UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, DC 20549

                                  FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934

                For the fiscal year ended September 30, 2007

                        Commission File Number 1-9788

                               LANDAUER, INC.
           (Exact name of registrant as specified in its charter)


              DELAWARE                           06-1218089
   (State or other jurisdiction of            (I.R.S. Employer
   incorporation or organization)          Identification Number)


                  2 SCIENCE ROAD, GLENWOOD, ILLINOIS 60425
            (Address of principal executive offices and zip code)


     Registrant's telephone number, including area code: (708) 755-7000


         Securities registered pursuant to Section 12(b) of the Act:


          COMMON STOCK WITH
          PAR VALUE OF $.10                NEW YORK STOCK EXCHANGE
        (Title of each class)      (Name of exchange on which registered)


         Securities registered pursuant to Section 12(g) of the Act:
                                    None

      Indicate by check mark if the Registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.   Yes [  ]  No [ X ]

      Indicate by check mark if the Registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [   ]  No [ X ]

      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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.  [ X ]

      Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the
Exchange Act.

          Large accelerated filer [  ]      Accelerated filer [ X ]
                         Non-accelerated filer [  ]



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

      As of March 31, 2007 the aggregate market value of the voting and
nonvoting common equity (based upon the closing price on the New York Stock
Exchange) held by non-affiliates was approximately $459,000,000. The number
of shares of common stock ($0.10 par value) outstanding as of December 6,
2007 was 9,216,016.


                     DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement in connection with
the February 7, 2008 Annual Meeting of Stockholders (the "Proxy Statement")
are incorporated by reference into Part III of this Annual Report on
Form 10-K.






















































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                                    INDEX

Item                                                                Page
----                                                                ----

PART I
1.         Business
                General Description. . . . . . . . . . . . . . . . .   4
                Marketing and Sales. . . . . . . . . . . . . . . . .   5
                Seasonality. . . . . . . . . . . . . . . . . . . . .   7
                International Activities . . . . . . . . . . . . . .   7
                Patents. . . . . . . . . . . . . . . . . . . . . . .   7
                Raw Materials. . . . . . . . . . . . . . . . . . . .   7
                Competition. . . . . . . . . . . . . . . . . . . . .   7
                Research and Development . . . . . . . . . . . . . .   8
                Environmental and Other Governmental Regulations . .   8
                Employees and Labor Relations. . . . . . . . . . . .   9
                Available Information. . . . . . . . . . . . . . . .   9
1A.        Risk Factors. . . . . . . . . . . . . . . . . . . . . . .   9
1B.        Unresolved Staff Comments . . . . . . . . . . . . . . . .  12
2.         Properties. . . . . . . . . . . . . . . . . . . . . . . .  12
3.         Legal Proceedings . . . . . . . . . . . . . . . . . . . .  12
4.         Submission of Matters to a Vote of Security Holders . . .  12

PART II
5.         Market for Registrant's Common Equity,
             Related Stockholder Matters and Issuer Purchases
             of Equity Securities. . . . . . . . . . . . . . . . . .  13
6.         Selected Financial Data . . . . . . . . . . . . . . . . .  14
7.         Management's Discussion and Analysis of
             Financial Condition and Results of Operations . . . . .  15
7A.        Quantitative and Qualitative Disclosures
             About Market Risk . . . . . . . . . . . . . . . . . . .  24
8.         Consolidated Financial Statements and
           Supplementary Data
                Consolidated Balance Sheets. . . . . . . . . . . . .  25
                Consolidated Statements of Income. . . . . . . . . .  27
                Consolidated Statements of Stockholders' Equity
                  and Comprehensive Income . . . . . . . . . . . . .  28
                Consolidated Statements of Cash Flows. . . . . . . .  29
                Notes to Consolidated Financial Statements . . . . .  31
                Report of Independent Registered
                  Public Accounting Firm . . . . . . . . . . . . . .  47
9.         Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure. . . . . . . . .  49
9A.        Controls and Procedures . . . . . . . . . . . . . . . . .  49
9B.        Other Information . . . . . . . . . . . . . . . . . . . .  49

PART III
10.        Directors, Executive Officers and Corporate Governance. .  50
11.        Executive Compensation. . . . . . . . . . . . . . . . . .  51
12.        Security Ownership of Certain Beneficial Owners
             and Management and Related Stockholder Matters. . . . .  51
13.        Certain Relationships and Related Transactions,
             and Director Independence . . . . . . . . . . . . . . .  51
14.        Principal Accounting Fees and Services. . . . . . . . . .  51

PART IV
15.        Exhibits, Financial Statement Schedules
                Financial Statements . . . . . . . . . . . . . . . .  51
                List of Exhibits . . . . . . . . . . . . . . . . . .  51
                Signatures . . . . . . . . . . . . . . . . . . . . .  55
                Quarterly Financial Data (Unaudited) . . . . . . . .  56







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                                   PART I

ITEM 1.  BUSINESS

GENERAL DESCRIPTION

      Landauer is a leading provider of analytical services to determine
occupational and environmental radiation exposure. For over 50 years, the
Company has provided complete radiation dosimetry services to hospitals,
medical and dental offices, universities, national laboratories, nuclear
facilities and other industries in which radiation poses a potential threat
to employees. Landauer's services include the manufacture of various types
of radiation detection monitors, the distribution and collection of the
monitors to and from clients, and the analysis and reporting of exposure
findings. These services are provided to approximately 1.5 million
individuals in the U.S., Japan, France, the United Kingdom, Brazil, Canada,
China, Australia and other countries. In addition to providing analytical
services, the Company may lease or sell dosimetry detectors and reading
equipment to large customers that want to manage their own dosimetry
programs, or into smaller international markets in which it is not
economical to establish a direct service.

      As used herein, the "Company" or "Landauer" refers to Landauer, Inc.
and its subsidiaries. The Company's shares are listed on the New York Stock
Exchange under the symbol LDR. As of September 30, 2007, there were
9,210,861 shares outstanding.

      Substantially all of the Company's revenues are realized from
radiation monitoring services and other services incidental to radiation
dose measurement. The Company enters into agreements with customers to
provide them with radiation monitoring services, generally for a twelve-
month period, and such agreements have a high degree of renewal.
Relationships with customers are generally stable and recurring, and the
Company provides customers with on-going services. As part of its services,
the Company provides radiation detection badges, which are produced and
owned by the Company, to its customers. The badges are worn for a period
selected by the customers ("wear period"), which is usually one, two, or
three months in duration. At the end of the wear period, the badges are
returned to the Company for analysis. The Company analyzes the badges that
have been worn and provides its customers with a report indicating their
radiation exposures. The Company recycles certain badge components for
reuse, while also producing replacement badges on a continual basis.

      The Company offers its service for measuring the dosages of x-ray,
gamma radiation and other penetrating ionizing radiations to which the
wearer has been exposed, primarily through badges, which contain optically
stimulated luminescent ("OSL") material, which are worn by client
personnel. This technology is marketed under the trade name
Luxel+<registered trademark> and InLight<registered trademark>.

      Landauer believes that its business is largely dependent upon the
Company's technical competence, the quality, reliability and price of its
services and products, and its prompt and responsive performance.

      While most of the Company's revenues are domestic, these services are
also marketed by Landauer in Canada and by its subsidiaries in other parts
of the world. The Company owns a 75% interest in SAPRA-Landauer, Ltda.,
which provides radiation dosimetry services in Brazil and owns the
radiation dosimetry service business formerly conducted by REM in Sao
Paulo, Brazil. The Company has a 70% equity interest in a joint venture
with China National Nuclear Corporation known as Beijing-Landauer, Ltd.,
which provides radiation monitoring services in China. On July 1, 2007, the
Company acquired a 51% interest in Landauer Australasia Pty Ltd., which
provides radiation monitoring services in Australia and Asia. Landauer's
radiation monitoring activities also include operations in Japan through
Nagase-Landauer, Ltd., a 50%-owned joint venture.




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<PAGE>


      On April 2, 2002, the Company completed an agreement to merge its
European operations with the radiation monitoring business operated by
Laboratoire Central des Industries Electriques ("LCIE"), a wholly-owned
subsidiary of Bureau Veritas ("BV"), a professional services company
involved in quality, health and safety, and environmental management. Under
the agreement, Landauer exchanged its United Kingdom radiation monitoring
business and certain technologies for a 51% controlling interest in the new
subsidiary named Landauer-Europe, Ltd., formerly LCIE-Landauer, Ltd. LCIE
contributed its radiation monitoring business, all of which is located in
France. Landauer-Europe has its headquarters and laboratory in Fontenay-
aux-Roses, a Paris suburb. Landauer-Europe serves France-based customers
from this location and serves the United Kingdom customers from Oxford,
England. As part of the formation of the new entity, Landauer-Europe
purchased the Philips France radiation monitoring business. In April 2004,
Landauer consummated an agreement with BV to acquire the remaining 49%
minority interest in Landauer-Europe owned by BV's subsidiary, LCIE, for
$10.4 million in cash.

      Landauer operates a crystal manufacturing facility in Stillwater,
Oklahoma that it acquired in August 1998. Crystal material is a component
in the Company's OSL technology.

      Landauer's InLight dosimetry system, introduced in 2003, provides
small and mid-sized in-house and commercial laboratories with the ability
to provide in-house radiation monitoring services using OSL technology.
InLight services may involve a customer acquiring or leasing dosimetry
devices as well as analytical reading equipment from the Company. The
system is based on the Company's proprietary technology and instruments,
and dosimetry devices developed by Matsushita Industrial Equipment Company.
The InLight system allows customers the flexibility to tailor their precise
dosimetry needs.

