LDR Landauer, Inc. (delisted)

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 MARCH 31, 2009

or

[ ] TRANSITION REPORT pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the transition from ____________ to ___________

Commission File Number 1-9788

 Delaware 06-1218089
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

Registrant's telephone number, including area code (708) 755-7000

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

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 May 1, 2009
---------------------------- --------------------------
Common stock, $.10 par value 9,347,610

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LANDAUER, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(000's, except share amounts)

 March 31, September 30,
 2009 2008
 --------- -------------
ASSETS
------
Current assets:
 Cash and cash equivalents. . . . . . . $ 36,625 $ 33,938
 Receivables, net of allowances of
 $628 and $609, respectively. . . . . 22,413 19,738
 Inventories. . . . . . . . . . . . . . 3,457 3,550
 Prepaid expenses and other current
 assets . . . . . . . . . . . . . . . 1,402 1,227
 Prepaid income taxes . . . . . . . . . 1,553 7,964
 Deferred income taxes. . . . . . . . . 2,312 2,312
 --------- ---------
 Current assets . . . . . . . . . 67,762 68,729

Property, plant and equipment, at cost . . 60,367 57,595
 Less: Accumulated depreciation
 and amortization . . . . . . . . . . (39,522) (37,410)
 --------- ---------
Net property, plant and equipment. . . . . 20,845 20,185

Equity in joint venture. . . . . . . . . . 6,078 5,796
Goodwill . . . . . . . . . . . . . . . . . 13,242 13,343
Other intangible assets, net of
 amortization of $4,373 and $4,065,
 respectively . . . . . . . . . . . . . . 4,543 4,759
Dosimetry devices, net of amortization
 of $11,616 and $10,632, respectively . . 4,625 4,454
Other assets . . . . . . . . . . . . . . . 1,140 1,424
 --------- ---------
 $ 118,235 $ 118,690
 ========= =========

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

LANDAUER, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited) (Cont'd.)
(000's, except share amounts)

 March 31, September 30,
 2009 2008
 --------- -------------

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
 Accounts payable . . . . . . . . . . . $ 2,614 $ 981
 Dividends payable. . . . . . . . . . . 4,955 4,686
 Deferred contract revenue. . . . . . . 14,420 15,626
 Accrued compensation and
 related costs. . . . . . . . . . . . 2,910 5,368
 Accrued pension and post-
 retirement costs . . . . . . . . . . 366 366
 Other accrued expenses . . . . . . . . 6,523 7,197
 --------- ---------
 Current liabilities. . . . . . . 31,788 34,224

Non-current liabilities:
 Pension and postretirement
 obligations. . . . . . . . . . . . . 10,314 8,609
 Deferred income taxes. . . . . . . . . 4,745 4,622
 Other non-current liabilities. . . . . 1,088 935
 --------- ---------
 Non-current liabilities. . . . . 16,147 14,166

 Minority interest in subsidiary. . . . 441 545

Stockholders' equity:
 Preferred stock, $.10 par value
 per share, authorized 1,000,000
 shares; none issued. . . . . . . . . - -
 Common stock, $.10 par value per
 share, authorized 20,000,000 shares;
 9,372,213 and 9,332,508 shares
 issued and outstanding at March 31,
 2009 and September 30, 2008,
 respectively . . . . . . . . . . . . 937 933
 Additional paid in capital . . . . . . 30,180 28,826
 Accumulated other comprehensive
 (loss) income. . . . . . . . . . . . (1,816) 289
 Retained earnings. . . . . . . . . . . 40,558 39,707
 --------- ---------
 Stockholders' equity . . . . . . 69,859 69,755
 --------- ---------
 $ 118,235 $ 118,690
 ========= =========

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

LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
(000's, except per share amounts)

 Three Months Ended Six Months Ended
 March 31, March 31,
 ------------------- -------------------
 2009 2008 2009 2008
 -------- -------- -------- --------

Net Revenues . . . . . . . . $ 24,954 $ 23,743 $ 47,392 $ 45,552

Cost and expenses:
 Cost of sales. . . . . . . 8,379 7,515 15,519 14,716
 Selling, general and
 administrative . . . . . 6,688 6,447 13,181 13,235
 Net defined benefit plan
 curtailment loss and
 transition costs . . . . 2,236 - 2,236 -
 Reorganization charges . . 489 - 489 -
 -------- -------- -------- --------
 17,792 13,962 31,425 27,951
 -------- -------- -------- --------

Operating income . . . . . . 7,162 9,781 15,967 17,601

Equity in income of
 joint venture. . . . . . . 479 362 899 748
Other income, net. . . . . . 221 219 370 537
 -------- -------- -------- --------

Income before taxes. . . . . 7,862 10,362 17,236 18,886
Income taxes . . . . . . . . 2,406 3,866 5,553 7,045
 -------- -------- -------- --------

Income before minority
 interest . . . . . . . . . 5,456 6,496 11,683 11,841
Minority interest. . . . . . 28 66 113 135
 -------- -------- -------- --------

Net income . . . . . . . . . $ 5,428 $ 6,430 $ 11,570 $ 11,706
 ======== ======== ======== ========

