Landauer, Inc. Q3 2008 Earnings Call Transcript

Jul.29.08 | About: Landauer, Inc. (LDR)

Landauer, Inc. (NYSE:LDR)

Q3 2008 Earnings Call Transcript

July 29, 2008 2:00 pm ET

Executives

John Singer – SVP and CFO

Bill Saxelby – President and CEO

Craig Yoder – SVP, Marketing and Technology

Analysts

Steve O'Neil – Hilliard Lyons

Jason Rogers – Great Lakes Review

Tom Lamb – Weybosset Research

Operator

Good afternoon ladies and gentlemen, thank you for standing by and welcome to the Landauer Incorporated fiscal third quarter 2008 earnings conference. During today’s presentation, all participants will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator instructions) This conference is being recorded today, July 29, 2008. I would now like to turn the conference over to Mr. Jonathan Singer, please go ahead sir.

John Singer

Thank you operator, good afternoon. I’m John Singer, the Chief Financial Officer for Landauer Inc. On behalf of the company, I’m pleased to welcome everyone to the third quarter fiscal 2008 conference call. With us today on the line, we have Bill Saxelby, President and Chief Executive Officer; Craig Yoder, Senior Vice President, Marketing and Technology; and Gerry Bilek, our Controller.

By now, you should have received a copy of the press release. If not, please contact Rebecca Warmes at 708-441-8311, and she will send one to you immediately. Alternatively, you can visit the company’s website at www.landauerinc.com under the Investors heading. This conference call will follow a standard format with a review of the results followed by Q&A session.

Before I turn the call over to Bill, I need to remind you that certain statements made in the press release and on this conference call that are not historical may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Although Landauer believes the expectations reflected in any forward-looking statement are based upon reasonable assumptions, we can give no assurance that these expectations will be attained. Please refer to the complete Safe Harbor Statements in the press release. Additional information may be obtained by reviewing the Risk Factor section in the company’s annual report on Form 10-K for the year ended September 30, 2007, and other reports filed by the company from time to time with the SEC.

Additionally, we want to let people know that the information and statements made during the call are made as of the date of the call, today, July 29, 2008. Listeners to any replay should understand that the passage of time by itself will diminish the quality of the statements. Also, the contents in the call are the property of the company and any replay or transmission of the call may be done only with the consent of Landauer Inc.

At this time, I would like to turn the call over to Bill.

Bill Saxelby

Thank you, Jon. Good afternoon everyone and thank you for joining us for our earnings call. Our fiscal third quarter was another strong quarter for Landauer. We’ve made progress on our strategic growth initiatives as well as our continued commitment to financial discipline, and management of our resources.

Our revenues for the quarter ended June 30, 2008 were $21.9 million, which is 6% higher than the same quarter last year. This translated to strong profitability as our net income grew $5.8 million during the quarter, which is up 9% from what we earned in the year ago period after excluding the nonrecurring charges in the prior year quarter.

Another important benchmark for the health of our business is operating cash flow. It grew 27% over the year ago period to $24.3 million. These strong cash flows enable us to ensure future growth by reinvesting in our business and pursuing our growth initiatives. Jon will discuss the financial results in more detail during his portion of the call.

The results that we reported this quarter reflect a consistent and successful execution of our three strategic growth initiatives which are, optimizing the core business, driving competitive growth, and pursuing strategic expansion. Our first priority is to optimize the core business. We continue to make investments that drive productivity improvements and strengthen our core infrastructure. To that end, we are progressing towards the completion of our systems initiative.

As you recall, we determined in 2007 that we needed to make the investment to transform our customer facing systems to foster improved productivity and increase cash flows. We have made solid progress with the implementation of our new system and are currently in the final development phases.

The implementation is taking a little longer than expected but we continue to be focused on ensuring that the transition is as smooth as possible with zero impact to our core service. We've adopted a careful and prudent methodology as we implement a best-in-class customer phasing system, and we're confident that this approach will yield the best long term results for the company.

We continue to expect the integration and stabilization of the new system to be complete during the calendar year 2008 with the new platform going live in fiscal 2009. This investment is important to our future growth and we believe that the scalability of this new system will allow us to continue the momentum we have generated in growing our core business. Investments in strengthening our infrastructure on the sales and marketing front continue to benefit us as we gain knowledge and begin to build momentum in markets that we've targeted for growth.