      Landauer's operations include services for the measurement and
monitoring of radon gas (referred to as "sales of radon kits"), which
represent less than 3% of the Company's total revenues. Its wholly-owned
subsidiary, HomeBuyer's Preferred, Inc., offers a service, targeted to
corporate employee relocation programs, which provides radon monitoring
and, when necessary, remediation to purchasers of personal residences.
Testing requires the customer to deploy a radon detector and return the
detector to the Company's laboratories for dose determination and
reporting. The Company assists with remediation services on properties
where radon measurements exceed a specified threshold.

      Other radiation measurement-related services (ancillary services)
augment the basic radiation measurement services that the Company offers,
providing administrative and informational tools to customers for the
management of their radiation safety programs.

MARKETING AND SALES

      Landauer's dosimetry services are marketed in the U.S. and Canada
primarily by full-time Company personnel located in five sales regions. The
direct sales force is supplemented by a telesales organization targeted at
smaller accounts and remote territories. The Company's non-domestic
services are marketed through its wholly owned subsidiary operating in the
United Kingdom and France, as well as ventures in Japan, Brazil, Australia
and China. Other firms and individuals market the Company's services on a
commission basis, generally to small customers.

      Worldwide, the Company and its affiliates serve approximately 69,000
customers representing approximately 1.5 million individuals. The customer
base is diverse and fragmented with no single customer representing greater
than 2% of revenue. Typically, a client will contract on a subscription
basis for one year of service in advance, representing monthly, bimonthly






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<PAGE>


or quarterly badges, readings and reports. Customer relationships in the
radiation monitoring market are generally stable and recurring. Deferred
contract revenue, as shown on the consolidated balance sheets, represents
advance payment for services to be rendered for those customers invoiced in
advance. At September 30, 2007 and 2006, deferred contract revenue was
$13,832,000 and $13,761,000, respectively.

      The Company's domestic radiation monitoring services are largely
based on the Luxel+ dosimeter system in which all analyses are performed at
the Company's laboratories in Glenwood, Illinois. Luxel+ employs the
Company's proprietary OSL technology. Recently, the Company introduced the
InLight dosimetry system that enables certain customers to make their own
measurements using OSL technology. InLight is marketed to the smaller
radiation measurement laboratories found at nuclear power plants, military
installations, national research laboratories, and commercial services.
Landauer has positioned the InLight system as both a product line and a
radiation monitoring service in ways that others can benefit directly from
the technical and operational advantage of OSL technology. The resulting
business models include:

..     The provision of InLight systems to subsidiary and partner
      laboratories.

..     The sale of radiation detection monitors, analytical instruments and
      custom analytical software to independent laboratories throughout the
      world to replace their existing technologies with an OSL-based
      radiation dosimetry system.

..     The lease or rental of InLight systems by in-house laboratories such
      as nuclear power plants, Department of Energy facilities and others
      for their temporary or permanent use in radiation safety programs.

..     The sale of the MicroStar<registered trademark> system, a
      miniaturized OSL reader based on InLight technology, to hospitals,
      laboratories and others that require specialized radiation
      measurements for a variety of purposes; and

..     The provision of the "legal dose of record" to Homeland Security and
      First Responder personnel by combining InLight passive dosimetry
      technology with the active dosimeters offered by industry leaders.

      For most radiation dosimetry laboratories operating around the world,
the laboratory must maintain accreditation with a regulatory body to
provide the user with a formal record of dose - a process that is expensive
and time consuming. By combining the implementation of an InLight system in
the laboratory and "dose of record" determination by Landauer or a Company
affiliated and accredited facility, the user can provide its workers with
the periodic radiation safety management infrastructure without the need to
maintain its own accreditation. Additionally, dosimetry management software
options provide the ability to measure incremental radiation dose of
workers at regular intervals over long periods of time.

      For those customers that require the establishment of an on-site
laboratory but do not have the need or ability to maintain inventories of
ready-to-wear devices for their employees, the InLight system allows those
devices to be provided by Landauer at predetermined intervals. This option
reduces investment in the dosimetry system and adds the convenience of on-
time delivery of devices. InLight also forms the basis for Landauer's
European operations and other future operations that might occur where
local requirements preclude using a U.S. or other foreign-based laboratory.

      Radon gas detection kits are marketed directly by the Company
primarily to institutional customers and government agencies. The
HomeBuyer's Preferred<registered trademark> Radon Protection Plan service
agreement is marketed directly by Landauer to companies and to their
corporate relocation service providers for the benefit of purchasers of
residences incident to transfers of personnel.



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<PAGE>


SEASONALITY

      The services provided by the Company to its customers are ongoing and
are of a subscription nature. As such, revenues are recognized in the
periods in which such services are rendered, irrespective of whether
invoiced in advance or in arrears. Given the subscription nature of
Landauer's services, quarterly revenues are fairly consistent. During the
second quarter of each fiscal year, the Company provides additional
services for reporting annual radiation dose summaries that generate
increased revenues. The introduction of the Company's InLight product line
may result in some variability in quarter-to-quarter revenue comparisons
given the nature of purchase cycles associated with sales of radiation dose
measurement instruments and detectors.

INTERNATIONAL ACTIVITIES

      Information regarding the Company's activities by geographic region
is contained under the footnote "Geographic Information" on page 46 of this
Annual Report on Form 10-K.

PATENTS

      The Company holds exclusive worldwide licenses to patent rights for
certain technologies that measure and image radiation exposure to
crystalline materials when stimulated with light. These licenses were
acquired by the Company from Battelle Memorial Institute and Oklahoma State
University as part of collaborative efforts to develop and commercialize a
new generation of radiation dosimetry technology. These licenses expire in
years 2011 through 2015.

      As of September 30, 2007, the Company is using OSL technology to
provide dosimetry services to essentially its entire domestic and many of
its international customers. These licenses and systems represent an
important proprietary component of the OSL-based radiation monitoring
services and products sold under the trade names Luxel, Luxel+ and InLight.
Additionally, the Company holds certain patents that relate to various
dosimeter designs, radiation measurement materials and methods, and optical
data storage techniques using aluminum oxide generated from the Company's
research and development activities. These patents expire in 2017 through
2024.

      Rights to inventions of employees working for Landauer are assigned
to the Company.

RAW MATERIALS

      The Company has multiple sources for many of its raw materials and
supplies, and believes that the number of sources and availability of items
are adequate. Landauer internally produces certain of its requirements,
such as OSL detector materials and plastic badge holders. All crystal
materials used in the Company's OSL technology are produced at the
Company's crystal manufacturing facility in Stillwater, Oklahoma. The
InLight dosimetry system and its components are manufactured by Matsushita
Industrial Equipment Company under an exclusive agreement. If the Company
were to lose availability of its Stillwater facility or materials from
Matsushita due to a fire, natural disaster or other disruptions, such loss
could have a material adverse effect on the Company and its operations.

COMPETITION

      In the United States, Landauer competes against a number of dosimetry
service providers. One of these providers, Global Dosimetry Solutions, a
division of Mirion Technologies, is a significant competitor with
substantial resources. Other competitors in the United States that provide
dosimetry services tend to be smaller companies, some of which operate on a
regional basis. Outside of the United States, radiation monitoring
activities are conducted by a combination of private entities and
government agencies.


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      In the United States, most government agencies, such as the
Department of Energy and Department of Defense, have their own in-house
radiation monitoring services, as do many large private nuclear power
plants.

      The Company competes on the basis of advanced technologies, competent
execution of these technologies, the quality, reliability and price of its
services, and its prompt and responsive performance. The Company's InLight
dosimetry system, while competitive with a number of systems offered by
other companies, is believed to provide the only OSL-based radiation
monitoring system.

      Radon gas detection services represent a market where Landauer has
many large and small competitors, many of whom use short-term charcoal
detectors rather than the Company's long-term alpha-track detectors. The
HomeBuyer's Preferred Radon Protection Plan represents a product sold
exclusively to the corporate relocation market through firms providing
relocation services and directly to corporate customers.

RESEARCH AND DEVELOPMENT

      The Company's technological expertise has been an important factor in
its growth. The Company regularly pursues product improvements to maintain
its technical position. The development of OSL dosimetry, announced in
1994, was funded by the Company in its collaborative effort with Battelle
Memorial Institute and Oklahoma State University. The Company
commercialized this technology beginning in 1998 and has converted most of
its customers to the technology. Presently, research efforts seek to expand
the use of OSL, particularly as it applies to radiation measurements in
therapeutic and diagnostic radiology and nuclear medicine as well as to
environmental radiation dosimetry, and investigate the usage of OSL in
optical data storage.

      The Company also participates regularly in several technical
professional societies, both domestic and international, that are active in
the fields of health physics and radiation detection and monitoring. In
fiscal 2007, 2006 and 2005, the Company spent $1,831,000, $1,769,000, and
$1,704,000, respectively, on research and development activities.

ENVIRONMENTAL AND OTHER GOVERNMENTAL REGULATIONS

      The Company believes that it complies with federal, state and local
provisions that have been enacted or adopted regulating the discharge of
materials into the environment or otherwise protecting the environment.
This compliance has not had, nor is it expected to have, a material effect
on the capital expenditures, financial condition, liquidity, results of
operations, or competitive position of Landauer.

