Landauer, Inc. - Company Profile, Information, Business Description, History, Background Information on Landauer, Inc.

2 Science Road
Glenwood, Illinois 60425-1586

Company Perspectives:

Landauer's leadership is the result of superior technical competence, advance data management, and, most importantly, a results oriented customer commitment.

History of Landauer, Inc.

Since 1954, Laudauer, Inc. has provided radiation dosimetry services to hospitals, medical and dental offices, university and national laboratories, nuclear power plants, and other industries. The company has more than two hundred employees devoted to services that include the manufacture of various types of radiation detection monitors for measuring dosages of x-ray, gamma radiation, and other penetrating ion radiations by means of optically stimulated luminescent, film, and thermoluminescent badges worn by its clients' personnel; the distribution and collection of monitors to and from clients; and the analysis, reporting, and record keeping of exposure findings. Laundauer's subsidiary, HomeBuyers Preferred, Inc. provides a radon monitoring service and radon remediation.

Getting Started As a One-Man Laboratory: 1954-68

In 1954, Robert Landauer began R.S. Landauer, Jr. and Company to provide radiation monitoring, or dosimetry, services. Landauer's interest in dosimetry began as a child in the 1930s, when he had on occasion accompanied his father as the Landauer, Sr. made his rounds calibrating radiology equipment used in medical x-ray therapy. After serving in World War II, the younger Landauer worked part-time with his father while earning a degree at the University of Chicago. He then worked for two and a half years in the commercial radiation instrumentation field before starting his own dosimetry company out of his home in Park Forest, Illinois, in 1954. According to company literature, he began "with a few borrowed dollars and a prayer." Landauer incorporated R.S. Landauer, Jr. and Company in 1956.

At first, Landauer did most of the work himself, which included marking film, processing badges, and preparing reports for clients. Purdue University, General Electric, and Michael Reese Hospital were his early customers, lending credibility to his business, and Landauer's venture expanded steadily. In 1959, the company introduced the practice of cumulative total reporting to the marketplace. By 1965, the company processed more than a million dosimeters. It permanently archived the results of its monitoring.

In 1968, Landauer and Company merged with Tech/Ops, Inc. and became the R.S. Landauer Division of Tech/Ops. The combined company pioneered a number of innovations that made their services more user-oriented: an 8mm film system; a smaller, more convenient badge for clients' employees to wear to monitor radiation exposure; and an automated film reading system. Badges used film emulsion, which darkened with exposure, to record the wearer's exposure to radiation. In 1973, Tech/Ops expanded its offerings to provide Laudauer's Thermo Luminescent Dosimetry (TLD) service as a means of improving its finger badges. In 1978, it introduced neutron track etch technology, which it called Neutrak, and, in 1982, nitrous oxide dosimetry, called Nitrox. The company leased rather than sold its detection badges to customers, who returned the badges to Tech/Ops for processing. The company also took its first major step toward doing business internationally with the Nagase-Landauer Ltd. joint venture, an undertaking that provided dosimetry service in Japan in 1973.

Capitalizing on Home Radon Monitoring: 1987-90

In 1987, Landauer and Tech/Ops incorporated as Tech/Ops Landauer, Inc. to carry on the radiation business previously handled by Tech/Ops. This business included the activities of Terradex Corp., a pioneer in the field of radon gas detection and measurement that had been purchased by Tech/Ops in 1986. It also included Landauer-Nagase Ltd. and Tech/Ops Sevcon Inc., Tech/Ops' solid-state electronic speed controller business. The move to incorporate followed Tech/Ops decision to divest itself of its businesses, a decision it implemented in 1988 when it transferred its radiation monitoring business to Tech Ops/Landauer, Inc. in exchange for shares of common stock. After it began to operate independently in 1988, Tech/Ops Landauer purchased Terradex Corp. Tech/Ops Landauer began trading on the American Stock Exchange under the symbol TOV.

Tech/Ops Landauer received a boost in 1988 when the Environmental Protection Agency (EPA) and the Surgeon General issued a public health advisory concerning radon gas. The gas, a naturally occurring radioactive element found as a result of uranium decay in soil and rock formations, can infiltrate into basements of homes. It was presumed that exposure to radon gas could cause significant health risks.

The ensuing radon scare created business opportunities for Tech/Ops, the industry leader in radon detection. With more than 50 percent of the $12 to $15 billion market nationwide, its share price shot upward in anticipation of further growth. Thomas M. Fulton, Tech/Ops Landauer's president and CEO, speaking of the $20 million company's opportunity for expansion, was quoted in a 1988 article in Crain's Chicago Business as saying, "We're ready to ride it as far as it's gonna take us."

