position, with or without reasonable accommodation, for a continuous period of at least six months, as determined solely by the Committee.

“Employment Termination Date” shall mean, in the case of the termination by the Company of an employee’s employment, the date specified in the Company’s written notice to such employee of such employee’s termination of employment or, if no date is specified in such notice, the date that the Company notifies such employee in writing of such termination of employment and, in the case of the termination by an employee of employment with the Company, the date specified in such employee’s written notice to the Company of such employee’s termination of employment or, if no date is specified in such notice, the date on which the Company shall first receive written notification from such employee of such termination of employment.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Fair Market Value” shall mean the closing transaction price of a share of Common Stock as reported on the New York Stock Exchange on the date as of which such value is being determined or, if the Common Stock is not listed on the New York Stock Exchange, the closing transaction price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided,  however, that if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate.

“Free-Standing SAR” shall mean an SAR which is not granted in tandem with, or by reference to, an option, which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock), cash or a combination thereof with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised.

“Incentive Stock Option” shall mean an option to purchase shares of Common Stock that meets the requirements of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute an Incentive Stock Option.

“Incumbent Board”  shall have the meaning set forth in Section 6.8(b)(2).

“Measurement Date” shall mean the last day of a Performance Period, as set forth in an Agreement.

“Non-Employee Director”  shall mean any director of the Company who is not an officer or employee of the Company or any Subsidiary.

2

 “Non-Statutory Stock Option” shall mean a stock option which is not an Incentive Stock Option.

“Outstanding Common Stock” shall have the meaning set forth in Section 6.8(b)(1).

“Outstanding Voting Securities” shall have the meaning set forth in Section 6.8(b)(1).

 “Performance Measures”  shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the holder’s receipt, in the case of a Restricted Stock Award or a Performance Share Award, of the shares of Common Stock subject to such award, or, in the case of a Restricted Stock Unit Award or a Performance Share Unit Award, of the shares of Common Stock subject to such award or of payment with respect to such award, or, in the case of a Cash Performance Award, of payment with respect to such award. To the extent necessary for an award to be qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder, such criteria and objectives shall include one or more of the following:  cash flow; return on operating revenue; stock price; return on equity; total stockholder return; return on capital (including return on total capital or return on invested capital); return on assets or net assets; market capitalization; debt leverage (debt to capital); revenue; income or net income; operating income; operating profit or net operating profit; operating margin or profit margin; earnings per share; earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA margin and adjusted EBITDA; cash from operations; operating ratio; operating revenue; customer service; reductions in expense levels; employee productivity; market share; strategic business criteria, consisting of one or more objectives based on meeting specified market share, geographic business expansion goals, objectively identified project milestones, production volume levels, and goals relating to acquisitions or divestitures; debt ratings, debt leverage and debt service; or any combination of the foregoing.   In the sole discretion of the Committee and to the extent permitted under Section 162(m) of the Code, the Committee may amend or adjust the Performance Measures or other terms and conditions of an outstanding award in recognition of asset write downs; litigation, claims, judgments or settlements; accruals for reorganization and restructuring programs; unusual or nonrecurring events affecting the Company or its financial statements (including any objectively determinable legal, integration, or deal-related costs in connection therewith); or changes in law or accounting principles.

“Performance Option” shall mean an Incentive Stock Option or Non‑Statutory Stock Option, the grant of which or the exercisability of all or a portion of which is contingent upon the attainment of specified Performance Measures within a specified Performance Period.

“Performance Period” shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an award shall be measured and (ii) the conditions to vesting applicable to an award shall remain in effect.

“Performance Share” shall mean a share of Common Stock, the vesting of which is subject to the attainment of specified Performance Measures within a specified Performance Period. 

3

 “Performance Share Award” shall mean an award of Performance Shares under this Plan.

“Performance Share Unit” shall mean a right to receive, contingent upon the attainment of specified Performance Measures within a specified Performance Period, one share of Common Stock, which may be Restricted Stock, or in lieu thereof, the Fair Market Value of such Performance Share in cash.

“Performance Share Unit Award” shall mean an award of Performance Share Units under this Plan.

 “Permanent and Total Disability” shall have the meaning set forth in Section 22(e)(3) of the Code or any successor thereto.

“Restricted Stock” shall mean shares of Common Stock which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment of specified Performance Measures within a specified Performance Period.

“Restricted Stock Award” shall mean an award of Restricted Stock under this Plan.

“Restricted Stock Unit” shall mean a right to receive one share of Common Stock or, in lieu thereof, the Fair Market Value of such share of Common Stock in cash, which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon the attainment of specified Performance Measures within a specified Performance Period.

“Restricted Stock Unit Award” shall mean an award of Restricted Stock Units under this Plan.

“Restriction Period” shall mean any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such award, or (ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall remain in effect.

“SAR” shall mean a stock appreciation right which may be a Free‑Standing SAR or a Tandem SAR.

“Stock Award” shall mean a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Share Award or a Performance Share Unit Award.

“Subsidiary” shall mean any corporation, limited liability company, partnership, joint venture or similar entity in which the Company owns, directly or indirectly, an equity interest possessing more than 50% of the combined voting power of the total outstanding equity interests of such entity. 

“Tandem SAR” shall mean an SAR which is granted in tandem with, or by reference to, an option (including a Non-Statutory Stock Option granted prior to the date of grant of the SAR),

4

which entitles the holder thereof to receive, upon exercise of such SAR and surrender for cancellation of all or a portion of such option, shares of Common Stock (which may be Restricted Stock), cash or a combination thereof with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such option, or portion thereof, which is surrendered.

“Tax Date” shall have the meaning set forth in Section 6.5.

“Ten Percent Holder” shall have the meaning set forth in Section 2.1(a).

1.3Administration.  This Plan shall be administered by the Committee.  Any one or a combination of the following awards may be made under this Plan to eligible persons: (i) options to purchase shares of Common Stock in the form of Incentive Stock Options or Non‑Statutory Stock Options (which may include Performance Options), (ii) SARs in the form of Tandem SARs or Free‑Standing SARs, (iii) Stock Awards in the form of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Share Units and (iv) Cash Performance Awards.  The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount and timing of each award to such persons and, if applicable, the number of shares of Common Stock, the number of SARs, the number of Restricted Stock Units and the number of Performance Share Units subject to such an award, the exercise price or base price associated with the award, the amount payable under the award, the time and conditions of exercise or settlement of the award and all other terms and conditions of the award, including, without limitation, the form of the Agreement evidencing the award. The Committee shall, subject to the terms of this Plan, interpret this Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the administration of this Plan and may impose, incidental to the grant of an award, conditions with respect to the award, such as limiting competitive employment or other activities.  All such interpretations, rules, regulations and conditions shall be conclusive and binding on all parties.

The Committee may delegate some or all of its power and authority hereunder to the Board or, subject to applicable law, to the Chief Executive Officer or other executive officer of the Company as the Committee deems appropriate; provided,  however, that (i) the Committee may not delegate its power and authority to the Board or the Chief Executive Officer or other executive officer of the Company with regard to the grant of an award to any person who is a “covered employee” within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to be a covered employee at the time during the period an award hereunder to such employee would be outstanding and (ii) the Committee may not delegate its power and authority to the Chief Executive Officer or other executive officer of the Company with regard to the selection for participation in this Plan of an officer, director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an award to such an officer, director or other person. 

No member of the Board or Committee, and neither the Chief Executive Officer nor any other executive officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection with this Plan in good faith, and the members of the Board and the

5

Committee and the Chief Executive Officer or other executive officer shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Company’s Certificate of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time.

A majority of the Committee shall constitute a quorum.  Except as otherwise required in the definition of the term “Cause” in Section 1.2, the acts of the Committee shall be either (i) acts of a majority of the members of the Committee present at any meeting at which a quorum is present or (ii) acts approved in writing by all of the members of the Committee without a meeting.

1.4Eligibility.  Participants in this Plan shall consist of such officers, other employees and nonemployee directors, and persons expected to become officers, other employees and nonemployee directors, of the Company and its Subsidiaries as the Committee in its sole discretion may select from time to time.  The Committee’s selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in this Plan at any other time.

1.5SharesAvailable.  Subject to adjustment as provided in Section 6.7,700,000 shares of Common Stock shall be available under this Plan, reduced by the sum of the aggregate number of shares of Common Stock which become subject to outstanding options, outstanding Free-Standing SARs and outstanding Stock Awards and delivered upon the settlement of Cash Performance Awards.  To the extent that shares of Common Stock subject to an outstanding option (other than in connection with the exercise of a Tandem SAR), Free-Standing SAR or Stock Award are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award, then such shares of Common Stock shall again be available under this Plan.

Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof.

To the extent necessary for an award to be qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder (i) the maximum number of shares of Common Stock with respect to which options or SARs or a combination thereof may be granted during any fiscal year of the Company to any person shall be 200,000, subject to adjustment as provided in Section 6.7; (ii) the maximum number of shares of Common Stock with respect to which Stock Awards subject to Performance Measures may be granted during any fiscal year of the Company to any person shall be 200,000, subject to adjustment as provided in Section 6.7, and (iii) the maximum amount that may be payable to any person under a Cash Performance Award granted with respect to a particular Performance Period shall be $2,500,000. 

1.6Minimum Vesting.  No award granted under this Plan shall become exercisable or vested prior to the one-year anniversary of the date of grant; provided, however, that such restriction shall not apply to awards granted under this Plan with respect to a number of shares of Common Stock which, in the aggregate, does not exceed five percent (5%) of the total number of

6

shares of Common Stock initially available for awards under this Plan.  This Section 1.6 shall not restrict the right of the Committee to accelerate or continue the vesting or exercisability of an award upon or after a Change in Control.

II.  STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

2.1Stock Options.  The Committee may, in its discretion, grant options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee.  Each option, or portion thereof, that is not an Incentive Stock Option, shall be a Non-Statutory Stock Option.  Each Incentive Stock Option shall be granted within ten years of the effective date of this Plan. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Company, or any parent or Subsidiary) exceeds the amount (currently $100,000) established by the Code, such options shall constitute Non‑Statutory Stock Options.