      Many of the Company's technology based services must comply with
various national and international standards that are used by regulatory
and accreditation bodies for approving such services and products. These
accreditation bodies include, for example, the National Voluntary
Laboratory Accreditation Program in the U.S. and governmental agencies,
generally, in international markets. Changes in these standards and
accreditation requirements can result in the Company having to incur costs
to adapt its offerings and procedures. Such adaptations may introduce
quality assurance issues during transition that need to be addressed to
ensure timely and accurate analyses and data reporting. Additionally,
changes affecting radiation protection practices, including new
understandings of the hazards of radiation exposure and amended
regulations, may impact how the Company's services are used by its
customers and may, in some circumstances, cause the Company to alter its
products and delivery of its services.







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<PAGE>


EMPLOYEES AND LABOR RELATIONS

      As of September 30, 2007, the Company employed approximately 400
full-time employees worldwide. The Company believes that it generally
maintains good relations with employees at all locations.

AVAILABLE INFORMATION

      As a reporting company, Landauer is subject to the informational
requirements of the Securities Exchange Act of 1934 (the "Exchange Act")
and, accordingly, files its annual report on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). The
public may read and copy any materials filed with the SEC at the SEC's
Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Please
call the SEC at (800) SEC-0330 for further information on the Public
Reference Room. As an electronic filer, Landauer's public filings are
maintained on the SEC's Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC. The address of that website is
http://www.sec.gov. In addition, Landauer's annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of
the Exchange Act may be accessed free of charge through Landauer's website
as soon as reasonably practicable after Landauer has electronically filed
such material with, or furnished it to, the SEC. The address of Landauer's
website is http://www.landauerinc.com.

      A copy of the Company's Annual Report on Form 10-K is available free
of charge upon the written request of any shareholder.

      Pursuant to Section 303A.12(a), Landauer, Inc. has complied with the
New York Stock Exchange requirement to provide an annual CEO certification
no later than 30 days following the Company's annual meeting.


ITEM 1A.  RISK FACTORS

      In addition to factors discussed elsewhere in this Annual Report on
Form 10-K, set forth below are certain risks and uncertainties that could
adversely affect our results of operations or financial condition and cause
actual results or events to differ materially from those expressed in any
forward-looking statements made by or on behalf of the Company.

WE RELY ON A SINGLE FACILITY FOR THE PRIMARY MANUFACTURING AND PROCESSING
OF OUR PRODUCTS AND SERVICES.

      Landauer conducts its primary manufacturing and laboratory processing
operations and performs significant functions for some of its international
operations from a single facility in Glenwood, Illinois. If the Company
were to lose availability of its primary facility due to fire, natural
disaster or other disruptions, the Company's operations could be
significantly impaired. Although the Company maintains business
interruption insurance, there can be no assurance that the proceeds of such
insurance would be sufficient to offset any loss the Company might incur or
that the Company would be able to retain its customer base if operations
were so disrupted.













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WE RELY ON A SINGLE FACILITY FOR THE MANUFACTURING OF CRYSTAL MATERIAL, A
KEY COMPONENT IN OUR OSL TECHNOLOGY, AND A SINGLE VENDOR FOR THE
MANUFACTURING OF INLIGHT PRODUCTS.

      Crystal material is a key component in Landauer's OSL technology. The
Company operates a single crystal manufacturing facility in Stillwater,
Oklahoma that currently supplies all OSL crystal radiation measurement
material used by the Company. Although multiple sources for raw crystal
material exist, there can be no assurance that the Company could secure
another source to produce finished crystal materials to Landauer's
specification in the event of a disruption at the Stillwater facility. The
InLight dosimetry system and its components are manufactured by Matsushita
Industrial Equipment Company under an exclusive agreement. If the Company
were to lose availability of its Stillwater facility or materials from
Matsushita due to a fire, natural disaster or other disruptions, such loss
could have a material adverse effect on the Company and its operations.

IF WE ARE NOT SUCCESSFUL IN THE DEVELOPMENT OR INTRODUCTION OF NEW
TECHNOLOGIES, OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE
MATERIALLY AND ADVERSELY AFFECTED.

      Landauer's technological expertise has been an important factor in
its growth. The Company regularly pursues product improvements to maintain
its technical position. The development and introduction of new
technologies, the adaptability of OSL to new platforms and new formats, the
usefulness of older technologies as well as the introduction of new
technologies by the competition present various risks to the Company's
business. The failure or lack of market acceptance of a new technology or
the inability to respond to market requirements for new technology could
adversely affect the Company's operations or reputation with customers. The
cancellation of technology projects or the cessation of use of an existing
technology can result in write-downs and charges to the Company's earnings.
In the normal course of its business, Landauer must record and process
significant amounts of data quickly and accurately and relies on various
computer and telecommunications equipment and software systems. Any failure
of such equipment or systems could adversely affect the Company's
operations.

AS A PORTION OF OUR BUSINESS IS CONDUCTED OUTSIDE OF THE UNITED STATES,
ADVERSE INTERNATIONAL DEVELOPMENTS COULD NEGATIVELY IMPACT OUR BUSINESS AND
RESULTS OF OPERATIONS.

      Landauer conducts business in numerous international markets such as
Japan, France, the United Kingdom, Brazil, Canada, Australia and China.
Foreign operations are subject to a number of special risks, including,
among others, currency exchange rate fluctuations; disruption in relations;
political and economic unrest; trade barriers; exchange controls;
expropriation; and changes in laws and policies, including those governing
foreign owned operations.

OUR BUSINESS IS SUBJECT TO EXTENSIVE DOMESTIC AND FOREIGN GOVERNMENT
REGULATIONS, WHICH COULD INCREASE OUR COSTS, CAUSE US TO INCUR LIABILITIES
AND ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.

      Regulation, present and future, is a constant factor affecting the
Company's business. The radiation monitoring industry is subject to
federal, state, and international governmental regulation. Unknown matters,
new laws and regulations, or stricter interpretations of existing laws or
regulations may materially affect Landauer's business or operations in the
future and/or could increase the cost of compliance.










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<PAGE>


      Many of the Company's technology-based services must comply with
various domestic and international standards that are used by regulatory
and accreditation bodies for approving such services and products. The
failure of the Company to obtain accreditation for its products and
services may adversely affect the Company's business and market perception
of the effectiveness of its products and services. Changes in these
standards and accreditation requirements may also result in the Company
having to incur substantial costs to adapt its offerings and procedures.
Such adaptations may introduce quality assurance issues during transition
that need to be addressed to ensure timely and accurate analyses and data
reporting. Additionally, changes affecting radiation protection practices,
including new understandings of the hazards of radiation exposure and
amended regulations, may impact how the Company's services are used by its
customers and may, in some circumstances, cause the Company to alter its
products and delivery of its services.

FLUCTUATIONS IN CURRENCY EXCHANGE RATES COULD ADVERSELY AFFECT OUR RESULTS.

      The Company is exposed to market risk, including changes in foreign
currency exchange rates. The financial statements of the Company's non-U.S.
subsidiaries are remeasured into U.S. dollars using the U.S. dollar as the
functional currency. To date, the market risk associated with foreign
currency exchange rates has not been material in relation to the Company's
financial position, results of operations, or cash flows. These risks could
increase, however, as the Company expands in international markets. The
Company does not have any significant trade accounts receivable, trade
accounts payable, or commitments in a currency other than that of the
reporting unit's functional currency. As such, the Company does not
currently use derivative financial instruments to manage the exposure in
its non-U.S. operations.

SEVERAL OF OUR CURRENT AND POTENTIAL COMPETITORS HAVE SIGNIFICANTLY GREATER
RESOURCES, AND INCREASED COMPETITION COULD IMPAIR SALES OF OUR PRODUCTS.

      The Company competes on the basis of advanced technologies, competent
execution of these technologies, the quality, reliability and price of its
services and its prompt and responsive performance. In much of the world,
radiation monitoring activities are conducted by a combination of private
entities and governmental agencies. The Company's primary competitor in the
United States is large, has substantial resources, and has been
particularly active in recent years in soliciting business from the
Company's customers. The Company also faces competitive pressures from a
number of smaller competitors.

UNFORESEEN PROBLEMS WITH THE IMPLEMENTATION AND MAINTENANCE OF OUR
INFORMATION SYSTEMS COULD INTERFERE WITH OUR OPERATIONS.

      As part of the Company's initiative to re-engineer business processes
and replace components of its information technology systems, the Company
is implementing new enterprise resource planning software and other
applications to manage certain of its business operations. As the new
applications are implemented and functionality added, unforeseen problems
could arise. Such problems could adversely impact the Company's operations,
including the ability to perform the following in a timely manner: customer
quotes, customer orders, product shipment, customer services and support,
order billing and tracking, contractual obligations fulfillment and other
related operations. If the new systems fail to provide simplified processes
to serve customers and increase the speed with which the Company develops
and introduces new products, the Company's results of operations and cash
flows could be adversely affected.










                                     11


<PAGE>


OUR FAILURE TO ATTRACT, MOTIVATE AND RETAIN QUALIFIED AND KEY PERSONNEL TO
SUPPORT OUR BUSINESS MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS
PLANS, PROSPECTS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

      The Company's success depends, in large part, upon the talent and
efforts of key individuals including highly skilled scientists and
engineers, as well as experienced senior management, sales, marketing and
finance personnel. Competition for these individuals is intense and there
can be no assurance that the Company will be successful in attracting,
motivating, or retaining key personnel. The loss of the services of one or
more of these senior executives or key employees, or the inability to
continue to attract these personnel may have a material effect on its
business plans, prospects, results of operations and financial condition.
The Company's continued ability to compete effectively depends on its
ability to attract new skilled employees and to retain and motivate its
existing employees.


