GLENWOOD, Ill., March 9, 2015 /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 2015 first quarter ended December 31, 2014.
Fiscal 2015 First Quarter Highlights
- Revenue of $37.5 million, a decrease of 1.6% year-over-year
- Operating income of $6.1 million, an increase of 13.1% year-over-year
- Net income of $4.4 million, or $0.46 per diluted share
- Adjusted EBITDA of $10.3 million
- Verifii, the next generation wireless service platform, continued advancement according to plan.
- Company declares a reduction in dividend to $0.275 per share, compared to $0.55 per share in the previous quarter
- Company reaffirms 2015 guidance
Mike Leatherman, President and Chief Executive Officer of Landauer stated, “We are pleased with our fiscal first quarter results, which provides a solid foundation for fiscal year 2015. We expect to return to a normal reporting cycle going forward. With the continued progress of our next generation digital dosimeter platform, Verifii, and the accounting issues clearly identified, the company has reset its strategic plan to become the premier Radiation Safety Solution Company. Going forward the priorities for increasing shareholder value includes the following:
- Continue investment in technology and the organization required to fully capitalize on the Verifii platform. Our goal is to increase penetration and expand our offering to our current channels of acute health care, professional health care offices and the military and industrial markets. The primary focus to drive revenue and profit growth will be new products and services that are annuity based in nature.
- Stabilize the core business by continuing the aggressive remediation of the accounting control issues identified in our latest Form 10K filing.
- Remain fully prepared to pursue large military and equipment orders.
- Assess all components of the business to ensure alignment with strategic objectives.
- Continue to manage the balance sheet and reduce debt.
- Continue to return a competitive dividend to our shareholders.
Given Landauer’s history of successfully servicing regulated environments, we are well positioned to expand our services to the healthcare market as a result of the new regulations passed into law by The Joint Commission which become effective in July, 2015. Our dosimetry services combined with Imaging Physics services and our IT infrastructure uniquely position Landauer as an integrated solution for these new requirements. The introduction of the wireless Verifii platform into this set of integrated services is expected to bring increased value to the customer and a lower cost structure to Landauer. Finally, the changes we have made in our Medical Products business are beginning to yield results, as we realize modest, sequential growth and have received FDA approval for a new product. This product is now moving into field trials and there are two additional products in the FDA pipeline.”
First Fiscal Quarter Financial Overview and Business Segment Results
Revenues for the first fiscal quarter of 2015 were $37.5 million, a decrease 1.6%, compared with revenues of $38.1 million for the first fiscal quarter of 2014. The Radiation Measurement segment revenue decreased 6.0% to $26.5 million, due to a $0.8 million unfavorable foreign currency impact and a $0.7 million decrease in sales of military products. The Medical Physics segment increased 9.1% to $8.4 million, due to increased imaging and radiation therapy services. The Medical Products segment increased 18.2% to $2.6 million, due to higher domestic revenues and the full-quarter impact in fiscal 2015 of a modest acquisition in December 2013.
Gross margin was 52.8% for the first fiscal quarter of 2015, compared with 52.0% for the first fiscal quarter of 2014. Higher gross margins in the Radiation Measurement segment, were primarily attributable to favorable product mix, partially offset by a 0.6% decline in gross margin driven by increased staffing expenses in the Medical Physics segment to support additional contracts in the imaging and therapy divisions and a 0.5% decline in gross margin driven by Spherz price pressure in the Medical Products segment.
Selling, general and administrative expenses for the first fiscal quarter of 2015 were $13.7 million, a decrease of $0.6 million, or 4.2%, compared with $14.3 million for the first fiscal quarter of 2014. The decrease in selling, general and administrative expenses resulted primarily from a $0.9 million decrease in research and development expenses and a $0.7 million decrease in amortization expense as a result of adjustments recorded during the third fiscal quarter of 2014 to reduce the carrying value of intangible assets, offset by higher legal, audit and other professional fees of $0.7 million.
Operating income for the first fiscal quarter of 2015 was $6.1 million, an increase of $0.7 million, or 13.0%, compared with operating income of $5.4 million for the first fiscal quarter of 2014. The increase in operating income was driven by a $0.9 million decrease in research and development expenses, offset by an increase in selling, general and administrative expenses of $0.3 million.
