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Last updated on April 18, 2014 at 11:05 EDT

Landauer, Inc. Reports Fiscal 2013 Second Quarter Results

May 6, 2013

GLENWOOD, Ill., May 6, 2013 /PRNewswire/ — Landauer, Inc. (NYSE: LDR), a recognized leader in personal and environmental radiation measurement and monitoring, outsourced medical physics services and high quality medical consumable accessories, today reported financial results for its fiscal 2013 second quarter ended March 31, 2013.

Fiscal 2013 Second Quarter Highlights

  • Revenue of $37.1 million in the second quarter of fiscal 2013
  • Operating income of $7.1 million includes IT platform enhancement expense ($1.9 million) and non-cash stock based compensation ($0.4 million)
  • Net income of $5.2 million, or $0.54 per diluted share, included $0.06 per diluted share of IT platform enhancement, acquisition expenses, and non-cash stock based compensation expenses
  • EBITDA of $11.3 million
  • Updated Financial Guidance:
    • Revenue lowered to a range of $150 million to $155 million
    • Adjusted EBITDA lowered to a range of $51 million to $53 million
    • Net Income range unchanged: $21 million to $23 million

“Our second quarter results reflect the stable operating environment in our Radiation Measurement segment, improved profitability in our Medical Physics segment and the challenging marketplace in our Medical Products unit,” said Bill Saxelby, President and CEO of Landauer. “During the quarter, revenue growth in both our Radiation Measurement and Medical Physics businesses were flat to prior year due to the timing of new orders from military and first responder customers in the core Radiation Measurement business and the focus on improving operating margins in the Medical Physics business. Our Medical Products business experienced significant pricing pressure, which had a major impact on the revenue contributions from this business through our fiscal 2013 second quarter. As a result, we are lowering our revenue guidance expectations for the full year to reflect year to date performance and the current pricing and demand environment.”

Saxelby continued, “Despite these near term challenges, we remain committed to our long-term plan and the growth potential of our combined radiation measurement and safety platform. Our expanding relationships with military and first responder customers, along with next generation products will continue to drive the Radiation Measurement business. The Medical Physics business has continued to show improved profitability and is gaining traction with its system-wide radiation safety solution. We reorganized the leadership and sales structure of the Medical Products business, acquired the assets of a complimentary business and are already seeing these strategic moves begin to yield positive results. We remain committed to creating value for our shareholders by executing against our strategic initiatives while maintaining our robust dividend policy.”

Second Fiscal Quarter Financial Overview and Business Segment Results

Revenues for the second fiscal quarter of 2013 and for the second fiscal quarter of 2012 were $37.1 million and $39.1 million, respectively. The Medical Products segment revenue decreased $1.8 million and Radiation Measurement and Medical Physics revenues each decreased $0.1 million over the prior fiscal year period. Consolidated revenue for the second fiscal quarter of 2013 was negatively affected by $0.1 million in currency fluctuation, as compared with the prior fiscal year period, principally due to weakness in the Brazil Real against the U.S. Dollar.

Gross margins were 54.0 percent for the second fiscal quarter of 2013, compared with 59.0 percent for the second fiscal quarter of 2012. The decrease in the gross margin over the prior year period was due to planned cost increases primarily related to IT platform enhancement expenses of $0.5 million for additional depreciation, $1.0 million in IT consulting services and $0.4 million in increased international costs, offset by decreased service costs of $0.3 million and decreased materials of $0.5 million.

Total selling, general and administrative expenses for the second fiscal quarter of 2013 and 2012 were $12.6 million, respectively. For the second fiscal quarter of 2013, total selling, general and administrative expenses included $0.4 million additional depreciation expense for the IT platform, $0.4 million of non-cash stock based compensation expenses, $0.3 million of customer service related expenses and $0.4 million of service cost reductions. This compares with $0.3 million of IT platform enhancement related expenses and $0.6 million of non-cash stock based compensation expenses in the second fiscal quarter of 2012.

Operating income for the second fiscal quarter of 2013 was $7.1 million, a decrease of $3.0 million, or 29.7 percent, compared with operating income of $10.1 million for the second fiscal quarter of 2012. Operating income, adjusted for non-recurring acquisition and reorganization expenses, IT platform stabilization related expenses, and non-cash stock based compensation expenses, for the second fiscal quarter of 2013 was $7.8 million, a 31 percent decrease, compared with adjusted operating income on a relative basis of $11.3 million for the second fiscal quarter of 2012.