ITEM 1B.  UNRESOLVED STAFF COMMENTS

      At September 30, 2007, the Company is not aware of any unresolved
written comments from the Commission staff regarding its periodic or
current reports under the Act.


ITEM 2.  PROPERTIES

      Landauer owns three adjacent buildings totaling approximately 65,000
square feet in Glenwood, Illinois, about 30 miles south of Chicago, and
leases a local warehouse. The properties house the Company's administrative
offices, information technology resources, laboratory, assembly and reading
operations. The properties and equipment of the Company are in good
condition and, in the opinion of management, are suitable and adequate for
the Company's operations. The Company leases a crystal growth facility in
Stillwater, Oklahoma and maintains laboratories in Japan, through its joint
venture with Nagase-Landauer, Ltd., Brazil, China, Australia and France, as
well as a sales office in Oxford, England.


ITEM 3.  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 September 30, 2007, if adversely determined, would have a material
effect on its business, financial position, results of operations, or cash
flows.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      There were no matters submitted to a vote of security holders during
the three months ended September 30, 2007.

















                                     12


<PAGE>


                                   PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
         MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

      The Company's common stock is traded on the New York Stock Exchange
under the trading symbol LDR. Prior to January 2002, the Company's common
stock was traded on the American Stock Exchange.  A summary of market
prices of the Company's common stock is set forth in the table on page 56
of this Annual Report on Form 10-K. As of December 6, 2007, there were
approximately 356 shareholders of record. There were no sales of
unregistered securities of the Company and no repurchases of equity
securities of the Company during fiscal 2007 by the Company.

      On November 30, 2007, the Company declared an increase of the regular
quarterly cash dividend by 5% to $0.50 per share for the first quarter of
fiscal 2008. This increase represents an annual rate of $2.00 per share
compared with $1.90 paid in fiscal 2007. A summary of cash dividends paid
for the last two years is set forth in the table on page 56 of this Annual
Report on Form 10-K.

PERFORMANCE GRAPH

      The following graph reflects a comparison of the cumulative total
return (change in stock price plus reinvested dividends) assuming $100
invested in Landauer's common stock, in the New York Stock Exchange
("NYSE") Market Index and in an industry index represented by a group of
testing laboratories during the period from September 30, 2002 through
September 30, 2007. (On January 15, 2002, the listing of Landauer's common
stock was changed to the New York Stock Exchange from the American Stock
Exchange.)  The comparisons in the following table are historical and are
not intended to forecast or be indicative of possible future performance of
Landauer's common stock.


[ LINE CHART INDICATING THE FOLLOWING ]


                               Value of Investment at September 30,
                              ---------------------------------------
                              2002   2003   2004   2005   2006   2007
                              ----   ----   ----   ----   ----   ----
Landauer, Inc. . . . . . .    $100   $111   $153   $165   $178   $185
NYSE Market Index. . . . .     100    122    142    165    185    219
Testing Laboratories . . .     100    123    119    124    144    159

























                                     13


<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

                      FIVE YEAR SELECTED FINANCIAL DATA
                       LANDAUER, INC. AND SUBSIDIARIES
                      FOR THE YEARS ENDED SEPTEMBER 30,


(Dollars in Thousands,
Except per Share)        2003(1)   2004(2)   2005(3)   2006(4)   2007(5)
----------------------  --------  --------  --------  --------  --------
Operating results
  Net revenues . . . .  $ 64,818  $ 69,809  $ 75,221  $ 79,043  $ 83,716
  Operating income . .    23,857    27,720    26,551    29,505    28,603
  Net income . . . . .    15,019    17,770    17,208    19,046    19,316
  Diluted net income
    per share. . . . .  $   1.69  $   1.98  $   1.90  $   2.09  $   2.10
Cash dividends
  per share. . . . . .  $   1.50  $   1.60  $   1.70  $   1.80  $   1.90
Total assets . . . . .  $ 64,238  $ 77,518  $ 85,859  $ 90,674  $ 97,340

(1)   Fiscal 2003 includes an asset impairment charge of $2,750,000 related
      to the Company's Aurion product line, offset by $500,000 lower
      incentive compensation expense. The resulting decline in operating
      income of $2,250,000 reduced net income by $1,356,000 (after income
      tax benefit of $894,000) or $0.15 per diluted share.

(2)   The Company acquired the remaining 49% minority interest in
      Landauer-Europe in fiscal 2004.

(3)   Fiscal 2005 includes a management reorganization charge of
      $2,300,000, reducing net income by $1,386,000 (after income tax
      benefit of $914,000) or $0.15 per diluted share.

(4)   Fiscal 2006 includes reorganization charges and management transition
      charges of $1,650,000, reducing net income by $994,000 (after income
      tax benefit of $656,000) or $0.11 per diluted share.

(5)   Fiscal 2007 includes accelerated depreciation and impairment charges
      of $2,875,000, reducing net income by $1,725,000 (after income tax
      benefit of $1,150,000) or $0.19 per diluted share.






























                                     14


<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

OVERVIEW

      Landauer is a leading provider of analytical services to determine
occupational and environmental radiation exposure. For over 50 years, the
Company has provided complete radiation dosimetry services to hospitals,
medical and dental offices, universities, national laboratories, nuclear
facilities and other industries in which radiation poses a potential threat
to employees. Landauer's services include the manufacture of various types
of radiation detection monitors, the distribution and collection of the
monitors to and from clients, and the analysis and reporting of exposure
findings. These services are provided to approximately 69,000 customers
representing approximately 1.5 million individuals in the U.S., Japan,
France, the United Kingdom, Brazil, Canada, China, Australia and other
countries. In addition to providing analytical services, the Company may
lease or sell dosimetry detectors and reading equipment to large customers
that want to manage their own dosimetry programs, or into smaller
international markets in which it is not economical to establish a direct
service.

      Landauer operates a mature business, and growth in numbers of
customers is modest. In recent years, the Company's strategy has been to
expand into new international markets, primarily by partnering with
existing dosimetry service providers with a prominent local presence. In
addition, the Company has been developing new platforms and formats for its
OSL technology, such as InLight, to gain access to markets where the
Company previously did not have a significant presence, such as smaller in-
house and commercial laboratories. Revenue growth in recent years has
occurred as a result of increased prices for certain services, entry into
new markets through joint ventures and acquisitions, modest unit growth,
and new ancillary services and products. The Company believes pricing in
the domestic market has become more competitive and opportunities to
continue to obtain regular price increases from its customers may be more
limited in the future.

RESULTS OF OPERATIONS

FISCAL 2007 COMPARED TO FISCAL 2006

      Revenues for fiscal 2007 were $83,716,000, an increase of 5.9%
compared with revenues of $79,043,000 for fiscal 2006. Domestic revenue
growth for fiscal 2007 was $962,000 or 1.5%, attributable primarily to
strong performance of the HomeBuyer's Preferred subsidiary and continued
growth of domestic InLight. International revenue increased $3,711,000 or
24.6%, as a result of growth in volume in most regions, lead by increased
InLight service revenues; revenues attributable to the addition of a new
51% owned joint venture in Australia; and favorable currency exchange
rates. Favorable currency, primarily the strengthening of the Euro against
the dollar, contributed approximately $1,250,000 of the revenue growth.

      Total cost of revenues for fiscal 2007 were $27,527,000, a decline of
$1,207,000 or 4.2%, compared with cost of revenues of $28,734,000 for
fiscal 2006. Gross margins for fiscal 2007 were 67.1% of revenues, compared
with 63.6% in fiscal 2006. The improvement is a result of the profit
improvement plan initiated in the second quarter of fiscal 2006 resulting
in a reduction in labor and related expenses and material costs, and
reduced depreciation expense due to certain investments in manufacturing
and lab operations equipment becoming fully depreciated.

      During the 2007 fiscal year, the Company implemented a plan to
support long-term profitability and growth. This plan supported investment
in two initiatives to improve focus and build shareholder value. First, the
Company expanded sales and marketing resources to better reach markets
targeted by the Company for growth. Secondly, the Company accelerated its
program to re-engineer business processes. An important part of the program



                                     15


<PAGE>


is replacing the Company's information technology system. The information
systems initiative is expected to cost $9,000,000 to $10,000,000 over the
life of the project, with approximately $2,000,000 to $3,000,000 to be
expensed and $7,000,000 to $8,000,000 to be capitalized. The project was
initiated during fiscal 2007 and is targeted to be completed during fiscal
2008.

      Selling, general and administrative expenses for fiscal 2007 were
$24,711,000, an increase of $5,557,000 or 29.0%, compared with selling,
general and administrative expenses of $19,154,000 for fiscal 2006. Factors
contributing to the increase in selling, general and administrative costs
include: $2,114,000 in spending to re-engineer business processes and to
replace the Company's information technology systems that support improved
customer relationship management and the order-to-cash cycle; $920,000 in
higher spending for salaries and benefits; $908,000 of increased cost in
other foreign operations, primarily relating to increased foreign exchange
rates; $802,000 of increased spending for professional fees primarily for
investments in support of certain strategic initiatives and increased
spending related to tax services; and $489,000 incremental operating
expenses from the addition of the new 51% owned joint venture in Australia.

      As part of the IT initiative in the 2007 fiscal year, management
completed an evaluation of the usefulness of investments made in legacy
information systems' hardware and software having a net book value of
approximately $4,600,000. Of these assets, approximately $3,500,000 was
determined to be either impaired or subject to accelerated depreciation.
This resulted in a fiscal 2007 charge of $2,875,000 ($1,725,000, after-
tax), of which $2,185,000 was for impaired assets. The Company expects to
record accelerated depreciation of approximately $375,000 in fiscal 2008.