A significant portion of this year's growth has been the result of the success of our international diversification strategy which we will continue to pursue. Within our domestic portfolio, we continue to focus on driving growth on our core occupational monitoring services while expanding our served markets through a focus on nuclear power, first responders, the military, and patient monitoring for therapeutic and diagnostic procedures.

Our second strategic priority is to drive competitive growth. During the quarter, we made progress in the markets we've targeted for competitive growth. As we have discussed on earlier calls, the market is indicating that the medical community has an interest in expanding their understanding of the impact of the increased utilization of radiation and medical procedures on the patient population. While in most instances, the use of radiation is in support of critical diagnostic and therapeutic procedures. There is an emerging need to understand the nature of the exposure for either quality assurance or patient safety reasons.

While the interest in patient monitoring is in the early stages of development, during the quarter, we sold our 100th microStar with over 80% these placements going into the medical market for applications outside of traditional occupational monitoring. In support of these placements, we upgraded the operating software to integrate key features required by the medical market, and we launched a new product, the NanoDot [ph] that was specifically designed to address patient monitoring specifications.

Before we discuss some of the ways our customers are utilizing the microStar, I want to take a step back to review how we've approached this market. This will also illustrate how we are pursuing opportunities when we speak about competitive growth.

The microStar is part of the InLight family of products. It's a small desktop reader that was designed to be simple to use, portable, and ideal for doing a small number of readings in the field or at the point of exposure. It cost approximately $30,000 to develop the first prototype and was initially in response to a perceived need by first responders and emergency room employees for quick monitoring solutions in the event of localized nuclear emergencies. As replaced some early units in the hospitals, we saw that the health physicist and radiation oncologist were finding expanded applications for the units.

Approximately 12 to 18 months ago, our sales, marketing and R&D organizations began to actively engage leading research institutions and their thought leaders in evaluating OSL as a solution of choice for patient dose measurement and therapeutic and diagnostic procedures.

Based upon their research and related input, we modified the software and developed a monitor specifically for their needs. This was done utilizing existing technology targeted at an existing customer relationship and this is a key core opportunity relative to competitive growth for Landauer.

Now these customers are in the early stages of discovery of how they can utilize OSL to assist with patient monitoring. As a result, our business model and the market’s long term impact on our growth are still undefined. However, we can provide some early examples that continue to fuel our interest in this opportunity.

We have recently received a commitment from a leading research institution that they will be moving to OSL as the technology foundation for their accreditation program.

The program plays a role in accrediting all domestic radiation oncology centers that participate in clinical studies, which includes over 2,000 domestic facilities. This does not mean that all sites will be buying our technology, but it does expose these sites to OSL as the monitoring solution of choice for purposes of quality assurance within certain radiation oncology procedures.

Another recent microStar order was received through a competitive bidding process in which OSL was selected over a competing technology for utilization in a quality assurance program for the application of radiation oncology.

The institution believes that routine quality assurance makes for good clinical practice and ultimately provides better treatment for the patient. They were looking for a solution that is simple to use and can be fully integrated into their clinical practice. They anticipate utilizing over 100 of our NanoDots a month to serve as a second opinion on the application of their treatment plan.

Applications of this nature provide a potential business model that incorporates a recurring revenue stream in addition to the initial equipment sale. And a final example is that several customers are utilizing our monitoring technology in the cardiac cath lab for purposes of monitoring patient safety.

Many cath lab procedures particularly related to the electrophysiology have long procedure times and expose the patients to high level of radiation which can result in burns or other postprocedure issues.

The institutions are monitoring exposure for purposes of patient communication and a desire to improve operating efficiency. You will note that most of these examples are geared towards helping the medical community optimize the beneficial use of radiation. It is difficult for us currently to extrapolate the examples because we don’t have enough data points to support any firm conclusions.

Although we placed 100 units, there are 6,000 hospitals in the United States and the medical device market is littered with products that never gain acceptance beyond research institutions and a few curious thought leaders.

However, based on these early examples, we know that we have the right products and solutions within our existing portfolio to pursue and develop this market and look forward to keeping you informed on our progress.

Another substantial piece of our competitive growth initiative is rooted in the global acceptance of our InLight products. Recent ventures into Australia, Brazil, China and Mexico, as well as product sales into Italy and Canada demonstrate our commitment to expand our international customer base while also affirming the superiority of our OSL technology.

We expect to significantly expand our revenues and representation in these markets over the next several years, as well as avail ourselves of similar opportunities in other markets around the world.

