UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2017

Commission file number 1-9788


	LANDAUER, INC. (Exact Name of Registrant as Specified in Its Charter)

	Delaware	06-1218089
	(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

	2 Science Road, Glenwood, IL 60425 (Address of Principal Executive Offices and Zip Code)

	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 [ X ] No [ ]

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


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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

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

As of ~~May~~ August 4, 2017, 9,~~639~~638,~~863~~580 shares of common stock, par value $0.10 per share, of the registrant were outstanding.

TABLE OF CONTENTS



PART I FINANCIAL INFORMATION

Item 1.	Financial Statements

		Consolidated Balance Sheets (Unaudited)	3

		Consolidated Statements of Operations (Unaudited)	4

		Consolidated Statements of Comprehensive Income (Unaudited)	5

		Consolidated Statement of Stockholders’ Equity (Unaudited)	6

		Consolidated Statements of Cash Flows (Unaudited)	7

		Notes to Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		23

Item 4.	Controls and Procedures		24


PART II OTHER INFORMATION

Item 1.	Legal Proceedings		25

Item 1A.	Risk Factors		25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		25

Item 3.	Defaults Upon Senior Securities		25

Item 4.	Mine Safety Disclosures		25

Item 5.	Other Information		25

Item 6.	Exhibits		26


SIGNATURE			27

PART I FINANCIAL INFORMATION

Item 1.Financial Statements

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (Unaudited)

(Dollars in Thousands)	~~March~~June 3130, 2017		September 30,2016
Assets
Cash and cash equivalents	$	1221,~~875~~064	$	13,285
Receivables, net of allowances of $1,380 at March 31, 2017 and $1,296 at September 30, 2016		36,195		31,998
Receivables, net of allowances of $1,324 at June 30, 2017 and $1,296 at September 30, 2016		33,618		31,998
Inventories		65,~~026~~229		5,670
Deferred income tax assets - current		24,~~014~~470		2,098
Prepaid income taxes		~~862~~5,692		764
Prepaid expenses and other current assets		3,~~707~~186		2,187
Total current assets		6173,~~679~~259		56,002
Property, plant and equipment, at cost		~~108~~111,~~939~~994		105,237
Less accumulated depreciation and amortization		(6264,~~389~~768)		(58,820)
Property, plant and equipment, net		4647,~~550~~226		46,417
Equity in joint ventures		2526,~~312~~488		26,174
Goodwill		33,~~469~~916		33,807
Intangible assets, net of accumulated amortization of $12,060 at March 31, 2017 and $11,772 at September 30, 2016		8,786		9,297
Intangible assets, net of accumulated amortization of $12,704 at June 30, 2017 and $11,772 at September 30, 2016		8,602		9,297
Dosimetry devices, net of accumulated depreciation of $6,615 at March 31, 2017 and $6,197 at September 30, 2016		2,724		3,162
Dosimetry devices, net of accumulated depreciation of $6,845 at June 30, 2017 and $6,197 at September 30, 2016		2,638		3,162
Deferred income tax assets		~~5,507~~74		9,104
Other assets		65,~~481~~963		6,853
Total assets	$	~~190~~198,~~508~~166	$	190,816
Liabilities
Accounts payable	$	23,~~482~~158	$	3,012
Dividends payable		2,~~871~~911		2,815
Deferred contract revenue		14,~~651~~910		13,932
Accrued compensation and related costs		79,~~370~~464		9,256
Accrued severance		~~128~~64		302
Other accrued expenses		5,~~863~~800		5,181
Total current liabilities		3336,~~365~~307		34,498
Long-term debt		~~105,~~100,600		109,100
Pension and postretirement obligations		25,~~166~~184		24,833
Deferred income tax liabilities		~~109~~4,450		86
Uncertain income tax liabilities		~~1,516~~518		1,495
Other non-current liabilities		~~181~~222		205
Total liabilities		~~165~~167,~~437~~281		170,217
Commitments and Contingencies
Stockholders' equity
Preferred stock, $0.10 par value per share, authorized 1,000,000 shares; none issued		-		-
Common stock, $0.10 par value per share, authorized 20,000,000 shares; 9,814,751 and 9,727,264 shares issued and outstanding at March 31, 2017 and September 30, 2016, respectively		981		973
Common stock, $0.10 par value per share, authorized 20,000,000 shares; 9,811,668 and 9,727,264 shares issued and outstanding at June 30, 2017 and September 30, 2016, respectively		981		973
Additional paid in capital		4546,~~861~~842		43,982
Accumulated other comprehensive loss		(1615,~~714~~780)		(15,266)
Accumulated deficit		(62,~~319~~611)		(10,511)
Landauer, Inc. stockholders' equity		2329,~~809~~432		19,178
Noncontrolling interest		1,~~262~~453		1,421
Total stockholders' equity		2530,~~071~~885		20,599
Total Liabilities and Stockholders' Equity	$	~~190~~198,~~508~~166	$	190,816

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

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Statements of Operations (Unaudited)

Three Months Ended March 31,

Six Months Ended March 31,

Three Months Ended June 30,

Nine Months Ended June 30,

(Dollars in Thousands, Except per Share)

2017

2016

2017

2016

Revenues:

Service revenues

34,~~213~~609

3332,~~162~~344

66101,~~962~~571

6497,~~707~~051

Product revenues

45,~~909~~279

45,~~920~~510

915,~~732~~011

915,~~905~~415

Total revenues

39,~~122~~888

3837,~~082~~854

76116,~~694~~582

74112,~~612~~466

Costs and expenses:

Service costs

16,~~775~~939

16,~~498~~032

3249,~~753~~692

3248,~~676~~708

Product costs

21,~~030~~862

12,~~829~~304

35,~~989~~851

35,~~666~~970

Total cost of sales

18,~~805~~801

18,~~327~~336

3655,~~742~~543

3654,~~342~~678

Gross profit

2021,~~317~~087

19,~~755~~518

3961,~~952~~039

3857,~~270~~788

Selling, general and administrative expense

12,~~508~~504

1211,~~538~~805

2437,~~701~~205

2436,~~801~~606

Operating income

78,~~809~~583

7,~~217~~713

1523,~~251~~834

1321,~~469~~182

Equity in income of joint ventures

1,~~173~~206

~~252~~244

13,~~809~~015

~~553~~797

Interest expense, net

(~~609~~695)

(~~1,129~~703)

(12,~~403~~098)

(2,~~062~~765)

Other income (expense), net

7115

~~103~~3,550

(~~257~~242)

~~(57)~~3,493

Income before taxes

89,~~444~~109

610,~~443~~804

1524,~~400~~509

1122,~~903~~707

Income tax expense

32,~~091~~509

23,~~005~~382

57,~~467~~976

37,~~692~~074

Net income

56,~~353~~600

47,~~438~~422

916,~~933~~533

815,~~211~~633

Less: Net income attributed to noncontrolling interest

~~178~~200

~~159~~157

~~357~~557

~~289~~446

Net income attributed to Landauer, Inc.