      During fiscal 2006, the Company recognized $1,650,000 ($994,000,
after-tax) for reorganization expense and management transition costs. In
the second quarter of fiscal 2006, the Company initiated programs to
reorganize several departments and functions to eliminate redundant
positions, require employees to meet established performance criteria, and
significantly alter or eliminate some benefit programs. The implementation
of these programs resulted in a pre-tax charge in the amount of $600,000
primarily related to severance payments, extended employee benefits and
related separation costs. In September 2006, Landauer recognized an
additional reorganization charge of $1,050,000 for management transition
expenses primarily related to early retirement incentives and associated
pension benefit expenses arising from the retirement of two of the
Company's executive officers.

      The charges discussed above had the following impact on results in
fiscal 2007 and 2006, respectively:

                                             2007          2006
                                         -----------   -----------
      Operating income . . . . . . . .   $(2,875,000)  $(1,650,000)
      Tax benefit. . . . . . . . . . .     1,150,000       656,000
                                         -----------   -----------
      Net income . . . . . . . . . . .   $(1,725,000)  $  (994,000)
                                         ===========   ===========
      Diluted earnings per share . . .   $     (0.19)  $     (0.11)
                                         ===========   ===========

      Operating income for fiscal 2007 was $28,603,000, a decline of
$902,000 or 3.1%, compared with operating income of $29,505,000 for fiscal
2006. The decline in operating income is due primarily to the spending in
fiscal 2007 for the systems initiative and the impact of the charge for
accelerated depreciation and impaired assets.








                                     16


<PAGE>


      Net other income, including equity in income of joint venture, for
fiscal 2007 was $2,227,000, an increase of $735,000 or 49.3%, compared with
other income of $1,492,000 for fiscal 2006. The increase in other income is
due to increases in interest and investment income and higher Nagase-
Landauer, Ltd. equity earnings. Fiscal 2006 equity earnings included a
$237,000 charge for the write-down of accounts receivable, which represents
the Company's 50% equity share of the charge.

      Income tax expense for fiscal 2007 and 2006 was $11,413,000 and
$11,783,000, respectively. The effective tax rate was 37.0% and 38.0% in
fiscal 2007 and 2006, respectively. The decline in the effective tax rate
is driven by a number of factors including the increased impact of foreign
source income.

      Net income for the 2007 fiscal year was $19,316,000, an increase of
1.4% compared with net income of $19,046,000 for fiscal 2006, with
resulting diluted earnings per share for the current year of $2.10 compared
with $2.09 reported a year ago.

FISCAL 2006 COMPARED TO FISCAL 2005

      Revenues for fiscal 2006 were $79,043,000, an increase of 5.1%
compared with revenues of $75,221,000 for fiscal 2005. Domestic revenue
growth for fiscal 2006 was $2,910,000, or 4.8%, from gains in the core
radiation monitoring business, strong performance for the HomeBuyer's
Preferred subsidiary, and a doubling of domestic InLight revenue
predominantly through the sale of equipment. International revenue
increased $912,000, or 6.4%, supported by growth in most markets led by
InLight services in France.

      Total cost of revenues for fiscal 2006 were $28,734,000, an increase
of $426,000 or 1.5%, compared with cost of revenues of $28,308,000 for
fiscal 2005. Gross margins for fiscal 2006 were 63.6% of revenues, compared
with 62.4% in fiscal 2005. The improvement in gross margin is due primarily
to reductions in labor, operating supplies and postage costs as a result of
the profit improvement program initiated in the second quarter of fiscal
2006, partially offset by increased depreciation expense.

      Selling, general and administrative expenses for fiscal 2006 were
$19,154,000, an increase of $1,092,000 or 6.1%, compared with selling,
general and administrative expenses of $18,062,000 for fiscal 2005. The
increase is primarily driven by higher incentive compensation expense from
equity based compensation programs under SFAS 123R.

      During fiscal 2006, the Company recognized $1,650,000 for
reorganization expense and management transition costs. During fiscal 2005,
Landauer recognized reorganization expense in the amount of $2,300,000
associated with various organizational changes, including early retirement
incentives and related pension benefit expenses arising from the retirement
of the Company's former chief executive officer, recruitment expenses
related to the recent election of a new chief executive officer and
severance and other costs related to additional personnel changes. These
charges had the following impact on results in fiscal 2006 and 2005,
respectively:

                                             2006          2005
                                         -----------   -----------
      Operating income . . . . . . . .   $(1,650,000)  $(2,300,000)
      Tax benefit. . . . . . . . . . .       656,000       914,000
                                         -----------   -----------
      Net income . . . . . . . . . . .   $  (994,000)  $(1,386,000)
                                         ===========   ===========
      Diluted earnings per share . . .   $     (0.11)  $     (0.15)
                                         ===========   ===========






                                     17


<PAGE>


      Operating income for fiscal 2006 was $29,505,000, an increase of
$2,954,000 or 11.1%, compared with operating income of $26,551,000 for
fiscal 2005. Operating income as a percentage of revenue was 37.3% in
fiscal 2006 compared to 35.3% in fiscal 2005. The improvement was driven by
lower reorganization expense as outlined above and reductions in the
operating cost structure as a result of the profit improvement plan
initiated in the second quarter of fiscal 2006.

      Net other income, including equity in income of joint venture, for
fiscal 2006 was $1,492,000, an increase of $111,000 or 8.0%, compared with
other income of $1,381,000 for fiscal 2005. The increase in other income is
due to increases in interest and investment income offset partially by
lower Nagase-Landauer, Ltd. equity earnings, due to a charge for the write-
down of accounts receivable. The Company's share of the charge was
$237,000.

      Income tax expense for fiscal 2006 and 2005 was $11,783,000 and
$10,623,000, respectively. The effective tax rate was 38.0% in both fiscal
2006 and 2005.

      Net income for fiscal 2006 was $19,046,000, an increase of 10.7%
compared with net income of $17,208,000 for fiscal 2005 with resulting
diluted earnings per share for the 2006 fiscal year of $2.09 compared with
$1.90 in fiscal 2005.

FOURTH QUARTER RESULTS OF OPERATIONS

      Revenues for the fourth fiscal quarter of 2007 were $21,334,000, an
increase of $1,150,000 or 5.7%, compared with $20,184,000 in the fourth
fiscal quarter of 2006. Domestic revenue for the 2007 fourth quarter was
approximately flat with the fourth quarter of the prior year. International
revenue in the fourth fiscal quarter of 2007 increased $929,000, or 22.6%,
supported by growth in volume in most regions, the addition of a new 51%
owned joint venture in Australia and favorable currency exchange rates.
Cost of revenues for the fourth quarter of fiscal 2007 was $6,710,000
compared to $6,673,000 for fiscal 2006. Selling, general and administrative
costs for the fourth quarter of fiscal 2007 were $7,228,000, an increase of
$2,416,000 or 50.2%, compared to $4,812,000 in fiscal 2006, due primarily
to spending for the Company's systems initiative, employee related expenses
and international spending. Accelerated depreciation charges were $518,000
in the fourth quarter of fiscal 2007 and reorganization costs primarily for
management transition costs were $1,050,000 in the fourth quarter of fiscal
2006. The Company expects to record accelerated depreciation of
approximately $375,000 in fiscal 2008.

      Operating income for the fourth fiscal quarter of 2007 was
$6,878,000, a decline of $771,000 or 10.1%, compared with $7,649,000 in the
fourth fiscal quarter of 2006, primarily due to $1,111,000 of spending for
the Company's systems initiative. Other income for the fourth quarter
increased by $338,000 to $526,000 in fiscal 2007 due primarily to higher
Nagase-Landauer, Ltd. equity earnings, which in fiscal 2006 was impacted by
a fourth quarter charge related to the write-down of accounts receivable,
of which the Company's share was $237,000. Income tax expense and the
effective tax rates were $2,761,000 and 37.3% in fiscal fourth quarter
2007, and $3,131,000 and 40.0% in the fiscal fourth quarter 2006,
respectively. The lower effective tax rate in 2007 was due to higher
foreign source income.

   Net income for the fiscal fourth quarter of 2007 was $4,610,000,
compared with net income of $4,670,000 for fourth quarter 2006, with
resulting diluted earnings per share for the 2007 quarter of $0.50 compared
with $0.51 reported in the fiscal fourth quarter of 2006.








                                     18


<PAGE>


OUTLOOK FOR FISCAL 2008

      Landauer's business plan for fiscal 2008 currently anticipates
aggregate revenue growth for the year to be in the range of 4 - 5%. The
Company anticipates a net income increase in the range of 6 - 8% excluding
the $2,875,000 ($1,725,000, after tax at a marginal tax rate of 40%) impact
of the fiscal 2007 accelerated depreciation and impairment charges.

LIQUIDITY AND CAPITAL RESOURCES

      Landauer generated $5,649,000 in cash during fiscal year 2007 to end
the year with $21,069,000 in cash on hand. The Company made payments of
$1,717,000 on its line of credit, ending the year with no outstanding
borrowings.

      Cash flows provided by operating activities for fiscal 2007 was
$28,005,000, an increase of $3,992,000, or 16.6%, from fiscal 2006. The
increase is due primarily to lower cash expenses and a reduction in
accounts receivables during fiscal 2007.