Net income per share:
 Basic. . . . . . . . . . . $ 0.58 $ 0.70 $ 1.25 $ 1.27
 ======== ======== ======== ========
 Weighted average basic
 shares outstanding . . . 9,281 9,209 9,273 9,184
 ======== ======== ======== ========

 Diluted. . . . . . . . . . $ 0.58 $ 0.69 $ 1.24 $ 1.27
 ======== ======== ======== ========
 Weighted average diluted
 shares outstanding . . . 9,328 9,268 9,320 9,247
 ======== ======== ======== ========

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

LANDAUER, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(000's)

 Six Months Ended
 --------------------
 March 31, March 31,
 2009 2008
 --------- ---------
Cash flows from operating activities:
 Net income . . . . . . . . . . . . . . . . . . . $ 11,570 $ 11,706

Adjustments to reconcile net income to
 net cash provided by operating activities:
 Depreciation . . . . . . . . . . . . . . . . . . 2,553 3,424
 Amortization . . . . . . . . . . . . . . . . . . 309 322
 Equity in net income of joint venture. . . . . . (899) (748)
 Dividends from joint venture . . . . . . . . . . 1,062 894
 Stock-based compensation . . . . . . . . . . . . 993 783
 Tax benefit from stock-based compensation
 arrangements . . . . . . . . . . . . . . . . . 254 242
 Excess tax benefit from stock-based
 compensation arrangements. . . . . . . . . . . (120) (221)
 Defined benefit plans curtailment loss . . . . . 1,350 -
 Increase in accounts receivable, net . . . . . . (3,296) (3,026)
 Decrease in prepaid taxes. . . . . . . . . . . . 6,598 1,767
 Increase in dosimetry devices at cost. . . . . . (863) (572)
 Increase in accounts payable and
 other current liabilities. . . . . . . . . . . 1,031 650
 Decrease in accrued payroll. . . . . . . . . . . (2,500) (1,313)
 (Decrease) increase in deferred contract
 revenue. . . . . . . . . . . . . . . . . . . . (1,054) 1,374
 (Decrease) increase in long-term pension
 and postretirement obligations . . . . . . . . (936) 522
 Other operating activities, net. . . . . . . . . (898) (631)
 -------- --------
 Net cash provided by operating activities. . . . 15,154 15,173

Cash flows used by investing activities:
 Acquisition of property, plant and equipment . . (2,437) (2,385)
 -------- --------
 Net cash used by investing activities. . . . . . (2,437) (2,385)

Cash flows used by financing activities:
 Dividends paid to minority interest. . . . . . . (151) (167)
 Dividends paid to stockholders . . . . . . . . . (9,549) (8,987)
 Proceeds from the exercise of stock options. . . 355 1,931
 Excess tax benefit from stock-based
 compensation arrangements. . . . . . . . . . . 120 221
 -------- --------
 Net cash used by financing activities. . . . . . (9,225) (7,002)

 Effects of foreign currency translation. . . . . (805) 189
 -------- --------

 Net increase in cash and cash equivalents. . . . 2,687 5,975
 Opening balance - cash and cash equivalents. . . 33,938 21,069
 -------- --------
 Ending balance - cash and cash equivalents . . . $ 36,625 $ 27,044
 ======== ========

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

LANDAUER, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited) March 31, 2009

(1) BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements reflect the financial position of Landauer, Inc. and subsidiaries ("Landauer" or "the Company") as of March 31, 2009 and September 30, 2008, and the consolidated results of operations and cash flows for the three and six month periods ended March 31, 2009 and 2008. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of the Company and its consolidated results of operations and cash flows. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended September 30, 2008 and other financial information filed with the Securities and Exchange Commission.

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.

The results of operations for the three and six month periods ended March 31, 2009 and 2008 are not necessarily indicative of the results to be expected for the full year. The September 30, 2008 balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The accounting policies followed by the Company are set forth in the 2008 Landauer Annual Report on Form 10-K.

The sources of revenues for the Company are radiation measuring and monitoring services including other services incidental to measuring and monitoring and the sale of radiation monitoring products to its customers. The measuring and monitoring 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.

Other services incidental to measuring and monitoring augment the basic radiation measurement services that the Company offers, providing administrative and informational tools to customers for the management of their radiation detection programs. Other service revenues are recognized upon delivery of the reports to customers or as other such services are provided.

The Company sells radiation monitoring products to its customers, principally InLightTM products, for their use in conducting radiation measurements or managing radiation detection programs. Revenues from product sales are recognized when shipped.

LANDAUER, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited) (Cont'd.) March 31, 2009

(2) NET DEFINED BENEFIT PLAN CURTAILMENT LOSS AND TRANSITION COSTS

On February 5, 2009, the Board of Directors approved changes to the Company's retirement benefit plans. The objective of the changes is to transition from a defined benefit philosophy for retirement benefits to a defined contribution approach. These changes, effective March 31, 2009, include the following actions:

. cease all accruals for future years of service in the Company's defined benefit retirement plans and supplemental retirement plans and to freeze benefits provided under the plans effective March 31, 2009;

. provide supplemental transition benefits to participants who satisfy certain age and service requirements;

. provide enhanced benefits in the existing 401(k) retirement savings plan; and

. adopt a new nonqualified deferred compensation plan for the benefit of certain executives.

