GLENWOOD, Ill., Dec. 14, 2016 /PRNewswire/ -- Landauer, Inc. (NYSE: LDR), a recognized leader in personal and environmental radiation measurement and monitoring and outsourced medical physics services, today reported financial results for its fiscal 2016 full year and fourth quarter ended September 30, 2016 and provided guidance for Fiscal 2017.
Fiscal 2016 and Fourth Quarter Highlights
- Fiscal 2016 reported revenue of $149.2 million
- Excluding the divested Medical Products and Radon businesses, pro forma revenue of $143.3 million increased 4.8% compared to the prior year
- Fiscal 2016 reported net income of $17.8 million and earnings per diluted share of $1.85
- Fiscal 2016 adjusted net income of $18.4 million, or $1.92 per diluted share, exceeds top end of guidance of $17.5 million
- Reported fourth quarter earnings per diluted share of $0.26, includes negative tax impact of the divested Medical Products business
- Fourth quarter adjusted earnings per diluted share of $0.44
- Full-year debt reduction of $24 million, an 18% reduction
- Full remediation of prior year material weaknesses completed
Mike Kaminski, President and Chief Executive Officer of Landauer stated, “Our Fiscal 2016 results continue to demonstrate the strong progress and transformation occurring at Landauer. Throughout the year, we successfully streamlined our core business and made significant progress on the development of our Verifii digital dosimetry platform, passing a number of key technical milestones and beginning our initial rollout of customer field testing. Looking ahead to 2017, we expect demand for our imaging physics and informatics solutions to drive increased recurring revenue and we will continue to be squarely focused on executing our strategic growth plan by making the investments in R&D and marketing necessary to support the launch of our Verifii platform.”
Fiscal Year Ended September 30, 2016 Financial Overview
Revenues for fiscal 2016 were $149.2 million, a 1.4% decrease compared to $151.3 million for fiscal 2015. Excluding the divested Medical Products and Radon businesses, total revenues increased $6.6 million, or 4.8%, compared to the prior year period. Domestic Radiation Measurement services revenues increased 2.4%, and revenues in the Medical Physics segment increased $3.8 million, or 10.7%, due to strong demand for imaging services.
Operating income for fiscal 2016 was $26.6 million, a 12.4% increase compared to operating income of $23.7 million for the fiscal 2015. Excluding the operating income from the divested Medical Products and Radon businesses, operating income increased $4.4 million, or 20.9%, compared to the prior year period. The increase in operating income was driven by higher margin sales coupled with a decrease in reorganization expenses and selling, general and administrative expenses.
Fourth Quarter Financial Overview
Revenues for the fourth fiscal quarter of 2016 were $36.8 million, an 8.4% decrease compared to revenues of $40.2 million for the fourth fiscal quarter of 2015. Excluding the divested Medical Products and Radon businesses, total revenues decreased $0.2 million compared to the prior year period. As expected given the timing of military sales, Radiation Measurement revenues for the quarter decreased to $26.5 million from $28.1 million for the fourth fiscal quarter of 2015. There were no military sales in the fourth fiscal quarter of 2016 compared to approximately $2 million in the fourth fiscal quarter of 2015. Medical Physics revenues increased $0.8 million, or 8.5%, to $10.3 million, due to strong demand for imaging services.
Operating income for the fourth fiscal quarter of 2016 was $5.5 million, compared to operating income of $6.8 million for the fourth fiscal quarter of 2015. Excluding the operating income from the divested Medical Products and Radon businesses, operating income decreased $0.9 million compared to the prior year period due to the timing of military sales.
Fiscal 2017 Outlook
The Company anticipates fiscal 2017 revenues in the range of $149 million to $154 million, representing a 4% to 7% increase compared to the fiscal 2016 Comparable Revenues. The Company anticipates diluted earnings per share in the range of $1.65 to $1.71, representing a 1% to 5% increase versus the fiscal 2016 Comparable Diluted EPS.
