-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, StMBq4XjmXedhGqO24l7Plwpg2EcjHTz01mvod4dPgr4voxPUy4W5gpA/m3AZ/mY 5f2ovjZydz3d8GihEL7KHQ== 0000892626-01-500110.txt : 20010815 0000892626-01-500110.hdr.sgml : 20010815 ACCESSION NUMBER: 0000892626-01-500110 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANDAUER INC CENTRAL INDEX KEY: 0000825410 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 061218089 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-71973 FILM NUMBER: 1709958 BUSINESS ADDRESS: STREET 1: TWO SCIENCE RD CITY: GLENWOOD STATE: IL ZIP: 60425 BUSINESS PHONE: 7087557000 MAIL ADDRESS: STREET 1: 2 SCIENCE ROAD CITY: GLENWOOD STATE: IL ZIP: 60425 FORMER COMPANY: FORMER CONFORMED NAME: TECH OPS LANDAUER INC DATE OF NAME CHANGE: 19910521 10-Q 1 lan_601.txt SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q [ X ] QUARTERLY REPORT pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended JUNE 30, 2001 or [ ] TRANSITION REPORT pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition from ____________ to ___________ LANDAUER, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Commission File Number 1-9788 Delaware 06-1218089 ------------------------------- --------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 2 Science Road, Glenwood, Illinois 60425 ----------------------------------------------------- (Address of principal executive offices and Zip Code) Registrant's telephone number, including area code (708) 755-7000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at August 13, 2001 ---------------------------- ------------------------------ Common stock, $.10 par value 8,714,788 1 PART I. FINANCIAL INFORMATION LANDAUER, INC. AND SUBSIDIARIES Consolidated Balance Sheets (000's) ASSETS ------ June 30, Sept. 30, 2001 2000 -------- --------- (Unaudited) (Derived from audited statements) Current assets: Cash and cash equivalents . . . . . . $ 3,944 $ 3,001 Short-term investments. . . . . . . . 380 475 Accounts receivable, less allowances of $383 at 6/30/01 and $385 at 9/30/00 . . . . . . . . 12,973 10,734 Inventories . . . . . . . . . . . . . 1,592 1,587 Prepaid expenses. . . . . . . . . . . 564 308 Prepaid income taxes. . . . . . . . . 454 849 -------- -------- Total current assets. . . . . . . 19,907 16,954 Property, plant and equipment, at cost. . . . . . . . . . . . . . . . 34,271 32,198 Less: Accumulated depreciation and amortization. . . . . . . . . . 18,320 16,161 -------- -------- Net property, plant and equipment . . . . . . . . . . . . . . 15,951 16,037 Cost of purchased businesses in excess of net assets acquired. . . 3,756 4,021 Equity in joint venture . . . . . . . . 3,409 3,550 Other assets. . . . . . . . . . . . . . 6,554 6,499 -------- -------- $ 49,577 $ 47,061 ======== ======== The accompanying notes are an integral part of these financial statements. 2 LANDAUER, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Cont'd.) (000's, except share amounts) LIABILITIES AND STOCKHOLDERS' INVESTMENT ---------------------------------------- June 30, Sept. 30, 2001 2000 -------- --------- (Unaudited) (Derived from audited statements) Current liabilities: Accounts payable. . . . . . . . . . . $ 215 $ 966 Deferred contract revenue . . . . . . 11,684 10,346 Dividend payable. . . . . . . . . . . 3,047 3,031 Accrued compensation and related costs . . . . . . . . . . . 1,962 1,792 Accrued pension costs . . . . . . . . 1,709 1,531 Accrued taxes on income . . . . . . . 13 535 Accrued expenses. . . . . . . . . . . 2,680 1,991 -------- -------- Total current liabilities . . . . 21,310 20,192 Minority interest in subsidiary . . . . 111 51 -------- -------- Total liabilities . . . . . . . . . . . 21,421 20,243 Stockholders' investment: Preferred stock, $.10 par value per share - Authorized - 1,000,000 shares Outstanding - None. . . . . . . . . . -- -- Common stock, $.10 par value per share - Authorized - 20,000,000 shares Outstanding - 8,706,019 shares at 6/30/01 and 8,660,748 shares at 9/30/00 . . . . . . . . . . . . 871 866 Premium paid in on common stock . . . 9,156 8,752 Cumulative translation adjustments. . (847) (372) Retained earnings . . . . . . . . . . 18,976 17,572 -------- -------- Total stockholders' investment. . . . . . . . . . . 28,156 26,818 -------- -------- $ 49,577 $ 47,061 ======== ======== The accompanying notes are an integral part of these financial statements. 3 LANDAUER, INC. AND SUBSIDIARIES Consolidated Statements of Income (000's, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended -------------------- -------------------- June 30, June 30, June 30, June 30, 2001 2000 2001 2000 -------- -------- -------- -------- Net Revenues. . . . . . . . $ 12,941 $ 11,598 $ 39,503 $ 34,928 Cost and expenses: Cost of revenues. . . . . 4,640 4,401 14,208 12,669 Selling, general and administrative. . . . . 