Interest expense, net of investment income in the quarter, increased $0.2 million associated with the borrowings to acquire IZI Medical Products in the first fiscal quarter of 2012.

The effective tax rate for the second fiscal quarter of 2013 and 2012 was 23.6 percent and 30.0 percent, respectively. The decrease in effective tax rate was due primarily to the recently enacted R&D credit as well as a change in the mix of earnings based on geographic location of the Company’s operations in various jurisdictions and the specific legal entities subject to taxation in those jurisdictions.

Net income for the second fiscal quarter ended March 31, 2013 was $5.2 million, or $0.54 per diluted share, compared to net income of $7.1 million, or $0.75 per diluted share, in the same period last year. The decrease in net income was due to reduced sales of $2.0 million, increased IT platform enhancement related expenses of $1.9 million, decreased equity earnings of $0.5 million and additional international costs of $0.4 million. Additionally, this decrease was offset by an effective tax rate reduction of $1.5 million, and other decreased costs of $1.0 million. Excluding the costs associated with the acquisition, IT platform enhancement, and non-cash stock based compensation expenses, adjusted net income was $5.7 million, compared to adjusted net income of $8.0 million in the comparable prior year period. The resulting adjusted diluted earnings per share for the second fiscal quarter ended March 31, 2013 was $0.60 per share, compared to $0.85 in the same period last year.

Adjusted EBITDA for the fiscal second quarter 2013 was $12.0 million compared with $14.9 million for the second fiscal quarter of 2012. The decrease was due primarily to lower earnings. A reconciliation of net income to EBITDA and Adjusted EBITDA is included in the attached financial exhibits.

Radiation Measurement Segment

Radiation Measurement revenues for the second fiscal quarter of 2013 decreased 0.4 percent, or $0.1 million, from the second fiscal quarter of 2012 to $27.3 million. The decrease in the fiscal 2013 second quarter was primarily due to revenue decreases domestically over the prior year second fiscal quarter of $0.6 million, offset by international increases of $0.6 million less currency impacts of $0.1 million.

Radiation Measurement operating income for the second fiscal quarter of 2013 decreased to $6.1 million, or 23.8 percent, from $8.0 million in the comparable prior year period. The decrease in operating income was due to increased IT platform enhancement related expenses of $1.9 million, $0.4 million in increased international costs, and increased customer services costs of $0.3 million, offset by $0.4 million in lower material costs in the current quarter and decreased prior year IT platform expenses of $0.3 million.

Medical Physics Segment

Medical Physics revenues for the second fiscal quarter of 2013 decreased 1.3 percent, or $0.1 million, from the comparable period in fiscal 2012 to $7.6 million. The Medical Physics segment operating income was $0.7 million due primarily to decreased service costs of $.7 million, or 9.2 percent of revenues, as compared to $0.1 million, or 1.3 percent of revenues, in the second fiscal quarter of 2012.

Medical Products Segment

Medical Products revenues for the second fiscal quarter of 2013 decreased 45.1 percent, or $1.8 million, from the second fiscal quarter of 2012 to $2.2 million. Medical Products operating income for the second fiscal quarter of 2013 was $0.3 million, or 13.6 percent of revenues, as compared to $2.0 million, or 50.0 percent of revenues, in the second fiscal quarter of 2012. The decrease in revenue and operating income was due primarily to a decline in selling price and shipments of Spherz product without a corresponding decrease in costs.

Fiscal Six Months Financial Overview and Business Segment Results

Revenues for the first six months of fiscal 2013 were $73.8 million, a decrease of $2.0 million, or 2.6 percent compared with revenues of $75.8 million for the same period in fiscal 2012. The Medical Products segment had a decline of $1.3 million and the Radiation Measurement segment decreased $0.7 million in revenues.

Gross margins were 54.4 percent for the first six months of fiscal 2013, compared with 59.2 percent for the first six months of fiscal 2012. The decline in gross margin over the prior year period was due to decreased revenue of $2.0 million as well as planned cost increases primarily related to IT platform enhancement expenses of $2.5 million, $0.1 million of additional manufacturing and international costs and service costs of $0.2 million.