Options shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a)Number of Shares and Purchase Price.  The number of shares of Common Stock subject to an option and the purchase price per share of Common Stock purchasable upon exercise of the option shall be determined by the Committee; provided,  however, that the purchase price per share of Common Stock purchasable upon exercise of a Non‑Statutory Stock Option or an Incentive Stock Option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such option; providedfurther, that if an Incentive Stock Option shall be granted to any person who, at the time such option is granted, owns capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or Subsidiary) (a “Ten Percent Holder”), the purchase price per share of Common Stock shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option.

(b)Option Period and Exercisability.  The period during which an option may be exercised shall be determined by the Committee; provided,  however, that no option shall be exercised later than 10 years after its date of grant; providedfurther, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such option shall not be exercised later than five years after its date of grant.  The Committee may, in its discretion, determine that an option is to be granted as a Performance Option and may establish an applicable Performance Period and Performance Measures which shall be satisfied or met as a condition to the grant of such option or to the exercisability of all or a portion of such option.  The Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time.  An exercisable option, or portion thereof, may be exercised only with respect to whole shares of Common Stock.

(c)Method of Exercise.  An option may be exercised (i) by giving written notice to the Company specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment

7

to the Company’s satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of previously owned whole shares of Common Stock (for which the optionee has good title, free and clear of all liens and encumbrances)having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount of the required payment, (D)except as may be prohibited by applicable law, in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (D) a combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the option, (ii) if applicable, by surrendering to the Company any Tandem SARs which are cancelled by reason of the exercise of the option and (iii) by executing such documents as the Company may reasonably request.  Any fraction of a share of Common Stock which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the optionee.  No certificate representing Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 6.5, have been paid (or arrangement made for such payment to the Company’s satisfaction).

2.2Stock Appreciation Rights.  The Committee may, in its discretion, grant SARs to such eligible persons as may be selected by the Committee.  The Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR.

SARs shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a)Number of SARs and Base Price.  The number of SARs subject to an award shall be determined by the Committee.  Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted.  The base price of a Tandem SAR shall be the purchase price per share of Common Stock of the related option.  The base price of a Free-Standing SAR shall be determined by the Committee; provided,  however, that such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR.

(b)Exercise Period and Exercisability.  The Agreement relating to an award of SARs shall specify whether such award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a combination thereof.  The period for the exercise of an SAR shall be determined by the Committee; provided,  however, that no SAR may be exercised later than 10 years after its date of grant; providedfurther, that no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture or other termination of the related option.  The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of an SAR or to the exercisability of all or a portion of an SAR.  The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time.  An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock and, in the case of a Free‑Standing SAR, only with respect to a whole number of SARs.  If an

8

SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c) and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.2(d).  Prior to the exercise of an SAR for shares of Common Stock, including Restricted Stock, the holder of such SAR shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such SAR.

(c)Method of Exercise.  A Tandem SAR may be exercised (i) by giving written notice to the Company specifying the number of whole SARs which are being exercised, (ii) by surrendering to the Company any options which are cancelled by reason of the exercise of the Tandem SAR and (iii) by executing such documents as the Company may reasonably request.  A Free-Standing SAR may be exercised (i) by giving written notice to the Company specifying the whole number of SARs which are being exercised and (ii) by executing such documents as the Company may reasonably request.

2.3Termination of Employment.  (a)    Disability.  Subject to paragraph (f) below and unless otherwise specified in the Agreement relating to an option or SAR, as the case may be, if the employment with the Company of the holder of an option or SAR terminates by reason of Disability, each option and SAR held by such holder shall be fully exercisable and may thereafter be exercised by such holder (or such holder’s legal representative or similar person) until and including the earlier to occur of (i) the date which is one year (or such other period as set forth in the Agreement relating to such option or SAR) after such holder’s Employment Termination Date and (ii) the expiration date of the term of such option or SAR.

(b)Retirement.  Subject to paragraph (f) below and unless otherwise specified in the Agreement relating to an option or SAR, as the case may be, if the employment with the Company of the holder of an option or SAR terminates by reason of retirement on or after age 65 (or prior to age 65 with the consent of the Committee) each option and SAR held by such holder shall be fully exercisable and may thereafter be exercised by such holder (or such holder’s legal representative or similar person) until and including the earlier to occur of (i) the date which is one year (or such other period as set forth in the Agreement relating to such option or SAR) after such holder’s Employment Termination Date and (ii) the expiration date of the term of such option or SAR.

(c)Death.  Subject to paragraph (f) below and unless otherwise specified in the Agreement relating to an option or SAR, as the case may be, if the employment with the Company of the holder of an option or SAR terminates by reason of death, each option and SAR held by such holder shall be fully exercisable and may thereafter be exercised by such holder’s executor, administrator, legal representative, beneficiary or similar person, as the case may be, until and including the earlier to occur of (i) the date which is one year (or such other period as set forth in the Agreement relating to such option or SAR) after the date of death and (ii) the expiration date of the term of such option or SAR; provided,  however, that, in the event that the date of death is less than six months prior to such expiration date, such holder’s executor, administrator, legal representative, beneficiary or similar person, as the case may be, shall have not less than six months from the date of death to so exercise such option or SAR (except that, in the event that such option is an Incentive Stock Option, such period of exercise shall not under

9

any circumstance extend beyond the tenth anniversary of the date of grant of such Incentive Stock Option).

(d)Other Termination.  If the employment with the Company of the holder of an option or SAR is terminated by the Company for Cause, each option and SAR held by such holder shall terminate automatically on such holder’s Employment Termination Date.

Subject to paragraph (f) below and unless otherwise specified in the Agreement relating to an option or SAR or in an employment agreement or severance plan or agreement having terms relating to an option or SAR, as the case may be, if the employment with the Company of the holder of an option or SAR terminates for any reason other than Disability, retirement on or after age 65 (or prior to age 65 with the consent of the Committee), death or Cause, each option and SAR held by such holder shall be exercisable only to the extent that such option or SAR is exercisable on such holder’s Employment Termination Date and may thereafter be exercised by such holder (or such holder’s legal representative or similar person) until and including the earlier to occur of (i) the date which is three months (or such other period as set forth in the Agreement relating to such option or SAR) after such holder’s Employment Termination Date and (ii) the expiration date of the term of such option or SAR.

(e)Death Following Termination of Employment.  Subject to paragraph (f) below and unless otherwise specified in the Agreement relating to an option or SAR, as the case may be, if the holder of an option or SAR dies during the period set forth in Section 2.3(a) following termination of employment by reason of Disability, or if the holder of an option or SAR dies during the period set forth in Section 2.3(b) following termination of employment by reason of retirement on or after age 65 (or prior to age 65 with the consent of the Committee), or if the holder of an option or SAR dies during the period set forth in Section 2.3(d) following termination of employment for any reason other than Disability or retirement on or after age 65 (or prior to age 65 with the consent of the Committee) (or, in each case, such other period as set forth in the Agreement relating to such option or SAR), each option and SAR held by such holder shall be exercisable only to the extent that such option or SAR, as the case may be, is exercisable on the date of such holder’s death and may thereafter be exercised by the holder’s executor, administrator, legal representative, beneficiary or similar person, as the case may be, until and including the earlier to occur of (i) the date which is one year (or such other period as set forth in the Agreement relating to such option or SAR) after the date of death and (ii) the expiration date of the term of such option or SAR; provided,  however, that, in the event that the date of death is less than six months prior to such expiration date, such holder’s executor, administrator, legal representative, beneficiary or similar person, as the case may be, shall have not less than six months from the date of death to so exercise such option or SAR (except that, in the event that such option is an Incentive Stock Option, such period of exercise shall not under any circumstance extend beyond the tenth anniversary of the date of grant of such Incentive Stock Option).

(f)Termination of Employment - Incentive Stock Options.  Unless otherwise specified in the Agreement relating to the option, if the employment with the Company of a holder of an Incentive Stock Option terminates by reason of Permanent and Total Disability, each Incentive Stock Option held by such optionee shall become fully exercisable and may thereafter be exercised by such optionee (or such optionee’s legal representative or similar

10

person) until and including the earlier to occur of (i) the date which is one year (or such shorter period as set forth in the Agreement relating to such option) after such optionee’s Employment Termination Date by reason of Permanent and Total Disability and (ii) the expiration date of the term of such option.

Unless otherwise specified in the Agreement relating to the option, if the employment with the Company of a holder of an Incentive Stock Option terminates by reason of death, each Incentive Stock Option held by such optionee shall become fully exercisable and may thereafter be exercised by such optionee’s executor, administrator, legal representative, beneficiary or similar person until and including the earlier to occur of (i) the date which is one year (or such shorter period as set forth in the Agreement relating to such option) after the date of death and (ii) the expiration date of the term of such option.

If the employment with the Company of the optionee of an Incentive Stock Option is terminated by the Company for Cause, each Incentive Stock Option held by such optionee shall terminate automatically on the effective date of such optionee’s termination of employment.  If the employment with the Company of a holder of an Incentive Stock Option terminates for any reason other than Permanent and Total Disability, death or Cause, each Incentive Stock Option held by such optionee shall be exercisable only to the extent such option is exercisable on the effective date of such optionee’s termination of employment and may thereafter be exercised by such holder (or such holder’s legal representative or similar person) until and including the earlier to occur of (i) the date which is three months after such optionee’s Employment Termination Date and (ii)  the expiration date of the term of such option.

If the holder of an Incentive Stock Option dies during the period set forth in the first paragraph of this Section 2.3(f) following termination of employment by reason of Permanent and Total Disability (or such shorter period as set forth in the Agreement relating to such option), or if the holder of an Incentive Stock Option dies during the period set forth in the third paragraph of this Section 2.3(f) following termination of employment for any reason other than Permanent and Total Disability, death or Cause, each Incentive Stock Option held by such optionee shall be exercisable only to the extent such option is exercisable on the date of the optionee’s death and may thereafter be exercised by the optionee’s executor, administrator, legal representative, beneficiary or similar person until and including the earlier to occur of (i) the date which is one year (or such shorter period as set forth in the Agreement relating to such option) after the date of death and (ii) the expiration date of the term of such option.