2,975 2,132 9,251 7,486 Impairment in value of assets . . . . . . . -- -- -- 520 -------- -------- -------- -------- 7,615 6,533 23,459 20,675 -------- -------- -------- -------- Operating Income. . . . . . 5,326 5,065 16,044 14,253 Equity in income of joint venture . . . . . . 94 156 428 508 Other income, net . . . . . 35 59 91 165 -------- -------- -------- -------- Income before income taxes and minority interest. . . . . . . . . 5,455 5,280 16,563 14,926 Income taxes. . . . . . . . 1,970 1,956 6,012 5,508 -------- -------- -------- -------- Income before minority interest. . . . . . . . . 3,485 3,324 10,551 9,418 Minority interest therein . . . . . . . . . 6 9 26 47 -------- -------- -------- -------- Net income. . . . . . . . . $ 3,479 $ 3,315 $ 10,525 $ 9,371 ======== ======== ======== ======== Net income per common share: Basic . . . . . . . . . . $ 0.40 $ 0.38 $ 1.21 $ 1.08 ======== ======== ======== ======== Based on average shares outstanding. . . 8,699 8,661 8,681 8,660 ======== ======== ======== ======== Diluted . . . . . . . . . $ 0.40 $ 0.38 $ 1.21 $ 1.08 ======== ======== ======== ======== Based on average shares outstanding. . . 8,780 8,683 8,722 8,691 ======== ======== ======== ======== The accompanying notes are an integral part of these financial statements. 4 LANDAUER, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (000's) (Unaudited) Nine Months Ended --------------------- June 30, June 30, 2001 2000 -------- -------- Cash flow from operating activities: Net income. . . . . . . . . . . . . . . . . . $ 10,525 $ 9,371 Non-cash expenses, revenues, and gains reported in income Depreciation and amortization . . . . . . . 3,279 2,979 Equity in income of joint venture . . . . . (428) (507) Exercise of stock options - net . . . . . . 408 41 -------- -------- 3,259 2,513 -------- -------- Net increase in other current assets. . . (1,992) (2,102) Net increase in current liabilities . . . 1,146 2,519 Net increase (decrease) due to exchange rates. . . . . . . . . . . . . (475) 75 Net increase in net long-term assets. . . (721) (1,304) -------- -------- (2,042) (812) -------- -------- Net cash generated from operating activities. . . . . . . . . . 11,742 11,072 Cash flow from investing activities: Acquisition of property, plant and equipment . . . . . . . . . . . . . . . (2,073) (2,453) -------- -------- Net cash used by investing activities . . (2,073) (2,453) Cash flow from financing activities: Dividend received from foreign affiliate. . 378 400 Dividends paid. . . . . . . . . . . . . . . (9,104) (9,085) -------- -------- Net cash used by financing activities . . (8,726) (8,685) -------- -------- Net increase (decrease) in cash . . . . . . . . 943 (66) Opening balance - cash and cash equivalents . . 3,001 4,524 -------- -------- Ending balance - cash and cash equivalents. . . $ 3,944 $ 4,458 ======== ======== Supplemental Disclosure of Cash Flow Information: Cash paid for income taxes. . . . . . . . . . $ 5,361 $ 3,792 ======== ======== Supplemental Disclosure of Non-cash Financing Activity: Dividend declared . . . . . . . . . . . . . . $ 3,047 $ 3,031 ======== ======== The accompanying notes are an integral part of these financial statements. 5 LANDAUER, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - June 30, 2001 (Unaudited) (1) BASIS OF PRESENTATION The accompanying unaudited condensed financial statements reflect the financial position of Landauer, Inc. and Subsidiaries ("Landauer" or "the Company") as of June 30, 2001 and September 30, 2000, and the consolidated results of operations for the three-month and nine-month periods ended June 30, 2001 and 2000 and consolidated cash flows for the nine-month periods ended June 30, 2001 and 2000. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of Landauer as of June 30, 2001 and September 30, 2000, and the consolidated results of operations for the three-month and nine-month periods ended June 30, 2001 and 2000, and cash flows for the nine-month periods ended June 30, 2001 and 2000. The accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements in the 2000 Landauer Annual Report on Form 10-K, which is incorporated by reference. Certain reclassifications have been made in the statements for comparative purposes. These reclassifications have no effect on the results of operations or financial position. The results of operations for the three-month and nine-month periods ended June 30, 2001 and 2000 are not necessarily indicative of the results to be expected for the full year. (2) CASH DIVIDENDS On June 8, 2001, the Company declared a regular quarterly cash dividend in the amount of $.35 per share payable on July 13, 2001 to stockholders of record on June 22, 2001. On March 9, 2001, the Company declared a regular quarterly