-----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, KDK8Oy4DT9T2/8GHR8RGcZ1KcVN35pApWSmf/goofgrtRw0ECMlCzntqJmgtkDjs IkI7VMSVgoMOSw1BWILmBw== 0000892626-05-000168.txt : 20050808 0000892626-05-000168.hdr.sgml : 20050808 20050808144214 ACCESSION NUMBER: 0000892626-05-000168 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050808 DATE AS OF CHANGE: 20050808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANDAUER INC CENTRAL INDEX KEY: 0000825410 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 061218089 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09788 FILM NUMBER: 051005574 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 ldr_605.txt UNITED STATES 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, 2005 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 by check mark whether the registrant is an accelerated filer as defined in Rule 12b.2 of the Exchange Act. 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 5, 2005 ---------------------------- ----------------------------- Common stock, $.10 par value 8,975,335 1 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS LANDAUER, INC. AND SUBSIDIARIES Condensed Consolidated Unaudited Balance Sheets (000's, except share amounts) ASSETS ------ June 30, September 30, 2005 2004 ---------- ------------- Current assets: Cash and cash equivalents. . . . . . . . . . $ 8,202 $ 8,595 Accounts receivable, net of allowances of $390 and $460, respectively . . . . . . 18,135 15,060 Inventories. . . . . . . . . . . . . . . . . 3,036 3,206 Prepaid expenses . . . . . . . . . . . . . . 816 1,116 Prepaid income taxes . . . . . . . . . . . . 3,207 2,292 Deferred income taxes. . . . . . . . . . . . 21 21 ---------- ---------- Current assets . . . . . . . . . . . . 33,417 30,290 Property, plant and equipment, at cost . . . . 43,808 41,021 Less: Accumulated depreciation and amortization . . . . . . . . . . . . . (25,638) (22,481) ---------- ---------- Net property, plant and equipment. . . . . . . 18,170 18,540 Goodwill . . . . . . . . . . . . . . . . . . . 13,240 13,156 Other intangible assets, net of amortization. . . . . . . . . . . . . 5,970 6,337 Dosimetry devices, net of amortization of $5,924 and $4,447, respectively. . . . . . . 6,193 4,791 Equity in joint venture. . . . . . . . . . . . 4,254 3,916 Other assets . . . . . . . . . . . . . . . . . 1,219 488 ---------- ---------- $ 82,463 $ 77,518 ========== ========== The accompanying notes are an integral part of these financial statements. 2 LANDAUER, INC. AND SUBSIDIARIES Condensed Consolidated Unaudited Balance Sheets (Cont'd.) (000's, except share amounts) LIABILITIES AND SHAREHOLDERS' INVESTMENT ---------------------------------------- June 30, September 30, 2005 2004 ---------- ------------- Current liabilities: Accounts payable . . . . . . . . . . . . . . $ 1,011 $ 1,306 Notes payable. . . . . . . . . . . . . . . . 4,311 5,262 Deferred contract revenue. . . . . . . . . . 13,596 12,554 Dividends payable. . . . . . . . . . . . . . 3,811 3,577 Accrued pension costs. . . . . . . . . . . . 315 834 Accrued income taxes . . . . . . . . . . . . 1,000 20 Deferred income taxes. . . . . . . . . . . . 94 94 Accrued expenses . . . . . . . . . . . . . . 4,582 4,629 ---------- ---------- Current liabilities. . . . . . . . . . 28,720 28,276 Non-current liabilities: Pension and postretirement obligation. . . . 5,033 3,845 Deferred income taxes. . . . . . . . . . . . 1,199 1,317 ---------- ---------- Non-current liabilities. . . . . . . . 6,232 5,162 Minority interest in subsidiary. . . . . . . 77 83 ---------- ---------- Shareholders' 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 - 8,973,732 shares at 6/30/05 and 8,945,665 shares at 9/30/04 . . . . . . . . . . . . . . . 897 895 Premium paid in on common stock. . . . . . . 15,111 14,400 Cumulative translation adjustments . . . . . (210) (251) Retained earnings. . . . . . . . . . . . . . 31,636 28,953 ---------- ---------- Total shareholders' investment . . . . 47,434 43,997 ---------- ---------- $ 82,463 $ 77,518 ========== ========== The accompanying notes are an integral part of these financial statements. 3 LANDAUER, INC. AND SUBSIDIARIES Condensed Consolidated Unaudited Statements of Income (000's, except per share amounts) Three Months Ended Nine Months Ended -------------------- -------------------- June 30, June 30, June 30, June 30, 2005 2004 2005 2004 -------- -------- -------- -------- Revenues, net of sales allowances . . . . . . . . $ 18,200 $ 17,203 $ 56,231 $ 52,242 Costs and expenses: Cost of revenues . . . . . 7,071 6,436 21,427 18,938 Selling, general and administrative . . . . . 4,487 4,050 13,538 12,561 -------- -------- -------- -------- 11,558 10,486 34,965 31,499 -------- -------- -------- -------- Operating income . . . . . . 6,642 6,717 21,266 20,743 Equity in income of joint venture. . . . . . . 355 300 1,037 818 Other income (expense), net. . . . . . . . . . . . 28 (3) (10) 64 -------- -------- -------- -------- Income before income taxes and minority interest . . . . . . . . . 7,025 7,014 22,293 21,625 Income taxes . . . . . . . . 2,475 2,615 8,133 8,115 -------- -------- -------- -------- Income before minority interest . . . . . . . . . 4,550 4,399 14,160 13,510 Minority interest therein. . 19 5 56 272 -------- -------- -------- -------- Net income . . . . . . . . . $ 4,531 $ 4,394 $ 14,104 $ 13,238 ======== ======== ======== ======== Net income per common share: Basic. . . . . . . . . . . $ 0.50 $ 0.49 $ 1.57 $ 1.49 ======== ======== ======== ======== Based on average shares outstanding. . . . . . . 8,964 8,903 8,956 8,884 ======== ======== ======== ======== Diluted. . . . . . . . . . $ 0.50 $ 0.49 $ 1.56 $ 1.48 ======== ======== ======== ======== Based on average shares outstanding. . . . . . . 9,039 8,976 9,028 8,961 ======== ======== ======== ======== The accompanying notes are an integral part of these financial statements. 4 LANDAUER, INC. AND SUBSIDIARIES Condensed Consolidated Unaudited Statements of Cash Flows (000's, except per share amounts) Nine Months Ended --------------------- June 30, June 30, 2005 2004 -------- -------- Cash flows from operating activities: Net income . . . . . . . . . . . . . . . . . . . $ 14,104 $ 13,238 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation . . . . . . . . . . . . . . . . . . 4,918 3,837 Amortization . . . . . . . . . . . . . . . . . . 