Total selling, general and administrative expenses for the first six months of fiscal 2013 of $26.0 million, an increase of $1.0 million, or 4 percent, compared to $25.0 million for the first six months of fiscal 2012. For the first six months of fiscal 2013, total selling, general and administrative expenses included $0.7 million additional depreciation expense for the IT platform enhancement, $1.1 million of non-cash stock based compensation expenses, and $0.8 million of customer service related expenses. This compares with $0.6 million of IT platform enhancement related expenses and $1.5 million of non-cash stock based compensation expenses in the first six months of fiscal 2012.

In the first six months of fiscal 2013, we incurred $0.3 million acquisition expenses related to Medical Physics, as compared to $2.2 million in the first six months of fiscal 2012 primarily due to the acquisition of IZI Medical Products.

Operating income for the first six months of fiscal 2013 was $13.9 million, a decrease of $3.8 million, or 21.5 percent, compared with operating income of $17.7 million for the same period in fiscal 2012. The decrease in operating income was due to reduced Medical Products operating income of $1.4 million, the impact of reduced Radiation Measurement revenue of $0.7 million, increased IT platform enhancement related expenses of $3.2 million, additional manufacturing and international costs of $0.6 million additional customer service support of $0.8 million, and acquisition costs of $0.3 million, offset by prior fiscal year first six months acquisition costs of $2.2 million and prior year IT platform expense of $.6 million.

The effective tax rate was 27.5 percent and 32.2 percent for the first six months of fiscal 2013 and 2012, respectively. The decline in the effective tax rate was due primarily to the enactment of the R&D credit for calendar year 2013 in the second fiscal quarter of 2013 as well as a change in the mix of earnings based on geographic location of the Company’s operations in various jurisdictions and the specific legal entities subject to taxation in those jurisdictions.

Net income for the first six months of fiscal 2013 was $10.0 million, a decrease of $2.0 million, or 16.7 percent, compared to $12.0 million in the same period in fiscal 2012. The decrease in net income was due to reduced Medical Products operating income, reduced Radiation Measurement revenue, increased IT platform enhancement related expenses of $3.2 million, additional manufacturing and international costs of $0.6 million, additional customer service support of $0.8 million and additional other expense of $0.2 million, offset by effective tax rate reduction decreasing taxes by $1.9 million and the prior fiscal year first six months acquisition costs of $2.2 million, less current year acquisition costs of $0.3 million and service costs reductions of $.5 million and prior year IT platform expense of $.6 million. Excluding the costs associated with the acquisitions, IT platform enhancement, and non-cash stock based compensation, adjusting net income was $11.2 million, compared to $14.9 million in the comparable prior year period. The resulting adjusted diluted earnings per share for the six month period ended March 31, 2013 was $1.18 per share, compared to $1.59 in the same period last year.

Adjusted EBITDA for the first six months of fiscal 2013 was $24.4 million compared with $28.4 million for the first six months of fiscal 2012. The decrease was due primarily to lower earnings. A reconciliation of net income to EBITDA and Adjusted EBITDA is included in the attached financial exhibits.

Radiation Measurement Segment

Radiation Measurement revenues for the first six months of fiscal 2013 decreased 1.3 percent, or $0.7 million, from the first six months of fiscal 2012 to $53.7 million. The decrease in the first six months of fiscal 2013 was primarily due to decreases of equipment sales by $.3 million and currency impacts of $0.3 million as compared to prior fiscal year first six months.

Radiation Measurement operating income for the second fiscal quarter of 2013 decreased to $11.4 million, or 20.3 percent, from $14.3 million in the comparable prior year period. The decrease in operating income was due to reduced Radiation Measurement revenue of $0.7 million, increased IT platform enhancement related expenses of $3.2 million, additional manufacturing and international costs of $0.6 million, additional customer service support of $0.8 million and acquisition costs of $.3 million, offset by prior fiscal year first six months acquisition costs of $2.2 million and prior year IT platform costs of $.6 million.

Medical Physics Segment

Medical Physics revenues for the first six months of fiscal 2013 increased 0.7 percent, or $0.1 million, from the comparable period in fiscal 2012 to $15.2 million due to the impact of acquired companies. The Medical Physics segment operating income was $1.5 million, or 9.9 percent of revenues, as compared to $1.0 million, or 6.6 percent of revenues, in the first six months of fiscal 2012 due primarily to decreased service costs of $.5 million.