cash dividend in the amount of $ .35 per share payable on April 13, 2001, to stockholders of record on March 23, 2001. On December 22, 2000, the Company declared a regular quarterly cash dividend in the amount of $ .35 per share payable on January 18, 2001, to stockholders of record on January 4, 2001. Regular quarterly cash dividends of $ .35 per share ($1.40 annually) were declared during fiscal 2000. (3) COMPREHENSIVE INCOME Comprehensive income is the total of net income and all other nonowner changes in equity. The following table sets forth Company's comprehensive income for the three and nine month periods ended June 30, 2001 and 2000 ($000's): 6 LANDAUER, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements - June 30, 2001 (Cont'd.) Three Months Ended Nine Months Ended -------------------- -------------------- June 30, June 30, June 30, June 30, 2001 2000 2001 2000 -------- -------- -------- -------- Net income. . . . . . . . . $ 3,479 $ 3,315 $ 10,525 $ 9,371 Other comprehensive income- Foreign currency translation adjustment. . (175) (105) (475) 75 -------- -------- -------- -------- Comprehensive income. . . . $ 3,304 $ 3,210 $ 10,050 $ 9,446 ======== ======== ======== ======== MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Landauer's cash flow from operating activities for the nine months ended June 30, 2001 and 2000 amounted to $11,742,000 and $11,072,000, respectively. Acquisitions of property, plant and equipment amounted to $2,073,000 and $2,453,000, respectively for fiscal 2001 and 2000. The Company's financing activities were limited to payments of cash dividends, offset by foreign dividends received from Nagase-Landauer, Ltd., our Japanese joint venture. The Company has no long-term liabilities and its requirement for cash flow to support investing activities is generally limited. Capital expenditures for the balance of fiscal 2001 are expected to amount to approximately $1,500,000 principally for the acquisition of equipment to support the Company's Luxel product line, introduction of new products, the development of supporting software systems, and computer hardware. The Company anticipates that funds for these capital improvements will be provided from operations. The Company presently maintains external sources of liquidity in the form of a $5 million line of credit with its bank. In the opinion of management, resources are adequate for projected operations and capital spending programs, as well as continuation of the regular cash dividend program. Landauer requires limited working capital for its operations since many of its customers pay for services in advance. Such advance payments amounted to $11,684,000 and $10,346,000, respectively, as of June 30, 2001 and September 30, 2000, and are included in deferred contract revenue. While these amounts represent more than one-half of current liabilities, such amounts generally do not represent a cash requirement. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D.) RESULTS OF OPERATIONS - --------------------- Revenues for the quarter ended June 30, 2001 were 11.6% higher compared with the same quarter a year ago. The increase in revenues was primarily attributable to higher pricing for the Company's products and services and increased unit demand principally resulting from the recent acquisition of another dosimetry service provider. Gross margins were 64.1% of revenues for the second quarter of fiscal 2001, which was improved relative to the same period in 2000 when gross margins were 62.1%. Selling, general and administrative expenses were higher in the third quarter as a percent of revenues at 23.0% versus 18.4% for the third quarter of fiscal 2000 as a result of consulting fees related to the Company's technology and business development initiatives, and higher employee and amortization costs. In addition, selling, general and administrative expenses for the third quarter of last fiscal year were favorably impacted by the recognition of a one-time $500,000 technology cost reimbursement from the Company's 50% owned subsidiary, Nagase Landauer. As a result, operating income for the third quarter of 2001 was 41.2% of revenues compared to 43.7% for the same period last year. Income before taxes and minority interest was 42.2% of the revenues for the quarter just ended compared to 45.5% for the third fiscal quarter of 2000. The effective tax rate for the Company during the third quarter of fiscal 2001 was 36.1% compared with 37.0% for the third quarter of fiscal 2000. Resulting net income of $3,479,000 for the third fiscal quarter of 2001 compared with $3,315,000 reported in fiscal 2000. Diluted income per share for the current quarter was $ .40 versus $ .38 for fiscal 2000. Revenues for the nine months ended June 30, 2001, were 13.1% higher