481 338 Equity in net income of foreign affiliate. . . . (1,037) (818) Tax effect of stock options. . . . . . . . . . . 389 668 Loss on sale and disposition of assets . . . . . 20 110 Increase in accounts receivable, net . . . . . . (3,126) (2,115) Increase in other current assets . . . . . . . . (440) (1,091) Increase in dosimetry devices at cost. . . . . . (2,880) (1,315) Increase in other long-term assets . . . . . . . (201) (2,151) Increase in accounts payable and other current liabilities. . . . . . . . . . . . . . 170 2,254 Increase in deferred contract revenue. . . . . . 993 809 Increase in long-term liabilities. . . . . . . . 1,070 449 Increase in minority interest. . . . . . . . . . 56 255 -------- -------- Net cash provided from operating activities. . . 14,517 14,468 Cash flows from investing activities: Acquisition of property, plant and equipment. . . . . . . . . . . . . . . . . . . (3,096) (3,666) Acquisition of minority interests. . . . . . . . -- (10,404) -------- -------- Net cash used by investing activities. . . . . . (3,096) (14,070) Cash flows from financing activities: Proceeds from revolving credit facilities. . . . 1,500 7,916 Payments on revolving credit facilities. . . . . (2,360) (1,970) Dividends paid to minority interest. . . . . . . (85) (913) Dividends paid to stockholders . . . . . . . . . (11,189) (10,429) Proceeds from the exercise of stock options. . . 324 756 Advance from affiliate . . . . . . . . . . . . . -- 598 -------- -------- Net cash used by financing activities. . . . . . (11,810) (4,042) Effects of foreign currency translation. . . . . . (4) (20) Net decrease in cash and cash equivalents. . . . . (393) (3,664) Opening balance - cash and cash equivalents. . . . 8,595 11,012 -------- -------- Ending balance - cash and cash equivalents . . . . $ 8,202 $ 7,348 ======== ======== The accompanying notes are an integral part of these financial statements. 5 LANDAUER, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Unaudited Financial Statements June 30, 2005 (1) BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements reflect the financial position of Landauer, Inc. and subsidiaries ("Landauer" or "the Company") as of June 30, 2005 and September 30, 2004, and the condensed consolidated results of operations and cash flows for the three and nine-month periods ended June 30, 2005 and 2004. 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, 2005 and September 30, 2004, and the consolidated results of operations and cash flows for the three and nine-month periods ended June 30, 2005 and 2004. Certain prior year amounts have been reclassified to conform to current year presentation. These reclassifications have no effect on the results of operations or financial position. Additionally, the balance of short-term investments with original maturities of three months or less were reclassed to cash and cash equivalents. The results of operations for the three and nine-month periods ended June 30, 2005 and 2004 are not necessarily indicative of the results to be expected for the full year. The accounting policies followed by the Company are set forth in the 2004 Landauer Annual Report on Form 10-K. The only significant source of revenues for the Company is radiation measuring and monitoring services including other services incidental to measuring and monitoring. The services provided by the Company to its customers are of a subscription nature and are continuous. The Company views its business as services provided to customers over a period of time and the wear period is the period over which those services are provided. Badge production, wearing of badges, badge analysis, and report preparation are integral to the benefit that the Company provides to its customers. These services are provided to customers on an agreed-upon recurring basis (monthly, bi- monthly or quarterly) that the customer chooses for the wear period. Revenue is recognized on a straight-line basis, adjusted for changes in pricing and volume, over the wear period as the service is continuous and no other discernible pattern of recognition is evident. Revenues are recognized over the periods in which the customers wear the badges irrespective of whether invoiced in advance or in arrears. Ancillary service revenues are recognized upon delivery of the reports to customers or as other such services are provided. (2) CASH DIVIDENDS On June 3, 2005, the Company declared a regular quarterly cash dividend in the amount of $0.425 per share payable on July 8, 2005, to shareholders of record on June 17, 2005. On March 4, 2005, the Company declared a regular quarterly cash dividend in the amount of $0.425 per share payable on April 8, 2005, to shareholders of record on March 18, 2005. On November 12, 2004, the Company declared a regular quarterly cash dividend in the amount of $0.425 per share payable on January 17, 2005, to shareholders of record on December 17, 2004. Regular quarterly cash dividends of $.40 per share ($1.60 annually) were declared during fiscal 2004. 6 LANDAUER, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Unaudited Financial Statements (Cont'd) June 30, 2005 (3) COMPREHENSIVE INCOME Comprehensive income is the total of net income and all other changes in equity. The following table sets forth the Company's comprehensive income for the three and nine-month periods ended June 30, 2005 and 2004 (000's): Three Months Ended Nine Months Ended -------------------- -------------------- June 30, June 30, June 30, June 30, 2005 2004 2005 2004 -------- -------- -------- -------- Net income . . . . . . . . . $ 4,531 $ 4,394 $ 14,104 $ 13,238 Other comprehensive income - foreign currency translation adjustment . . (79) (471) 41 (20) -------- -------- -------- -------- Comprehensive income . . . . $ 4,452 $ 3,923 $ 14,145 $ 13,218 ======== ======== ======== ======== (4) EARNINGS PER SHARE Earnings per share computations have been made in accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share." Basic earnings per share were computed by dividing net income by the weighted average number of shares of common stock outstanding during each period. Diluted earnings per share were computed by dividing net income by the weighted average number of shares of common stock that would have been outstanding assuming dilution during each period. The following table presents the weighted average number of shares of common stock for the three and nine-month periods ended June 30, 2005 and 2004 (000's): Three Months Ended Nine Months Ended ------------------- -------------------- June 30, June 30, June 30, June 30, 2005 2004 2005 2004 -------- -------- -------- -------- Weighted average number of shares of common stock outstanding. . . . . . . . 