Medical Products Segment

Medical Products revenues for the first six months of fiscal 2013 decreased 21.0 percent, or $1.3 million, from the first six months of fiscal 2012 to $4.9 million. Medical Products operating income for the first six months of fiscal 2013 was $1.0 million, or 20.4 percent of revenues, as compared to $2.4 million, or 38.7 percent of revenues, in the first six months of fiscal 2012. The decrease in revenue and operating income is due primarily to a decline in selling price and shipments of Spherz without a corresponding decrease in costs.

Balance Sheet

Landauer ended the second fiscal quarter of 2013 with total assets of $299.0 million, a decrease of $3.1 million compared to total assets of $302.1 million at the end of fiscal 2012. The Company completed the quarter with $11.1 million of cash and cash equivalents on the balance sheet and unused borrowing capacity of $32.0 million under its current $175 million credit facility, which provides adequate liquidity to meet its current and anticipated obligations. Net operating cash flow generated during the first six months of fiscal 2013 was $7.5 million.

Fiscal 2013 Outlook

Landauer’s business plan for fiscal 2013 currently anticipates aggregate revenues for the year to be in the range of $150 to $155 million. The business plan also anticipates a blended effective tax rate for the full fiscal year to be within a range of 28 percent to 30 percent.

Based upon the above assumptions, the Company anticipates reported net income for fiscal 2013 in the range of $21 to $23 million and Adjusted EBITDA expected for fiscal 2013 in the range of $51 to $53 million.

Conference Call Details

Landauer has scheduled its second quarter conference call for investors over the Internet on Tuesday, May 7, 2013, at 9:00 a.m. Central Time (10 a.m. Eastern Time). To participate, callers should dial 888-549-7880 (within the United States and Canada), or 480-629-9770 (international callers) about 10 minutes before the presentation. To listen to a webcast on the Internet, please go to the Company’s website at http://www.landauer.com at least 15 minutes early to register, download and install any necessary audio software. Investors may access a replay of the call by dialing 800-406-7325 (within the United States and Canada), or 303-590-3030 (international callers), passcode 4614878#, which will be available through Friday, June 7, 2013. The replay will also be available on Landauer’s website for 90 days following the call.

About Landauer
Landauer is a leading global provider of technical and analytical services to determine occupational and environmental radiation exposure, the leading domestic provider of outsourced medical physics services, as well as a provider of high quality medical accessories used in radiology, radiation therapy, and image guided surgery procedures. For more than 50 years, the Company has provided complete radiation dosimetry services to hospitals, medical and dental offices, universities, national laboratories, nuclear facilities 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 customers, and the analysis and reporting of exposure findings. The Company provides its dosimetry services to approximately 1.8 million individuals globally. In addition, through its Medical Physics segment, the Company provides therapeutic and imaging physics services to the medical physics community. Through its Medical Products segment, the Company provides medical consumable accessories used in radiology, radiation therapy, and image guided surgery procedures. For information about Landauer, please visit our website at http://www.landauer.com.

Safe Harbor Statement

Some of the information shared here (including, in particular, the section titled “Fiscal 2013 Outlook”) constitutes forward-looking statements that are based on assumptions and involve certain risks and uncertainties. These include the following, without limitation: assumptions, risks and uncertainties associated with the Company’s future performance, the Company’s development and introduction of new technologies in general; the ability to protect and utilize the Company’s intellectual property; continued customer acceptance of the InLight technology; the adaptability of optically stimulated luminescence (OSL) technology to new platforms and formats; military and other government funding for the purchase of certain of the Company’s equipment and services; the impact on sales and pricing of certain customer group purchasing arrangements; changes in spending or reimbursement for medical products or services; the costs associated with the Company’s research and business development efforts; the usefulness of older technologies and related licenses and intellectual property; the effectiveness of and costs associated with the Company’s IT platform enhancements; the anticipated results of operations of the Company and its subsidiaries or ventures; valuation of the Company’s long-lived assets or business units relative to future cash flows; changes in pricing of products and services; 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” and information contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2012 and other reports filed by the Company, from time to time, with the Securities and Exchange Commission. 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.