Our third priority is strategic expansion. While we believe our product offering presents significant growth opportunities both domestically and abroad, we are always evaluating opportunities in which to facilitate strategic expansion which is our third priority. We feel that our core technologies and competencies such as patient dose monitoring, chain of custody analysis and high volume testing can be leveraged across many peripheral markets. Based upon available opportunities, we will also evaluate whether we want to supplement organic growth with strategic acquisitions.

Despite the weakness and volatility in the broad overall economy, our product offerings are relatively inelastic and our costumer base is less exposed to the economic headwinds in many industries. That said, we’ve consciously managed our costs and have gone to great lengths to build a reliable cost structure designed to guide the business and ensure steady growth through a variety of market environments. While we've worked hard to secure our position as the leading provider of dosimetry services, we’ve become aware of some current global trends that we've identified as potential areas in which we could leverage our business offerings.

As the industry leader in medical and industrial monitoring, we continue to see favorable industry trends for our business, particularly the growing awareness of the risks of the global threat of radiation exposure. Recent regulatory standardization in developing countries relating to employee safety speaks to the need for our products and has helped bolster our international InLight sales.

As the leading provider of monitoring services, we’re poised to increase penetration of this growing demographic. In conclusion, we are pleased with the success we've achieved in the third quarter and believe that the market opportunities that exist currently will continue to present us with attractive prospects to grow and expand our business.

The results for this most recent quarter demonstrate the balanced approach we take in pursuit of new growth opportunities and we continue to manage resources to ensure progress against all three priorities.

Furthermore, we believe that the traditional commitment to our shareholders' best interest, the strength of our product offering, and our position as the market leader in the global dosimetry services space will continue to drive the growth and development of Landauer over the long term.

We are excited about these opportunities and will continue to execute on our strategic initiatives over the rest of 2008 and beyond. Ultimately, we believe we are well positioned to capitalize on our strategic initiatives and drive growth and profitability going forward.

With that, I would like to turn the call over to John Singer for our review of our financials and our outlook for the remainder of 2008.

John Singer

Thanks, Bill. Jumping right into the financials, revenues for the third quarter of fiscal 2008 were $21.9 million, a 6.4% increase compared to revenues of $20.6 million for the same quarter in fiscal 2007. Domestic revenue for the quarter increased $170,000 or 1.1%, driven primarily by InLight equipment sales. International revenue increased $1.1 million or 24.2% supported by growth in volume in most regions, favorable currency exchange rates, which contributed approximately $626,000 of the increase and the addition of a new 56.25% owned subsidiary in Mexico.

One quick note, I spent some time this quarter with our partners in Mexico and they are off to a good start. There are thought leaders in the area of radiation monitoring in Mexico and are driving the introduction of OSL in the market. In addition, they see a number of opportunities for introducing the microStar into the healthcare system in Mexico. We are delighted with our newest partners and their long term prospects.

The cost of sales for the third quarter of fiscal 2008 was $6.9 million, an increase of $333,000 or 5% compared with the cost of sales of $6.6 million for the same quarter in fiscal 2007. Gross margins were 68.4% of revenues for the third quarter of fiscal 2008 compared with the 68% reported for the same period in fiscal 2007.

The improvement is primarily a result of increased revenues without a corresponding increase to the fixed cost structure, as well as lower depreciation expense. Selling, general, and administrative expenses for the third quarter of fiscal 2008 were $6.5 million, an increase of $307,000 or 5% compared with the expense of $6.2 million for the third quarter of fiscal 2007.

Factors contributing to the increase in selling, general and administrative costs include $382,000 for incentive compensation programs and $286,000 for foreign operations primarily related to increased foreign exchange rates. These increases were partially offset by $393,000 in reduced expense spending for our project to reengineer business processes and to replace the company's information technology systems that support improved business relationship management in the order of cash cycle.

As part of this initiative begun in fiscal 2007, we completed an evaluation of the legacy investments in information systems hardware and software. $3.5 million of assets were determined to be either impaired or subject to accelerated depreciation. This resulted in a fiscal 2007 third quarter charge of $2.4 million or $1.4 million after-tax, of which $2.2 million was for impaired assets.

Resulting operating income for the quarter ended June 30, 2008 was $8.5 million, an increase of 55.4% compared with $5.5 million reported in the same quarter a year ago. Net other income, including equity and income of joint ventures for the quarter, was $16,000 lower than a year ago, reflecting lower net interest income and lower earnings from Nagase-Landauer. Equity earnings in Nagase-Landauer contributed $405,000 for the third quarter fiscal 2008 compared with $426,000 in 2007.