8,964 8,903 8,956 8,884 Options issued to executives & directors . . 75 73 72 77 -------- -------- -------- -------- Weighted average number of shares of common stock assuming dilution. . . . . 9,039 8,976 9,028 8,961 ======== ======== ======== ======== 7 LANDAUER, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Unaudited Financial Statements (Cont'd) June 30, 2005 (5) STOCK-BASED COMPENSATION PLANS The Company maintains stock option plans for key employees. It also maintains a stock option plan for its non-employee directors. The Company accounts for those plans under the recognition and measurement principles of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees", and related Interpretations. Under APB Opinion No. 25, no compensation cost is recognized except for performance based grants. Under SFAS No. 123, "Accounting for Stock-Based Compensation", compensation costs are recognized based on the fair-value method of the stock options granted, calculated using certain assumptions about future volatility and dividend growth. Had compensation cost for these plans been determined consistent with SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's net income and earnings per share in each period would have been as follows (000's, except per share data): Three Months Ended Nine Months Ended -------------------- -------------------- June 30, June 30, June 30, June 30, 2005 2004 2005 2004 -------- -------- -------- -------- Net income, as reported. . . $ 4,531 $ 4,394 $ 14,104 $ 13,238 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects. . . . 62 356 1,411 896 -------- -------- -------- -------- Pro forma net income . . . . $ 4,469 $ 4,038 $ 12,693 $ 12,342 ======== ======== ======== ======== Earnings per share: Basic - As reported. . . . $ 0.50 $ 0.49 $ 1.57 $ 1.49 ======== ======== ======== ======== Basic - Pro forma. . . . . $ 0.50 $ 0.45 $ 1.42 $ 1.39 ======== ======== ======== ======== Diluted - As reported. . . $ 0.50 $ 0.49 $ 1.56 $ 1.48 ======== ======== ======== ======== Diluted - Pro forma. . . . $ 0.49 $ 0.45 $ 1.41 $ 1.38 ======== ======== ======== ======== On December 16, 2004, the Financial Accounting Standards Board issued SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"). SFAS 123R eliminates the alternative of applying the intrinsic value measurement provisions of Opinion 25 to stock compensation awards issued to employees. Rather, the new standard requires enterprises to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). In April 2005, the SEC approved a new rule that delays the effective date of SFAS 123R for public companies to annual, rather than interim, periods that begin after June 15, 2005. Under the SEC's rule, SFAS 123R will be effective for the Company beginning October 1, 2005. The Company is in the process of assessing the impact of SFAS 123R on its consolidated financial statements. 8 LANDAUER, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Unaudited Financial Statements (Cont'd) June 30, 2005 (6) NOTES PAYABLE In April 2004, the Company negotiated a $25 million line of credit provided by LaSalle Bank, ABN AMRO. The credit agreement was amended, effective March 25, 2005, to extend the maturity date to March 25, 2006 and reduce the aggregate loan commitment under the credit facility to $15 million, with an option for the Company to increase to $25 million. The remaining terms of the amended credit facility are consistent with the original credit facility. In April 2004, the Company borrowed $7,724,000 (euro denominated) under this facility as part of funding the acquisition of the remaining 49% minority interest in LCIE-Landauer, Ltd. During the third quarter of fiscal 2005, the Company borrowed $1,500,000 and made principal and interest payments of $1,796,000 and $40,000, respectively. Year to date the Company has made principal payments of $2,360,000 and interest payments of $185,000. The outstanding balances under the line of credit of $4,311,000 at June 30, 2005 and $5,262,000 at September 30, 2004 are denominated in euros and at June 30, 2005, bears interest at 3.42% until July 29, 2005, at which time the Company has executed a new EURIBOR election notice for an additional interest period of 180 days at a rate of 3.37%, as permitted under the terms of the credit agreement. While the Company expects to renew the credit facility at maturity, in the event it is not renewed, it is expected that cash on hand, and cash flow from operations, and the Company's borrowing capacity will be sufficient to satisfy the obligation. The expectation is the Company will fund euro-based debt service payments from the euro-denominated cash flows. (7) PENSION AND POSTRETIREMENT MEDICAL BENEFIT EXPENSES The components of net periodic benefit cost for pension and retiree medical plans are as follows (000's): Pension Benefits Other Benefits ------------------- ------------------- Three Months Ended June 30, ------------------------------------------ 2005 2004 2005 2004 -------- -------- -------- -------- Components of net periodic benefit cost: Service cost . . . . . . . $ 259 $ 250 $ 25 $ 25 Interest cost. . . . . . . 273 247 27 20 Expected return on plan assets . . . . . . . . . (181) (162) -- -- Amortization of transi- tion (asset) obliga- tion . . . . . . . . . . (2) (2) 6 6 Amortization of prior service cost . . . . . . 68 39 4 4 Recognized net actuarial loss . . . . . . . . . . 26 30 11 3 -------- -------- -------- -------- Net periodic benefit cost . . . . . . . . . . $ 443 $ 402 $ 73 $ 58 ======== ======== ======== ======== 9 LANDAUER, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Unaudited Financial Statements (Cont'd) June 30, 2005 Pension Benefits Other Benefits ------------------- ------------------- Nine Months Ended June 30, ------------------------------------------ 2005 2004 2005 2004 -------- -------- -------- -------- Components of net periodic benefit cost: Service cost . . . . . . . $ 777 $ 715 $ 76 $ 71 Interest cost. . . . . . . 