During the past several years, the Company has been engaged in an initiative to re-engineer many of its business processes and replace significant components of its information technology systems. A principal component of this initiative is the implementation of new enterprise resource planning software and other applications to manage certain business operations. This enhancement of the Company’s IT platform has been a complex project and has involved extensive customization of the Company’s software and IT systems. In July 2012, the enhanced IT platform became operational. Although the Company has been encouraged by its experience with the enhanced platform during the first several months of the platform’s start-up phase, there can be no assurance that the new platform will continue to maintain its functionality at the levels anticipated or otherwise meet the Company’s business and operational objectives. If unforeseen problems arise, the Company’s operations could be adversely impacted, including the ability of the Company to perform one or more of the following in a timely manner: customer quotes, customer orders, product shipment, customer services and support, order billing and tracking, contractual obligations fulfillment and related operations. As previously disclosed, the Company expects to incur ongoing maintenance expenditures for the new IT platform at levels higher than the Company traditionally experienced under its prior platform. Unforeseen problems with the new platform could increase further such expenditures.

Financial Tables Follow

                                                                                    Landauer, Inc. and Subsidiaries

                                                                Second Fiscal Quarter 2013 Consolidated Statements of Income (Unaudited)

                                             Three Months Ended                         Six Months Ended

                                                 March 31,                                 March 31,
                                                 ---------                                 ---------

    (Dollars in thousands, Except per
     Share)                                                2013                         2012                                2013         2012
    ---------------------------------                      ----                         ----                                ----         ----

    Net revenues                                                            $37,082                                      $39,094              $73,763  $75,763

    Costs and expenses:

        Cost of sales                                                        17,050                                       16,029               33,613   30,935

        Selling, general and administrative                                  12,578                                       12,604               25,969   24,965

        Acquisition and reorganization costs                                    300                                          312                  300    2,161
        ------------------------------------                                    ---                                          ---                  ---    -----

    Costs and expenses                                                       29,928                                       28,945               59,882   58,061
    ------------------                                                       ------                                       ------               ------   ------

    Operating income                                                          7,154                                       10,149               13,881   17,702

    Equity in income of joint ventures                                          556                                        1,067                2,084    1,871

    Interest expense, net                                                    (1,081)                                        (863)              (2,114)  (1,453)

    Other income (expense), net                                                 224                                           (9)                 319       50
    ---------------------------                                                 ---                                          ---                  ---      ---

    Income before taxes                                                       6,853                                       10,344               14,170   18,170

    Income taxes                                                              1,620                                        3,104                3,894    5,846
    ------------                                                              -----                                        -----                -----    -----

    Net income                                                                5,233                                        7,240               10,276   12,324

    Less:  Net income attributed to
     noncontrolling interest                                                     80                                          130                  246      289
    -------------------------------                                             ---                                          ---                  ---      ---

    Net income attributed to Landauer,
     Inc.                                                                    $5,153                                       $7,110              $10,030  $12,035
    ==================================                                       ======                                       ======              =======  =======

    Net income per share attributable to
     Landauer, Inc. shareholders:

        Basic                                                                 $0.54                                        $0.76                $1.06    $1.28

        Weighted average basic shares
         outstanding                                                          9,417                                        9,361                9,391    9,347
        =============================                                         =====                                        =====                =====    =====

        Diluted                                                               $0.54                                        $0.75                $1.05    $1.27

        Weighted average diluted shares
         outstanding                                                          9,462                                        9,402                9,438    9,387
        ===============================                                       =====                                        =====                =====    =====

    Dividends paid per share                                                  $0.55                                        $0.55                $1.10    $1.10

                                           Landauer, Inc. and Subsidiaries

                                       Consolidated Balance Sheets (Unaudited)

    (Dollars in Thousands)                March 31,                             September 30,

                                                2013                                     2012
    ---                                         ----                                     ----

    ASSETS

    Current assets:

        Cash and cash equivalents                                      $11,054                 $17,633

        Receivables, net of allowances
         of $1,133 and $1,088,
         respectively                                                   36,419                  35,165

        Inventories                                                      9,718                   8,638

        Prepaid income taxes                                             4,902                   2,148

        Prepaid expenses and other
         current assets                                                  4,267                   3,975
        --------------------------                                       -----                   -----

    Current assets                                                      66,360                  67,559
    --------------                                                      ------                  ------

    Property, plant and equipment,
     at cost                                                           105,883                 101,375