56,~~175~~400

47,~~279~~265

915,~~576~~976

715,~~922~~187

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

Basic

0.5467

0.4576

1.0067

01.8359

Weighted average basic shares outstanding

9,~~561~~585

9,~~518~~531

9,~~550~~562

9,~~483~~523

Diluted

0.5466

0.4576

01.9966

01.8358

Weighted average diluted shares outstanding

9,~~595~~606

9,~~550~~564

9,~~589~~595

9,~~516~~555

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

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended March 31, 2017						Six Months EndedMarch 31, 2017
	Three Months Ended June 30, 2017						Nine Months Ended June 30, 2017
(Dollars in Thousands)	Landauer, Inc.		NoncontrollingInterest		Total		Landauer, Inc.		NoncontrollingInterest		Total
Net income	$	56,~~175~~400	$	~~178~~200	$	56,~~353~~600	$	915,~~576~~976	$	~~357~~557	$	916,~~933~~533
Other comprehensive income (loss):
Defined benefit pension and postretirement plans activity, net of taxes of ($71) and ($142), respectively		119		-		119		238		-		238
Defined benefit pension and postretirement plans activity, net of taxes of ($71) and ($213), respectively		119		-		119		357		-		357
Unrealized gains (losses) on available-for-sale securities, net of taxes of $0		-		-		-		-		-		-
Foreign currency translation adjustment, net of taxes of ($232) and $271, respectively		701		53		754		(1,686)		14		(1,672)
Foreign currency translation adjustment, net of taxes of ($73) and $343, respectively		815		(9)		806		(871)		5		(866)
Comprehensive income	$	57,~~995~~334	$	~~231~~191	$	67,~~226~~525	$	815,~~128~~462	$	~~371~~562	$	816,~~499~~024
	Three Months Ended March 31, 2016						Six Months EndedMarch 31, 2016
	Three Months Ended June 30, 2016						Nine Months Ended June 30, 2016
(Dollars in Thousands)	Landauer, Inc.		NoncontrollingInterest		Total		Landauer, Inc.		NoncontrollingInterest		Total
Net income	$	47,~~279~~265	$	~~159~~157	$	47,~~438~~422	$	715,~~922~~187	$	~~289~~446	$	815,~~211~~633
Other comprehensive income:
Defined benefit pension and postretirement plans activity, net of taxes of ($76) and ($101), respectively		128		-		128		172		-		172
Defined benefit pension and postretirement plans activity, net of taxes of ($52) and ($153), respectively		85		-		85		257		-		257
Unrealized losses on available-for-sale securities, net of taxes of ($22) and ($1), respectively		83		-		83		8		-		8
Unrealized losses on available-for-sale securities, net of taxes of $35 and $34, respectively		(195)		-		(195)		(187)		-		(187)
Foreign currency translation adjustment, net of taxes of ($519) and ($357), respectively		980		22		1,002		663		24		687
Foreign currency translation adjustment, net of taxes of ($427) and ($784), respectively		793		3		796		1,456		27		1,483
Comprehensive income	$	57,~~470~~948	$	~~181~~160	$	58,~~651~~108	$	816,~~765~~713	$	~~313~~473	$	917,~~078~~186

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

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Statement of Stockholders’ Equity (Unaudited)

	Landauer, Inc. Stockholders' Equity
(Dollars in Thousands)	CommonStockShares		CommonStock		Addi- tional Paid in Capital		Accumulated Other Compre-hensive (Loss) Income		(Accumulated Deficit) RetainedEarnings		Non-ControllingInterest		TotalStock-holders'Equity
September 30, 2016		9,727,264	$	973	$	43,982	$	(15,266)	$	(10,511)	$	1,421	$	20,599
Stock-based compensation arrangements		8784,~~487~~404		8		12,~~879~~860		-		-		-		12,~~887~~868
Dividends		-		-		-		-		(58,~~384~~076)		(530)		(58,~~914~~606)
Net income		-		-		-		-		915,~~576~~976		~~357~~557		916,~~933~~533
Foreign currency translation adjustment, net of tax		-		-		-		(~~1,686~~871)		-		145		(~~1,672~~866)
Defined benefit pension and postretirement plans activity, net of tax		-		-		-		~~238~~357		-		-		~~238~~357
March 31, 2017		9,814,751	$	981	$	45,861	$	(16,714)	$	(6,319)	$	1,262	$	25,071
June 30, 2017		9,811,668	$	981	$	46,842	$	(15,780)	$	(2,611)	$	1,453	$	30,885

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

LANDAUER, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended March 31,
	Nine Months EndedJune 30,
(Dollars in Thousands)	2017		2016
Cash flows from operating activities:
Net income	$	916,~~933~~533	$	815,~~211~~633
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		58,~~352~~047		58,~~661~~461
Equity in income of joint ventures		(13,~~809~~015)		(~~553~~797)
Dividends from joint ventures		1,341		1,195
Stock-based compensation and related net tax benefits		12,~~456~~449		12,~~144~~048
Current and long-term deferred taxes, net		310,~~307~~568		13,~~076~~639
Loss on sale, disposal and abandonment of fixed assets		17		12
Gain on disposition of business		-		(3,904)
Gain on investments		(281)		(221)
Loss on sale, disposal and abandonment of fixed assets		23		368
Gain on investments		(411)		(558)
Changes in operating assets and liabilities:
Increase in accounts receivable, net		(41,~~487~~582)		(~~276~~1,771)
Decrease in prepaid taxes		700		39
(Increase) decrease in prepaid taxes		(4,064)		39
Increase in other operating assets, net		(1,065)		(842)
Decrease (increase) in other operating assets, net		607		(298)
Decrease in accounts payable and other accrued liabilities		(1,248)		(2,779)
Increase (decrease) in accounts payable and other accrued liabilities		1,564		(1,083)
Increase in other operating liabilities, net		722		143
Decrease in other operating liabilities, net		(47)		(753)
Net cash provided by operating activities		1332,~~938~~013		1222,~~810~~219
Cash flows from investing activities:
Acquisition of property, plant and equipment		(46,~~557~~989)		(46,~~278~~845)
Payment of transaction expenses associated with divestiture of business		-		(472)
Proceeds from disposition of business		-		10,089
Other investing activities, net		(~~554~~511)		~~(1,232)~~551
Net cash used in investing activities		(5,111)		(5,982)
Net cash (used in) provided by investing activities		(7,500)		3,795
Cash flows from financing activities:
Long-term borrowings - loan		3,500		1113,~~000~~500
Long-term borrowings - repayment		(712,~~500~~000)		(1834,~~400~~585)
Dividends paid to stockholders		(57,~~328~~979)		(57,~~286~~933)
Other financing activities, net		(72231)		(~~155~~417)
Net cash used in financing activities		(916,~~400~~710)		(1229,~~841~~435)
Effects of foreign currency translation		~~163~~(24)		~~(88)~~82
Net decrease in cash and cash equivalents		(410)		(6,101)
Net increase (decrease) in cash and cash equivalents		7,779		(3,339)
Opening balance - cash and cash equivalents		13,285		15,314
Ending balance - cash and cash equivalents	$	1221,~~875~~064	$	911,~~213~~975
Accrued capital spending included in accounts payable and other accrued liabilities	$	~~509~~730	$	~~783~~477

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

LANDAUER, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

~~March~~June 3130, 2017

(Dollars in Thousands)

(1)Basis of Presentation and Consolidation

As used herein, the terms “Company,” “Landauer,” “we,” “us,” and “our” refer collectively to Landauer, Inc. and its subsidiaries through which its various businesses are conducted.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

The consolidated financial statements include the accounts of the Company, its subsidiaries and variable interest entities in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. Entities in which the Company does not have a controlling financial interest, but is considered to have significant influence, are accounted for on the equity method.