820 720 81 56 Expected return on plan assets . . . . . . . . . (543) (464) -- -- Amortization of transi- tion (asset) obliga- tion . . . . . . . . . . (5) (6) 17 18 Amortization of prior service cost . . . . . . 204 117 13 12 Recognized net actuarial loss . . . . . . . . . . 77 83 34 6 -------- -------- -------- -------- Net periodic benefit cost . . . . . . . . . . $ 1,330 $ 1,165 $ 221 $ 163 ======== ======== ======== ======== Landauer contributed $789,000 to its pension plan in fiscal 2005, the maximum amount permitted under U.S. tax law. The Company made $250,000 in pension contributions in the first fiscal quarter of 2005 and funded the remaining $539,000 on April 20, 2005. (8) ACQUISITION OF MINORITY INTEREST IN LCIE-LANDAUER, LTD. In April 2004, Landauer, Inc. consummated an agreement with Bureau Veritas ("BV") to acquire the 49% minority interest in LCIE-Landauer, Ltd. owned by BV's subsidiary, Laboratoire Central Industries des Electriques ("LCIE"), for $10.4 million in cash. The purchase price was allocated to identifiable intangible assets based on estimates of fair value as determined by an independent third party valuation consultant. Substantially all of the purchase price, plus deferred tax liabilities recorded, was allocated to intangible assets including $3.9 million of customer lists (amortized over the estimated useful life of 15 years) and goodwill of $7.9 million. Had the acquisition occurred at the beginning of the periods presented, unaudited net income of the Company on a pro forma basis would have been as follows (000's, except per share data): Three Nine Months Months Ended Ended June 30, June 30, 2004 2004 ---------- ---------- Pro forma net income . . . . . . . . . . . $ 4,394 $ 13,355 Diluted earnings per share . . . . . . . . $ 0.49 $ 1.49 The unaudited pro forma net income is for illustrative purposes only and is not necessarily indicative of the financial results had the acquisition actually occurred at the beginning of the periods presented. Landauer funded the purchase price from a combination of working capital funds ($2.7 million), and $7.7 million borrowed under a credit facility obtained in April 2004. See Note 6 for additional information on the credit facility. 10 LANDAUER, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Unaudited Financial Statements (Cont'd) June 30, 2005 (9) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2005, the Financial Accounting Standards Board ("FASB") issued SFAS No. 154, "Accounting Changes and Error Corrections." SFAS No. 154 replaces APB Opinion No. 20, "Accounting Changes." SFAS No. 154 requires that voluntary changes in accounting principle be applied retrospectively to prior periods' financial statements, unless it is impracticable to do so. SFAS No. 154 also provides that a change in method of depreciating or amortizing long-lived nonfinancial assets be accounted for as a change in accounting estimate. SFAS No. 154 is effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. The Company does not believe that implementing SFAS No. 154 will have a material impact on its financial position and results of operations. 11 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Landauer is a leading provider of analytical services to determine occupational and environmental radiation exposure. For over 50 years, the Company has provided complete radiation dosimetry services to hospitals, medical and dental offices, universities, national laboratories, and other industries in which radiation poses a potential threat to employees. Landauer's services include the manufacture of various types of radiation detection monitors, the distribution and collection of the monitors to and from clients, and the analysis and reporting of exposure findings. The majority of these services are provided to customers in the U.S., Japan, France, the United Kingdom, Brazil, Canada and China. Substantially all of the Company's revenues are realized from radiation monitoring services and other services incidental to radiation dose measurement. The Company enters into agreements with customers to provide them with radiation monitoring services, generally for a twelve- month period; these agreements have a high degree of renewal. Relationships with customers are generally stable and recurring, and the Company provides them with on-going services. As part of its services, the Company provides to its customers radiation detection badges, which are produced and owned by the Company. Raw material components related to the production of radiation detection badges are included in inventories. Finished badges are included in dosimetry devices in the consolidated balance sheet. The customers wear the badges for a period selected by the customers ("wear period"), which is usually one, two, or three months in duration. At the end of the wear period, the badges are returned to the Company for analysis. The Company analyzes the badges that have been worn and provides its customers with a report indicating radiation exposures. The Company recycles the badges for reuse, while also producing new replacement badges on a continual basis. Additional reporting and other radiation measurement and management services are provided to customers at their option ("ancillary services"). Landauer's InLightTM dosimetry system, introduced in late fiscal 2003, provides smaller in-house and commercial laboratories with the ability to offer a complete radiation monitoring service using optically stimulated luminescence ("OSL") technology. The system is based on the Company's propriety technology and instruments and dosimetry devices developed by Matsushita Industrial Equipment Company and allows customers the flexibility to tailor their precise dosimetry needs. InLight services may involve a customer acquiring or leasing dosimetry reading equipment from the Company. Landauer's operations include services for the measurement and monitoring of radon gas (referred to as "sales of radon kits") and services related to the remediation of radon gas, which require the customer to deploy a radon detector and return the detector to the Company's laboratories for dose determination and reporting. Where a customer has purchased a radon services agreement, the Company may assist with remediation services on properties where radon measurements exceed a specified threshold. InLight and radon services represent less than 5% of consolidated revenues. Landauer operates a mature business, and growth in numbers of customers is modest. In recent years, the Company's strategy has been to expand into new international markets, primarily by partnering with existing dosimetry service providers with a prominent local presence. In addition, the Company has been developing new platforms and formats for its optically stimulated luminescence ("OSL") technology such as InLight to gain access to markets where the Company previously did not have a significant presence such as smaller in-house and commercial laboratories. 