The Company anticipates that the re-design of its retirement plans will result in future cost savings while offering market based retirement benefits to its employees.

In connection with the redesign of its retirement benefit plans, the Company recognized charges of $2,236,000 during its second fiscal quarter. The charges include a one-time net curtailment loss, in accordance with the guidance of SFAS No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits," in the amount of $1,125,000. In addition, the charge also includes costs of $1,111,000 related to the transition of the contractual retirement benefit obligation of the Company's Chief Executive Officer to a defined contribution obligation and professional fees directly associated with the benefit plan transitions. The Company also increased the funding of the defined benefit pension plan with a contribution of $534,000 in March 2009. The remainder of the plan's current unfunded balance of approximately $4,360,000 was contributed by the Company in April 2009.

(3) REORGANIZATION CHARGES

During the second quarter of fiscal 2009, the Company initiated a management reorganization plan to strengthen selected roles in the organization. As a result, in March 2009, the Company recognized expense, including severance, in the amount of $489,000 associated with these management organizational changes.

(4) INCOME TAXES

The fiscal year 2009 effective tax rate decreased primarily due to a reduction in Illinois state income taxes, the primary state in which the Company operates. Effective with the Company's fiscal year 2009 Illinois income tax return, the apportionment method used to calculate the income tax has changed from a cost of performance method to a market based approach, resulting in a decline in the Company's Illinois apportionment factor directly reducing Illinois taxable income and income tax. During

LANDAUER, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited) (Cont'd.) March 31, 2009

the quarter ended March 31, 2009, the Company benefited from the settlement of uncertain tax positions with certain states. Additionally during the first quarter of fiscal 2009, the Company benefited from the recognition of certain tax credits for qualified research and development activities as a result of Federal tax law changes allowing for the retroactive reinstatement of the credits.

As of March 31, 2009, the Company's U.S. income tax returns for 2005 and subsequent years remain subject to examination by the Internal Revenue Service. The Company has no current on-going examination of any tax year by the Internal Revenue Service. State income tax returns generally have statute of limitations for periods between three and five years from the date of filing. For the Company's major foreign jurisdictions, its tax returns in the UK and France for fiscal years 2006, 2007 and 2008 remain open and subject to examination by taxing officials.

(5) CASH DIVIDENDS

On February 27, 2009, the Company declared a regular quarterly cash dividend in the amount of $0.525 per share for the second quarter of fiscal 2009. The dividends were paid on April 3, 2009 to shareholders of record on March 13, 2009. As of March 31, 2009, there were accrued and unpaid dividends of $4,955,000. Regular quarterly cash dividends of $0.50 per share, or $2.00 annually, were paid during fiscal 2008.

(6) COMPREHENSIVE INCOME

The components of accumulated other comprehensive (loss) income included in the accompanying unaudited consolidated balance sheets at March 31, 2009 and September 30, 2008 consist of net minimum pension liability adjustments, impact of the adoption of SFAS No. 158 and defined benefit plan adjustments for net gains, losses and prior service costs, net defined benefit plan curtailment loss and cumulative foreign currency translation adjustments. The following table sets forth the Company's comprehensive income and its components for the three and six month periods ended March 31, 2009 and 2008 (000's):

 Three Months Ended Six Months Ended
 March 31, March 31,
 ------------------- -------------------
 2009 2008 2009 2008
 -------- -------- -------- --------
Net income . . . . . . . . . $ 5,428 $ 6,430 $ 11,570 $ 11,706
Other comprehensive income:
 Foreign currency trans-
 lation adjustments . . . (1,086) 933 (804) 1,103
 Defined benefit pension
 and postretirement plans:
 Amortization of prior
 service cost
 (credit) . . . . . . . (19) 9 (10) 18
 Amortization of net
 loss . . . . . . . . . 4 13 9 26
 Impact of curtailment. . (1,300) - (1,300) -
 -------- -------- -------- --------
Comprehensive income . . . . $ 3,027 $ 7,385 $ 9,465 $ 12,853
 ======== ======== ======== ========

LANDAUER, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited) (Cont'd.) March 31, 2009

(7) INCOME PER COMMON 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 six month periods ended March 31, 2009 and 2008 (000's):

 Three Months Ended Six Months Ended
 March 31, March 31,
 ------------------- -------------------
 2009 2008 2009 2008
 -------- -------- -------- --------
Weighted average number of
 shares of common stock
 outstanding. . . . . . . . 9,281 9,209 9,273 9,184
Effect of dilutive securities:
 Stock-based compensation
 awards . . . . . . . . . 47 59 47 63
 -------- -------- -------- --------
Weighted average number of
 shares of common stock
 assuming dilution. . . . . 9,328 9,268 9,320 9,247
 ======== ======== ======== ========

(8) STOCK-BASED COMPENSATION

Stock-based compensation expense totaled $993,000 and $783,000 for the six months ended March 31, 2009 and 2008, respectively. The total income tax benefit recognized in the consolidated statements of income related to expense for stock-based compensation was $358,000 and $316,000 during the first half of fiscal 2009 and 2008, respectively.