2.4No Repricing.    Notwithstanding anything in this Plan to the contrary and subject to Section 6.7, without the approval of the stockholders of the Company the Committee will not (i) amend or replace any previously granted option or SAR in a transaction that constitutes a “repricing,” as such term is used in Section 303A.08 of the Listed Company Manual of the New York Stock Exchange or (ii) cancel any previously granted option or SAR in exchange for cash or another award if the option exercise price or the SAR base price exceeds the Fair Market Value of a share of Common Stock on the date of such cancellation, other than in connection with a Change in Control.  

11

III.  STOCK AWARDS

3.1StockAwards.  The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be selected by the Committee.  The Agreement relating to a Stock Award shall specify whether the Stock Award is a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Share Award or a Performance Share Unit Award.

3.2Terms of Restricted Stock Awards.  Restricted Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a)Number of Shares and Other Terms.  The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee.

(b)Vesting and Forfeiture.  The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period. 

(c)Delivery of Shares.  During the Restriction Period, the shares subject to a Restricted Stock Award shall be registered in the holder’s name.  Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), the restrictions applicable to the shares subject to a Restricted Stock Award shall lapse and, unless otherwise provided in the Agreement relating to the Restricted Stock Award, and subject to the Company’s right to require payment of any taxes in accordance with Section 6.5, the shares shall be delivered to the holder by the book entry method.  Alternatively, the Committee, in its discretion, choose to issue stock certificates for such shares.

(d)Rights with Respect to Restricted Stock Awards.  Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided,  however, that a distribution with respect to shares of Common Stock, other than a regular cash dividend, shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution was made.

3.3Terms of Restricted Stock Unit Awards.  Restricted Stock Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

12

(a)Number of Shares and Other Terms.  The number of shares of Common Stock subject to a Restricted Stock Unit Award and the Restriction Period and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee.

(b)Vesting and Forfeiture.  The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.

(c)Settlement of Vested Restricted Stock Unit Awards.  The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall be entitled to receive, on a current or deferred basis, dividend equivalents, and, if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award.  Prior to the settlement of a Restricted Stock Unit Award, the holder of such award shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such award.  A Restricted Stock Unit Award shall be settled no later than March 15 of the calendar year following the calendar year in which the award becomes vested. 

3.4Terms of Performance Share Awards.  Performance Share Awards shall be subject to the following terms and conditions and shall be subject to such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a)Number of Shares and Other Terms.  The number of shares of Common Stock subject to a Performance Share Award and the Performance Measures and Performance Period applicable to a Performance Share Award shall be determined by the Committee.

(b)Vesting and Forfeiture.  The Agreement relating to a Performance Share Award  shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such award if  the specified Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of the shares of Common Stock subject to such award if the specified Performance Measures are not satisfied or met during the specified Performance Period.

(c)Delivery of Shares.  During the Performance Period, the shares subject to a Performance Share Award shall be registered in the holder’s name.  Upon termination of any applicable Performance Period (and the satisfaction or attainment of applicable Performance Measures), the restrictions applicable to the shares subject to a Performance Share Award shall lapse and, unless otherwise provided in the Agreement relating to the Performance Share Award, and subject to the Company’s right to require payment of any taxes in accordance with Section

13

6.5, the shares shall be delivered to the holder by the book entry method.  Alternatively, the Committee, in its discretion, choose to issue stock certificates for such shares.

(d)Rights with Respect to Performance Share Awards.  Unless otherwise set forth in the Agreement relating to a Performance Share Award, and subject to the terms and conditions of a Performance Share Award, the holder of such award shall have rights as a stockholder of the Company, including, but not limited to, voting rights and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided,  however, that any distribution with respect to shares of Common Stock, including a regular cash dividend, shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution was made.

3.5Terms of Performance Share Unit Awards.  Performance Share Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a)Number of Shares and Other Terms.  The number of shares of Common Stock subject to a Performance Share Unit Award and the Performance Measures and Performance Period applicable to a Performance Share Unit Award shall be determined by the Committee.

(b)Vesting and Forfeiture.  The Agreement relating to a Performance Share Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Performance Share Unit Award if the specified Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of the shares of Common Stock subject to such award if the specified Performance Measures are not satisfied or met during the specified Performance Period. 

(c)Settlement of Vested Performance Share Unit Awards.  The Agreement relating to a Performance Share Unit Award shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall be entitled to receive, on a current or deferred basis, dividend equivalents and, if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award.  Prior to the settlement of a Performance Share Unit Award, the holder of such award shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such award.    A Performance Share Unit Award shall be settled no later than March 15 of the calendar year following the calendar year in which the award becomes vested. 

3.6Termination of Employment.  (a)    Disability or Death.  Unless otherwise specified in the Agreement relating to a Stock Award or in an employment agreement or severance plan or agreement having terms relating to a Stock Award, if the employment with the Company of the holder of such award terminates by reason of death or Disability:

(i)in the case of a Restricted Stock Award or Restricted Stock Unit Award, the portion of the Restricted Stock Award or Restricted Stock Unit Award which is unvested as of such holder’s Employment Termination Date shall vest in full, and

14

(ii)in the case of a Performance Share Award or Performance Share Unit Award, the Performance Period applicable to such award shall terminate as of such holder’s Employment Termination Date and all Performance Measures applicable to such award shall be deemed to have been satisfied at the target level with respect to the number of shares of Common Stock subject to such award.

(b)Retirement.  Unless otherwise specified in the Agreement relating to a Stock Award or in an employment agreement or severance plan or agreement having terms relating to a Stock Award, if the employment with the Company of the holder of such award terminates by reason of retirement on or after age 65 (or prior to age 65 with the consent of the Committee):

(i)in the case of a Restricted Stock Award or Restricted Stock Unit Award, the award shall vest with respect to the number of shares of Common Stock subject to the award multiplied by a fraction whose numerator is the number of days between the date of the award and the date on which the holder’s employment terminates (including the date of such termination) and the denominator of which is the number of days in the vesting period, and

(ii)in the case of a Performance Share Award or Performance Share Unit Award, the Performance Period applicable to such award shall terminate as of such holder’s Employment Termination Date and all Performance Measures applicable to such award shall be deemed to have been satisfied at the target level with respect to the number of shares of Common Stock subject to such award, and the award shall vest with respect to the number of shares of Common Stock subject to the award multiplied by a fraction whose numerator is the number of days between the date of the award and the date on which the holder’s employment terminates (including the date of such termination) and the denominator of which is the number of days in the Performance Period.

(c)Termination for Cause.  Unless otherwise set forth in the Agreement relating to a Stock Award or in an employment agreement or severance plan or agreement having terms relating to a Stock Award, if the employment with the Company of the holder of a Stock Award terminates for Cause, the portion of the Stock Award which is unvested as of such holder’s Employment Termination Date shall be forfeited and such portion shall be cancelled by the Company.

(d)Termination without Cause.  Unless otherwise specified in the Agreement relating to a Stock Award or in an employment agreement or severance plan or agreement having terms relating to a Stock Award, if the employment with the Company of the holder of such award is terminated by the Company without Cause:

(i)in the case of a Restricted Stock Award or Restricted Stock Unit Award, the award shall vest with respect to the number of shares of Common Stock subject to the award multiplied by a fraction whose numerator is the number of days between the date of the award and the date on which the holder’s employment terminates (including the date of such termination) and the denominator of which is the number of days in the vesting period, unless such termination of employment occurs within the twenty-four (24) month period following a Change in Control and such award was granted before such Change in Control, in which case the holder shall vest in full; and

15

(ii)in the case of a Performance Share Award or Performance Share Unit Award, the number of shares of Common Stock subject to such award shall be prorated by multiplying the number of shares of Common Stock subject to the award by a fraction, the numerator of which is the number of days between the Grant Date and the Employment Termination Date (including the date of such termination) and the denominator of which is thenumber of days between the Grant Date and the Measurement Date (the “Pro-Rata Share Amount”). The number of shares of Common Stock subject to the award less the Pro-Rata Share Amount shall be immediately forfeited as of the Employment Termination Date. Vesting of the Pro-Rata Share Amount shall be determined as of the Measurement Date, taking into account performance over the entire Performance Period.  As of the Measurement Date, the holder shall vest in a portion of the Pro-Rata Share Amount determined based on the following, whichever results in the holder vesting in a smaller number of shares of Common Stock: (A) actual performance and satisfaction of any applicable Performance Measures, as determined by the Committee, or (B) performance and satisfaction of applicable Performance Measures at the target level.  Notwithstanding this provision, (x) if such termination of employment occurs within the twenty-four (24) month period following a Change in Control and such award was granted before such Change in Control, then the holder shall vest in  the number of shares of Common Stock subject to the award at the target level (regardless of actual performance) as of the date of such termination of employment, and (y) if a Change in Control occurs following such a termination of employment but prior to the Measurement Date, and if in connection with such Change in Control holders of Shares receive consideration other than shares of common stock that are registered under Section 12 of the Exchange Act, then the holder shall vest, as of the date of such Change in Control, in the Pro-Rata Share Amount at the target level or, at the Board’s discretion, based on the actual performance attained through the date of such Change in Control (as determined by the Board).

(e)Other Terminations.  If the holder ceases to be employed by the Company for any reason not described in paragraphs (a) through (d) of this Section, each share of Common Stock subject to the award which has not vested prior thereto shall be forfeited by the holder and shall be transferred, without payment of any consideration to the holder, to the Company (or its assignee or nominee) and all rights of the holder to or with respect to such share of Common Stock shall terminate.

IV.  CASH PERFORMANCE AWARDS

4.1Cash Performance Awards.  The Committee may, in its discretion, grant Cash Performance Awards to such eligible persons as may be selected by the Committee.

4.2Terms of Cash Performance Awards.  Cash Performance Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a)Amount of Award and Performance Measures.  The amount payable under a Cash Performance Award and the Performance Measures and Performance Period applicable to a Cash Performance Award shall be determined by the Committee.

16

(b)Vesting and Forfeiture.  The Agreement relating to a Cash Performance Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Cash Performance Award if the specified Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of such award if the specified Performance Measures are not satisfied or met during the specified Performance Period.