We believe that we have included all normal recurring adjustments necessary for a fair presentation of the results for the interim period. Operating results for the three and ~~six~~nine months ended ~~March~~June 3130, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2017.

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016 (the “Form 10-K”) and other financial information filed with the Securities and Exchange Commission (the “SEC”). The September 30, 2016 balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

The accounting policies followed by the Company are set forth in the Form 10-K, and there have been no changes to the accounting policies for the ~~six~~nine-month period ended ~~March~~June 3130, 2017.

(2)Recent Accounting Pronouncements

Accounting Standards Adopted

In June 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance on accounting for share-based payments requiring a specific performance target to be achieved in order for employees to become eligible to vest in the awards when that performance target may be achieved after the requisite service period for the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period for which the requisite service has already been rendered. The Company adopted the updated standard in the first quarter of fiscal 2017 with no significant impact on its financial statements.

In April 2015, the FASB issued new guidance on a customer’s accounting for fees paid in a cloud computing arrangement (“CCA”). Under the new standard, customers will apply the same criteria as vendors to determine whether a CCA contains a software license or is solely a service contract. The Company adopted the updated standard prospectively in the first quarter of fiscal 2017 with no significant impact on its financial statements.

Accounting Standards Not Yet Adopted

In May 2014, the FASB issued new guidance for recognizing revenue from contracts with customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. In July 2015, the FASB deferred the effective date of the new revenue standard by one year. Public companies would now be required to adopt the new guidance for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The FASB decided to allow earlier adoption of the new revenue standard, but not earlier than the original effective date. This guidance is effective for the Company in the first quarter of fiscal 2019. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity. To date, the Company has formed a committee to evaluate the impact and is in the initial stages of evaluation.

In July 2015, the FASB issued new guidance on simplifying the measurement of inventory. This update requires a company to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This guidance is effective for the Company in the first quarter of fiscal 2018 and should be applied prospectively with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its results of operations, financial position and liquidity.

In November 2015, the FASB issued new guidance on the presentation of deferred income taxes. This update requires a company to present deferred tax liabilities and assets as noncurrent in a classified statement of financial position rather than the current requirement to separate deferred income tax liabilities and assets into current and noncurrent amounts. This guidance is effective for the Company in the first quarter of fiscal 2018, with early adoption permitted. The Company does not expect the adoption of this guidance will have a material impact on its results of operations, financial position and liquidity.

In February 2016, the FASB issued new guidance on the accounting treatment for leases. This guidance will require all leases with durations greater than twelve months to be recognized on the balance sheet of the lessee. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. This guidance is effective for the Company in the first quarter of fiscal 2020, although early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity.

In March 2016, the FASB issued new guidance to improve the accounting for share-based payments. This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. The guidance also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for the Company in the first quarter of fiscal 2018, although early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its results of operations, financial position and liquidity.

In June 2016, the FASB issued new guidance to introduce a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update is effective for the Company in the first quarter of fiscal 2020, although early adoption is permitted. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures.

In August 2016, the FASB issued an Accounting Standards Update (“ASU”) to provide cash flow statement guidance for certain cash receipts and payments, including (a) debt prepayment or extinguishment costs; (b) contingent consideration payments made after a business combination; (c) insurance settlement proceeds; (d) distributions from equity method investees; (e) beneficial interests in securitization transactions and (f) application of the predominance principle for cash receipts and payments with aspects of more than one class of cash flows. The update is effective for the Company in the first quarter of fiscal 2018. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures.

In November 2016, the FASB issued amendments to current guidance related to the classification and presentation of changes in restricted cash in the Statement of Cash Flows. The update is effective for the Company in the first quarter of fiscal 2019, and early adoption is permitted. The Company is currently evaluating the impact that this update will have on its financial statements and related disclosures.

No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on the Consolidated Financial Statements.

(3)Fair Value Measurements

The Company estimates the fair value of assets and liabilities in accordance with the framework established by the authoritative guidance for fair value measurements. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety.

The three levels of the hierarchy are as follows:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date.

Level 2 – Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

Level 3 – Unobservable inputs for the asset or liability used to measure fair value that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

Financial assets measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at March 31, 2017
	Fair Value Measurements at June 30, 2017
(Dollars in Thousands)	Level 1		Level 2		Level 3
Asset Category
Cash equivalents	$	~~547~~554	$	-	$	-
Mutual funds		4,~~360~~397		-		-
Total financial assets at fair value	$	4,~~907~~951	$	-	$	-
	Fair Value Measurements at September 30, 2016
(Dollars in Thousands)	Level 1		Level 2		Level 3
Asset Category
Cash equivalents	$	453	$	-	$	-
Mutual funds		3,687		-		-
Total financial assets at fair value	$	4,140	$	-	$	-

Following is a description of each category in the fair value hierarchy and the financial assets and liabilities of the Company that were included in each category at ~~March~~June 3130, 2017 and September 30, 2016, measured on a recurring basis.

The Level 1 financial assets were comprised of investments in trading securities, which are reported in other long-term assets. The investments are held in a Rabbi trust for benefits under the Company’s deferred compensation plan. Under the plan, participants designate investment options to serve as the basis for measurement of the notional value of their accounts. The investments include a money market fund and mutual funds that are publicly traded. The fair values of the shares or underlying securities of these funds are based on quoted market prices.

The Company’s long-term debt is classified as Level 2. The carrying amount of the Company’s long-term debt is the approximated fair value, as the stated interest rates were variable in relation to prevailing market rates.

(4)Income per Common Share

Basic net income per share was computed by dividing net income available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share was computed by dividing net income available to common stockholders for the period by the weighted average number of shares of common stock that would have been outstanding assuming dilution from stock-based compensation awards during the period.