    Accumulated depreciation and
     amortization                                                      (51,256)                (46,983)
    ----------------------------                                       -------                 -------

    Net property, plant and
     equipment                                                          54,627                  54,392
    -----------------------                                             ------                  ------

    Equity in joint ventures                                            22,683                  24,108

    Goodwill                                                           106,746                 106,717

    Intangible assets, net of
     accumulated amortization of
     $11,395 and $9,696,
     respectively                                                       36,091                  37,402

    Dosimetry devices, net of
     accumulated depreciation of
     $9,511 and $8,879,
     respectively                                                        6,436                   6,189

    Other assets                                                         6,101                   5,758
    ------------                                                         -----                   -----

    Assets                                                            $299,044                $302,125
    ======                                                            ========                ========

    LIABILITIES AND STOCKHOLDERS'
     EQUITY

    Current liabilities:

        Accounts payable                                                $6,541                  $9,656

        Dividends payable                                                5,403                   5,345

        Deferred contract revenue                                       14,413                  14,947

        Accrued compensation and
         related costs                                                   6,938                   8,260

        Other accrued expenses                                           7,789                   7,096
        ----------------------                                           -----                   -----

    Current liabilities                                                 41,084                  45,304
    -------------------                                                 ------                  ------

    Non-current liabilities:

        Long-term debt                                                 143,260                 141,347

        Pension and postretirement
         obligations                                                    17,821                  17,586

        Deferred income taxes                                           16,179                  15,733

        Other non-current liabilities                                    1,106                   1,053
        -----------------------------                                    -----                   -----

    Non-current liabilities                                            178,366                 175,719
    -----------------------                                            -------                 -------

    Stockholders' equity:

      Preferred stock, $.10 par value
       per share, authorized
       1,000,000 shares; none issued                                         0                       0

      Common stock, $.10 par value
       per share, authorized
       20,000,000 shares; 9,562,320
       and 9,493,368 shares issued
       and outstanding at March 31,
       2013 and September 30, 2012,
       respectively                                                        956                     949

      Additional paid in capital                                        37,063                  35,898

      Accumulated other comprehensive
       loss                                                             (7,324)                 (5,272)

      Retained earnings                                                 47,685                  48,142
      -----------------                                                 ------                  ------

    Landauer, Inc. stockholders'
     equity                                                             78,380                  79,717

    Noncontrolling interest                                              1,214                   1,385
    -----------------------                                              -----                   -----

    Stockholders' equity                                                79,594                  81,102
    --------------------                                                ------                  ------

    Liabilities and Stockholders'
     Equity                                                           $299,044                $302,125
    =============================                                     ========                ========

    Reconciliation of Net Income to Adjusted Earnings before Interest,
     Taxes, Depreciation and Amortization

                                                  Three Months Ended

                                                      March 31,
                                                      ---------

                                                 2013              2012
                                                 ----              ----

    Adjusted
     EBITDA

    Net
     income
     attributed
     to
     Landauer,
     Inc.                                                $5,153          $7,110

    Add back:

        Interest
         expense, net                                       976             771

        Depreciation
         and
         amortization                                     3,526           2,674

        Provision for
         income taxes                                     1,620           3,104
        -------------                                     -----           -----

     Earnings
     before
     interest,
     taxes,
     depreciation
     and
     amortization
     (EBITDA)                                           $11,275         $13,659
     ------------                                       -------         -------

    Adjustments:

        Non-cash
         stock-based
         compensation
         expense                                            382             624

        IT platform
         enhancements
         expenses                                            27             306

        Acquisition
         and
         reorganization
         costs                                              300             312
        ---------------                                     ---             ---

        Sub-total
         adjustments                                        709           1,242
        ------------                                        ---           -----

     Adjusted
     EBITDA                                             $11,984         $14,901
     ========                                           =======         =======

                                                 Six Months Ended

                                                    March 31,
                                                    ---------

                                                 2013              2012
                                                 ----              ----

    Adjusted
     EBITDA

    Net
     income
     attributed
     to
     Landauer,
     Inc.                                               $10,030         $12,035

    Add back:

        Interest
         expense, net                                     1,908           1,299

        Depreciation
         and
         amortization                                     6,976           5,030

        Provision for
         income taxes                                     3,894           5,846
        -------------                                     -----           -----