12 Revenue growth in recent years has occurred as a result of increased prices for certain services, entry into new markets through joint ventures and acquisitions, modest unit growth and new ancillary services. The services provided by the Company to its customers are ongoing and are of a subscription nature. As such, revenues are recognized in the periods in which such services are rendered irrespective of whether invoiced in advance or in arrears. Given the subscription nature of Landauer's services, quarterly revenues are fairly consistent. During the second quarter of each fiscal year, however, the Company provides the additional services of reporting annual radiation dose summaries that generate increased revenues. The introduction of the Company's InLight product line may introduce some variability in quarter-to-quarter revenue comparisons given the nature of purchase cycles associated with sales of radiation dose measurement instruments and detectors. LIQUIDITY AND CAPITAL RESOURCES Landauer's cash provided from operating activities for the nine-month periods ended June 30, 2005 and 2004 amounted to $14,517,000 and $14,468,000, respectively. Acquisitions of property, plant and equipment were $3,096,000 and $3,666,000, respectively for the nine months ended June 30, 2005 and 2004. The Company's financing activities are comprised of credit facility activities and payments of cash dividends to shareholder and minority partners, offset partially by proceeds from the exercise of stock options and, in 2004, foreign dividends received from Nagase- Landauer, Ltd., the Company's Japanese joint venture and its subsidiary in Brazil. The Company has long-term liabilities in the amount of $6,232,000 and $5,162,000 at June 30, 2005 and September 30, 2004, respectively, and its requirement for cash flows to support investing activities is generally limited. Capital expenditures for the balance of fiscal 2005 are expected to be between $1,600,000 and $2,000,000 principally for the acquisition of equipment to support the Company's introduction of the InLight service line, introduction of new services, and the development of supporting software systems, and computer hardware. The Company anticipates that funds for these capital improvements will be provided from operations. As described in Note 6 to the financial statements, the Company borrowed under its credit facility, which expires in March 2006. In April 2004, the Company borrowed under this facility as part of funding the $10,400,000 acquisition of the remaining 49% minority interest in LCIE-Landauer Ltd. The borrowings are classified as current liabilities and are denominated in euros, which is the functional currency of LCIE-Landauer, Ltd. The credit facility permits borrowing up to a maximum of $15,000,000. In the opinion of management, cash flows from operations and the Company's borrowing capacity under its line of credit are adequate for projected operations and capital spending programs, as well as continuation of the regular cash dividend program. From time to time, the Company may have the opportunity to make investments for acquisitions or other purposes, and borrowings can be made under the credit facility to fund such investments. Landauer requires limited working capital for its operations since many of its customers pay for services in advance. Such advance payments, reflected on the balance sheet as "Deferred Contract Revenue", amounted to $13,596,000 and $12,554,000, respectively, as of June 30, 2005 and September 30, 2004. While these amounts represent approximately 47% and 44% of current liabilities, respectively, such amounts generally do not represent a cash requirement. All customers are invoiced in accordance with the Company's standard terms, with payment due thirty days from date of invoice. Considering the Company's invoicing practices and that a significant portion of the Company's revenues are subject to health care industry reimbursement cycles, the average days of sales outstanding for the Company have ranged from 43 to 78 days over the course of fiscal 2004 and fiscal 2005 year to date. 13 RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2005 Revenues for the third quarter of fiscal 2005 were $18,200,000, a 5.8% increase compared to revenues of $17,203,000 for the same quarter in fiscal 2004. Higher domestic radiation monitoring activities represented approximately $500,000 of revenue growth for the quarter, due to the realization of higher pricing, increased ancillary service revenues and modest unit gains. Growth in international radiation monitoring revenues of more than $425,000 over the prior year resulted from a mix of increased business activity in Europe, Asia and Brazil, as well as a weaker U.S. dollar. The balance of revenue growth was attributable to sales of InLight products and services in the U.S. and abroad. Gross margins were 61.1% of revenues for the third quarter of fiscal 2005, slightly lower than the 62.6% reported for the same period in fiscal 2004. Cost of revenues was approximately $650,000 or 9.9% higher than fiscal 2004. Direct labor costs exceeded the prior year by $53,000 as a result of wage increases and currency impact; direct materials were $65,000 higher attributable to InLight sales activity as well as currency related cost increases. Factors contributing to higher overhead costs include increases in outside services primarily related to information technology projects, $158,000; depreciation expense, $178,000; postage, $94,000; and higher international costs, $129,000, impacted by the weakened U.S. dollar particularly in relation to the euro and the costs associated with the conversion of