Landauer Declares Q1 Fiscal 2009 Results

Fiscal 2009 first quarter highlights

Gross profit grew 5% to $15.3 million on increased sales and continued operating leverage.

Effective tax rate declined to 33.6% due primarily to changes in Illinois state tax law.

“We are very pleased with our results for the first quarter of fiscal 2009, which reflect the stability of our business model, as well as our continued focus on executing our strategic priorities: optimizing our core business, driving competitive growth, and pursuing strategic expansion,” stated Bill Saxelby, president and chief executive officer of Landauer. “Our performance confirms the ongoing acceptance of our InLight suite of products, the success of our international expansion initiative, as well as the continued adoption of our offerings in the medical and nuclear markets.”

Domestic performance fuels revenue growth

Domestic revenue increased 6%, or $886,000, on InLight equipment demand and growth in domestic badge revenue, driven primarily by targeted price increases. International revenue declined 5%, or $257,000, due to the strengthening of the dollar against most foreign currencies, which reduced revenue by approximately $700,000 during the quarter.

Cost of sales declined 1% for the quarter, while the gross margin improved to 68% from 67% in the year ago period. Operating expenses for the first fiscal quarter of 2009 declined 4%, or $295,000. The primary factor contributing to the decline was 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.

Contributing to the growth in earnings was a reduction in the effective tax rate for the first fiscal quarter of 2009 to 33.6% compared with 37.3% for the first fiscal quarter of 2008. The reduction is due primarily to a change in the state tax rate driven by changes in the Illinois state tax law, as well as the benefit of certain tax credits realized in the quarter. The resulting diluted earnings per share for the first fiscal quarter of 2009 were $0.66 compared with $0.57 for the first fiscal quarter of 2008.

Solid financial position

Landauer ended the first fiscal quarter of 2009 with total assets of $113.0 million and working capital of $34.1 million. At December 31, 2008, Landauer continued to be debt free. Cash provided by operating activities was $1.1 million, a decline of $7.4 million from the first fiscal quarter of 2008. The decline is due primarily to a payment to the company’s defined benefit pension plan to increase funding, an increase over prior year in employee performance compensation, and other timing related changes in the other components of working capital.

Fiscal 2009 Guidance

Saxelby continued, “The progress we have made in the first fiscal quarter of 2009 highlights the sustainability of our product offering and the continued global awareness of the risks of radiation exposure. While we are not fully immune to the challenging macro economy, we believe that we are well positioned to manage through this difficult period. Our strong cash generation, financial discipline and efficient cost structure support our current market opportunities, while allowing us to continually evaluate peripheral markets and technologies in which we can leverage our core competencies and further drive shareholder value.”

The company is in the process of evaluating alternatives to its current retirement programs which will reduce its long-term cost structure. Changes to the defined benefit component of our retirement programs will likely result in a curtailment charge during fiscal 2009. In addition, the company is in the process of evaluating the scope, cost and timing of its systems initiative that will likely result in additional capital and expense spending requirements.

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 presently projects a net income increase in the range of 6 – 8%, prior to the potential impact of retirement program changes and changes to our systems initiative.