      Investing activities included acquisitions of property, plant and
equipment in the amounts of $7,386,000, $3,498,000 and $4,068,000 in fiscal
2007, 2006 and 2005, respectively. The Company capitalized approximately
$5,263,000 for its systems initiative in fiscal 2007. Cash paid for income
taxes was $13,191,000, $12,713,000 and $10,501,000 in fiscal 2007, 2006 and
2005, respectively. Capital expenditures for fiscal 2008 are expected to be
approximately $5,000,000 to $6,000,000 principally for the development of
supporting software systems and computer hardware. The Company anticipates
that funds for these capital improvements will be provided from operations.

      The Company's financing activities are comprised of credit facility
activities and payments of cash dividends to shareholders and minority
partners, offset partially by proceeds from the exercise of stock options.
During fiscal 2007, 2006 and 2005, the Company paid cash dividends of
$17,163,000, or $1.90 per share; $16,044,000, or $1.80 per share; and
$15,002,000, or $1.70, respectively, and such amounts have been provided
from operations.

      As described in Note 7 to the financial statements, the Company
maintained a credit facility, which expired in March 2007. At September 30,
2006, outstanding borrowings under the credit agreement were $1,649,000.
The borrowings were classified as current liabilities and were denominated
in euros, which is the functional currency of Landauer-Europe. In October
2007, the Company negotiated a new credit facility, which expires on
October 31, 2009. The new credit facility permits borrowing up to
$15,000,000.

      In the opinion of management, cash flows from operations and the
Company's borrowing capacity under its line of credit are adequate for
projected operations and capital spending programs, as well as continuation
of the regular cash dividend program. From time to time, the Company may
have the opportunity to make investments for acquisitions or other
purposes, and borrowings can be made under the current credit facility to
fund such investments.

      Landauer requires limited working capital for its operations since
many of its customers pay for services in advance. Such advance payments,
reflected on the balance sheets as "Deferred Contract Revenue", amounted to
$13,832,000 and $13,761,000, respectively, as of September 30, 2007 and
2006. While these amounts represent approximately 49% and 48% of current
liabilities, respectively as of September 30, 2007 and 2006, such amounts
generally do not represent a cash requirement.

      All customers are invoiced in accordance with the Company's standard
terms, with payment generally due thirty days from date of invoice.
Reflecting the Company's invoicing practices and that a significant portion
of the Company's revenues are subject to health care industry reimbursement
cycles, days of sales outstanding for the Company averaged approximately 65
days over the course of fiscal 2007 and 2006.

                                     19


<PAGE>


      Landauer also offers radiation monitoring services in the United
Kingdom, Canada, Japan, Brazil, China, Australia and France. The Company's
operations in these markets generally do not depend on significant capital
resources.

      The Company is exposed to market risk, including changes in foreign
currency exchange rates. The financial statements of the Company's non-U.S.
subsidiaries are remeasured into U.S. dollars using the U.S. dollar as the
functional currency. The market risk associated with foreign currency
exchange rates is not material in relation to the Company's financial
position, results of operations, or cash flows. The Company does not have
any significant trade accounts receivable, trade accounts payable,
commitments or borrowings in a currency other than that of the reporting
units' functional currencies. As such, the Company does not use derivative
financial instruments to manage the exposure in its non-U.S. operations.

CONTRACTUAL OBLIGATIONS

      As of September 30, 2007, the expected resources required for
scheduled payment of contractual obligations were as follows:

                                   Scheduled payments by fiscal year
                              -------------------------------------------
                                                                   There-
(Dollars in Thousands)       Total      2008   2009-10  2011-12    after
----------------------      -------   -------  -------  -------   -------

Purchase obligations (1) .  $ 4,890   $ 4,890  $     -  $     -   $     -
Dividends (2). . . . . . .    4,375     4,375        -        -         -
Pension and postretire-
  ment benefits (3). . . .    4,322       877      586      683     2,176
Operating leases (4) . . .    1,339       335      596      158       250
                            -------   -------  -------  -------   -------
                            $14,926   $10,477  $ 1,182  $   841   $ 2,426
                            =======   =======  =======  =======   =======

(1)   Includes accounts payable under other agreements to purchase goods or
      services including open purchase orders; also includes remaining
      contractual obligations associated with the Company's IT system
      upgrade.

(2)   Cash dividends in the amount of $0.475 per share were declared on
      August 31, 2007.

(3)   Includes required contributions to the Company's defined benefit
      pension plan in fiscal 2008 and estimated future benefit payments for
      the supplemental key executive retirement plans and a terminated
      retirement plan that provides certain retirement benefits payable to
      non-employee directors. The amounts are actuarially determined, which
      includes the use of assumptions, and may vary significantly from
      expectations.

(4)   The Company has several small operating leases that are generally
      short-term in nature; it has no material operating or capital leases.

RECENT ACCOUNTING PRONOUNCEMENTS

      In June 2006, the Financial Accounting Standards Board (FASB) issued
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes"
(FIN No. 48). FIN No. 48 clarifies the accounting for uncertainty in income
taxes by prescribing a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. FIN No. 48 also provides guidance
on de-recognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. In addition, the FASB released
Staff Position No. FIN 48-1 (FSP 48-1) to provide guidance on how an
enterprise should determine whether a tax position is effectively settled



                                     20


<PAGE>


for the purpose of recognizing previously unrecognized tax benefits. FIN
No. 48 is effective for fiscal years beginning after December 15, 2006, and
will become effective for the Company in the first quarter of fiscal 2008.
The Company continues to evaluate the impact of FIN No. 48 to its financial
position, results of operations and financial disclosures.

      In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements." SFAS No. 157 defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements.
SFAS No. 157 applies under other accounting pronouncements that require or
permit fair value measurements. SFAS No. 157 is effective for the Company
for fiscal year 2009. The Company is currently evaluating the impact of
SFAS No. 157 to its financial position, results of operations and financial
disclosures.

      In February 2007, the FASB issued SFAS No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities, including an
Amendment of FASB Statement No. 115."  SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at
fair value on an instrument-by-instrument basis, with unrealized gains and
losses related to these financial instruments reported in earnings at each
subsequent reporting date. SFAS No. 159 also establishes presentation and
disclosure requirements to facilitate comparisons between companies that
choose different measurement attributes for similar assets and liabilities.
SFAS No. 159 is effective for fiscal years beginning after November 15,
2007. The Company is currently evaluating the impact of SFAS No. 159 to its
financial position, results of operations and financial disclosures.

      In March 2007, the FASB ratified the Emerging Issues Task Force
(EITF) Issue No. 06-10, "Accounting for the Deferred Compensation and
Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life
Insurance Arrangements."  The EITF affirmed as a final consensus that an
employer should recognize a liability for the postretirement benefit
related to a collateral assignment split-dollar life insurance arrangement
in accordance with either SFAS No. 106 or APB Opinion No. 12. Issue No. 06-
10 applies only when the arrangement is determined to provide a
postretirement benefit. The final consensus on Issue No. 06-10 will also
require an employer to recognize and measure the asset under a collateral
assignment arrangement based on the substance of the arrangement. The Issue
is effective for fiscal years beginning after December 15, 2007, including
interim periods within those fiscal years. The Company is currently
evaluating the impact of Issue No. 06-10 to its financial position, results
of operations and financial disclosures.

      In June 2007, the FASB ratified EITF Issue No. 06-11, "Accounting for
Income Tax Benefits of Dividends on Share-Based Payment Awards."  EITF No.
06-11 requires companies to recognize the realized tax benefit from
dividends or dividend equivalents that are charged to retained earnings and
paid to employees for nonvested or outstanding equity-classified employee
share-based payment awards as an increase to additional paid-in-capital.
The EITF also addresses the accounting for these tax benefits if an
entity's estimate of forfeitures changes in subsequent periods. The Issue
is to be applied prospectively to dividends declared in fiscal years
beginning after December 15, 2007, including interim periods within those
fiscal years. The Company has evaluated Issue No. 06-11 and does not expect
it to have a material impact on its consolidated financial statements.

INFLATION

      The Company strives to reflect the inflationary impact of materials,
labor and other operating costs and expenses in its prices. The market for
the services and products that the Company offers, however, is highly
competitive, and in some cases has limited the ability of the Company to
offset inflationary cost increases.






                                     21


<PAGE>


FORWARD LOOKING STATEMENTS

      Certain matters contained in this report, including the information
contained under the heading "Outlook for Fiscal 2008" in Item 7 of 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 development and introduction of new
technologies in general; introduction and customer acceptance of the
InLight technology; the adaptability of optically stimulated luminescence
(OSL) technology to new platforms and formats, such as Luxel+; the costs
associated with the Company's research and business development efforts;
the effectiveness of changes and upgrades to the Company's information
systems; the usefulness of older technologies; the anticipated results of
operations of the Company and its subsidiaries or ventures; valuation of
the Company's long-lived assets or business units relative to future cash
flows; changes in pricing of products and services; changes in postal and
delivery practices; the Company's business plans; anticipated revenue and
cost growth; the risks associated with conducting business internationally;
other anticipated financial events; the effects of changing economic and
competitive conditions; foreign exchange rates; government regulations;
accreditation requirements; 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 anticipated
results. 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" and
information contained in the Company's reports filed, from time to time,
with the SEC.

CRITICAL ACCOUNTING POLICIES

      Critical accounting policies are those that are most important to the
portrayal of a company's financial condition and results, 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. Management has identified the following critical
accounting policies used in the preparation of the Company's financial
statements and accompanying notes.