STOCK OPTIONS

The Company has not granted stock options subsequent to fiscal 2005. Grants of stock options in prior fiscal years were granted with an exercise price equal to the market value of the stock on the date of grant. Expense related to stock options issued to eligible employees and directors is recognized ratably over the vesting period. Stock options generally vest over a period of 0 to 4 years and have 10-year contractual terms. A summary of stock option activity during the six months ended March 31, 2009 is presented below:

 Weighted-
 Average
 Weighted- Remaining
 Number Average Contractual Aggregate
 of Exercise Term Intrinsic
 Options Price (Years) Value
 ------- --------- ----------- ----------
Outstanding at
 October 1, 2008. . . . 163,000 $44.94
Exercised. . . . . . . . (13,000) 42.10
 ------- ------
Outstanding at
 March 31, 2009 . . . . 150,000 $45.19 5.6 $822,000
 ======= ======
Exercisable at
 March 31, 2009 . . . . 150,000 $45.19 5.6 $822,000
 ======= ======

LANDAUER, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited) (Cont'd.) March 31, 2009

As of March 31, 2009, all outstanding stock options were vested and compensation expense related to stock options was recognized in prior fiscal years. The intrinsic value of options exercised totaled $281,000 and $518,000 during the first half of fiscal 2009 and 2008, respectively. The total income tax benefit recognized in the consolidated statements of income related to the exercise of stock options was $101,000 and $208,000 during the six month periods ending March 31, 2009 and 2008, respectively.

RESTRICTED SHARE AWARDS

Restricted share awards consist of performance shares and time vested restricted stock. Performance shares represent a right to receive shares of common stock upon satisfaction of performance goals or other specified metrics. Restricted stock represents a right to receive shares of common stock upon the passage of a specified period of time. The fair value of performance shares and restricted stock granted under the Company's 2005 Long-Term Incentive Plan was based on the average of the Company's high and low stock prices on the date of grant. Upon the adoption of the Company's Incentive Compensation Plan in February 2008, the fair value of performance shares and restricted stock granted under the new plan is based on the Company's closing stock price on the grant date. Compensation expense for performance shares is recorded ratably over the vesting period, assuming that achievement of performance goals is deemed probable. Compensation expense for restricted stock is recognized ratably over the vesting period. The per share weighted average fair value of restricted shares, including restricted stock and performance shares, granted during the six months ended March 31, 2009 and 2008 was $62.13 and $50.85, respectively.

Restricted stock issued to eligible employees and directors vests, to date, over a period from 6 months to 5 years, and performance shares contingently vest over various periods, depending on the nature of the performance goal. Restricted share transactions during the six months ended March 31, 2009 were as follows:

 Number of Weighted-
 Restricted Average
 Share Fair
 Awards Value
 ---------- ---------
Outstanding at October 1, 2008 . . . . . . 47,000 $50.41
Granted. . . . . . . . . . . . . . . . . . 33,000 62.13
Vested . . . . . . . . . . . . . . . . . . (7,000) 51.18
Forfeited. . . . . . . . . . . . . . . . . (2,000) 49.37
 ------ ------
Outstanding at March 31, 2009. . . . . . . 71,000 $55.79
 ====== ======

As of March 31, 2009, unrecognized compensation expense related to restricted share awards totaled approximately $2,464,000 and is expected to be recognized over a weighted average period of 1.5 years. The total fair value of shares vested during the six month periods ended March 31, 2009 and 2008 was $375,000 and $271,000, respectively.

(9) CREDIT FACILITY

In October 2007, the Company negotiated a credit facility, which expires on October 31, 2009. The credit facility permits borrowing up to $15,000,000. To date, no borrowings have been made under this facility. The Company continues to evaluate a new credit facility that would extend the expiration date of the Company's credit facility and increase permitted borrowing.

LANDAUER, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited) (Cont'd.) March 31, 2009

(10) PENSION AND POSTRETIREMENT MEDICAL BENEFIT EXPENSES

The components of net periodic benefit cost for pension and retiree medical plans were as follows (000's):

 Pension Other
 Benefits Benefits
 -------------- -------------
 Three Months Ended
 March 31,
 ------------------------------
 2009 2008 2009 2008
 ------ ------ ------ ------
Service cost . . . . . . . . . . . . . . $ 709 $ 270 $ 11 $ 15
Interest cost. . . . . . . . . . . . . . 373 327 17 21
Expected return on plan assets . . . . . (279) (215) - -
Amortization of prior service cost
 (credit) . . . . . . . . . . . . . . . 8 37 (27) (28)
Amortization of net loss . . . . . . . . 2 2 2 11
Curtailment loss . . . . . . . . . . . . 1,125 - - -
 ------ ------ ------ ------
Net periodic benefit cost. . . . . . . . $1,938 $ 421 $ 3 $ 19
 ====== ====== ====== ======