The following table sets forth the computation of net income per share:

	Three Months EndedMarch 31,				Six Months EndedMarch 31,
	Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands, Except per Share)	2017		2016		2017		2016
Basic Net Income per Share:
Net income attributed to Landauer, Inc.	$	56,~~175~~400	$	47,~~279~~265	$	915,~~576~~976	$	715,~~922~~187
Less: Income allocated to unvested restricted stock		15		2120		3853		3959
Net income available to common stockholders	$	56,~~160~~385	$	47,~~258~~245	$	915,~~538~~923	$	715,~~883~~128
Basic weighted average shares outstanding		9,~~561~~585		9,~~518~~531		9,~~550~~562		9,~~483~~523
Net income per share - Basic	$	0.5467	$	0.4576	$	1.0067	$	01.8359
Diluted Net Income per Share:
Net income attributed to Landauer, Inc.	$	56,~~175~~400	$	47,~~279~~265	$	915,~~576~~976	$	715,~~922~~187
Less: Income allocated to unvested restricted stock		15		2120		3853		3959
Net income available to common stockholders	$	56,~~160~~385	$	47,~~258~~245	$	915,~~538~~923	$	715,~~883~~128
Basic weighted average shares outstanding		9,~~561~~585		9,~~518~~531		9,~~550~~562		9,~~483~~523
Effect of dilutive securities		3421		3233		3933		3332
Diluted weighted averages shares outstanding		9,~~595~~606		9,~~550~~564		9,~~589~~595		9,~~516~~555
Net income per share - Diluted	$	0.5466	$	0.4576	$	01.9966	$	01.8358
Dividends paid per share	$	0.275	$	0.275	$	0.5583	$	0.5583

On ~~February 16~~May 2, 2017, the Company declared a regular quarterly cash dividend in the amount of $0.275 per share. The dividends were paid on ~~April 4~~July 6, 2017 to shareholders of record as of ~~March~~June 1716, 2017.

(5)Employee Benefit Plans

The components of net periodic benefit cost for pension and other benefits were as follows:

Pension Benefits	Three Months ~~EndedMarch~~Ended 31June 30,				~~Six~~Nine Months ~~EndedMarch~~Ended 31June 30,
(Dollars in Thousands)	2017		2016		2017		2016
Interest cost	$	~~353~~352	$	~~393~~392	$	~~705~~1,057	$	~~785~~1,177
Expected return on plan assets		(~~387~~388)		(~~374~~373)		(~~775~~1,163)		(~~747~~1,120)
Amortization of net loss		190		~~140~~141		~~380~~570		~~281~~422
Net periodic benefit cost	$	~~156~~154	$	~~159~~160	$	~~310~~464	$	~~319~~479
Other Benefits	Three Months ~~EndedMarch~~Ended 31June 30,				~~Six~~Nine Months ~~EndedMarch~~Ended 31June 30,
(Dollars in Thousands)	2017		2016		2017		2016
Service cost	$	16	$	15	$	3248	$	3045
Interest cost		89		910		1726		1929
Amortization of net gain		-		(43)		-		(811)
Net periodic benefit cost	$	2425	$	2022	$	4974	$	4163

The Company, under the IRS minimum funding standards, has no required contributions to make to its defined benefit pension plan during fiscal 2017.

The Company sponsors a 401(k) retirement savings plan covering substantially all of the U.S. full-time employees in the Company’s Radiation Measurement segment as well as substantially all of the employees in the Company’s Medical Physics segment, and prior to its divestiture, the Medical Products segment. The Company also maintains a supplemental defined contribution plan for certain executives, which allows participating executives to make voluntary deferrals and provides for employer contributions at the discretion of the Company. Amounts expensed for Company contributions under these plans during the three months ended June ~~March 31~~30, 2017 and 2016 were $~~488~~483 and $~~499~~494, respectively. Amounts expensed for Company contributions under these plans during the ~~six~~nine months ended ~~March~~June 3130, 2017 and 2016 were $1,~~031~~514 and $~~918~~1,412, respectively.

(6)Goodwill and Intangible Assets

Changes in the carrying amount of goodwill, by reportable segment, for the ~~six~~nine months ended ~~March~~June 3130, 2017 were as follows:

(Dollars in Thousands)	Radiation Measurement		Medical Physics		Total
Balance as of September 30, 2016	$	11,196	$	22,611	$	33,807
Currency translation adjustment		~~(338)~~109		-		~~(338)~~109
Balance as of March 31, 2017	$	10,858	$	22,611	$	33,469
Balance as of June 30, 2017	$	11,305	$	22,611	$	33,916

The Company had no accumulated impairment losses as of ~~March~~June 3130, 2017 and September 30, 2016.

Intangible assets consisted of the following:

	March 31, 2017
	June 30, 2017
(Dollars in Thousands)	GrossCarryingAmount		AccumulatedAmortization		Net Carrying Amount
Customer lists	$	1617,~~691~~108	$	1011,~~637~~237	$	65,~~054~~871
Trademarks and tradenames		133		-		133
Licenses and patents		3,~~465~~508		~~866~~910		2,~~599~~598
Other intangibles		557		557		-
Intangible assets	$	2021,~~846~~306	$	12,~~060~~704	$	8,~~786~~602



	September 30, 2016
(Dollars in Thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer lists	$	16,982	$	10,436	$	6,546
Trademarks and tradenames		133		-		133
Licenses and patents		3,397		779		2,618
Other intangibles		557		557		-
Intangible assets	$	21,069	$	11,772	$	9,297

Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Intangible asset amortization expense was $~~385~~388 and $~~771~~1,159 for the three and ~~six~~ nine months ended ~~March~~June 3130, 2017, respectively, and was $~~568~~453 and $1,~~123~~576 for the three and ~~six~~nine months ended ~~March~~June 3130, 2016, respectively.

(7)Accumulated Other Comprehensive Loss

Accumulated elements of other comprehensive loss, net of tax, are included in the stockholders’ equity section of the condensed consolidated balance sheets. Changes in each component for the ~~six~~nine months ended ~~March~~June 3130, 2017 and 2016 are as follows:

(Dollars in Thousands)	Foreign Currency Translation Adjustments		Unrealized Gains and Losses on Available-for-Sale Securities		Pension and Postretirement Plans		Comprehensive (Loss) Income
Balance at September 30, 2016	$	(4,696)	$	-	$	(10,570)	$	(15,266)
Other comprehensive (loss) income before reclassifications		(1,686)		-		-		(1,686)
Other comprehensive loss before reclassifications		(871)		-		-		(871)
Amounts reclassified from accumulated other comprehensive (loss) income		-		-		238		238
Amounts reclassified from accumulated other comprehensive income		-		-		357		357
Net current period other comprehensive (loss) income		(~~1,686~~871)		-		~~238~~357		(~~1,448~~514)
Balance at March 31, 2017	$	(6,382)	$	-	$	(10,332)	$	(16,714)
Balance at June 30, 2017	$	(5,567)	$	-	$	(10,213)	$	(15,780)