REVENUE RECOGNITION AND DEFERRED CONTRACT REVENUE

      Substantially all of the services provided by the Company to its
customers are of a subscription nature and are continuous. The Company
views its business as services provided to customers over a period of time
and the wear period is the period over which those services are provided.
Badge production, wearing of badges, badge analysis, and report preparation
are integral to the benefit that the Company provides to its customers.
These services are provided to customers on an agreed-upon recurring basis
(monthly, bi-monthly or quarterly) that the customer chooses for the wear
period. Revenue is recognized on a straight-line basis, adjusted for
changes in pricing and volume, over the wear period as the service is
continuous and no other discernible pattern of recognition is evident.
Revenues are recognized over the periods in which the customers wear the
badges irrespective of whether invoiced in advance or in arrears. The
amounts recorded as deferred contract revenue in the consolidated balance
sheets represent customer deposits invoiced in advance during the preceding
twelve months for services rendered over the succeeding twelve months, and
are net of services rendered through the respective consolidated balance
sheet date. Such advance billings amounted to $13,832,000 and $13,761,000,
respectively, as of September 30, 2007 and September 30, 2006.






                                     22


<PAGE>


PROPERTY, PLANT & EQUIPMENT

      Plant and equipment (including dosimetry badges and software) are
recorded at cost and are depreciated or amortized on a straight-line basis
over the estimated useful lives, which are primarily 30 years for buildings
and three to eight years for equipment. Landauer assesses the carrying
value of its property, plant and equipment and the remaining useful lives
whenever events or circumstances indicate the carrying value may not be
recoverable or the estimated useful life may no longer be appropriate.
Factors that could trigger this review include competitive conditions,
government regulations and technological changes. Maintenance and repairs
are charged to expense, and renewals and betterments are capitalized.
Landauer capitalizes, as a component of equipment, internal software costs
in accordance with SOP 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use". Such costs amounted to $4,532,000,
$1,427,000 and $1,449,000, respectively, for fiscal years 2007, 2006 and
2005. In fiscal year 2007, $3,926,000 of the software costs was related to
the implementation of an information technology initiative to re-engineer
various business processes and replace components of its information
technology systems that support customer relationship management and the
order-to-cash cycle. The new software is replacing certain legacy assets
that were either subject to immediate impairment or retirement once the
full system implementation has been completed. In fiscal year 2007, the
remainder of the costs was related to legacy assets, some of which were
included in the evaluation for immediate impairment or retirement.
Information regarding these costs is contained under the footnote
"Impairment and Accelerated Depreciation Charges" on page 35 of this Annual
Report on Form 10-K.

GOODWILL AND OTHER INTANGIBLE ASSETS

      Landauer's intangible assets include purchased customer lists,
licenses, patents and goodwill, an asset with an indefinite life. The
Company acquired goodwill primarily from its acquisitions of Landauer-
Europe and SAPRA-Landauer as well as other smaller investments. Purchased
customer lists are recorded at cost and are amortized on a straight-line
basis over estimated useful lives, which range from 10 to 15 years. Patents
and licenses are also recorded at cost and are amortized on a straight-line
basis over their useful lives, which range from 10 to 17 years. SFAS No.
142 requires that goodwill and certain intangible assets with indefinite
lives be reviewed periodically for impairment. Under SFAS No. 142, the
impairment review of goodwill and other intangible assets that are not
being amortized, generally, must be performed annually and based on fair
values. The Company's methodology for testing goodwill for impairment
includes a review of potential impairment triggering events, financial
analysis of future undiscounted cash flows projections by investment, and
tests of fair market value. As a result of applying the impairment
provisions of SFAS No. 142, no impairment loss was required as of
September 30, 2007. Information regarding the value of goodwill and other
intangible assets is presented under the footnote "Goodwill and Other
Intangible Assets" on page 37 of this Annual Report on Form 10-K.

DEFINED BENEFIT PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

      In the United States, Landauer maintains a qualified noncontributory
defined benefit pension plan covering substantially all full-time employees
and a supplemental key executive retirement plan that provides for certain
retirement benefits payable to key officers and managers. While charges for
the supplemental plan are expensed annually, the plan is not separately
funded. The Company maintains a directors' retirement plan, terminated in
1997, that provides for certain retirement benefits payable to non-employee
directors. Additionally, the Company maintains an unfunded retiree medical
expense reimbursement plan. The pension expenses and benefit obligations
recorded for these plans are dependent on actuarial assumptions. These
assumptions include discount rates, expected return on plan assets,
interest costs, expected compensation increases, benefits earned, mortality




                                     23


<PAGE>


rates, and other factors. Management reviews the plan assumptions on an
annual basis to ensure that the most current, relevant information is
considered. If actual results vary considerably from those that are
expected or if future changes are made to these assumptions, the amounts
recognized for these plans could change significantly.

      The weighted-average assumed discount rate used to determine the
fiscal 2007 plan expenses was 5.90% compared to 5.75% for fiscal 2006. For
fiscal 2007 expense, the expected long-term rate of return of plan assets
was 6.50% compared to the fiscal 2006 rate of 7.50%. In establishing the
rate, management considered the historical rates of return and the current
and planned asset classes of the plan investment portfolio. In determining
the rate of compensation increase of 3.50% for fiscal 2007 and 2006,
management considered historical Company increases, market expectations and
expected future Company increases. The weighted-average assumptions used to
determine benefit obligations at September 30, 2007 were: a discount rate
of 6.30% compared to the fiscal 2006 rate of 5.90%, adjusted to reflect the
single rate that, when applied to the projected benefit disbursements from
the plan, would result in the same discounted value as the array of rates
that make up the Citigroup Pension Discount Curve as of September 30, 2007;
and a rate of compensation increase of 3.50%, unchanged from fiscal 2006.

      Effective September 30, 2007, the Company adopted SFAS No. 158,
"Employers' Accounting for Defined Benefit Pension and Other Postretirement
Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)". The
statement requires the recognition of a plan's funded status on the
Company's balance sheet. Previously unrecognized transactions and events
affecting the plan's funded status are recognized as components of the
ending balance of accumulated other comprehensive income, net of tax. These
components will continue to be modified as a result of future transactions
and events, amortization of previously unrecognized costs, and changes to
actuarial assumptions. An increase or decrease in the assumptions or
economic events outside of management's control could have a material
effect on the Company's results of operations or financial condition.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company is exposed to market risk, including changes in foreign
currency exchange rates. The financial statements of the Company's
international subsidiaries are remeasured into U.S. dollars using the U.S.
dollar as the functional currency. To date, the market risk associated with
foreign currency exchange rates has not been material in relation to the
Company's financial position, results of operations, or cash flows. These
risks could increase, however, as the Company expands in international
markets. The Company does not have any significant trade accounts
receivable, trade accounts payable, or commitments in a currency other than
that of the reporting unit's functional currency. The Company estimates
that a 10% adverse change in the underlying foreign currency exchange rates
would have decreased reported net income by approximately $485,000 in
fiscal 2007. The Company does not believe that such an adverse change would
have a material impact to its financial condition. Therefore, the Company
does not currently use derivative financial instruments to manage the
exposure in its non-U.S. operations or for trading or speculative purposes.
















                                     24


<PAGE>


ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                         CONSOLIDATED BALANCE SHEETS
                       LANDAUER, INC. AND SUBSIDIARIES
                             AS OF SEPTEMBER 30,


(Dollars in Thousands)                                2007        2006
----------------------                              --------    --------

ASSETS

Current assets:
  Cash and cash equivalents. . . . . . . . . . .    $ 21,069    $ 15,420
  Receivables, net of allowances of
    $531 in 2007 and $567 in 2006. . . . . . . .      19,750      20,284
  Inventories. . . . . . . . . . . . . . . . . .       2,729       2,508
  Prepaid expenses and other current assets. . .       1,112       1,499
  Prepaid income taxes . . . . . . . . . . . . .       1,767         407
  Deferred income taxes. . . . . . . . . . . . .       4,078       1,859
                                                    --------    --------
Current assets . . . . . . . . . . . . . . . . .      50,505      41,977
                                                    --------    --------
Property, plant and equipment, at cost:
  Land and improvements. . . . . . . . . . . . .         635         634
  Buildings and improvements . . . . . . . . . .       4,287       4,230
  Equipment. . . . . . . . . . . . . . . . . . .      45,816      41,225
                                                    --------    --------
                                                      50,738      46,089
  Accumulated depreciation and amortization. . .     (34,084)    (29,673)
                                                    --------    --------
Net property, plant and equipment. . . . . . . .      16,654      16,416
                                                    --------    --------

Equity in joint venture. . . . . . . . . . . . .       4,978       3,980
Goodwill and other intangible assets,
  net of amortization. . . . . . . . . . . . . .      18,327      19,650
Dosimetry devices, net of amortization
  of $9,392 in 2007 and $7,789 in 2006 . . . . .       5,345       6,502
Deferred income taxes. . . . . . . . . . . . . .         333       1,222
Other assets . . . . . . . . . . . . . . . . . .       1,198         927
                                                    --------    --------
ASSETS . . . . . . . . . . . . . . . . . . . . .    $ 97,340    $ 90,674
                                                    ========    ========


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























                                     25


<PAGE>


                         CONSOLIDATED BALANCE SHEETS
                                 (CONTINUED)
                       LANDAUER, INC. AND SUBSIDIARIES
                             AS OF SEPTEMBER 30,