 Pension Other
 Benefits Benefits
 -------------- -------------
 Six Months Ended
 March 31,
 ------------------------------
 2009 2008 2009 2008
 ------ ------ ------ ------
Service cost . . . . . . . . . . . . . . $ 977 $ 549 $ 21 $ 30
Interest cost. . . . . . . . . . . . . . 710 659 34 42
Expected return on plan assets . . . . . (492) (428) - -
Amortization of prior service cost
 (credit) . . . . . . . . . . . . . . . 45 74 (55) (56)
Amortization of net loss . . . . . . . . 4 4 5 22
Curtailment loss . . . . . . . . . . . . 1,125 - - -
 ------ ------ ------ ------
Net periodic benefit cost. . . . . . . . $2,369 $ 858 $ 5 $ 38
 ====== ====== ====== ======

In connection with the redesign of its retirement benefit plans, effective March 31, 2009, the Company recognized a one-time net curtailment loss, in accordance with the guidance of SFAS No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits," in the amount of $1,125,000. Footnote 2, "Net defined benefit plan curtailment loss and transition costs", provides further information regarding the benefit plan changes.

In the first quarter of fiscal 2009, the Company contributed $148,000 to the pension plan to fulfill funding requirements for the 2008 plan year.

Also the Company contributed $2,000,000 to the plan, fulfilling its funding requirements for fiscal 2009 and offsetting the loss on plan assets that occurred during fiscal 2008. In March 2009, the Company contributed an additional $534,000 to the pension plan to increase the overall funded status of the plan. The remainder of the plan's unfunded balance of approximately $4,360,000 was contributed by the Company in April 2009.

LANDAUER, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited) (Cont'd.) March 31, 2009

(11) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2007, the FASB issued SFAS No. 141R, "Business Combinations," and SFAS No. 160 "Noncontrolling Interests in Consolidated Financial Statements." These standards aim to improve, simplify, and converge internationally the accounting for and reporting of business combinations and noncontrolling interests in consolidated financial statements. The provisions of SFAS No. 141R and SFAS No. 160 are effective, and should be applied prospectively, for the Company beginning in fiscal 2010. The Company will apply SFAS No. 141R for any business combinations beginning in fiscal 2010. The Company is currently evaluating the impact of SFAS No. 160 to its financial position, results of operations and financial disclosures.

(12) RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Effective October 1, 2008, the Company adopted the guidance of the Emerging Issues Task Force (EITF) Issue No. 06-10, "Accounting for the Deferred Compensation and Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life Insurance Arrangements." The EITF affirmed as a final consensus that an employer should recognize a liability for the postretirement benefit related to a collateral assignment split-dollar life insurance arrangement. As a result of the implementation of EITF No. 06- 10, the Company recognized a decrease of $362,000 in its long-term asset recorded for its collateral assignment split-dollar life insurance arrangement and recorded a liability of $538,000 for premiums payable under the arrangement. The October 1, 2008 balance of retained earnings was reduced by $900,000. The Company's liability for this arrangement is expected to be settled in fiscal 2014.

Effective October 1, 2008, the Company adopted SFAS No. 157, "Fair Value Measurements." SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements. The adoption of SFAS No. 157 did not impact the Company's unaudited consolidated financial statements for the quarter ended March 31, 2009.

Effective October 1, 2008, the Company adopted SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including an Amendment of FASB Statement No. 115." SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value on an instrument-by-instrument basis, with unrealized gains and losses related to these financial instruments reported in earnings at each subsequent reporting date. SFAS No. 159 also establishes presentation and disclosure requirements to facilitate comparisons between companies that choose different measurement attributes for similar assets and liabilities.

The adoption of SFAS No. 159 did not impact the Company's financial position, results of operations and financial disclosures for the quarter ended March 31, 2009.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

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, 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 clients, and the analysis and reporting of exposure findings. These services are provided to approximately 69,000 customers representing approximately 1.6 million individuals in the U.S., Japan, France, the United Kingdom, Brazil, Canada, China, Australia, Mexico and other countries. In addition to providing analytical services, the Company leases or sells dosimetry detectors and reading equipment to large customers that want to manage their own dosimetry programs, or into smaller international markets in which it is not economical to establish a direct service.

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 developed 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. Revenue growth in recent years has occurred as a result of entry into new markets through joint ventures and acquisitions, modest unit growth, the sale of InLight equipment and badges, new ancillary services and products, and increased pricing for certain services. The Company believes pricing in the domestic market has become more competitive and opportunities to continue to obtain regular price increases from its customers may be more limited in the future.

Revenues for the second quarter of fiscal 2009 were $24,954,000, a 5.1% increase compared to revenues of $23,743,000 for the same quarter in fiscal 2008. Domestic revenue growth for the second quarter was $1,110,000, or 6.1%, resulting from gains in the core radiation monitoring business driven by increased pricing for certain services and increases in domestic InLight equipment revenue. International revenue increased $101,000, or 1.8%. Growth in volume in most regions was offset by the impact of the strengthening of the dollar against most foreign currencies which reduced revenue by approximately $1,042,000.

The domestic InLight equipment sales increase was driven primarily by sales to the Canadian government agency responsible for occupational monitoring and radiation emergency preparedness for the citizens of Canada.