(c)Settlement of Cash Performance Awards.  The Agreement relating to a Cash Performance Award shall specify whether such award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a combination thereof.  If a Cash Performance Award is settled in shares of Restricted Stock, shares of Common Stock shall be issued in accordance with Section 3.2(c) and the holder of such Restricted Stock shall have such rights as a stockholder of the Company as determined pursuant to Section 3.2(d).  Prior to the settlement of a Cash Performance Award in shares of Common Stock, including Restricted Stock, the holder of such award shall have no rights as a stockholder of the Company.  A Cash Performance Award shall be settled no later than March 15 of the calendar year following the calendar year in which the award becomes vested.

4.3Termination of Employment.  (a) Disability, Retirement or Death.  Unless otherwise set forth in the Agreement relating to a Cash Performance Award or in an employment agreement or severance plan or agreement having terms relating to a Cash Performance Award, if the employment with the Company of the holder of such award terminates by reason of Disability, retirement on or after age 65 (or prior to age 65 with the consent of the Committee) or death, the Performance Period applicable to such award shall terminate as of such holder’s Employment Termination Date and all Performance Measures applicable to such award shall be deemed to have been satisfied at the target level with respect to the Cash Performance Award.

(b)Termination for Cause.  Unless otherwise set forth in the Agreement relating to a Cash Performance Award or in an employment agreement or severance plan or agreement having terms relating to a Cash Performance Award, if the employment with the Company of the holder of a Cash Performance Award terminates for Cause, the portion of the Cash Performance Award which is unvested as of such holder’s Employment Termination Date shall be forfeited and such portion shall be cancelled by the Company.

(c)Termination without Cause.  Unless otherwise set forth in the Agreement relating to a Cash Performance Award or in an employment agreement or severance plan or agreement having terms relating to a Cash Performance Award, if the employment with the Company of the holder of such award is terminated by the Company without Cause, the Performance Period applicable to such award shall continue through the end of such Performance Period, and the holder shall be entitled to the lesser of (A) the amount the holder would have been entitled to receive, if any, based on actual performance and satisfaction of any applicable Performance Measures, as determined by the Committee, and (B) the amount the holder would have been entitled to receive if the applicable Performance Measures were satisfied at the target level, in each case, determined as of the last day of the Performance Period and multiplied by a fraction, the numerator of which is the number of days between the Grant Date and the holder’s Employment Termination Date (including the date of such termination) and the denominator of

17

which is the number of days between the grant date of such award and the last day of the Performance Period. 

(d)Other Terminations.  Unless otherwise set forth in the Agreement relating to a Cash Performance Award or in an employment agreement or severance plan or agreement having terms relating to a Cash Performance Award, if the employment with the Company of the holder of a Cash Performance Award terminates for any reason not described in paragraphs (a) through (c) of this Section, the portion of the Cash Performance Award which is unvested as of such holder’s Employment Termination Date shall be forfeited and such portion shall be cancelled by the Company.

V.  PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS

5.1Eligibility.  Each Non-Employee Director shall be granted Restricted Stock Awards or Restricted Stock Unit Awards in accordance with this Article V. 

5.2Grants of Restricted Stock or Restricted Stock Units.Each Non-Employee Director shall be granted Restricted Stock Awards or Restricted Stock Unit Awards as follows:

(a)Time of Grant.  On the date of each annual meeting of stockholders of the Company, each person who is a Non-Employee Director immediately after such annual meeting of stockholders shall be granted such number of shares of Restricted Stock or such number of Restricted Stock Units as shall be determined by the Committee, in its discretion  (which number shall be pro-rated if such Non-Employee Director is first elected or begins to serve as a Non-Employee Director on a date other than the date of an annual meeting of stockholders).Notwithstanding the above, the aggregate grant date fair value of Restricted Stock Awards or Restricted Stock Unit Awards that may be granted during any fiscal year of the Company to any Non-Employee Director shall not exceed $650,000, provided,  however, that (i) the limit set forth in this sentence shall be multiplied by two in the year in which a Non-Employee Director commences service on the Board and (ii) shares of Common Stock provided to Non-Employee Directors in lieu of cash otherwise payable to a Non-Employee Director pursuant to the Plan or otherwise shall be disregarded for purposes of this limitation.

(b)Vesting.  Except as otherwise provided in this Article V and in Section 6.8, Restricted Stock and Restricted Stock Units granted pursuant to this Article V shall vest in accordance with the terms and conditions as determined by the Board and set forth in the Agreement relating to such Restricted Stock Award or Restricted Stock Unit Award.

(c)Deferral.  To the extent permitted by the Committee, a Non-Employee Director may elect to defer receipt of all or any portion of the shares of Restricted Stock or payment of all or any portion of the Restricted Stock Units that are granted pursuant to this Article V in accordance with rules established by the Committee.  Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion.

5.3Terms of Restricted Stock Awards.     Restricted Stock Awards shall be subject to the following additional terms and conditions:

18

(a)Delivery of Shares.  Shares of Restricted Stock granted pursuant to this Article V shall be issued subject to the terms and conditions set forth in Section 3.2(c).

(b)Rights with Respect to Restricted Stock Awards.  The holder of a Restricted Stock Award granted pursuant to this Article V shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided,  however, that a distribution with respect to shares of Common Stock, other than a regular cash dividend, shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution was made.

5.4Terms of Restricted Stock Unit Awards.  Restricted Stock Unit Awards shall be subject to the following additional terms and conditions:

(a)Dividend Equivalents.   Restricted Stock Units shall accrue dividend equivalents at the same rate and at the same times as cash dividends are paid on shares of Common Stock.  Such dividend equivalents shall be retained by the Company on behalf of the Non-Employee Director, reinvested in the form of additional Restricted Stock Units and become payable at the same time and in the same manner as the Restricted Stock Units upon which they shall have accrued.

(b)Settlement.    Subject to Section 5.2(c), as of the date of vesting of any Restricted Stock Unit granted to a Non-Employee Director pursuant to this Article V, such Restricted Stock Unit shall be converted into the right to receive one share of Common Stock.  As soon as practical thereafter the Company shall (i) issue one share of Common Stock to such Non-Employee Director for each whole Restricted Stock Unit which shall have vested and (ii) pay to such Non-Employee Director a cash amount in lieu of any fractional Restricted Stock Unit which shall have vested.  Restricted Stock Unit Awards granted to a Non-Employee Director pursuant to this Article V shall be settled no later than March 15 of the calendar year following the calendar year in which the award becomes vested. 

(c)No Stockholder Rights.    Prior to the settlement of a Restricted Stock Unit Award granted pursuant to this Article V, the holder of such Restricted Stock Unit Award shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such award.

5.5Termination of Directorship.

(a)Disability.    If the holder of a Restricted Stock Award or a Restricted Stock Unit Award granted pursuant to this Article V ceases to be a director of the Company by reason of Disability, each share of Restricted Stock or each Restricted Stock Unit subject to such award shall vest in full.

(b)Retirement. If the holder of a Restricted Stock Award or a Restricted Stock Unit Award granted pursuant to this Article V ceases to be a director of the Company on or after age 70, each share of Restricted Stock or each Restricted Stock Unit subject to such award shall vest in full.

19

(c)Death. If the holder of a Restricted Stock Award or a Restricted Stock Unit Award granted pursuant to this Article V ceases to be a director of the Company by reason of death, each share of Restricted Stock or each Restricted Stock Unit subject to such award shall vest in full.

(d)Other Termination. If the holder of a Restricted Stock Award or a Restricted Stock Unit Award granted pursuant to this Article V ceases to be a director of the Company for any reason other than Disability, ceasing to be a director on or after age 70 or death, each share of Restricted Stock or each Restricted Stock Unit subject to such award which has not vested prior thereto shall be forfeited and all rights of such Non-Employee Director to or with respect to such share of Restricted Stock or such Restricted Stock Unit shall terminate.

VI.  GENERAL

6.1EffectiveDateand TermofPlan.  This Plan shall be submitted to the stockholders of the Company for approval at the Company’s 2016 annual meeting of stockholders and, if approved by the affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy at such annual meeting of stockholders, shall become effective on the date of such approval.  Once effective, this Plan shall supersede and replace the Landauer Inc., Incentive Compensation Plan (the “Prior Plan”); provided that, the Prior Plan shall remain in effect with respect to all outstanding awards granted under the Prior Plan until such awards have been exercised, forfeited, cancelled, expired or otherwise terminated in accordance with the terms of such awards. This Plan shall terminate 10 years after its effective date, unless terminated earlier by the Board. Termination of this Plan shall not affect the terms or conditions of any award granted prior to termination.

Awards hereunder may be made at any time prior to the termination of this Plan, provided that no award may be made later than 10 years after the effective date of this Plan.  In the event that this Plan is not approved by the stockholders of the Company, this Plan and any awards hereunder shall be void and of no force or effect.

6.2Amendments.  The Board may amend this Plan as it shall deem advisable, subject to any requirement of stockholder approval required by applicable law, rule or regulation, including Section 162(m) of the Code and any rule of the New York Stock Exchange, or, if the Common Stock is not listed on the New York Stock Exchange, any rule of the principal national stock exchange on which the Common Stock is then traded; provided,  however, that no amendment may impair the rights of a holder of an outstanding award without the consent of such holder.

6.3Agreement.  Each Stock Award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions applicable to such award.  No Stock Award shall be valid until an Agreement is executed by the Company and the recipient of such award and, upon execution by each party and delivery of the Agreement to the Company, such award shall be effective as of the effective date set forth in the Agreement.

6.4Non-Transferability.  Unless otherwise specified in the Agreement relating to an award, no award shall be transferable other than by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company.  Except to the extent permitted

20

by the foregoing sentence or the Agreement relating to an award, each award may be exercised or settled during the holder’s lifetime only by the holder or the holder’s legal representative or similar person.  Except as permitted by the second preceding sentence, no award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process.  Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any award, such award and all rights thereunder shall immediately become null and void.