The effect of income tax rate for the third quarter of fiscal 2008 was 35.2% compared with the prior year at 35.8%. The rate is normally lower in the third quarter versus our average rate of 37% for the year due to the return to provision adjustment that gets booked as we file our income tax return during the quarter. Resulting net income for the quarter ended June 30, 2008 amounted to $5.8 million or $0.62 per diluted share compared with $3.9 million or $0.42 per diluted share for the same quarter in fiscal 2007. The impact of the asset impairment in accelerated depreciation charges decreased diluted earnings per share by $0.15 in the fiscal 2007 third quarter.

Moving to the results of operations for the nine months ended June 30, 2008, revenue for the first nine months of the fiscal year were $67.5 million, an 8.1% increase compared to revenues of $62.4 million for the same period in fiscal 2007. Domestic revenue growth was $1.7 million or 3.5%, primarily from increases in the InLight equipment sales. International revenue increased $3.4 million or 24.7%, supported by growth in volume in most regions led by InLight badges and equipment, favorable currency exchange rates which contributed $1.8 million, and the addition of the new 56.25% owned subsidiary in Mexico.

The domestic InLight equipment increase was driven primarily by a sale to the Canadian government agency responsible for occupational monitoring in Radiation Emergency Preparedness for the citizens of Canada. The company completed a $2 million contract during the quarter ended March 31, 2008, under which $1.9 million of product was delivered. Approximately $1.1 million of the product requires additional processing by Landauer to be fully utilized for its intended purpose, or can be returned for completed product by Health Canada. In accordance with company's accounting policy and procedures, revenue was not recognized on this portion of the shipment and continues to be recorded as deferred revenue at quarter end.

Cost of sales for the first nine months of fiscal 2008 were $21.6 million, an increase of $828,000 or 4%, compared with cost of sales of $20.8 million for the same period of fiscal 2007. Gross margins were 67.9% of revenue for the first nine months of fiscal 2008 compared with 66.6% reported for the same period in fiscal 2007.

Selling, general, and administrative expenses for the first nine months of fiscal 2008 were $19.3 million, an increase of $1.8 million or 10.6% compared with expense of $17.5 million for the same period of fiscal 2007. Operating income for the nine months ended June 30, 2008 was $26.1 million, an increase of $4.4 million or 20.2% compared with $21.7 million in the same period a year ago. The prior year operating income was impacted by the asset impairment accelerated depreciation charges discussed above.

Net other income included equity and income of joint venture for the first nine months. It was $217,000 higher than a year ago, primarily reflecting higher net interest income. Equity earnings in the Nagase-Landauer contributed $1.2 million for the nine months ended June 30, 2008, compared with $1.1 million in 2007. The effect of the income tax rate for the first nine months of fiscal 2008 was 36.6% compared with the prior year at 36.9%. Resulting net income for the nine months period ended June 30, 2008 amounted to $17.5 million or $1.89 per diluted share, compared with $14.7 million or $1.60 per diluted share for the same period in fiscal 2007.

We generated $11.1 million in cash during the nine months ended June 30, 2008, resulting in cash in hand of $32.1 million at June 30. Cash flows provided by operating activities for the first nine months of fiscal 2008 were $24.3 million, an increase of $5.2 million or 27.2% from the same period of fiscal 2007. The increase is due primarily to an increase in net income, dividends received from Nagase-Landauer Ltd, and contributions from the change in the components of working capital. The primary driver is the collection of the $2 million from the contract with Health Canada. It was sent out there at March 31.

Investing activities included acquisitions of property, plant, and equipment in these amounts of $3.1 million and $5.4 million for the nine months ended June 30, 2008 and 2007 respectively. In addition, Landauer invested $498,000 in the nine months ended June 30, 2008 for acquisition of 56.25% ownership in our new subsidiary in Mexico.

Capital expenditures for the remainder of fiscal 2008 are expected to be between $2 million and $3 million, principally for the continued development and implementation of supported software system and we will fund that from existing operating cash flow.

Reaffirming our outlook for the balance of fiscal 2008, our business plan for fiscal 2008 forecasted aggregate revenue growth for the year to be in the range of 4% to 5%, company planned net income increased in the range of 68% excluding the $2.9 million impact of the fiscal 2007 accelerated depreciation and impairment charge which is $1.7 million after tax. Based on the performance in the first nine months of the fiscal year, the company anticipates performance on the upper end of the planned range for revenue and net income.