During the quarter ended March 31, 2009, the Company executed a multi-year contract valued at approximately $8 million, which represents an estimate of purchases over the contract term with commitments to be established annually and subject to annual funding by the Canadian government. Approximately $2,000,000 of product was delivered during the quarter. Approximately $960,000 of the product delivered requires additional processing by Landauer to be fully utilized for its intended purpose. Per the terms of the agreement, the Canadian agency has the option to obtain additional processing of the dosimetry materials from the Company or to exchange the materials for finished product. Consistent with the Staff Accounting Bulletin No. 104 "Revenue Recognition," the Company recorded $960,000 of deferred revenue as of March 31, 2009, related to the portion of the sale that requires additional performance by the Company. In fiscal

2008, during its second quarter, the Company initiated a similar contract in the amount of $2,000,000 with the agency, under which $1,850,000 of product was delivered. Approximately $1,100,000 of the product delivered required additional processing by Landauer to be fully utilized for its intended purpose. The Company recorded $1,100,000 of deferred revenue in fiscal 2008, related to the portion of the sale that required additional performance by the Company. During the first and second quarters of fiscal 2009, the Company recognized approximately $556,000 and $538,000, respectively, of revenue for InLight equipment delivered under the exchange provisions of the fiscal 2008 agreement.

Total cost of sales for the second quarter of fiscal 2009 was $8,379,000, an increase of $864,000, or 11.5%, compared with cost of sales of $7,515,000 for the same quarter in fiscal 2008. Gross margins were 66.4% of revenues for the second quarter of fiscal 2009, compared with the 68.3% reported for the same period in fiscal 2008. The decline in gross margin rate is primarily a result of revenue mix due to the increased contribution of lower margin InLight equipment sales.

Selling, general and administrative expense for the second quarter of fiscal 2009 was $6,688,000, an increase of $241,000, or 3.7%, compared with expense of $6,447,000 for the second quarter of fiscal 2008, which included accelerated depreciation charges of $188,000. The primary factors contributing to the increase were $371,000 in additional non-recurring pension expense due to the acceleration of certain costs to support the defined benefit plan curtailment, and $185,000 in additional professional fees to support due diligence of an acquisition opportunity the Company chose not to pursue. These costs were partially offset by the timing of expense spending to re-engineer business processes and to replace the Company's information technology systems that support customer relationship management and the order-to-cash cycle.

On February 5, 2009, the Board of Directors approved changes to the Company's retirement benefit plans to transition from a defined benefit philosophy for retirement benefits to a defined contribution approach. The Company anticipates that the redesign of its retirement plans will result in future cost savings while offering market based retirement benefits to its employees. As a result of the changes, the Company recognized $2,236,000 ($1,478,000 after-tax) of non-recurring pension curtailment and transition costs during the second fiscal quarter of 2009. Further details are included in Note 2 to the Consolidated Financial Statements. In addition, the Company initiated a management reorganization plan to strengthen selected roles in the organization. As a result, the Company recognized $489,000 ($322,000 after-tax) of non-recurring reorganization charges during the second fiscal quarter of 2009.

Resulting operating income for the quarter ended March 31, 2009 was $7,162,000, a decrease of 26.8% compared with $9,781,000 reported in the same quarter in fiscal 2008.

Net other income, including equity in income of joint venture, for the quarter was $119,000 higher than a year ago, primarily reflecting recognized foreign currency gains.

The effective income tax rates for the second quarter of fiscal 2009 and 2008 were 30.6% and 37.3%, respectively. The reduction in the current year rate is due primarily to a change in the state tax rate driven by changes in the Illinois state tax law, as well as the favorable settlement of certain state tax liabilities during the quarter.

Resulting net income for the quarter ended March 31, 2009 amounted to $5,428,000, or $0.58 per diluted share, compared with $6,430,000 or $0.69 per diluted share, for the same quarter in fiscal 2008.

Revenues for the first six months of the fiscal year were $47,392,000, a 4.0% increase compared to revenues of $45,552,000 for the same period in fiscal 2008. Domestic revenue growth was $1,996,000, or 5.8%, resulting from gains in the core radiation monitoring business driven by increased prices for certain services and increases in domestic InLight equipment revenue. International revenue decreased $156,000, or 1.4%. Growth in volume in most regions was offset by the impact of the strengthening of the dollar against most foreign currencies which reduced revenue by approximately $1,741,000.

As noted above for the quarter ended March 31, 2009, the domestic InLight equipment sales increase was driven primarily by sales to the Canadian government agency responsible for occupational monitoring and radiation emergency preparedness for the citizens of Canada. Revenues recognized year-to-date under contracts with the agency were approximately $2,163,000.

Total cost of sales for the first six months of fiscal 2009 was $15,519,000, an increase of $803,000 or 5.5%, compared with cost of sales of $14,716,000 for the same period in fiscal 2008. Gross margins were 67.3% of revenues for the first half of fiscal 2009, compared with the 67.7% reported for the same period in fiscal 2008.