(Dollars in Thousands)	Foreign Currency Translation Adjustments		Unrealized Gains and Losses on Available-for-Sale Securities		Pension and Postretirement Plans		Comprehensive (Loss) Income
Balance at September 30, 2015	$	(5,468)	$	259	$	(8,532)	$	(13,741)
Other comprehensive (loss) income before reclassifications		663		97		-		760
Other comprehensive income before reclassifications		1,456		147		-		1,603
Amounts reclassified from accumulated other comprehensive (loss) income		-		(89334)		~~172~~257		83(77)
Net current period other comprehensive (loss) income		~~663~~1,456		8(187)		~~172~~257		~~843~~1,526
Balance at March 31, 2016	$	(4,805)	$	267	$	(8,360)	$	(12,898)
Balance at June 30, 2016	$	(4,012)	$	72	$	(8,275)	$	(12,215)

The tables below present the impact on net income of significant amounts reclassified out of each component of accumulated other comprehensive loss:

Pension and Postretirement Plans (1)	Three Months ~~EndedMarch~~Ended 31June 30,				~~Six~~Nine Months ~~EndedMarch~~Ended 31June 30,
(Dollars in Thousands)	2017		2016		2017		2016
Amortization of net loss	$	190	$	~~204~~137	$	~~380~~570	$	~~273~~410
Total before tax		190		~~204~~137		~~380~~570		~~273~~410
Provision for income taxes		71		7652		~~142~~213		~~101~~153
Total net of tax	$	119	$	~~128~~85	$	~~238~~357	$	~~172~~257

(1)These accumulated other comprehensive loss components are included in the computation of net periodic benefit costs (refer to Note 5 of the Notes to Consolidated Financial Statements for additional details regarding employee benefit plans).

Unrealized Gains and Losses on Available-for-Sale Securities	Three Months ~~EndedMarch~~Ended 31June 30,				~~Six~~Nine Months ~~EndedMarch~~Ended 31June 30,
(Dollars in Thousands)	2017		2016		2017		2016
Realized gains on available-for-sale securities into earnings (1)	$	-	$	-(288)	$	-	$	(~~105~~393)
Total before tax		-		-(288)		-		(~~105~~393)
Provision for income taxes (2)		-		-(43)		-		(1659)
Total net of tax	$	-	$	-(245)	$	-	$	(89334)

(1)This amount is reported in Interest Expense, net on the Consolidated Statements of Operations

(2)This amount is reported in Income Tax Expense (Benefit) on the Consolidated Statements of Operations

(8)Income Taxes

The effective tax rates for the three months ended ~~March 31~~June 30, 2017 and 2016 were 3627.65% and 31.13%, respectively. The ~~increase~~decrease in the effective tax rate was primarily due to the mix of taxable earnings between jurisdictions ~~and~~with differing tax ~~law~~rates ~~changes~~and ~~that~~the ~~impacted~~release ~~the~~of ~~prior~~uncertain ~~year~~tax positions relative to pretax earnings. The effective tax rates for the ~~six~~nine months ended ~~March~~June 3130, 2017 and 2016 were 3532.5% and 31.02%, respectively. The increase in the effective tax rate was primarily due to the mix of earnings between jurisdictions with differing tax rates and tax law changes that impacted the timing of recognition of certain credits in the prior year. The Company believes it is reasonably possible that $~~570~~135 of unrecognized tax benefits will be realized in fiscal year ~~2017~~2018.

(9)Segment Information

In fiscal year 2017, the Company is organized into two reportable business segments: Radiation Measurement and Medical Physics. As disclosed in the Form 10-K for the fiscal period ended September 30, 2016, the Medical Products business was divested in May 2016; accordingly, there were no reportable revenues and operating income for the three and ~~six~~ nine month periods ended ~~March~~June 3130, 2017 for that reportable segment. These segments reflect the manner in which the Company’s businesses are currently managed and represent an aggregation of services and products based on type of customer and how the businesses are marketed. For more information regarding the nature of the Company’s services and products, see Note 16 of the Notes to Consolidated Financial Statements in the Form 10-K.

The following tables summarize financial information for each reportable segment:

Three Months EndedMarch 31,

Six Months EndedMarch 31,

Three Months Ended June 30,

Nine Months Ended June 30,

(Dollars in Thousands)

2017

2016

2017

2016

Revenues by segment:

Radiation Measurement

2829,~~692~~594

2527,~~520~~492

5685,~~324~~918

5077,~~224~~716

Medical Physics

10,~~430~~294

109,~~033~~562

2030,~~370~~664

1928,~~386~~948

Medical Products

~~2,529~~800

5,~~002~~802

Consolidated revenues

39,~~122~~888

3837,~~082~~854

76116,~~694~~582

74112,~~612~~466

Three Months EndedMarch 31,

Six Months EndedMarch 31,

Three Months Ended June 30,

Nine Months Ended June 30,

(Dollars in Thousands)

2017

2016

2017

2016

Operating income (loss) by segment:

Radiation Measurement

1112,~~409~~138

910,~~969~~294

2234,~~641~~779

1829,~~867~~161

Medical Physics

~~672~~789

~~918~~756

12,~~351~~140

12,~~696~~452

Medical Products

~~432~~141

~~922~~1,063

Corporate

(4,~~272~~344)

(43,~~102~~478)

(813,~~741~~085)

(811,~~016~~494)

Consolidated operating income

78,~~809~~583

7,~~217~~713

1523,~~251~~834

1321,~~469~~182

(Dollars in Thousands)	~~March~~June 3130, 2017		September 30,2016
Segment assets:
Radiation Measurement	$	~~159~~165,~~090~~720	$	160,560
Medical Physics		4448,~~311~~081		43,174
Eliminations		(1215,~~893~~635)		(12,918)
Consolidated assets	$	~~190~~198,~~508~~166	$	190,816

(10)Related Party Transactions

The Company has a minority interest in Yamasato, Fujiwara, Higa & Associates, Inc. doing business as Aquila. The Company provides dosimetry parts to Aquila for its military contract. The Company also has a 50% equity interest in Nagase-Landauer, Ltd. (“Nagase”), a radiation measurement company in Japan.

The sales to and purchases from Aquila were as follows:

	Three Months EndedMarch 31,				Six Months EndedMarch 31,
	Three Months Ended June 30,				Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016		2017		2016
Sales to Aquila	$	23,~~933~~347	$	182,653	$	58,~~501~~848	$	~~414~~3,067
Purchases from Aquila		30128		~~214~~201		~~104~~232		~~204~~405

Balance sheet items associated with Aquila were as follows:

(Dollars in Thousands)	~~March~~June 3130, 2017		September 30, 2016
Amounts in accounts receivable	$	43,~~069~~439	$	1,910
Amounts in accounts payable		~~114~~193		320

The sales to and purchases from Nagase were as follows:

Three Months EndedMarch 31,

Six Months EndedMarch 31,

Three Months Ended June 30,

Nine Months Ended June 30,

(Dollars in Thousands)

2017

2016

2017

2016

Sales to Nagase

~~1,002~~961

1,~~196~~180

23,~~243~~204

23,~~294~~474

Purchases from Nagase

~~319~~58

99123

~~629~~687

~~694~~817

Balance sheet items associated with Nagase were as follows:

(Dollars in Thousands)	~~March~~June 3130, 2017		September 30, 2016
Amounts in accounts receivable	$	~~294~~117	$	288
Amounts in accounts payable		525		23

(11)Subsequent Event

On July 13, 2017, the Company entered into a Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”) that amends and restates in its entirety the Amended and Restated Credit Agreement dated as of August 2, 2013, as amended by the First Amendment to Amended and Restated Credit Agreement dated as of June 30, 2014 (the “Existing Credit Agreement”).