French customers to InLight. Selling, general and administrative expenses in the third quarter of fiscal 2005 were approximately $450,000 or 10.8% higher versus a year ago primarily due to increases of $148,000 for professional fees including Sarbanes Oxley Section 404 compliance and $112,000 for international costs impacted by foreign exchange. Resulting operating income for the quarter ended June 30, 2005 was $6,642,000, a decrease of 1.1% compared with $6,717,000 reported in the same quarter a year ago. Net other income for the quarter was $86,000 higher than a year ago, reflecting increased earnings of Nagase-Landauer, Ltd., the Company's joint venture in Japan, and higher net interest income. The effective income tax rate for the third quarter of fiscal 2005 was lower at 35.2% than the prior year at 37.3%, reflecting higher Nagase- Landauer income, as well as certain non-taxable items. Resulting net income for the third quarter amounted to $4,531,000, or $0.50 per diluted share, compared with $4,394,000, or $0.49 per diluted share, for the same quarter in fiscal 2004. RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 2005 Revenues for the first nine months of the fiscal year were $56,231,000, or 7.6% higher than revenues of $52,242,000 for the same period in fiscal 2004. Domestic revenue growth, representing more than $1,800,000 of the increase, resulted from improved pricing and modestly higher volume for radiation measurement and ancillary services. International radiation monitoring revenues were approximately $1,200,000 higher as a result of higher pricing, increased international business activity, and a continued weak U.S. dollar. The balance of revenue growth for the first nine months of fiscal 2005, or approximately $1,000,000, was attributable to sales of InLight products and services in the U.S. and abroad. Gross margins for the first nine months of fiscal 2005 were 61.9% of revenues, lower than the 63.7% reported for the same period in fiscal 2004. Cost of revenues increased $2,489,000 or 13.1% from the same period in the prior year. Direct labor costs exceeded the prior year by $186,000 as a result of increased business activity and currency impact, particularly in 14 relation to the euro. Direct materials were $415,000 higher attributable to InLight sales activity as well as currency translation. Overhead costs rose both domestically and internationally primarily due to increases in outside services related to information technology projects, $484,000; depreciation expense, $495,000; postage, $177,000; and higher international costs, $606,000, impacted by the consolidation of two laboratories in France, a weakened U.S. dollar particularly in relation to the euro, and conversion of French customers to InLight technology. Selling, general and administrative expenses for the first nine months of fiscal 2005 were $977,000 higher, or 7.8% higher than a year ago. The year to date increase in selling, general, and administrative expenses relates to increased employment fees, $113,000; outside services fees for market analysis, $221,000; professional fees including Sarbanes Oxley Section 404 compliance, $297,000; amortization, $133,000; and international expenses, $384,000, primarily due to the conversion of French customers to InLight, the consolidation of two laboratories in France, and currency translation. Resulting operating income for the first nine months of fiscal 2005 was $21,266,000 compared with $20,743,000 for the same period in fiscal 2004. Year to date net other income was $145,000 higher than a year ago, reflecting higher earnings of the Company's joint venture in Japan, $219,000, offset $74,000 by higher net interest and other costs. The effective tax rate of 36.5% for the nine-month period reflects higher Nagase-Landauer income as well as certain non-taxable items, and compares with 37.5% for the first nine months of fiscal 2004. Minority interest was $216,000 lower than prior year, reflecting the acquisition of the remaining interest in LCIE-Landauer in April 2004. Resulting net income for the nine months ended June 30, 2005 was $14,104,000, or $1.56 per diluted share, compared with $13,238,000, or $1.48 per diluted share, for the same period in fiscal 2004. OUTLOOK FOR BALANCE OF FISCAL 2005 Management's review of the first nine months of fiscal 2005 and expected business activity for the fourth quarter indicate that aggregate revenue growth for the year is anticipated to be 7 - 8%. Fiscal 2005 revenues from traditional domestic and international radiation monitoring services are expected to grow by approximately 5.5% compared with fiscal 2004. Revenues from sales for the InLight product line will contribute to the balance of revenue growth. Domestic revenue growth drivers include pricing, moderate unit growth and increased sales of ancillary services. Pricing and increased unit volume are expected to contribute to international revenue growth in fiscal 2005, although currency exchange rates may impact results reported in U.S. dollars. Based on the Company's current operating plan, costs and operating expenses for fiscal 2005 are expected to grow at an aggregate rate of 10 - 10.5% compared with fiscal 2004. Net other income in fiscal 2005 is anticipated to be approximately $200,000 higher than in fiscal 2004 and minority interest should be $200,000 lower, as a result of the elimination of the minority interest in LCIE- Landauer. The effective income tax rate for fiscal 2005 is expected to be 36.5 - 37.0%, compared with 37.4% in fiscal 2004. Based on these estimates, resulting net income for fiscal 2005 is currently anticipated to be higher by 5 - 6% compared with fiscal 2004. FORWARD LOOKING STATEMENTS Certain of the statements made herein (including, in particular, the statements made under the caption "Outlook for Balance of Fiscal 2005" above) constitute forward looking statements that are based on certain assumptions and involve certain risks and uncertainties, including, introduction and customer acceptance of the InLight technology, the adaptability of optically stimulated luminescence ("OSL") technology to new 15 platforms and formats, the cost associated with the Company's research and business development efforts, the usefulness of older technologies, the anticipated results of operations of the Company and its subsidiaries or