6.5Tax Withholding and Other Settlements in Lieu of Taxes.  The Company shall have the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash pursuant to an award made hereunder, payment by the holder of such award of any federal, state, local or other taxes which may be required to be withheld or paid in connection with such award.  An Agreement may provide that (i) the Company shall withhold whole shares of Common Stock which would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with an award (the “Tax Date”), or withhold an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company, (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation, (D) in the case of the exercise of an option and except as may be prohibited by applicable law, a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) any combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the award.  Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate.  Any fraction of a share of Common Stock which would be required to satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in cash by the holder.

6.6Restrictions on Shares.  Each award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration or qualification of the shares of Common Stock subject to such award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company.  The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any award made hereunder bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder.

21

6.7Adjustment.  In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin‑off or other similar change in capitalization or event, or any distribution to holders of Common Stock other than a regular cash dividend, the number and class of securities available under this Plan, the number and class of securities subject to each outstanding option and the purchase price per security, the terms of each outstanding SAR, the maximum number of securities with respect to which options or SARs may be granted during any fiscal year of the Company to any one grantee, the terms of each outstanding Restricted Stock Award, Restricted Stock Unit Award, Performance Share Award and Performance Share Unit Award, including the number and class of securities subject thereto, the terms of each outstanding Cash Performance Award, the maximum number of shares of Common Stock that may be awarded during any fiscal year of the Company pursuant to a Performance Share Award or a Performance Share Unit Award to any one grantee, the maximum amount that may be payable pursuant to any Cash Performance Award granted to any one grantee with respect a particular Performance Period, and the number of shares of Restricted Stock and the number of Restricted Stock Units to be granted to Non-Employee Directors pursuant to Article V shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding options and SARs without an increase in the aggregate purchase price or base price.  The decision of the Committee regarding any such adjustment shall be final, binding and conclusive.  If any such adjustment would result in a fractional security being (a) available under this Plan, such fractional security shall be disregarded, or (b) subject to an award under this Plan, the Company shall pay the holder of such award, in connection with the first vesting, exercise or settlement of such award, in whole or in part, occurring after such adjustment, an amount in cash determined by multiplying (i) the fraction of such security (rounded to the nearest hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on the vesting, exercise or settlement date over (B) the exercise or base price, if any, of such award.

6.8Change in Control.

(a)(1)Notwithstanding any provision in this Plan or any Agreement, in the event of a Change in Control pursuant to Section (b)(3) or (4) below in connection with which the holders of Common Stock receive shares of common stock that are registered under Section 12 of the Exchange Act, the Board may, in its sole discretion, provide that any, all, or none of the following shall occur: (i) outstanding options and SARs shall immediately become exercisable in full, (ii) the Restriction Period applicable to any outstanding Restricted Stock Award or Restricted Stock Unit Award shall lapse, (iii) the Performance Period applicable to any outstanding Performance Share, Performance Share Unit or Cash Performance Award shall lapse, (iv) the Performance Measures applicable to any outstanding award shall be deemed to be satisfied at the target level or, at the Board’s discretion, based on the actual performance attained through the date of the Change in Control (as determined by the Board) or (v) there shall be substituted for each share of Common Stock available under this Plan, whether or not then subject to an outstanding award, the number and class of shares into which each outstanding share of Common Stock shall be converted pursuant to such Change in Control.  In the event of any such substitution, the purchase price per share in the case of an option and the base price in the case of an SAR shall be appropriately adjusted by the Committee (whose determination shall be final, binding and conclusive), such adjustments to be made in the case of outstanding options and SARs without an increase in the aggregate purchase price or base price.

22

(2)Notwithstanding any provision in this Plan or any Agreement, in the event of a Change in Control pursuant to Section (b)(1) or (2) below, or in the event of a Change in Control pursuant to Section (b)(3) or (4) below in connection with which the holders of Common Stock receive consideration other than shares of common stock that are registered under Section 12 of the Exchange Act, the Board may, in its sole discretion, provide that any, all or none of the following shall occur: (i) each outstanding award shall be assumed or replaced with an award of substantially equivalent value (as determined by the Board), or (ii) each outstanding award shall be surrendered to the Company by the holder thereof, and each such surrendered award shall immediately be canceled by the Company, and the holder shall receive, within 10 days of the occurrence of a Change in Control, a cash payment from the Company in an amount equal to (A) in the case of an option, the number of shares of Common Stock then subject to such option, multiplied by the excess, if any, of the greater of (I) the highest per share price offered to stockholders of the Company in any transaction whereby the Change in Control takes place or (II) the Fair Market Value of a share of Common Stock on the date of occurrence of the Change in Control, over the purchase price per share of Common Stock subject to the option, (B) in the case of a Free-Standing SAR, the number of shares of Common Stock then subject to such SAR, multiplied by the excess, if any, of the greater of (I) the highest per share price offered to stockholders of the Company in any transaction whereby the Change in Control takes place or (II) the Fair Market Value of a share of Common Stock on the date of occurrence of the Change in Control, over the base price of the SAR, (C) in the case of a Stock Award, the number of shares of Common Stock, then subject to such award (calculated in the manner set forth in clause (iv) of Section 6.8(a)(1) in the case of a Performance Share Award or Performance Share Unit Award), multiplied by the greater of (I) the highest per share price offered to stockholders of the Company in any transaction whereby the Change in Control takes place or (II) the Fair Market Value of a share of Common Stock on the date of occurrence of the Change in Control, and (D) in the case of a Cash Performance Award, the amount payable under such award, which shall be calculated at the target level or at the Board’s discretion, based on the actual performance attained through the date of the Change in Control (as determined by the Board).  Further, in the event of a Change in Control, if the Board causes each outstanding option to be surrendered, each Tandem SAR shall also be surrendered by the holder thereof and shall be canceled simultaneously with the cancellation of the related option.

(b)“Change in Control” shall mean:

(1)the acquisition by any individual, entity or group (a “Person”), including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding shares of Common Stock (the “Outstanding Common Stock”) or (ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following: (A) any acquisition directly from the Company (excluding any acquisition resulting from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company), (B) any acquisition by the Company, (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 6.8(b); providedfurther, that for

23

purposes of clause (B), if any Person (other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall become the beneficial owner of 30% or more of the Outstanding Common Stock or 30% or more of the Outstanding Voting Securities by reason of an acquisition by the Company, and such Person shall, after such acquisition by the Company, become the beneficial owner of any additional shares of the Outstanding Common Stock or any additional Outstanding Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control;

(2)individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of the Company subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of the Company as a result of an actual or threatened solicitation by a Person other than the Board for the purpose of opposing a solicitation by any other Person with respect to the election or removal of directors, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall not be deemed a member of the Incumbent Board; 

(3)the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Corporate Transaction”); excluding, however, a Corporate Transaction pursuant to which (i) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding Common Stock and the Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than60% of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Common Stock and the Outstanding Voting Securities, as the case may be, (ii) no Person (other than:  the Company; any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; the corporation resulting from such Corporate Transaction; and any Person which beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, 30% or more of the Outstanding Common Stock or the Outstanding Voting Securities, as the case may be) will beneficially own, directly or indirectly, 30% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or

24

(4)the consummation of a plan of complete liquidation or dissolution of the Company.

6.9Deferrals.  The Committee may determine that the delivery of shares of Common Stock or the payment of cash, or a combination thereof, upon the exercise or settlement of all or a portion of any award made hereunder shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of awards.  Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion and consistent with the requirements of Section 409A of the Code.

6.10NoRight ofParticipation or Employment.  Unless otherwise set forth in an employment agreement, no person shall have any right to participate in this Plan.  Neither this Plan nor any award made hereunder shall confer upon any person any right to continued employment by the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment of any person at any time without liability hereunder.

6.11Rights as Stockholder.  No person shall have any right as a stockholder of the Company with respect to any shares of Common Stock or other equity security of the Company which is subject to an award hereunder unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security.

6.12Designation of Beneficiary.  A holder of an award may file with the Committee a written designation of one or more persons as such holder’s beneficiary or beneficiaries (both primary and contingent) in the event of the holder’s death or incapacity.  To the extent an outstanding option or SAR granted hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such option or SAR.

Each beneficiary designation shall become effective only when filed in writing with the Committee during the holder’s lifetime on a form prescribed by the Committee.  The spouse of a married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse.  The filing with the Committee of a new beneficiary designation shall cancel all previously filed beneficiary designations.

If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding option and SAR hereunder held by such holder, to the extent exercisable, may be exercised by such holder’s executor, administrator, legal representative or similar person.

6.13Governing Law.  This Plan, each award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

25

EX-31.1

Exhibit 31.1

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.

Date:February9, 2017	/s/ Michael P. Kaminski
	Michael P. Kaminski
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

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.

Date:February 9, 2017	/s/ Daniel J. Fujii
	Daniel J. Fujii
	Chief Financial Officer

EX-32.1

Exhibit 32.1

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 December 31, 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.

Date:February9, 2017	/s/ Michael P. Kaminski
	Michael P. Kaminski
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

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 December 31, 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.