Selling, general and administrative expenses for the first six months of fiscal 2009 were $13,181,000, a decrease of $54,000, or 0.4%, compared with expense of $13,235,000 reported for the same period in fiscal 2008, which included accelerated depreciation charges of $376,000. Increased costs due to additional non-recurring pension expense due to the acceleration of certain costs to support the defined benefit plan curtailment, and additional professional fees to support due diligence of an acquisition opportunity the Company chose not to pursue were partially offset by the timing of expense spending to re-engineer business processes and to replace the Company's IT systems that support customer relationship management and the order-to-cash cycle.

As noted above for the quarter ended March 31, 2009, changes to the Company's retirement benefit plans to transition from a defined benefit philosophy for retirement benefits to a defined contribution approach resulted in $2,236,000 ($1,478,000 after-tax) of non-recurring pension curtailment and transition costs during the second fiscal quarter of 2009. In addition, the Company recognized $489,000 ($322,000 after-tax) of non- recurring reorganization costs during the second fiscal quarter of 2009.

Resulting operating income for the six months ended March 31, 2009 was $15,967,000, a decrease of 9.3% compared with $17,601,000 reported in the same period in fiscal 2008.

Net other income, including equity in income of joint venture, for the first six months was $16,000 lower than a year ago, reflecting lower net interest income.

The effective income tax rate for the first half of fiscal 2009 and fiscal 2008 were 32.2% and 37.3%, respectively. The reduction is due primarily to a change in the state tax rate driven by changes in the Illinois state tax laws and the benefit of certain tax credits for qualified research and development activities, as well as the benefit of the reversal of certain state tax reserves not considered necessary after the settlement of open tax years.

Resulting net income for the six months ended March 31, 2009 amounted to $11,570,000, or $1.24 per diluted share, compared with $11,706,000, or $1.27 per diluted share, for the same period in fiscal 2008.

Landauer generated $2,687,000 in cash during the quarter ended March 31, 2009, resulting in cash on hand of $36,625,000. Cash flows provided by operating activities for the first half of fiscal 2009 were $15,154,000 compared to $15,173,000 in the first half of fiscal 2008.

During the 2007 fiscal year, the Company initiated a project to replace its information technology systems. The project has extended beyond its initial timeline and planned costs due to increased customization of the software to capture the unique business requirements of the Company. Due to the extension, the Company completed a thorough assessment of the scope, timing and cost required to successfully implement the systems initiative. The total project cost is currently estimated to be approximately $25 to $27 million and is targeted to be completed during calendar 2010.

Investing activities included acquisitions of property, plant and equipment in the amounts of $2,437,000 and $2,385,000 for the six months ended March 31, 2009 and 2008, respectively. Capital expenditures for the remainder of fiscal 2009 are expected to be approximately $7.0 to $8.0 million, including the expected increase in the cost of the Company's information systems initiative noted above. The Company anticipates that funds for these capital improvements will be provided from operations.

The Company's financing activities were comprised primarily of payments of cash dividends to shareholders. During the first half of fiscal 2009, the Company funded cash dividends of $9,549,000, or $0.525 per share for the first quarter of fiscal 2009 and $0.50 per share for the fourth quarter of fiscal 2008. During the first six months of fiscal 2008, the Company paid cash dividends of $8,987,000, or $0.50 per share. Such amounts have been provided from operations.

As described in Note 9 to the financial statements, the Company negotiated a credit facility in October 2007, which expires on October 31, 2009. The credit facility permits borrowings up to $15,000,000. To date, no borrowings have been made under this facility. The Company continues to evaluate a new credit facility that would extend the expiration date of the Company's credit facility and increase permitted borrowing.

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 $14,420,000 and $15,626,000, respectively, as of March 31, 2009 and September 30, 2008. While these amounts represent approximately 45% and 46% of current liabilities, respectively, as of March 31, 2009 and September 30, 2008, such amounts do not represent a future cash obligation.

All customers are invoiced in accordance with the Company's standard terms, with payment generally due thirty days from date of invoice. Reflecting the Company's invoicing practices and that a significant portion of the Company's revenues are subject to health care industry reimbursement cycles, the days of sales outstanding for the Company averaged approximately 94 and 95 days over the course of the second quarter of fiscal 2009 and fiscal 2008, respectively.

Landauer also offers radiation monitoring services in the United Kingdom, Canada, Japan, Brazil, China, Australia, France and Mexico. The Company's operations in these markets generally do not depend on significant capital.

Landauer's business plan for fiscal 2009 currently anticipates aggregate revenue growth for the year to be in the range of 3 - 5%. The Company currently anticipates a net income increase in the range of 6 - 8%, prior to the $1.8 million after-tax impact of the non-recurring pension curtailment and transition costs and management reorganization charges discussed above.

Certain of the statements made herein constitute forward-looking statements that are based on certain assumptions and involve certain risks and uncertainties. These include the following, without limitation:
assumptions, risks and uncertainties associated with the Company's development and introduction of new technologies in general; continued customer acceptance of the InLight technology; the adaptability of optically stimulated luminescence (OSL) technology to new platforms and formats, such as Luxel<registered trademark>+; the costs associated with the Company's research and business development efforts; the effectiveness of changes and upgrades to and costs associated with the Company's information systems; the usefulness of older technologies; 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 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; foreign exchange rates; government regulations; accreditation requirements; changes in the trading market that affect the cost 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 anticipated results. 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, 2008 and other reports filed by the Company, from time to time, with the SEC.