ventures, the valuation of the Company's long lived assets or business units relative to future cash flows, changes in pricing for the Company's services, changes in postal and delivery costs and practices, the Company's business plans, anticipated revenue and cost growth, the risks associated with conducting business internationally, other anticipated financial events, the effects of changing economic and competitive conditions, foreign exchange rates and currency translations, government regulations, accreditation requirements, and pending accounting pronouncements. Such assumptions may not materialize to the extent assumed and such risks and uncertainties may cause actual results to differ from anticipated results. Such risks and uncertainties may also 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 Company's Annual Report on Form 10-K for the year ended September 30, 2004 and other reports filed by the Company from time to time with the Securities and Exchange Commission. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections." SFAS No. 154 replaces APB Opinion No. 20, "Accounting Changes." SFAS No. 154 requires that voluntary changes in accounting principle be applied retrospectively to prior periods' financial statements, unless it is impracticable to do so. SFAS No. 154 also provides that a change in method of depreciating or amortizing long-lived nonfinancial assets be accounted for as a change in accounting estimate. SFAS No. 154 is effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. The Company does not believe that implementing SFAS No. 154 will have a material impact on its financial position and results of operations. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK SIGNIFICANT RISK FACTORS The Company's business and operations are subject to certain risks and uncertainties, including: FOREIGN CURRENCY EXCHANGE AND INTEREST RATE RISKS The Company is exposed to market risk, including changes in foreign currency exchange rates and interest rates. As discussed in Note 1 to the financial statements in the Company's Annual Report on Form 10-K, "Summary of Significant Accounting Policies" to the consolidated financial statements, the financial statements of the Company's non-U.S. subsidiaries are remeasured into U.S. dollars using the U.S. dollar as the functional currency. To date, the market risk associated with foreign currency exchange rates has not been material in relation to the Company's financial position, results of operations, or cash flows. These risks could increase, however, as the Company expands in international markets. The Company does not have any significant trade accounts receivable, trade accounts payable, or commitments in a currency other than that of the reporting unit's functional currency. As such, the Company does not currently use derivative financial instruments to manage the exposure in its non-U.S. operations. 16 RELIANCE UPON SINGLE MANUFACTURING FACILITY Landauer, Inc. conducts its primary manufacturing and laboratory processing operations from a single facility in Glenwood, Illinois. In addition, the Company performs significant functions for some of its international operations from the Glenwood facility. If the Company were to lose availability of its primary facility due to fire, natural disaster or other disruptions, the Company's operations could be significantly impaired. Although the Company maintains business interruption insurance, there can be no assurance that the proceeds of such insurance would be sufficient to offset any loss the Company might incur or that the Company would be able to retain its customer base if operations were so disrupted. SINGLE SOURCE FOR CRYSTAL MATERIALS Crystal material is a key component in Landauer's OSL technology. The Company operates a single crystal manufacturing facility in Stillwater, Oklahoma that currently supplies all OSL crystal radiation measurement material used by the Company. If the Company were to lose availability of its Stillwater facility due to a fire, natural disaster or other disruptions, such loss could have a material adverse effect on the Company and its operations. Although multiple sources for raw crystal material exists, there can be no assurance that the Company could secure another source to produce finished crystal materials to Landauer's specification in the event of a disruption at the Stillwater facility. TECHNOLOGY Landauer's technological expertise has been an important factor in its growth. The Company regularly pursues product improvements to maintain its technical position. The development and introduction of new technologies, the adaptability of OSL to new platforms and new formats, the usefulness of older technologies as well as the introduction of new technologies by the competition present various risks to the Company's business. The failure or lack of market acceptance of a new technology or the inability to respond to market requirements for new technology could adversely affect the Company's operations or reputation with customers. The cancellation of technology projects or the cessation of use of an existing technology can result in write-downs and charges to the Company's earnings. In the normal course of its business, Landauer must record and process significant amounts of data quickly and accurately and relies on various computer and telecommunications equipment and software systems. Any failure of such equipment or systems could adversely affect the Company's operations. INTERNATIONAL OPERATIONS POSE RISKS Landauer conducts business in numerous international markets such as Japan, France, the United Kingdom, Brazil, Canada and China. Foreign operations are subject to a number of special risks, including among others, currency exchange rate fluctuations; disruption in relations; political and economic unrest; trade barriers; exchange controls; expropriation; and changes in laws and policies, including those governing foreign owned operations. GOVERNMENT REGULATIONS Regulation, present and future, is a constant factor affecting the Company's business. The radiation monitoring industry is subject to federal and state governmental regulation. Unknown matters, new laws and regulations, or stricter interpretations of existing laws or regulations may materially affect Landauer's business or operations in the future and/or could increase the cost of compliance. 