Detecting radon gas in homes was simple. Most detection services at the time sold inexpensive canisters containing charcoal to absorb the gas. These were placed in homes through one heating season--a time when most households were closed tight, cutting off natural escape routes for the gas--and, at the end of the season, the canisters were removed and sent off for processing to assess radon level of a particular house. Tech/Ops offered somewhat more sophisticated measuring devices in home testing kits, which it also had the capability of monitoring.

Tech/Ops Landauer's revenues for fiscal 1989 reflected growth directly attributable to its radon test kits: a 31 percent increase to $25.9 million overall, of which approximately 25 percent was brought in by its radon detection business. By 1990, however, public concern about household radon had abated and demand for radon detectors had slowed. The downturn in the first quarter of fiscal 1990 for the company was sudden and steep. By the end of the year, the company's sales had fallen five percent to $24.7 million.

Fortunately for Tech/Ops Landauer, the demand for dosimeters remained strong. The basic dosimetry business continued to post unit growth of 4 to 5 percent a year. In addition, while retail demand for radon testing kits fell, institutional demand remained strong. Tech/Ops Landauer had contracts to provide kits for the U.S. Department of Agriculture, the U.S. Army, and school districts in Wisconsin, Virginia, and Minnesota. In addition, other industries were facing the need for dosimeters, among them airports, whose baggage handlers were exposed to x-rays, and airlines, whose pilots were exposed to cosmic radiation at high altitudes. Between 1990 and 1995, the company grew at a steady 15 percent rate per year. In 1993, it renovated and expanded its facilities at a cost of $2.2 million.

New Dosimetry Technologies: 1990s and Beyond

In 1991, the company changed its name to Landauer, Inc. and formulated plans for expanding its services into Europe. In 1992, Landauer, Inc. took a major step toward overseas expansion when it opened an office in the United Kingdom. It also began collaborating with Pacific Northwest Laboratory to develop new dosimetry technology, which it called optically stimulated luminescence (OSL) Technology. This technology used materials that luminesced when stimulated with beams of light to determine levels of radiation exposure. Until that time, traditional dosimetry methods relied upon heat exposure and were less precise. In 1994, Landauer acquired the exclusive worldwide license for use of the new technology, which it introduced shortly thereafter. That year radon gas detector kits sales were down to less than $1 million from more than $6 million in 1989. Still, overall sales for fiscal 1994 at Landauer rose 8 percent to $31.7 million.

In 1995, Landauer became the first U.S. company whose products were certified by Canada's Atomic Energy Commission. It was also the leading company in its market niche in the United States, providing radiation monitoring for corporate clients such as the Fermi National Laboratory, the Mayo Clinic, and Columbia/HCA Healthcare Corp. It controlled nearly half of the domestic $75-million market for radiation monitoring and was the number two company in its market niche in Japan. In fiscal 1995, revenues were up 8 percent to $34 million.

In 1998, Brent A. Latta replaced Fulton upon the latter's retirement after 21 years as president and chief executive officer of Landauer. Latta had joined Landauer in 1987 and had been vice-president of marketing and executive vice-president. Also in 1998, Landauer acquired a 75 percent interest in the radiation dosimetry business of Servico de Assessoria e Rotecao Radiologica S/C Ltda. (SAPRA) of Brazil.

By mid-1999, about 40 percent of Landauer's customers in the United States had been converted to OSL, which it called Luxel; the rest were converted by the end of 1999. The company began to introduce film strips, which had to be replaced monthly, to crystals, which lasted a year or longer, toward the end of 1998. This change drove income down temporarily due to a $3 million write-off of film-based radiation measurement technology. However, 1998 revenues were still up 7 percent to $42.7 million.

With Landauer's cutting-edge technology, there was optimism that the company would experience growth of 8 to 12 percent yearly in the first years of the twenty-first century. There was also hope that its new technology would give Landauer the means to penetrate European and other markets in the years to come. (Despite operations in Japan and Brazil and an office in United Kingdom, only a small percentage of Landauer's sales came from overseas.) Landauer entered into a collaborative agreement with Matsushita Industrial Electric Company to develop a series of instruments and radiation detectors based on OSL technology in 2001. It also began offering service to customers in China that year. In 2002, there was further optimism when the company's common stock began trading on the New York Stock Exchange; Latta and Landauer's chairman of the board were there for the ringing of the opening bell on the day the company made the switch from the American Stock Exchange.

Principal Subsidiaries: HomeBuyers Preferred, Inc.; SAPRA-Landauer Ltd.; Beijing-Landauer, Ltd.; Nagase-Landauer, Ltd.

Principal Competitors: Abatix Corp.; AFA Technology; First Alert, Inc.; ICN Pharmaceuticals Inc.; Siemens Gammasonics; Teledyne Inc.


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