Operator, will now open the call for questions.

Question-and-Answer Session

Operator

Thank you. (Operator instructions) Our first question is from the line of Steve O'Neil with Hilliard Lyons. Please go ahead.

Steve O'Neil – Hilliard Lyons

Good afternoon.

Bill Saxelby

Hey, Steve.

Steve O'Neil – Hilliard Lyons

Just a couple of housekeeping items, first, can you give us any idea what the revenue contribution was for Mexico, or was it very, very small?

Bill Saxelby

It was pretty small. For the quarter, it was about – or for the year to date, it's about $300,000.

Steve O'Neil – Hilliard Lyons

Were there some additional inventory stocking that may have raised the first quarter, when it was first quarter after establishment?

Bill Saxelby

No.

Steve O'Neil – Hilliard Lyons

Okay. And then is Australia still incremental or has it been more than the year since you established that?

Bill Saxelby

Believe it or not, Steve, it's been more than a year.

Steve O'Neil – Hilliard Lyons

Okay. Do you know why or can you explain why Nagase-Landauer earnings were down?

Bill Saxelby

Yes. They have had a couple of operating costs relative to – they had shipment badges that were exposed during shipping that we needed to replace the badges. And so, they had some operating costs during the year that we would consider to be one-time in nature which decreased their earnings.

Steve O'Neil – Hilliard Lyons

Any update on nuclear power plant contracts, any changes?

Bill Saxelby

No changes from previous quarters.

Steve O'Neil – Hilliard Lyons

Okay. Status of foreign operations using InLight, any remaining to be converted at this point?

Bill Saxelby

Mexico is at the very early stages of conversion. I think at this stage, they've got less than 10% conversion. Our goal for next year is get it fully converted. Australia is in a similar position and then China is fully converted, France is fully converted, and Brazil is the only one where they are ready to go but the regulatory infrastructure in Brazil isn't ready to – they just don’t know how to go through the evaluation of the technology given that it's new and different, and we are working with them to educate them.

Steve O'Neil – Hilliard Lyons

Any estimation on the future recognition of revenue from the Canadian contracts?

Bill Saxelby

We're working through that right now. In fact, as soon as the call is over, I'm jumping on a plane to go up there to talk to them about their needs and the timing around that.

Steve O'Neil – Hilliard Lyons

And do I understand you correctly, you are now using the microStar not only for diagnostic applications such as like a CT scan but also for therapeutic applications such as radiation treatment?

Bill Saxelby

Correct, correct. So, if you are familiar with the term Linet [ph] which is a radiation accelerator often used for post surgical treatment or very targeted treatment, we are using it in those settings as well, as well as a number of other settings.

Steve O'Neil – Hilliard Lyons

I'm sorry, could you explain it, what is the NanoDot again please?

Craig Yoder

Yes, Steve. It’s Craig Yoder. It’s a very small OSL detector, so it's very unobtrusive when you attach it to a patient. It gives you a reading of a very small area of the skin, and that's generally in the new therapeutic applications we are very concerned about, the doses in very, very small areas.

Steve O'Neil – Hilliard Lyons

Okay, thank you. And then one last thing and this – I know you all are probably being conservative but as far as your guidance and thinking about the full year and then the fourth quarter, I just want to make sure I've got some cost estimations correct, if I use the top end of your range which is 5% revenue growth, I come up with a possible fourth quarter decline of 4% to reach the top end of your projected range. First, any comment on that? Because usually the fourth quarter is somewhere close or maybe even above the third quarter.

Bill Saxelby

Decline versus this quarter, Steve?

Steve O'Neil – Hilliard Lyons

No, versus a year ago.

Bill Saxelby

No, I don't think your math is correct.

Steve O'Neil – Hilliard Lyons

I'll double check. I took 5% times the fiscal 2007 revenue and subtracted the nine months and got about $20.5 million. So, I will double check that to make sure.

John Singer

Yes, we are just going to reaffirm our guidance as provided.

Steve O'Neil – Hilliard Lyons

Okay. Well then, that's leading I guess to the earning side of it, because if I use that, I come up with a fourth quarter earnings figure of 56%, 57% -- $0.57, up a few percent, but last year the SG&A increased about 52% and I guess my question is, is there going to be a large amount of cost in the SG&A for some reason in this quarter that might grab that figure up that I wouldn't ordinarily be thinking about?