compared with the first nine months of fiscal 2000. The increase in revenues was attributable to higher pricing for the Company's products and services and increased unit demand principally resulting from the recent acquisition of another dosimetry service provider. Gross margins for the first half of fiscal 2000 were 64.0% of revenues, improved slightly from 63.7% a year ago. Selling, general, and administrative expenses were 23.4% of revenues for the first nine months of fiscal 2001 compared to 21.4% for the same period of fiscal 2000. The prior year-to-date earnings were impacted by $520,000 of the asset impairment charges, but are effectively offset by the $500,000 Nagase Landauer technology cost reimbursement. Operating income for the first nine months of fiscal 2001 was 40.6% of revenues compared with 40.8% for the same period last year. Income before income taxes and minority interest was 41.9% of revenues for the nine months just ended compared to 40.8% of revenues for the same period in fiscal 2000. The effective tax rate for the Company during the first nine months of fiscal 2000 was 36.3% compared with 36.9% a year ago. Resulting net income of $10,525,000 for the first nine months of 2001 exceeded earnings of $9,371,000 reported in fiscal 2000. Diluted income per share for the first nine months of fiscal 2001 was $ 1.21, compared to $ 1.08 in the nine months fiscal half of 2000. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D.) ACCOUNTING PRONOUNCEMENTS - ------------------------- On July 20, 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141 "Business Combinations" ("SFAS 141"), and Statements of Financial Accounting Standards No.142 "Goodwill and Other Intangible Assets" ("SFAS 142"). These pronouncements change the accounting for business combinations, goodwill, and intangible assets. SFAS No. 141 eliminates the pooling-of-interests method of accounting for business combinations and further clarifies the criteria to recognize intangible assets separately from goodwill. The requirements of SFAS No. 141 are effective for any business combination accounted for by the purchase method that is completed after June 30, 2001. SFAS No. 142 states goodwill and indefinite lived intangible assets are no longer amortized but are reviewed for impairment annually (or more frequently if impairment indicators arise). Separable intangible assets that are not deemed to have an indefinite life will continue to be amortized over their useful lives. The amortization provisions of SFAS No. 142 apply to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior to July 1, 2001, companies are required to adopt the pronouncement in their fiscal year beginning after December 15, 2001. We are currently evaluating the provisions of SFAS 141 and SFAS 142 and the impact that adoption will have on our financial position and results of operations. Based on historical purchase price allocations or preliminary allocations for business combinations completed prior to June 30, 2001, we estimate that the cessation of goodwill amortization will increase our operating income by approximately $160,000 on an annualized basis when the accounting pronouncements are adopted by the company. FORWARD LOOKING STATEMENTS - -------------------------- Certain of the statements made herein constitute forward looking statements that are based on certain assumptions and involve certain risks and uncertainties, including assumptions and risks associated with the Company's introduction of its Luxel technology, the usefulness of older technologies, the cost associated with the Company's business development and research efforts, he anticipated results of operations of the Company, the Company's market position, the Company's business plans, the effects of changing economic and competitive conditions, foreign exchange risks and government regulations. Such assumptions may not materialize to the extent assumed and such risks and uncertainties may cause actual results to differ from anticipated results. Additional information may be obtained by reviewing the Company's reports filed from time to time with the SEC. 9 PART II. OTHER INFORMATION ITEM 2. LEGAL PROCEEDINGS Landauer is involved in various legal proceedings but believes that these matters will be resolved without a material effect on its financial position. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) No exhibits are filed with this report. (b) There were no reports on Form 8-K during the quarter for which this report is filed. 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LANDAUER, INC. Date: August 13, 2001 /s/ James M. O'Connell ----------------------------- James M. O'Connell Vice President and Treasurer (Principal Financial and Accounting Officer) 11 694: -----END PRIVACY-ENHANCED MESSAGE-----