     Earnings
     before
     interest,
     taxes,
     depreciation
     and
     amortization
     (EBITDA)                                           $22,808         $24,210
     ------------                                       -------         -------

    Adjustments:

        Non-cash
         stock-based
         compensation
         expense                                          1,066           1,454

        IT platform
         enhancements
         expenses                                           205             588

        Acquisition
         and
         reorganization
         costs                                              300           2,161
        ---------------                                     ---           -----

        Sub-total
         adjustments                                      1,571           4,203
        ------------                                      -----           -----

     Adjusted
     EBITDA                                             $24,379         $28,413
     ========                                           =======         =======

    Reconciliation of EPS to Adjusted EPS

                                              Three Months Ended

                                                  March 31,
                                                  ---------

                                             2013               2012
                                             ----               ----

    Adjusted Net Income

    Net income attributed to Landauer,
     Inc.                                            $5,153           $7,110

    Sub-total adjustments                               709            1,242

    Income taxes on adjustments                        (167)            (373)
    ---------------------------                        ----             ----

    Adjustments, net                                    542              869
    ----------------                                    ---              ---

    Adjusted Net Income                              $5,695           $7,979
    ===================                              ======           ======

    Adjusted Net Income per Diluted
     Share                                             $.60             $.85
    ===============================                    ====             ====

                                             Six Months Ended

                                                March 31,
                                                ---------

                                             2013               2012
                                             ----               ----

    Adjusted Net Income

    Net income attributed to Landauer,
     Inc.                                           $10,030          $12,035

    Sub-total adjustments                             1,571            4,203

    Income taxes on adjustments                        (432)          (1,353)
    ---------------------------                        ----           ------

    Adjustments, net                                  1,139            2,850
    ----------------                                  -----            -----

    Adjusted Net Income                             $11,169          $14,885
    ===================                             =======          =======

    Adjusted Net Income per Diluted
     Share                                            $1.18            $1.59

    Free Cash Flow

    Net cash provided by operating
     activities                                      $7,473          $18,558

    Capital expenditures                             (4,611)          (7,358)
    --------------------                             ------           ------

    Free Cash Flow                                    2,862           11,200

        IT platform enhancements expenses               205              588

       Acquisition and reorganization costs             300            2,161
    ------------------------------------                ---            -----

    Adjusted Free Cash Flow                          $3,367          $13,949
    =======================                          ======          =======

                                            Three Months Ended

                                               December 31,
                                               ------------

                                             2013               2012
                                             ----               ----

    Free Cash Flow

    Net cash provided by operating
     activities                                      $2,140          $10,508

    Capital expenditures                             (1,902)          (3,839)
    --------------------                             ------           ------

    Free Cash Flow                                      238            6,669

        IT platform enhancements expenses               178              282

       Acquisition and reorganization costs               0            1,849
    ------------------------------------                ---            -----

    Adjusted Free Cash Flow                            $416           $8,800
    =======================                            ====           ======

    Segment Information

                                     Three Months Ended March 31, 2013
                                     ---------------------------------

                         Radiation                             Medical  Medical       Consolidated

                        Measurement                            Physics Products
                        -----------                            ------- --------

    Revenues                                          $27,249                  $7,598              $2,235 $37,082

    Operating
     income                                             6,118                     732                 304   7,154

                                   Three Months Ended March 31, 2012
                                   ---------------------------------

                         Radiation                             Medical  Medical       Consolidated

                        Measurement                            Physics Products
                        -----------                            ------- --------

    Revenues                                          $27,358                  $7,688              $4,048 $39,094

    Operating
     income                                             8,029                     109               2,011  10,149

                                    Six Months Ended March 31, 2013
                                    -------------------------------

                         Radiation                             Medical  Medical       Consolidated

                        Measurement                            Physics Products
                        -----------                            ------- --------

    Revenues                                          $53,652                 $15,187              $4,924 $73,763

    Operating
     income                                            11,383                   1,524                 974  13,881

                                    Six Months Ended March 31, 2012
                                    -------------------------------

                         Radiation                             Medical  Medical       Consolidated

                        Measurement                            Physics Products
                        -----------                            ------- --------

    Revenues                                          $54,402                 $15,122              $6,239 $75,763

    Operating
     income                                            14,319                   1,002               2,381  17,702
    ---------                                          ------                   -----               -----  ------

SOURCE Landauer, Inc.


Source: PR Newswire