Equity in income of joint ventures for the first fiscal quarter of 2015 was $0.7 million, a decrease of $0.6 million, or 46.2%, compared with $1.3 million for the first fiscal quarter of 2014. The decrease was due primarily to the timing of military orders.
The effective tax rates for the first fiscal quarter of 2015 and 2014 were 26.2% and 32.0%, respectively. The decrease in the effective tax rate was due primarily to the enactment of the research and development credit for calendar year 2014 in the first fiscal quarter of 2015.
Net income attributed to Landauer for the first fiscal quarter of 2015 was $4.4 million, an increase of $0.6 million, or 15.8%, compared with net income of $3.8 million in the first fiscal quarter of 2014. The increase in net income was the result of a decrease in operating expenses of $0.7 million and a decrease in income tax provision of $0.3 million, partially offset by a decrease in equity in income of joint ventures of $0.6 million.
Excluding the costs associated with an acquisition, and non-cash stock based compensation expenses, adjusted net income was $4.7 million, compared to adjusted net income of $4.1 million in the comparable prior year period. The resulting adjusted diluted earnings per share for the first fiscal quarter ended December 31, 2014 was $0.50 per share, compared to $0.43 per share in the same period last year.
The Company reported Adjusted EBITDA of $10.3 million in the first fiscal quarter of 2015 compared with $10.6 million for the first fiscal quarter of 2014. 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 fiscal quarter of 2015 were $26.5 million, a decrease of $1.7 million, or 6.0%, compared with $28.2 million for the first fiscal quarter of 2014. The decrease in revenues was due primarily to the unfavorable impact of changes in foreign currency exchange rates of $0.8 million and lower military product sales to our joint venture of $0.7 million.
Radiation Measurement operating income for the first fiscal quarter of 2015 was $9.4 million, an increase of $0.6 million, or 6.8%, compared with operating income of $8.8 million for the first fiscal quarter of 2014. The increase in operating income was primarily due to a $1.0 million decrease in research and development expenses to support the Verifii next generation dosimetry platform, offset by a $0.3 million increase in selling, general and administrative expenses due to higher bad debt expense and additional headcount to support sales and marketing activities.
Medical Physics Segment
Medical Physics revenues for the first fiscal quarter of 2015 were $8.4 million, an increase of $0.7 million, or 9.1%, compared with $7.7 million for the first fiscal quarter of 2014. Medical Physics operating income for the first fiscal quarter of 2015 was $0.6 million, compared to $0.4 million for the first fiscal quarter of 2014. The increase in operating income is due primarily to lower operating expenses as a result of organizational restructuring during fiscal 2014.
Medical Products Segment
Medical Products revenues for the first fiscal quarter of 2015 were $2.6 million, an increase of $0.4 million, or 18.2%, compared to $2.2 million for the first fiscal quarter of 2014. Medical Products operating income for the first fiscal quarter of 2015 was $0.3 million, as compared to an operating loss of $0.3 million for the first fiscal quarter of 2014. The change was primarily due to a $0.7 million decrease in amortization expense as a result of adjustments recorded during the third fiscal quarter of 2014 to reduce the carrying value of intangible assets.
Corporate Selling, General and Administrative Expenses
Corporate selling, general and administrative expenses for the first fiscal quarter of 2015 were $4.2 million, an increase of $0.7 million, or 20%, compared to $3.5 million for the first fiscal quarter of 2014. The increase was due primarily to higher legal, audit and other professional fees of $0.7 million.
Balance Sheet
Landauer ended the first fiscal quarter of 2015 with total assets of $210.8 million, a decrease of $5.8 million compared to total assets of $216.6 million at the end of fiscal 2014. The Company completed the quarter with $8.4 million of cash and cash equivalents on the balance sheet and unused borrowing capacity of $41 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 fiscal quarter of 2015 was $9.5 million, representing a decrease from the prior year period of $0.5 million.
Dividend
Today, the Board of Directors declared a dividend of $0.275 per share, which is a reduction from the previous quarter’s dividend of $0.55 per share. The dividend is payable on April 3, 2015 to shareholders of record on March 19, 2015.
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