17 Many of the Company's technology based services must comply with various national and international standards that are used by regulatory and accreditation bodies for approving such services and products. Changes in these standards and accreditation requirements can result in the Company having to incur costs to adapt its offerings and procedures. Such adaptations may introduce quality assurance issues during transition that need to be addressed to ensure timely and accurate analyses and data reporting. Additionally, changes affecting radiation protection practices, including new understandings of the hazards of radiation exposure and amended regulations, may impact how the Company's services are used by its customers and may in some circumstances cause the Company to alter its products and delivery of its services. COMPETITION The Company competes on the basis of advanced technologies, competent execution of these technologies, the quality, reliability and price of its services and its prompt and responsive performance. In much of the world, radiation monitoring activities are conducted by a combination of private entities and governmental agencies. The Company's primary competitor in the United States is large and has substantial resources. The Company also faces competitive pressures from a number of smaller competitors. COMPLIANCE WITH SECTION 404 OF THE SARBANES-OXLEY ACT The Company is in the process of documenting and testing its internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, that requires annual management assessments of the effectiveness of internal controls over financial reporting and an attestation report by its independent registered public accounting firm. At this time, due to the ongoing evaluation and testing, no assurance can be given that there may not be internal control deficiencies that would be required to be reported. Compliance with the requirements of Section 404 of the Sarbanes-Oxley Act will also increase the Company's overhead costs in 2005 and future years. ITEM 4. CONTROLS AND PROCEDURES As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of the Company's disclosure controls and procedures as defined in Rule 13a- 15(e) under the Securities and Exchange Act of 1934, as amended. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures as of June 30, 2005 were effective. There have been no changes in the Company's internal control over financial reporting that occurred during the period ended June 30, 2005 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. 18 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is a party to various legal proceedings, lawsuits and other claims arising in the ordinary course of its business. The Company does not believe that such litigation, if adversely determined, would have a material effect on its business, financial position, results of operations, or cash flows. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K On May 4, 2005, Landauer filed a report on Form 8-K related to the election of a new Director to its Board. On June 6, 2005, Landauer filed a report on Form 8-K related to a news release announcing the declaration of a regular quarterly cash dividend of $0.425 per share for the third quarter of fiscal 2005. On July 26, 2005, Landauer filed a report on Form 8-K related to its earnings for the third fiscal quarter ended June 30, 2005. Exhibit 31.1 Rule 13a-14(a)/15d-14(a), Certification of Chief Executive Officer Exhibit 31.2 Rule 13a-14(a)/15d-14(a), Certification of Chief Financial Officer Exhibit 32.1 Section 1350 Certification of Chief Executive Officer Exhibit 32.2 Section 1350 Certification of Chief Financial Officer 19 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 8, 2005 /s/ James M. O'Connell ------------------------------ James M. O'Connell Vice President and Treasurer (Principal Financial and Accounting Officer) 20 EX-31.1 2 exh_311.txt EXHIBIT 31.1 - ------------ Rule 13a-14(a)/15d-14(a) CERTIFICATION I, Brent A. Latta, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Landauer, Inc.; 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)) 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) 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 (c) 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. August 8, 2005 /s/ Brent A. Latta ----------------------------------- President & Chief Executive Officer EX-31.2 3 exh_312.txt EXHIBIT 31.2 - ------------ Rule 13a-14(a)/15d-14(a) CERTIFICATION I, James M. O'Connell, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Landauer, Inc.; 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)) 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) 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 (c) 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. August 8, 2005 /s/ James M. O'Connell ------------------------------ Chief Financial Officer EX-32.1 4 exh_321.txt EXHIBIT 32.1 - ------------ SECTION 1350 CERTIFICATION In connection with the Quarterly Report of Landauer, Inc. (the "Company") on Form 10-Q for the period ending June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Brent A. Latta, 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: 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 result of operations of the Company. /s/ Brent A. Latta ----------------------------------- President & Chief Executive Officer August 8, 2005 [Signed originals of these written statements required by Section 906 have been provided to Landauer, Inc. and will be retained by Landauer, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.] EX-32.2 5 exh_322.txt EXHIBIT 32.2 - ------------ SECTION 1350 CERTIFICATION In connection with the Quarterly Report of Landauer, Inc. (the "Company") on Form 10-Q for the period ending June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James M. O'Connell, 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: 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 result of operations of the Company. /s/ James M. O'Connell ------------------------------ Chief Financial Officer August 8, 2005 [Signed originals of these written statements required by Section 906 have been provided to Landauer, Inc. and will be retained by Landauer, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.] -----END PRIVACY-ENHANCED MESSAGE-----