In December 2007, the FASB issued SFAS No. 141R, "Business Combinations," and SFAS No. 160 "Noncontrolling Interests in Consolidated Financial Statements." These standards aim to improve, simplify, and converge internationally the accounting for and reporting of business combinations and noncontrolling interests in consolidated financial statements. The provisions of SFAS No. 141R and SFAS No. 160 are effective, and should be applied prospectively, for the Company beginning in fiscal 2010. The Company will apply SFAS No. 141R for any business combinations beginning in fiscal 2010. The Company is currently evaluating the impact of SFAS No. 160 to its financial position, results of operations and financial disclosures.

Effective October 1, 2008, the Company adopted the guidance of the Emerging Issues Task Force (EITF) Issue No. 06-10, "Accounting for the Deferred Compensation and Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life Insurance Arrangements." The EITF affirmed as a final consensus that an employer should recognize a liability for the postretirement benefit related to a collateral assignment split-dollar life insurance arrangement. As a result of the implementation of EITF No. 06- 10, the Company recognized a decrease of $362,000 in its long-term asset recorded for its collateral assignment split-dollar life insurance arrangement and recorded a liability of $538,000 for premiums payable under the arrangement. The October 1, 2008 balance of retained earnings was reduced by $900,000. The Company's liability for this arrangement is expected to be settled in fiscal 2014.

Effective October 1, 2008, the Company adopted SFAS No. 157, "Fair Value Measurements." SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements. The adoption of SFAS No. 157 did not impact the Company's unaudited consolidated financial statements for the quarter ended March 31, 2009.

Effective October 1, 2008, the Company adopted SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including an Amendment of FASB Statement No. 115." SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value on an instrument-by-instrument basis, with unrealized gains and losses related to these financial instruments reported in earnings at each subsequent reporting date. SFAS No. 159 also establishes presentation and disclosure requirements to facilitate comparisons between companies that choose different measurement attributes for similar assets and liabilities.

The adoption of SFAS No. 159 did not impact the Company's financial position, results of operations and financial disclosures for the quarter ended March 31, 2009.

The critical accounting policies followed by the Company are set forth in Item 7 and "Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements of the 2008 Landauer Annual Report on Form 10-K. The Company believes that at March 31, 2009, there have been no material changes to this information.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

The Company is exposed to market risk, including changes in foreign currency exchange rates. These risks are set forth in Item 7A of the 2008 Landauer Annual Report on Form 10-K. The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year through March 31, 2009.

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") (the Company's principal executive officer and principal financial officer, respectively), of the effectiveness of the design and operation of the Company's disclosure controls and procedures as defined in Rule 13(a)-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended. Based upon that evaluation, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures as of March 31, 2009 were effective.

There have been no changes in the Company's internal control over financial reporting that occurred during the quarterly period ended March 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is a party, from time to time, to various legal proceedings, lawsuits and other claims arising in the ordinary course of its business. The Company does not believe that any such litigation pending as of March 31, 2009, if adversely determined, would have a material effect on its business, financial position, results of operations, or cash flows.

ITEM 1A. RISK FACTORS

Information regarding risk factors are set forth in Item 1A of the 2008 Landauer Annual Report on Form 10-K. The Company believes there have been no material changes from the risk factors previously disclosed in the Company's fiscal 2008 Form 10-K.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At its Annual Meeting held on February 5, 2009, the shareholders voted to re-elect Stephen C. Mitchell and Thomas M. White as directors, each for a term of three years. The voting for each of the nominees was as follows:

 For Withheld
 --------- --------
Mr. Mitchell 8,451,668 245,813
Mr. White 8,648,674 48,807

In addition to Mr. Mitchell and Mr. White, the directors for the current year are Robert J. Cronin, William G. Dempsey, Michael T. Leatherman, David E. Meador and William E. Saxelby.

The shareholders voted to reappoint PricewaterhouseCoopers LLP as the Company's auditors for the fiscal year ending September 30, 2009, with 8,661,609 shares voted for, 27,552 shares voted against and 8,320 shares voted to abstain.

ITEM 6. EXHIBITS

Exhibit 31.1 Certification of William E. Saxelby, President and
 Chief Executive Officer, as adopted pursuant to
 Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 Certification of Jonathon M. Singer,
 Chief Financial Officer, as adopted pursuant to
 Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1 Certification of William E. Saxelby, President and
 Chief Executive Officer, pursuant to 18 U.S.C.
 Section 1350, as adopted pursuant to Section 906
 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2 Certification of Jonathon M. Singer,
 Chief Financial Officer, pursuant to 18 U.S.C.
 Section 1350, as adopted pursuant to Section 906
 of the Sarbanes-Oxley Act of 2002

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LANDAUER, INC.

Date: May 7, 2009


 /s/ Jonathon M. Singer
 ------------------------------
 Jonathon M. Singer
 Senior Vice President,
 Treasurer, Secretary and
 Chief Financial Officer
 (Principal Financial and
 Accounting Officer)

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