The Amended Credit Agreement replaced the Existing Credit Agreement that contained substantially similar terms but decreased the revolving loan facility amount from $175.0 million to $125.0 million and extended the maturity date from August 2, 2018 to July 13, 2022. The Amended Credit Agreement also added Landauer Europe as a borrower entity.

Similar to the Existing Credit Agreement, the Amended Credit Agreement contains customary representations and covenants, including financial covenants that the Company will maintain a fixed charge coverage ratio and leverage ratio within certain levels as defined in the Amended Credit Agreement.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the Company’s unaudited consolidated financial condition and results of operations should be read in conjunction with the annual audited consolidated financial statements and related notes thereto included in the Company’s Form 10-K. The following discussion includes forward-looking statements that involve certain risks and uncertainties. For additional information regarding forward-looking statements and risk factors, see “Forward-Looking Statements” herein and Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016.

The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Critical accounting policies are those that are most important to the portrayal of a company’s financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company bases its estimates, judgments and assumptions on historical experience and other relevant factors that are believed to be reasonable under the circumstances. In any given reporting period, the Company’s actual results may differ from the estimates, judgments and assumptions used in preparing the consolidated financial statements.

Results of Operations

Comparison of the ~~second~~ third fiscal quarter ended ~~March~~June 3130, 2017 and the ~~second~~ third fiscal quarter ended ~~March~~June 3130, 2016

Revenues for the ~~second~~third fiscal quarter of 2017 were $39.19 million, an increase of $12.0 million, or 25.63%, compared to revenues of $3837.19 million for the ~~second~~ third fiscal quarter of 2016. Revenues in the Radiation Measurement segment increased $3.2.1 million, which was primarily due to higher domestic service revenues and product sales to the military. Revenues in the Medical Physics segment increased $0.47 million, due to increased imaging services. Revenues in the Medical Products segment decreased $20.58 million due to the divestiture of this business in May 2016.

Gross profit was 5152.9% for the ~~second~~third fiscal quarter of 2017, ~~which~~ iscompared ~~unchanged~~with ~~from~~51.6% for the ~~second~~ third fiscal quarter of 2016. Gross profit increased for the third fiscal quarter of 2017 as compared to the third fiscal quarter of 2016 due to the increase in domestic service revenues and product sales to the military.

Selling, general and administrative expenses for the ~~second~~third fiscal quarter of 2017 were $12.5 million, ~~the~~compared ~~same~~to ~~amount~~expenses asof $11.8 million for the ~~second~~third fiscal quarter of 2016. ~~Operating~~ Corporate ~~expenses~~and inRadiation ~~the~~Measurement ~~Medical~~operating ~~Products~~expenses ~~segment~~increased ~~decreased~~by $1.1 million ~~due to the divestiture of the business in May 2016~~, partially offset by a $0.64 million ~~increase~~decrease in ~~Corporate~~the ~~and~~Medical ~~Radiation~~Products ~~Measurement~~segment ~~expenses~~due ~~and~~to athe ~~$0.5~~divestiture ~~million~~of ~~increase~~the business in ~~Medical~~May ~~Physics expenses~~2016. Corporate and Radiation Measurement operating expenses increased $01.61 million primarily due to a $0.36 million increase in ~~selling~~professional ~~and~~fees ~~marketing expenses~~ and a $0.3 million ~~of proxy contest expenses for the 2017 Annual Meeting of Stockholders. The~~ increase in ~~operating~~selling ~~expenses~~and inmarketing ~~Medical Physics was driven by an increase in personnel~~ expenses.

Operating income for the ~~second~~third fiscal quarter of 2017 was $7.8.6 million, compared with operating income of $7.27 million for the ~~second~~third fiscal quarter of 2016. Operating income increased ~~due~~ primarily due to the gross profit on the higher domestic service revenues and military sales.

The effective tax rates for the ~~second~~third fiscal quarter of 2017 and 2016 were 3627.65% and 31.13%, respectively. The ~~increase~~decrease in the effective tax rate was primarily due to the mix of taxable earnings between jurisdictions ~~and~~with differing tax ~~law~~rates ~~changes~~and ~~that impacted~~ the ~~timing~~release of ~~recognition~~uncertain oftax ~~certain~~positions ~~credits~~relative into ~~the~~pretax ~~prior year~~earnings.

Net income attributed to Landauer for the ~~second~~third fiscal quarter of 2017 was $56.24 million, compared with net income of $47.3 million in the ~~second~~third fiscal quarter of 2016. The ~~increase~~decrease in net income was driven by the $3.9 million pre-tax gain on sale of the Medical Products business that was divested in May 2016, partially offset by stronger operating margins, ~~and~~ higher equity earnings from joint ventures, ~~partially~~and ~~offset by~~ a ~~higher~~lower effective tax rate in the third fiscal quarter of 2017.

Radiation Measurement Segment

Radiation Measurement revenues for the ~~second~~ third fiscal quarter of 2017 were $2829.76 million, an increase of $3.2.1 million, or 127.56%, compared with $2527.5 million for the ~~second~~third fiscal quarter of 2016. The growth in revenues was primarily due to higher domestic service revenues and increased product sales to the military. During the third fiscal quarter of 2016, the Company was awarded a military order from the National Guard of the United States for the Radwatch personal in-field radiation monitoring system. Approximately $20.97 million of the increase in revenues resulted from the shipment of products for the National Guard order. The Company completed its final shipment for the National Guard order during the third fiscal quarter of 2017. While the Company is continuing to pursue orders for its Radwatch products, there are currently no open contracts or purchase orders for military products. International revenues increased $0.5 million.

Operating income for the ~~second~~ third fiscal quarter of 2017 increased to $1112.41 million from $10.03 million for the ~~second~~third fiscal quarter of 2016 due to the gross profit on the ~~increased~~higher ~~product sales~~revenues.

Medical Physics Segment

Medical Physics revenues for the ~~second~~ third fiscal quarter of 2017 were $10.43 million, an increase of $0.47 million, or 47.03%, compared with $109.06 million for the ~~second~~ third fiscal quarter of 2016. ~~Imaging~~Therapy services revenue increased $0.7 million, or 13.1%, and imaging services revenue increased by $0.65 million, or 1815.80%, driven by higher demand for the Company’s solutions for The Joint Commission’s new Diagnostic Imaging requirements that became effective for hospitals and ambulatory care centers on July 1, 2015.