Reflected in this outlook is an expectation that the Company will make meaningful investments in fiscal 2017 as it prepares for the launch of its next generation Verifii platform. The Company expects additional R&D spending and marketing and operations expenses of approximately $2 million to support the launch. In addition, the Company’s diluted earnings per share forecast in fiscal 2017 includes non-cash stock compensation expense of $3.1 million as it continues to shift its incentive compensation program more heavily towards longer-term, performance based awards.
Previously, the Company’s fiscal 2016 earnings outlook was based on a non-GAAP measure, adjusted net income. Adjusted net income excluded the impact of stock compensation expense and non-recurring gains and losses.
In order to provide comparable fiscal 2016 revenues and earnings per diluted share, please refer to the following table:
FY2016 Revenues, As Reported | $149.2 million |
Less: Decrease from divested businesses | (5.9) million |
FY2016 Comparable Revenues | $143.3 million |
FY2016 Net Income, As Reported | $17.8 million |
Add: Non-recurring expenses, net of tax | 0.5 million |
Less: Gain on divestiture | (1.9) million |
Less: Net income from divested businesses | (0.9) million |
FY2016 Comparable Net Income | $15.5 million |
FY2016 Comparable Diluted EPS | $1.63 |
Use of Non-GAAP Financial Measures
Management believes the disclosure of certain non-GAAP financial measures enhances investor understanding of our financial performance. Non-GAAP financial measures disclosed in this report include: Adjusted EBITDA, Adjusted Net Income, Pro Forma Revenue, Pro Forma Operating Income and Adjusted Earnings per Diluted Share.
Adjusted EBITDA is presented here not as an alternative to net income, but rather as a measure of the Company’s operating performance and is not intended to be a presentation in accordance with GAAP. Since EBITDA (generally, net income plus interest expenses, taxes, depreciation and amortization) is not calculated identically by all companies, this presentation may not be comparable to EBITDA or Adjusted EBITDA presentations disclosed by other companies. Adjusted EBITDA represents net income with adjustments for net financing costs, depreciation and amortization, provision for income taxes, stock compensation expense, goodwill and other intangible assets impairments, and acquisition, reorganization and nonrecurring costs. Management believes that Adjusted EBITDA is useful in evaluating the Company’s operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance.
In addition, the Company’s management used Adjusted Net Income as a measure of earnings to eliminate the effects of certain non-cash and nonrecurring items of the Company. Adjusted Net Income and Adjusted Earnings per Diluted Share represents net income with tax-effected adjustments for stock compensation expense, goodwill and other intangible assets impairments and acquisition, reorganization and nonrecurring costs.
The Pro Forma Revenue and Pro Forma Operating Income measures exclude the Medical Products business, which was divested in May 2016, and the Radon business, which was divested in September 2015, and the negative impact of foreign currency. As we operate in various foreign countries where the local currency may strengthen or weaken significantly versus the U.S. dollar or other currencies used in operations, we utilize these pro forma measures as an additional metric to evaluate the underlying performance of each business without consideration of foreign currency movements.
These financial measures are not recognized measurements under GAAP and should not be considered as an alternative to the most directly comparable measures presented in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is included within this news release.
Conference Call Details
Landauer has scheduled its full-year and fourth quarter conference call for investors over the Internet on Wednesday, December 14, 2016, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). To participate, callers should dial 866-866-1542 (within the United States and Canada), or 707-294-1539 (international callers), passcode 34771026, 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 855-859-2056 (within the United States and Canada), or 404-537-3406 (international callers), passcode 34771026, which will be available through Friday, January 13, 2017. The replay will also be available on Landauer’s website for 30 days following the call.
About Landauer
Landauer is a leading global provider of technical and analytical services to determine occupational and environmental radiation exposure, as well as the leading domestic provider of outsourced medical physics services. 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. For information about Landauer, please visit their website at http://www.landauer.com.
Safe Harbor Statement
Some of the information shared here (including, in particular, the section titled “Fiscal 2017 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 joint ventures; valuation of the Company’s long-lived assets or reporting units relative to future cash flows; changes in pricing of services and products; changes in postal and delivery practices; the Company’s business plans;
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