John Singer

The big increase in the SG&A last year in the fourth quarter, Steve, was for our systems initiative. And so, we will continue to work on that, we won't have, but we don't anticipate the same level of increase sequentially in the fourth quarter.

Steve O'Neil – Hilliard Lyons

Okay, what about year to year? Actually, let me back up, Jonathan. Your cost of product sold is about $6.9 million, almost $7 million in the third quarter, and I guess you would be estimating something a little higher than that in the fourth quarter?

Bill Saxelby

Steve, why don't we talk offline (inaudible)? My preference is just to reiterate our affirmation of the guidance.

Steve O'Neil – Hilliard Lyons

While we are on a public forum, I just wanted to get some stuff out there so we could discuss it, but that’s fine, we can talk offline.

Bill Saxelby

Yes.

Steve O'Neil – Hilliard Lyons

And that's all the questions I have. Thank you.

Bill Saxelby

Thanks, Steve.

Operator

Thank you. (Operator instructions) Our next question is from the line of Jason Rogers with the Great Lakes Review. Please go ahead.

Jason Rogers – Great Lakes Review

Good afternoon. Looking at the tax rates for the fourth quarter, do you expect that to sequentially increase from the third quarter?

Bill Saxelby

Yes, I think our effective tax rate guidance that we've given is between 37% and 37.3%. And so, yes, our tax rate tends to be a little bit lower in the third quarter because as I mentioned, we file our return during the quarter and we do our return to provision reconciliation. And then in the fourth quarter, it tends to be a little bit higher, because as we kind of true up a lot of the estimations that we've made based on final results throughout the year relative to both domestic and international operations.

Jason Rogers – Great Lakes Review

And would you use approximately the same rate for next year?

Bill Saxelby

Yes.

Jason Rogers – Great Lakes Review

Okay. And any yearly estimates for CapEx or D&A for fiscal ‘09?

John Singer

We'll be prepared to provide guidance. We're going through the operating plan right now, and kind of consistent with what our practice has been, we will provide guidance in conjunction with our fourth quarter call.

Jason Rogers – Great Lakes Review

Okay, thank you.

Operator

Thank you, our next question is from the line of Tom Lamb with Weybosset Research. Please go ahead.

Tom Lamb – Weybosset Research

Good afternoon, gentlemen.

Bill Saxelby

Hey, Tom.

Tom Lamb – Weybosset Research

I just have a question on domestic revenues. It looks like I think this quarter, they were up 1% I think I heard you say, and year to date, they're up 3.5%, I guess. Are we seeing a slowdown domestically or is this pretty typical, or were there some order delays or what might -- is this normal? It doesn't seem normal growth, but I'm just curious.

Bill Saxelby

Well it's been -- the domestic, if you look over the past four quarters with the exception of last quarter, the domestic revenue growth has been consistently between the 1% and then 2% ranged. So, at least over the past several quarters, it has been relatively consisting growth. Last quarter, we did have quite a bit of equipment sales that increased the growth rather significantly quarter over quarter but this is kind of inline with what we've been experiencing recently, Tom.

Tom Lamb – Weybosset Research

Okay. And internationally, your growth is -- you're doing a great job there. Do you see any – and it sure sounds like there are no clouds on the horizon, do you see any other horizon that aren’t evident in what you're telling us?

Bill Saxelby

No. Clouds on the horizon, there is always business challenges that you face. I think probably the largest exposure risk that we have relative to the international operations is currency.

Tom Lamb – Weybosset Research

Yes, sure enough.

Bill Saxelby

And so, other than that, there is constantly regulatory activities in the individual countries that we need to be prepared to respond to that could have an impact on the business. But overall, there is nothing that we see that would lead us to believe that other than the currency impact, we are getting a nice contribution from that right now.

Tom Lamb – Weybosset Research

Yes, okay, great. Well, good work. Keep it up.

Bill Saxelby

Thanks, Tom.

Tom Lamb – Weybosset Research

You’re welcome.

Operator

Thank you. (Operator instructions) Okay, gentlemen, we have no further questions. Please continue with any closing remarks.

John Singer

Folks, we'd like to just thank you for taking time to get on the call and we look forward to the fourth quarter call in three months.

Operator

Thank you ladies and gentleman, this concludes the Landauer Incorporated fiscal third quarter 2008 earnings conference. We thank you for your participation, and you may now disconnect.

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