Operating income for the ~~second~~ third fiscal quarter of 2017 was $0.78 million, ~~compared~~unchanged tofrom ~~$0.9 million for~~ the ~~second~~ third fiscal quarter of 2016. ~~The decrease in operating income was primarily due to an increase in personnel expenses.~~

Medical Products Segment

Medical Products revenues decreased $20.58 million as a result of the divestiture that occurred in May 2016.

Medical Products operating income decreased $0.41 million due to the May 2016 divestiture.

Corporate Selling, General and Administrative Expenses

Corporate selling, general and administrative expenses for the ~~second~~ third fiscal quarter of 2017 were $4.3 million, an increase of $0.28 million, or 422.9%, compared to $43.15 million for the ~~second~~ third fiscal quarter of 2016. The increase was due to aan ~~$0.3 million~~ increase in ~~proxy~~professional ~~expenses~~fees ~~for~~in the ~~2017~~third ~~Annual~~fiscal ~~Meeting~~quarter of ~~Stockholders~~2017.

Comparison of the ~~six~~nine months ended ~~March~~June 3130, 2017 and the ~~six~~nine months ended ~~March~~June 3130, 2016

Revenues for the first ~~six~~nine months of fiscal 2017 were $76116.76 million, an increase of $24.1 million, or 23.86%, compared to revenues of $74112.65 million for the first ~~six~~nine months of fiscal 2016. Revenues in the Radiation Measurement segment increased $68.12 million, which was primarily due to product sales to the military and growth in international revenues. Revenues in the Medical Physics segment increased $1.08 million, due to increased imaging services. Revenues in the Medical Products segment decreased $5.08 million due to the divestiture of this business in May 2016.

Gross profit was 52.14% for the first ~~six~~nine months of fiscal 2017, compared with 51.34% for the first ~~six~~nine months of fiscal 2016. Gross profit increased for the first ~~six~~nine months of 2017 as compared to the first ~~six~~nine months of fiscal 2016 due primarily to the increase in product sales to the military.

Selling, general and administrative expenses for the first ~~six~~nine months of fiscal 2017 were $2437.72 million, aan increase ~~decrease~~ of $0.16 million, or 01.46%, compared with $2436.86 million for the first ~~six~~nine months of fiscal 2016. Operating expenses in the Medical Physics segment increased $0.6 million, driven by an increase in personnel expenses. Operating expenses in the Medical Products segment decreased $2.26 million due to the divestiture of the business in May 2016, ~~partially~~ offset by a $12.56 million increase in Corporate and Radiation Measurement expenses ~~and a $0~~.~~6 million increase in Medical Physics expenses.~~ Corporate and Radiation Measurement operating expenses increased $12.56 million primarily due to a $0.6 million increase in selling and marketing expenses, $0.5 million of proxy contest expenses for the 2017 Annual Meeting of Stockholders, a $0.34 million increase in research and development expenses for the Verifii digital dosimetry platform, ~~a $0.3 million increase in selling~~ and ~~marketing expenses and~~ a $0.34 million increase in stock-based compensation expense. ~~The increase in operating expenses in Medical Physics was driven by an increase in personnel expenses.~~

Operating income for the first ~~six~~nine months of 2017 was $1523.38 million, compared with operating income of $1321.52 million for the first ~~six~~nine months of 2016. Operating income increased due primarily to the gross profit on the higher military sales. In addition, the Company successfully appealed the real estate taxes for fiscal 2011 and 2012, and as a result, is expected to receive a $0.6 million refund.

The effective tax rates for the first ~~six~~nine months of fiscal 2017 and fiscal 2016 were 3532.5% and 31.02%, respectively. The increase in the effective tax rate was primarily due to the mix of taxable earnings between jurisdictions and tax law changes that impacted the timing of recognition of certain credits in the prior year.

Net income attributed to Landauer for the first ~~six~~nine months of fiscal 2017 was $916.60 million, compared with net income of $715.92 million in the first ~~six~~nine months of 2016. The increase in net income was driven by stronger operating margins, partially offset by a higher effective tax rate.

Radiation Measurement Segment

Radiation Measurement revenues for the first ~~six~~nine months of fiscal 2017 were $5685.39 million, an increase of $68.12 million, or 1210.26%, compared with $5077.27 million for the first ~~six~~nine months of fiscal 2016. The growth in revenues was primarily due to product sales to the military and higher international revenues. During the third fiscal quarter of 2016, the Company was awarded a military order from the National Guard of the United States for the Radwatch personal in-field radiation monitoring system. Approximately $5.18 million of the increase in revenues resulted from the shipment of products for the National Guard order. The Company completed its final shipment for the National Guard order during the third fiscal quarter of 2017. International revenues increased $01.50 million due primarily to higher product sales.

Operating income for the first ~~six~~nine months of fiscal 2017 increased to $2234.68 million from $1829.92 million for the first ~~six~~nine months of fiscal 2016 due to the gross profit on the increased product sales and due to the refund of real estate taxes for fiscal 2011 and 2012.

Medical Physics Segment

Medical Physics revenues for the first ~~six~~nine months of fiscal 2017 were $2030.47 million, an increase of $1.08 million, or 56.2%, compared with $1928.49 million for the first ~~six~~nine months of fiscal 2016. Imaging services revenue increased by $1.27 million, or 1918.73%, driven by higher demand for the Company’s solutions for The Joint Commission’s new Diagnostic Imaging requirements that became effective for hospitals and ambulatory care centers on July 1, 2015.

Operating income for the first ~~six~~nine months of fiscal 2017 was $12.41 million, compared to $12.75 million for the first ~~six~~nine months of fiscal 2016. The decrease in operating income was primarily due to an increase in personnel expenses.

Medical Products Segment

Medical Products revenues decreased $5.08 million as a result of the divestiture that occurred in May 2016.

Medical Products operating income decreased $01.91 million due to the May 2016 divestiture.

Corporate Selling, General and Administrative Expenses

Corporate selling, general and administrative expenses for the first ~~six~~nine months of fiscal 2017 were $813.71 million, an increase of $01.76 million, or 813.79%, compared to $811.05 million for the first ~~six~~nine months of fiscal 2016. The increase was primarily due to a $0.5 million increase in proxy expenses for the 2017 Annual Meeting of Stockholders as well as a $0.34 million increase in stock-based compensation expense.

Liquidity and Capital Resources

The Company’s principal source of liquidity is operating cash flows supplemented by borrowings under its credit facility. The Company’s cash-generating capability is one of its fundamental strengths and provides it with substantial financial flexibility in meeting operating and investing needs.