Date:February9, 2017	/s/ Daniel J. Fujii
	Daniel J. Fujii
	Chief Financial Officer

XML

Document And Entity Information - shares	3 Months Ended
	Dec. 31, 2016	Feb. 03, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2017
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		9,622,159

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Assets
Cash and cash equivalents	$ 12,442	$ 13,285
Receivables, net of allowances of $1,313 at December 31, 2016 and $1,296 at September 30, 2016	32,482	31,998
Inventories	5,692	5,670
Deferred income tax assets - current	2,006	2,098
Prepaid income taxes	655	764
Prepaid expenses and other current assets	3,866	2,187
Total current assets	57,143	56,002
Property, plant and equipment, at cost	106,301	105,237
Less accumulated depreciation and amortization	(60,248)	(58,820)
Property, plant and equipment, net	46,053	46,417
Equity in joint ventures	24,956	26,174
Goodwill	33,335	33,807
Intangible assets, net of accumulated amortization of $11,699 at December 31, 2016 and $11,772 at September 30, 2016	9,003	9,297
Dosimetry devices, net of accumulated depreciation of $6,379 at December 31, 2016 and $6,197 at September 30, 2016	2,899	3,162
Deferred income tax assets	7,873	9,104
Other assets	6,490	6,853
Total assets	187,752	190,816
Liabilities
Accounts payable	2,450	3,012
Dividends payable	2,823	2,815
Deferred contract revenue	13,642	13,932
Accrued compensation and related costs	7,845	9,256
Accrued severance	122	302
Other accrued expenses	6,197	5,181
Total current liabilities	33,079	34,498
Long-term debt	107,600	109,100
Pension and postretirement obligations	24,874	24,833
Deferred income tax liabilities	103	86
Uncertain income tax liabilities	1,489	1,495
Other non-current liabilities	203	205
Total liabilities	167,348	170,217
Commitments and Contingencies
Stockholders’ equity:
Preferred stock, $0.10 par value per share, authorized 1,000,000 shares; none issued
Common stock, $0.10 par value per share, authorized 20,000,000 shares; 9,797,046 and 9,727,264 shares issued and outstanding at December 31, 2016 and September 30, 2016, respectively	980	973
Additional paid in capital	44,569	43,982
Accumulated other comprehensive loss	(17,534)	(15,266)
Accumulated deficit	(8,800)	(10,511)
Landauer, Inc. stockholders' equity	19,215	19,178
Noncontrolling interest	1,189	1,421
Total stockholders' equity	20,404	20,599
Total Liabilities and Stockholders' Equity	$ 187,752	$ 190,816

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Consolidated Balance Sheets [Abstract]
Receivables, allowances	$ 1,313	$ 1,296
Intangible assets, accumulated amortization	11,699	11,772
Dosimetry devices, accumulated depreciation	$ 6,379	$ 6,197
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	9,797,046	9,727,264
Common stock, shares outstanding	9,797,046	9,727,264

XML

Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Revenues:
Service revenues	$ 32,749	$ 31,545
Product revenues	4,823	4,985
Total revenues	37,572	36,530
Costs and expenses:
Service costs	15,978	16,178
Product costs	1,959	1,837
Total cost of sales	17,937	18,015
Gross profit	19,635	18,515
Selling, general and administrative expense	12,193	12,263
Operating income	7,442	6,252
Equity in income of joint ventures	636	301
Interest expense, net	(794)	(933)
Other (expense) income, net	(328)	(160)
Income before taxes	6,956	5,460
Income tax expense	2,376	1,687
Net income	4,580	3,773
Less: Net income attributed to noncontrolling interest	179	130
Net income attributed to Landauer, Inc.	$ 4,401	$ 3,643
Net income per share attributable to Landauer, Inc. shareholders:
Basic	$ 0.46	$ 0.38
Weighted average basic shares outstanding	9,540	9,460
Diluted	$ 0.46	$ 0.38
Weighted average diluted shares outstanding	9,584	9,492

XML

Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Net income	$ 4,580	$ 3,773
Other comprehensive income (loss):
Defined benefit pension and postretirement plans activity, net of taxes	119	44
Unrealized gains (losses) on available-for-sale securities, net of taxes		(75)
Foreign currency translation adjustment , net of taxes	(2,426)	(315)
Comprehensive income	2,273	3,427
Landauer, Inc. [Member]
Net income	4,401	3,643
Other comprehensive income (loss):
Defined benefit pension and postretirement plans activity, net of taxes	119	44
Unrealized gains (losses) on available-for-sale securities, net of taxes		(75)
Foreign currency translation adjustment , net of taxes	(2,387)	(317)
Comprehensive income	2,133	3,295
Non-Controlling Interest [Member]
Net income	179	130
Other comprehensive income (loss):
Foreign currency translation adjustment , net of taxes	(39)	2
Comprehensive income	$ 140	$ 132

XML

Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements Of Comprehensive Income [Abstract]
Defined benefit pension and postretirement plans activity, tax	$ 71	$ 25
Unrealized gains/(losses) on available-for-sale securities, tax	0	23
Foreign currency translation adjustment, tax	$ 503	$ 162

XML

Consolidated Statement Of Stockholders' Equity - 3 months ended Dec. 31, 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
Balance at Sep. 30, 2016	$ 973	$ 43,982	$ (15,266)	$ (10,511)	$ 1,421	$ 20,599
Balance, shares at Sep. 30, 2016	9,727,264					9,727,264
Stock-based compensation arrangements	$ 7	587				$ 594
Stock-based compensation arrangements, shares	69,782
Dividends				(2,690)	(372)	(3,062)
Net income				4,401	179	4,580
Foreign currency translation adjustment, net of tax			(2,387)		(39)	(2,426)
Defined benefit pension and postretirement plans activity, net of taxes			119			119
Balance at Dec. 31, 2016	$ 980	$ 44,569	$ (17,534)	$ (8,800)	$ 1,189	$ 20,404
Balance, shares at Dec. 31, 2016	9,797,046					9,797,046

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 4,580	$ 3,773
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,678	2,797
Equity in income of joint ventures	(636)	(301)
Dividends from joint ventures		1,195
Stock-based compensation and related net tax benefits	744	457
Current and long-term deferred taxes, net	1,752	632
Loss (gain) on sale, disposal and abandonment of fixed assets	17	(9)
Gain on investments	(58)	(190)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable, net	(892)	224
Decrease in prepaid taxes	106	40
Increase in other operating assets, net	(1,005)	(982)
Decrease in accounts payable and other accrued liabilities	(1,057)	(2,052)
Increase in other operating liabilities, net	261	357
Net cash provided by operating activities	6,490	5,941
Cash flows from investing activities:
Acquisition of property, plant and equipment	(1,877)	(1,534)
Payment of transaction expenses associated with divestiture of business		(472)
Other investing activities, net	(538)	(923)
Net cash used in investing activities	(2,415)	(2,929)
Cash flows from financing activities:
Long-term borrowings - loan	2,000	7,000
Long-term borrowings - repayment	(3,500)	(12,700)
Dividends paid to stockholders	(2,682)	(2,651)
Other financing activities, net	(368)	(156)
Net cash used in financing activities	(4,550)	(8,507)
Effects of foreign currency translation	(368)	(279)
Net decrease in cash and cash equivalents	(843)	(5,774)
Opening balance - cash and cash equivalents	13,285	15,314
Ending balance - cash and cash equivalents	12,442	9,540
Accrued capital spending included in accounts payable and other accrued liabilities	$ 683	$ 1,153

XML

Basis Of Presentation And Consolidation

3 Months Ended

Dec. 31, 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 quarter ended December 31, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2017. 

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, 2016 (the “Form 10-K”) and other financial information filed with the Securities and Exchange Commission (the “SEC”).  The September 30, 2016 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 three month period ended December 31, 2016.

XML

Recent Accounting Pronouncements

3 Months Ended

Dec. 31, 2016

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

(2)Recent Accounting Pronouncements

Accounting Standards Adopted

In June 2014, the Financial Accounting Standards Board (“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.  The Company adopted the updated standard in the first quarter of fiscal 2017 with no significant impact on its financial statements.

In April 2015, the FASB issued new guidance on a customer’s accounting for fees paid in a cloud computing arrangement (CCA). Under the new standard, customers will apply the same criteria as vendors to determine whether a CCA contains a software license or is solely a service contract.  The Company adopted the updated standard prospectively in the first quarter of fiscal 2017 with no significant impact on its financial statements.

Accounting Standards Not Yet Adopted

In May 2014, the 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.  To date, the Company has formed a committee to evaluate the impact and are in the initial stages of evaluation.

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 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.

In June 2016, the FASB issued new guidance to introduce a new model for recognizing credit losses on financialinstruments based on an estimate of current expected credit losses. The update replaces the incurred loss impairmentmethodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of abroader range of reasonable and supportable information to inform credit loss estimates. The update is effective for theCompany in the first quarter of fiscal 2020, although early adoption is permitted. The Company is currently evaluatingthe effect that this update will have on its financial statements and related disclosures.

In August 2016, the FASB issued an ASU to provide cash flow statement guidance for certain cash receipts and payments, including (a) debt prepayment or extinguishment costs; (b) contingent consideration payments made after a business combination; (c) insurance settlement proceeds; (d) distributions from equity method investees; (e) beneficial interests in securitization transactions and (f) application of the predominance principle for cash receipts and payments with aspects of more than one class of cash flows. The update is effective for the Company in the first quarter of fiscal2018. The Company is currently evaluating the effect that this update will have on its financial statements and relateddisclosures.

In November 2016, the FASB issued amendments to current guidance related to the classification and presentation of changes in restricted cash in the Statement of Cash Flows.  The update is effective for the Company in the first quarter of fiscal 2019, and early adoption is permitted.  The Company is currently evaluating the impact that this update will have on its financial statements and related disclosures.

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.

XML

Fair Value Measurements

3 Months Ended

Dec. 31, 2016

Fair Value Measurements [Abstract]

Fair Value Measurements

(3)Fair Value Measurements

The Company estimatesthe 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 liabilitiesthat 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 thatreflectthe Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

Financial assets measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at December 31, 2016
(Dollars in Thousands)	Level 1		Level 2		Level 3
Asset Category
Cash equivalents	$	536	$	-	$	-
Mutual funds		4,163		-		-
Total financial assets at fair value	$	4,699	$	-	$	-
	Fair Value Measurements at September 30, 2016
(Dollars in Thousands)	Level 1		Level 2		Level 3
Asset Category
Cash equivalents	$	453	$	-	$	-
Mutual funds		3,687		-		-
Total financial assets at fair value	$	4,140	$	-	$	-

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 December 31, 2016 and September 30, 2016, 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 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.

XML

Income Per Common Share

3 Months Ended

Dec. 31, 2016

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:

	Three Months Ended December 31,
(Dollars in Thousands, Except per Share)	2016		2015
Basic Net Income per Share:
Net income attributed to Landauer, Inc.	$	4,401	$	3,643
Less:  Income allocated to unvested restricted stock		23		18
Net income available to common stockholders	$	4,378	$	3,625
Basic weighted average shares outstanding		9,540		9,460
Net income per share - Basic	$	0.46	$	0.38
Diluted Net Income per Share:
Net income attributed to Landauer, Inc.	$	4,401	$	3,643
Less:  Income allocated to unvested restricted stock		23		18
Net income available to common stockholders	$	4,378	$	3,625
Basic weighted average shares outstanding		9,540		9,460
Effect of dilutive securities		44		32
Diluted weighted averages shares outstanding		9,584		9,492
Net income per share - Diluted	$	0.46	$	0.38
Dividends paid per share	$	0.275	$	0.275

On November 30, 2016, the Company declared a regular quarterly cash dividend in the amount of $0.275 per share. The dividends were paid on January 3, 2017 to shareholders of record as of December 16, 2016.

XML

Employee Benefit Plans

3 Months Ended

Dec. 31, 2016

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:

Pension Benefits	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Interest cost	$	352	$	392
Expected return on plan assets		(388)		(373)
Amortization of net loss		190		141
Net periodic benefit cost	$	154	$	160
Other Benefits	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Service cost	$	16	$	15
Interest cost		9		10
Amortization of net gain		-		(4)
Net periodic benefit cost	$	25	$	21

The Company, under the IRS minimum funding standards, has no required contributions to make to its defined benefit pension plan during fiscal 2017.

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 segment, and prior to its divestiture, the Medical Products segment.  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 December 31, 2016 and 2015 were $543 and $419, respectively.

XML

Goodwill And Intangible Assets

3 Months Ended

Dec. 31, 2016

Goodwill And Intangible Assets [Abstract]

Goodwill And Intangible Assets

(6)Goodwill and Intangible Assets

Changes in the carrying amount of goodwill, by reportable segment, for the three months ended December 31, 2016 were as follows:

(Dollars in Thousands)	Radiation Measurement		Medical Physics		Total
Balance as of September 30, 2016	$	11,196	$	22,611	$	33,807
Currency translation adjustment		(472)		-		(472)
Balance as of December 31, 2016	$	10,724	$	22,611	$	33,335

The Company had no accumulated impairment losses as of December 31, 2016 and September 30, 2016.

Intangible assets consisted of the following: 

	December 31, 2016
(Dollars in Thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer lists	$	16,578	$	10,319	$	6,259
Trademarks and tradenames		133		-		133
Licenses and patents		3,434		823		2,611
Other intangibles		557		557		-
Intangible assets	$	20,702	$	11,699	$	9,003

	September 30, 2016
(Dollars in Thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer lists	$	16,982	$	10,436	$	6,546
Trademarks and tradenames		133		-		133
Licenses and patents		3,397		779		2,618
Other intangibles		557		557		-
Intangible assets	$	21,069	$	11,772	$	9,297

Identifiable intangible assets with finite lives are amortized over their estimated useful lives.  Intangible asset amortization expense was $386 and $555for the three months ended December 31, 2016 and 2015, respectively.

XML

Accumulated Other Comprehensive Loss

3 Months Ended

Dec. 31, 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 three months ended December 31, 2016 and 2015 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, 2016	$	(4,696)	$	-	$	(10,570)	$	(15,266)
Other comprehensive (loss) income before reclassifications		(2,387)		-		-		(2,387)
Amounts reclassified from accumulated other comprehensive (loss) income		-		-		119		119
Net current period other comprehensive (loss) income		(2,387)		-		119		(2,268)
Balance at December 31, 2016	$	(7,083)	$	-	$	(10,451)	$	(17,534)

(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		(317)		14		-		(303)
Amounts reclassified from accumulated other comprehensive (loss) income		-		(89)		44		(45)
Net current period other comprehensive (loss) income		(317)		(75)		44		(348)
Balance at December 31, 2015	$	(5,785)	$	184	$	(8,488)	$	(14,089)

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 December 31,
(Dollars in Thousands)	2016		2015
Amortization of net loss	$	190	$	69
Total before tax		190		69
Provision for income taxes		71		25
Total net of tax	$	119	$	44

(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 December 31,
(Dollars in Thousands)	2016		2015
Realized gains on available-for-sale securities into earnings (1)	$	-	$	(105)
Total before tax		-		(105)
Provision for income taxes (2)		-		(16)
Total net of tax	$	-	$	(89)

(1)This amount is reported in Interest Expense, net on the Consolidated Statements of Operations

(2)This amount is reported in Income Tax Expense (Benefit) on the Consolidated Statements of Operations

XML

Income Taxes

3 Months Ended

Dec. 31, 2016

Income Taxes [Abstract]

Income Taxes

(8)Income Taxes

The effective tax rates for the three months ended December 31, 2016 and 2015 were 34.2% and 30.9%, respectively. The increase in the effective tax rate was primarily due to the mix of taxable earnings between jurisdictions and tax law changes that impacted the prior year.  The Company believes it is reasonably possible that $563 of unrecognized tax benefits will be realized in fiscal year 2017.

XML

Segment Information

3 Months Ended

Dec. 31, 2016

Segment Information [Abstract]

Segment Information

(9)Segment Information

In fiscal year 2017, the Company is organized into two reportable business segments: Radiation Measurement and Medical Physics.   As disclosed in the Form 10-K for the fiscal period ended September 30, 2016, the Medical Products business was divested in May 2016; accordingly, there were no reportable revenues and operating income for the three month period ended December 31, 2016 for that 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 December 31,
(Unaudited, Dollars in Thousands)	2016		2015
Revenues by segment:
Radiation Measurement	$	27,632	$	24,704
Medical Physics		9,940		9,353
Medical Products		-		2,473
Consolidated revenues	$	37,572	$	36,530
	Three Months Ended December 31,
(Unaudited, Dollars in Thousands)	2016		2015
Operating income (loss) by segment:
Radiation Measurement	$	11,232	$	8,898
Medical Physics		679		778
Medical Products		-		490
Corporate		(4,469)		(3,914)
Consolidated operating income	$	7,442	$	6,252

(Dollars in Thousands)	December 31, 2016		September 30, 2016
Segment assets:
Radiation Measurement	$	157,499	$	160,560
Medical Physics		43,460		43,174
Eliminations		(13,207)		(12,918)
Consolidated assets	$	187,752	$	190,816

XML

Related Party Transactions

3 Months Ended

Dec. 31, 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:

	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Sales to Aquila	$	2,568	$	396
Purchases from Aquila		74		(10)

Balance sheet items associated with Aquila were as follows:

(Dollars in Thousands)	December 31, 2016		September 30, 2016
Amounts in accounts receivable	$	2,888	$	1,910
Amounts in accounts payable		394		320

The sales to and purchases from Nagase were as follows:

	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Sales to Nagase	$	1,241	$	1,098
Purchases from Nagase		310		595

Balance sheet items associated with Nagase were as follows:

(Dollars in Thousands)	December 31, 2016		September 30, 2016
Amounts in accounts receivable	$	334	$	288
Amounts in accounts payable		41		23

XML

Fair Value Measurements (Tables)

3 Months Ended

Dec. 31, 2016

Fair Value Measurements [Abstract]

Financial Assets Measured At Fair Value On A Recurring Basis

	Fair Value Measurements at December 31, 2016
(Dollars in Thousands)	Level 1		Level 2		Level 3
Asset Category
Cash equivalents	$	536	$	-	$	-
Mutual funds		4,163		-		-
Total financial assets at fair value	$	4,699	$	-	$	-
	Fair Value Measurements at September 30, 2016
(Dollars in Thousands)	Level 1		Level 2		Level 3
Asset Category
Cash equivalents	$	453	$	-	$	-
Mutual funds		3,687		-		-
Total financial assets at fair value	$	4,140	$	-	$	-

XML

Income Per Common Share (Tables)

3 Months Ended

Dec. 31, 2016

Income Per Common Share [Abstract]

Computation Of Net Income (Loss) Per Share

	Three Months Ended December 31,
(Dollars in Thousands, Except per Share)	2016		2015
Basic Net Income per Share:
Net income attributed to Landauer, Inc.	$	4,401	$	3,643
Less:  Income allocated to unvested restricted stock		23		18
Net income available to common stockholders	$	4,378	$	3,625
Basic weighted average shares outstanding		9,540		9,460
Net income per share - Basic	$	0.46	$	0.38
Diluted Net Income per Share:
Net income attributed to Landauer, Inc.	$	4,401	$	3,643
Less:  Income allocated to unvested restricted stock		23		18
Net income available to common stockholders	$	4,378	$	3,625
Basic weighted average shares outstanding		9,540		9,460
Effect of dilutive securities		44		32
Diluted weighted averages shares outstanding		9,584		9,492
Net income per share - Diluted	$	0.46	$	0.38
Dividends paid per share	$	0.275	$	0.275

XML

Employee Benefit Plans (Tables)

3 Months Ended

Dec. 31, 2016

Employee Benefit Plans [Abstract]

Schedule Of Net Periodic Benefit Costs

Pension Benefits	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Interest cost	$	352	$	392
Expected return on plan assets		(388)		(373)
Amortization of net loss		190		141
Net periodic benefit cost	$	154	$	160
Other Benefits	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Service cost	$	16	$	15
Interest cost		9		10
Amortization of net gain		-		(4)
Net periodic benefit cost	$	25	$	21

XML

Goodwill And Intangible Assets (Tables)

3 Months Ended

Dec. 31, 2016

Goodwill And Intangible Assets [Abstract]

Changes In The Carrying Amount Of Goodwill, By Reportable Segment

(Dollars in Thousands)	Radiation Measurement		Medical Physics		Total
Balance as of September 30, 2016	$	11,196	$	22,611	$	33,807
Currency translation adjustment		(472)		-		(472)
Balance as of December 31, 2016	$	10,724	$	22,611	$	33,335

Other Intangible Assets

	December 31, 2016
(Dollars in Thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer lists	$	16,578	$	10,319	$	6,259
Trademarks and tradenames		133		-		133
Licenses and patents		3,434		823		2,611
Other intangibles		557		557		-
Intangible assets	$	20,702	$	11,699	$	9,003

	September 30, 2016
(Dollars in Thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer lists	$	16,982	$	10,436	$	6,546
Trademarks and tradenames		133		-		133
Licenses and patents		3,397		779		2,618
Other intangibles		557		557		-
Intangible assets	$	21,069	$	11,772	$	9,297

XML

Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Dec. 31, 2016

Accumulated Other Comprehensive Loss [Abstract]