The following table sets forth a summary of the Company’s cash flows:

	Six Months Ended March 31,
	Nine Months Ended June 30,
(Dollars in Thousands)	2017		2016
Net cash provided by (used in):
Operating activities	$	1332,~~938~~013	$	1222,~~810~~219
Investing activities		(57,~~111~~500)		(53,~~982)~~795
Financing activities		(916,~~400~~710)		(1229,~~841~~435)
Effect of foreign currency translation		~~163~~(24)		~~(88)~~82
Net decrease in cash and cash equivalents	$	(410)	$	(6,101)
Net increase (decrease) in cash and cash equivalents	$	7,779	$	(3,339)

Cash provided by operating activities for the first ~~six~~nine months of fiscal 2017 was $1332.90 million, an increase of $19.18 million over the same fiscal period in 2016. The increase was primarily due to ~~lower~~ ~~spending~~growth in ~~professional~~radiation ~~service~~measurement ~~fees~~revenues, ~~and~~ lower cash interest payments on long-term borrowings ~~compared~~and tofavorable ~~the~~changes ~~prior~~in ~~year~~working capital accounts, including accounts receivable, other operating assets, accounts payable and other operating liabilities.

Cash used in investing activities for the first ~~six~~nine months of fiscal 2017 was $57.15 million, a change of $011.93 million over the same fiscal period of 2016. The change was primarily due to ~~transaction~~the ~~expenses~~cash proceeds received in fiscal 2016 related to the disposition of the ~~Radon~~Medical Products business ~~which were paid~~ in ~~fiscal~~May 2016.

Cash used in financing activities for the first ~~six~~nine months of fiscal 2017 was $916.47 million, a change of $312.47 million over the same fiscal period of 2016. The ~~change was primarily due to lower~~ net repayments of debt were ~~compared~~higher toin the prior year~~. In~~ ~~addition,~~due ~~the Company expects~~ to ~~pay down debt over~~ the ~~next four to five years as it realizes a~~ cash ~~tax~~proceeds ~~benefit~~received ~~of approximately $16.0 million resulting~~ from the ~~disposal~~disposition of the Medical Products business~~. As~~ ofin ~~March~~May ~~31, 2017, the Company had $34~~2016.~~9 million of unused availability under its current $140.0 million credit facility, which the Company believes provides adequate liquidity to meet its current and anticipated obligations.~~

The Company expects to meet short-term liquidity requirements (including capital expenditures) through net cash from operating activities and cash on hand. The Company was in compliance with all covenants under the credit facility as of March 31, 2017. The Company currently intends to use excess cash to continue to pay down the long-term debt balance. The debt facility expires August 2, 2018.

The Amended Credit Agreement replaced the Existing Credit Agreement that contained substantially similar terms but decreased the revolving loan facility amount to $125.0 million and extended the maturity date to July 13, 2022. The Company currently has $24.0 million of unused availability under its Amended Credit Agreement and believes the credit facility provides adequate liquidity to meet its current and anticipated obligations.

The Company was in compliance with all covenants under the Existing Credit Facility Agreement as of June 30, 2017. The Company currently intends to use excess cash to continue to pay down the long-term debt balance of the Amended Credit Agreement.

Recent Accounting Pronouncements

See Note 2 to the Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q.

Contractual Obligations

There have been no material changes, outside of the ordinary course of business, in the Company’s outstanding contractual obligations since the end of fiscal year 2016 through ~~March~~June 3130, 2017.

Forward-Looking Statements

Certain matters contained in this report 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 future performance; the Company’s development and introduction of new technologies and products in general; the ability to protect and utilize the Company’s intellectual property; events or circumstances which result in an impairment of assets; 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 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 and investments in cyber security 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; 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” of the Company’s Annual Report on Form 10-K for the year ended September 30, 2016 and information contained in other reports filed by the Company, from time to time, with the SEC. 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.

Item 3.quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk, including changes in foreign currency exchange rates and is subject to interest rate risk related to borrowings under its existing credit facility. These risks are set forth in Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016. The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year through ~~March~~June 3130, 2017.

Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of ~~March~~June 3130, 2017, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and 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 Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended.

Based upon that evaluation, our CEO and CFO concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level for the purpose of ensuring that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) accumulated and communicated to management including the CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting that occurred during the ~~second~~third quarter of fiscal 2017 that has materially affected, or is 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~~June 3130, 2017, 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 is set forth in Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016. The Company believes there have been no material changes in the information provided from the end of the preceding fiscal year through ~~March~~June 3130, 2017.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

The Company’s purchases of its equity securities from the end of the preceding fiscal year through ~~March~~June 3130, 2017 includes the deemed surrender of existing shares of Landauer common stock to the Company by stock-based compensation plan participants to satisfy the exercise price or tax liability of employee stock awards at the time of exercise or vesting. These surrendered shares are not part of any publicly announced share repurchase program.

Period	Total Number of SharesPurchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
October 1 - October 31, 2016	149	$	43.89	-	-
November 1 - November 30, 2016	-		-	-	-
December 1 - December 31, 2016	-		-	-	-
Quarter ended December 31, 2016	149	$	43.89	-	-
January 1 - January 31, 2017	375	$	50.30	-	-
February 1 - February 28, 2017	-		-	-	-
March 1 - March 31, 2017	-		-	-	-
Quarter ended March 31, 2017	375	$	50.30	-	-
April 1 - April 30, 2017	376	$	48.81	-	-
May 1 - May 31, 2017	-		-	-	-
June 1 - June 30, 2017	-		-	-	-
Quarter ended June 30, 2017	376	$	48.81	-	-

Item 3.Defaults Upon Senior Securities

Not Applicable

Item 4.Mine Safety Disclosures

Not Applicable

Item 5.Other Information

Not Applicable

Item 6.Exhibits

		Cer
10		~~Support~~Second Amended and Restated Credit Agreement, dated ~~January~~as 10of July 13, 2017, byamong ~~and~~Landauer, ~~among~~Inc., ~~the~~Global ~~Registrant~~Physics Solutions, Inc. and ~~Gilead~~Landauer ~~Capital~~Europe, LPLtd, ~~Gilead~~as ~~Capital~~borrowers, GPBMO ~~LCC~~Harris ~~and~~Bank ~~Jeffrey~~ N.A., ~~Strong~~as isadministrative agent, and the lenders party thereto incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed ~~January~~July 1218, 2017
31.1		Certification of Michael P. Kaminski, President and Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Daniel J. Fujii, Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Michael P. Kaminski, 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
32.2		Certification of Daniel J. Fujii, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL INSTANCE FILE
101.SCH		XBRL SCHEMA FILE
101.CAL		XBRL CALCULATION FILE
101.DEF		XBRL DEFINITION FILE
101.LAB		XBRL LABEL FILE
101.PRE		XBRL PRESENTATION FILE

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.

8
		LANDAUER, INC.
		(Registrant)
Date: May 9, 2017		/s/ Daniel J. Fujii
Date: August 8, 2017		/s/ Daniel J. Fujii
		Daniel J. Fujii
		Chief Financial Officer

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