Changes In Each Component Of AOCI

(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, 2016	$	(4,696)	$	-	$	(10,570)	$	(15,266)
Other comprehensive (loss) income before reclassifications		(2,387)		-		-		(2,387)
Amounts reclassified from accumulated other comprehensive (loss) income		-		-		119		119
Net current period other comprehensive (loss) income		(2,387)		-		119		(2,268)
Balance at December 31, 2016	$	(7,083)	$	-	$	(10,451)	$	(17,534)

(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		(317)		14		-		(303)
Amounts reclassified from accumulated other comprehensive (loss) income		-		(89)		44		(45)
Net current period other comprehensive (loss) income		(317)		(75)		44		(348)
Balance at December 31, 2015	$	(5,785)	$	184	$	(8,488)	$	(14,089)

Summary Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss)

Pension and Postretirement Plans (1)	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Amortization of net loss	$	190	$	69
Total before tax		190		69
Provision for income taxes		71		25
Total net of tax	$	119	$	44

(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 December 31,
(Dollars in Thousands)	2016		2015
Realized gains on available-for-sale securities into earnings (1)	$	-	$	(105)
Total before tax		-		(105)
Provision for income taxes (2)		-		(16)
Total net of tax	$	-	$	(89)

(1)This amount is reported in Interest Expense, net on the Consolidated Statements of Operations

(2)This amount is reported in Income Tax Expense (Benefit) on the Consolidated Statements of Operations

XML

Segment Information (Tables)

3 Months Ended

Dec. 31, 2016

Segment Information [Abstract]

Financial Information For Each Reportable Segment

	Three Months Ended December 31,
(Unaudited, Dollars in Thousands)	2016		2015
Revenues by segment:
Radiation Measurement	$	27,632	$	24,704
Medical Physics		9,940		9,353
Medical Products		-		2,473
Consolidated revenues	$	37,572	$	36,530
	Three Months Ended December 31,
(Unaudited, Dollars in Thousands)	2016		2015
Operating income (loss) by segment:
Radiation Measurement	$	11,232	$	8,898
Medical Physics		679		778
Medical Products		-		490
Corporate		(4,469)		(3,914)
Consolidated operating income	$	7,442	$	6,252

(Dollars in Thousands)	December 31, 2016		September 30, 2016
Segment assets:
Radiation Measurement	$	157,499	$	160,560
Medical Physics		43,460		43,174
Eliminations		(13,207)		(12,918)
Consolidated assets	$	187,752	$	190,816

XML

Related Party Transactions (Tables)

3 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

Schedule Of Related Party Transactions

	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Sales to Aquila	$	2,568	$	396
Purchases from Aquila		74		(10)

(Dollars in Thousands)	December 31, 2016		September 30, 2016
Amounts in accounts receivable	$	2,888	$	1,910
Amounts in accounts payable		394		320

	Three Months Ended December 31,
(Dollars in Thousands)	2016		2015
Sales to Nagase	$	1,241	$	1,098
Purchases from Nagase		310		595

(Dollars in Thousands)	December 31, 2016		September 30, 2016
Amounts in accounts receivable	$	334	$	288
Amounts in accounts payable		41		23

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 536	$ 453
Mutual funds	4,163	3,687
Total financial assets at fair value	4,699	4,140
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents
Mutual funds
Total financial assets at fair value
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents
Mutual funds
Total financial assets at fair value

XML

Income Per Common Share (Narrative) (Details)	3 Months Ended
	Dec. 31, 2016 $ / shares
Income Per Common Share [Abstract]
Date declared	Nov. 30, 2016
Dividends declared	$ 0.275
Date paid	Jan. 03, 2017
Date of record	Dec. 16, 2016

XML

Income Per Common Share (Computation Of Net Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Per Common Share [Abstract]
Net income attributed to Landauer, Inc.	$ 4,401	$ 3,643
Less: Income allocated to unvested restricted stock	23	18
Net income available to common stockholders	$ 4,378	$ 3,625
Basic weighted average shares outstanding	9,540	9,460
Net income per share - Basic	$ 0.46	$ 0.38
Effect of dilutive securities	$ 44	$ 32
Diluted weighted averages shares outstanding	9,584	9,492
Net income per share - Diluted	$ 0.46	$ 0.38
Dividends paid per share	$ 0.275	$ 0.275

XML

Employee Benefit Plans (Narrative) (Details) - USD ($)	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Employee Benefit Plans [Abstract]
Employer contribution for pension plan during 2016	$ 0
Employer contribution for defined contribution plans	$ 543,000	$ 419,000

XML

Employee Benefit Plans (Schedule Of Net Periodic Benefit Costs) (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	$ 352	$ 392
Expected return on plan assets	(388)	(373)
Amortization of net gain (loss)	190	141
Net periodic benefit cost	154	160
Other Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	16	15
Interest cost	9	10
Amortization of net gain (loss)		(4)
Net periodic benefit cost	$ 25	$ 21

XML

Goodwill And Intangible Assets (Narrative) (Details) - USD ($)	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2016
Goodwill And Intangible Assets [Abstract]
Accumulated impairment losses	$ 0		$ 0
Amortization expense	$ 386,000	$ 555,000

XML

Goodwill And Intangible Assets (Changes In The Carrying Amount Of Goodwill, By Reportable Segment) (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2016 USD ($)
Goodwill [Line Items]
Balance	$ 33,807
Effects of foreign currency - Goodwill	(472)
Balance	33,335
Radiation Measurement [Member]
Goodwill [Line Items]
Balance	11,196
Effects of foreign currency - Goodwill	(472)
Balance	10,724
Medical Physics [Member]
Goodwill [Line Items]
Balance	22,611
Effects of foreign currency - Goodwill
Balance	$ 22,611

XML

Goodwill And Intangible Assets (Other Intangible Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 20,702	$ 21,069
Accumulated Amortization	11,699	11,772
Net Carrying Amount	9,003	9,297
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	16,578	16,982
Accumulated Amortization	10,319	10,436
Net Carrying Amount	6,259	6,546
Trademarks And Tradenames [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	133	133
Net Carrying Amount	133	133
Licenses And Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	3,434	3,397
Accumulated Amortization	823	779
Net Carrying Amount	2,611	2,618
Other Intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	557	557
Accumulated Amortization	$ 557	$ 557

XML

Accumulated Other Comprehensive Loss (Changes In Each Component Of AOCI) (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	$ (15,266)	$ (13,741)
Other comprehensive (loss) income before reclassifications	(2,387)	(303)
Amounts reclassified from accumulated other comprehensive (loss) income	119	(45)
Net current period other comprehensive (loss) income	(2,268)	(348)
Balance	(17,534)	(14,089)
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(4,696)	(5,468)
Other comprehensive (loss) income before reclassifications	(2,387)	(317)
Amounts reclassified from accumulated other comprehensive (loss) income
Net current period other comprehensive (loss) income	(2,387)	(317)
Balance	(7,083)	(5,785)
Unrealized Gains and Losses on Available-for-Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance		259
Other comprehensive (loss) income before reclassifications		14
Amounts reclassified from accumulated other comprehensive (loss) income		(89)
Net current period other comprehensive (loss) income		(75)
Balance		184
Pension And Postretirement Plans [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(10,570)	(8,532)
Other comprehensive (loss) income before reclassifications
Amounts reclassified from accumulated other comprehensive (loss) income	119	44
Net current period other comprehensive (loss) income	119	44
Balance	$ (10,451)	$ (8,488)

XML

Accumulated Other Comprehensive Loss (Summary Of Reclassifications Out Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands		3 Months Ended
		Dec. 31, 2016	Dec. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Provision for income taxes		$ 71	$ 25
Total net of tax		(119)	(44)
Total net of tax			(75)
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]	190	69
Total before tax	[1]	190	69
Provision for income taxes	[1]	71	25
Total net of tax	[1]	119	44
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]		(105)
Total before tax			(105)
Provision for income taxes	[3]		(16)
Total net of tax			$ (89)

[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).

[2] This amount is reported in Interest Expense, net on the Consolidated Statements of Operations

[3] This amount is reported in Income Tax Expense (Benefit) on the Consolidated Statements of Operations

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Taxes [Abstract]
Effective tax rate	34.20%	30.90%
Unrecognized tax benefits	$ 563

XML

Segment Information (Details)	3 Months Ended
	Dec. 31, 2016 USD ($) segment	Dec. 31, 2015 USD ($)	Sep. 30, 2016 USD ($)
Segment Reporting Information [Line Items]
Reporting segments | segment	2
Consolidated revenues	$ 37,572,000	$ 36,530,000
Consolidated operating income	7,442,000	6,252,000
Consolidated Assets	187,752,000		$ 190,816,000
Eliminations [Member]
Segment Reporting Information [Line Items]
Consolidated Assets	(13,207,000)		(12,918,000)
Radiation Measurement [Member]
Segment Reporting Information [Line Items]
Consolidated revenues	27,632,000	24,704,000
Consolidated operating income	11,232,000	8,898,000
Consolidated Assets	157,499,000		160,560,000
Medical Physics [Member]
Segment Reporting Information [Line Items]
Consolidated revenues	9,940,000	9,353,000
Consolidated operating income	679,000	778,000
Consolidated Assets	43,460,000		$ 43,174,000
Medical Products [Member]
Segment Reporting Information [Line Items]
Consolidated revenues	0	2,473,000
Consolidated operating income		490,000
Corporate [Member]
Segment Reporting Information [Line Items]
Consolidated operating income	$ (4,469,000)	$ (3,914,000)

XML

Related Party Transactions (Narrative) (Details)	Dec. 31, 2016
Nagase-Landauer, Ltd. [Member]
Related Party Transaction [Line Items]
Equity interest	50.00%

XML

Related Party Transactions (Schedule Of Related Party Transactions) (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2016
Aquila [Member]
Related Party Transaction [Line Items]
Sales to related party	$ 2,568	$ 396
Purchases from related party	74	(10)
Amounts in accounts receivable	2,888		$ 1,910
Amounts in accounts payable	394		320
Nagase-Landauer, Ltd. [Member]
Related Party Transaction [Line Items]
Sales to related party	1,241	1,098
Purchases from related party	310	$ 595
Amounts in accounts receivable	334		288
Amounts in accounts payable	$ 41		$ 23