(Dollars in Thousands)                                2007        2006
----------------------                              --------    --------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable . . . . . . . . . . . . . . .    $  1,682    $  1,439
  Notes payable. . . . . . . . . . . . . . . . .           -       1,649
  Dividends payable. . . . . . . . . . . . . . .       4,375       4,092
  Deferred contract revenue. . . . . . . . . . .      13,832      13,761
  Accrued compensation and related costs . . . .       3,725       2,815
  Accrued pension and postretirement costs . . .         306         980
  Other accrued expenses . . . . . . . . . . . .       4,047       3,693
                                                    --------    --------
Current liabilities. . . . . . . . . . . . . . .      27,967      28,429
                                                    --------    --------
Non-current liabilities:
  Pension and postretirement obligations . . . .       9,575       8,348
                                                    --------    --------
Non-current liabilities. . . . . . . . . . . . .       9,575       8,348
                                                    --------    --------

Minority interest in subsidiary. . . . . . . . .         288         198

STOCKHOLDERS' EQUITY
Preferred stock, $.10 par value per share,
  authorized 1,000,000 shares; none issued . . .           -           -
Common stock, $.10 par value per share,
  authorized 20,000,000 shares; 9,210,861
  and 9,094,190 issued and outstanding,
  respectively, in 2007 and 2006 . . . . . . . .         921         909
Additional paid in capital . . . . . . . . . . .      23,581      19,641
Accumulated other comprehensive loss . . . . . .        (509)       (498)
Retained earnings. . . . . . . . . . . . . . . .      35,517      33,647
                                                    --------    --------
Stockholders' equity . . . . . . . . . . . . . .      59,510      53,699
                                                    --------    --------
LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . .    $ 97,340    $ 90,674
                                                    ========    ========

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
























                                     26


<PAGE>


                      CONSOLIDATED STATEMENTS OF INCOME
                       LANDAUER, INC. AND SUBSIDIARIES
                      FOR THE YEARS ENDED SEPTEMBER 30,


(Dollars in Thousands,
Except per Share)                           2007       2006       2005
----------------------                    --------   --------   --------

Net revenues . . . . . . . . . . . . . .  $ 83,716   $ 79,043   $ 75,221
Costs and expenses:
  Cost of sales. . . . . . . . . . . . .    27,527     28,734     28,308
  Selling, general, and
    administrative . . . . . . . . . . .    24,711     19,154     18,062
  Impairment and accelerated
    depreciation charges . . . . . . . .     2,875          -          -
  Reorganization charges . . . . . . . .         -      1,650      2,300
                                          --------   --------   --------
                                            55,113     49,538     48,670
                                          --------   --------   --------

Operating income . . . . . . . . . . . .    28,603     29,505     26,551
Equity in income of joint venture. . . .     1,414      1,141      1,352
Other income, net. . . . . . . . . . . .       813        351         29
                                          --------   --------   --------
Income before taxes. . . . . . . . . . .    30,830     30,997     27,932
Income taxes . . . . . . . . . . . . . .    11,413     11,783     10,623
                                          --------   --------   --------
Income before minority interest. . . . .    19,417     19,214     17,309
Minority interest. . . . . . . . . . . .       101        168        101
                                          --------   --------   --------
Net income . . . . . . . . . . . . . . .  $ 19,316   $ 19,046   $ 17,208
                                          ========   ========   ========
Net income per share:
    Basic. . . . . . . . . . . . . . . .  $   2.12   $   2.11   $   1.92
    Weighted average basic shares
      outstanding. . . . . . . . . . . .     9,127      9,045      8,966

    Diluted. . . . . . . . . . . . . . .  $   2.10   $   2.09   $   1.90
    Weighted average diluted shares
      outstanding. . . . . . . . . . . .     9,196      9,112      9,038
                                          ========   ========   ========

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


























                                     27


<PAGE>


<table>
                                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                              AND COMPREHENSIVE INCOME
                                           LANDAUER, INC. AND SUBSIDIARIES
<caption>
                                                    Addi-      Accumulated                  Total
                                                   tional         Other                     Stock-     Compre-
                                        Common     Paid In     Comprehensive   Retained    holders'    hensive
(Dollars in Thousands)                  Stock      Capital     Income (Loss)   Earnings     Equity     Income
----------------------                 --------    --------    -------------   --------   ----------   --------

                                    <c>         <c>         <c>             <c>        <c>          <c>
Balance September 30, 2004 . . . . .   $    895    $ 14,400        $   (251)   $ 28,953    $ 43,997
Options exercised. . . . . . . . . .          8       2,747               -           -       2,755
Net income . . . . . . . . . . . . .          -           -               -      17,208      17,208    $ 17,208
Foreign currency translation
  adjustment . . . . . . . . . . . .          -           -             111           -         111         111
Minimum pension liability
  adjustment . . . . . . . . . . . .          -           -            (235)          -        (235)       (235)
Dividends. . . . . . . . . . . . . .          -           -               -     (15,238)    (15,238)          -
                                       --------    --------        --------    --------    --------    --------
Comprehensive Income . . . . . . . .                                                                   $ 17,084
                                                                                                       ========
Balance September 30, 2005 . . . . .   $    903    $ 17,147        $   (375)   $ 30,923    $ 48,598
Stock-based compensation
   arrangements. . . . . . . . . . .          6       2,494               -           -       2,500
Net income . . . . . . . . . . . . .          -           -               -      19,046      19,046    $ 19,046
Foreign currency translation
  adjustment . . . . . . . . . . . .          -           -             (65)          -         (65)        (65)
Minimum pension liability
  adjustment . . . . . . . . . . . .          -           -             (58)          -         (58)        (58)
Dividends. . . . . . . . . . . . . .          -           -               -     (16,322)    (16,322)          -
                                       --------    --------        --------    --------    --------    --------
Comprehensive Income . . . . . . . .                                                                   $ 18,923
                                                                                                       ========
Balance September 30, 2006 . . . . .   $    909    $ 19,641        $   (498)   $ 33,647    $ 53,699
Stock-based compensation
   arrangements. . . . . . . . . . .         12       3,940               -           -       3,952
Net income . . . . . . . . . . . . .          -           -               -      19,316      19,316    $ 19,316
Foreign currency translation
  adjustment . . . . . . . . . . . .          -           -             609           -         609         609
Minimum pension liability
  adjustment . . . . . . . . . . . .          -           -             160           -         160         160
Dividends. . . . . . . . . . . . . .          -           -               -     (17,446)    (17,446)          -
Impact of adoption of SFAS No. 158 .          -           -            (780)          -        (780)          -
                                       --------    --------        --------    --------    --------    --------
Comprehensive Income . . . . . . . .                                                                   $ 20,085
                                                                                                       ========
Balance September 30, 2007 . . . . .   $    921    $ 23,581        $   (509)   $ 35,517    $ 59,510
                                       ========    ========        ========    ========    ========
<fn>
The accompanying notes are an integral part of these financial statements.
                                                         28
</table>


<PAGE>


                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                       LANDAUER, INC. AND SUBSIDIARIES
                      FOR THE YEARS ENDED SEPTEMBER 30,


(Dollars in Thousands)                        2007      2006      2005
----------------------                      --------  --------  --------
Cash flows from operating activities:
  Net income . . . . . . . . . . . . . . .  $ 19,316  $ 19,046  $ 17,208

Adjustments to reconcile net income to
 net cash provided by operating activities:
    Asset impairment and accelerated
      depreciation charges . . . . . . . .     2,875         -         -
    Depreciation . . . . . . . . . . . . .     6,851     7,513     6,626
    Amortization . . . . . . . . . . . . .       640       652       642
    Equity in net income of joint
      venture. . . . . . . . . . . . . . .    (1,414)   (1,141)   (1,352)
    Dividends from joint venture . . . . .       560     1,967         -
    Stock-based compensation . . . . . . .       801       888        61
    Tax benefit from stock-based
      compensation arrangements. . . . . .       925       442       887
    Excess tax benefit from stock-based
      compensation arrangements. . . . . .      (829)     (244)        -
    Loss on sale and disposition
      of assets. . . . . . . . . . . . . .        38       127        78
    Decrease (increase) in accounts
      receivable, net. . . . . . . . . . .     1,101    (2,111)   (2,979)
    Decrease (increase) in prepaid
      taxes. . . . . . . . . . . . . . . .    (1,343)      556     1,138
    Increase in current deferred taxes,
      net. . . . . . . . . . . . . . . . .    (2,219)     (345)   (1,587)
    Increase in dosimetry devices
      at cost. . . . . . . . . . . . . . .    (1,190)   (2,409)   (3,758)
    Decrease (increase) in long-term
      deferred taxes, net. . . . . . . . .       889    (1,460)   (1,079)
    Increase (decrease) in accounts
      payable and other current
      liabilities. . . . . . . . . . . . .      (309)     (830)    2,494
    Increase (decrease) in deferred
      contract revenue . . . . . . . . . .       (84)    1,005        87
    Increase in long-term liabilities. . .       697     1,107     3,296
    Other operating activities, net. . . .       700      (750)     (605)
                                            --------  --------  --------
    Net cash provided by operating
      activities . . . . . . . . . . . . .    28,005    24,013    21,157
                                            --------  --------  --------
Cash flows used by investing activities:
    Acquisition of property, plant
      & equipment. . . . . . . . . . . . .    (7,386)   (3,498)   (4,068)
                                            --------  --------  --------
    Net cash used by investing
      activities . . . . . . . . . . . . .    (7,386)   (3,498)   (4,068)
                                            --------  --------  --------
Cash flows used by financing activities:
    Proceeds from revolving credit
      facilities . . . . . . . . . . . . .         -         -     1,500
    Payments on revolving credit
      facilities . . . . . . . . . . . . .    (1,717)   (2,599)   (2,593)
    Dividends paid to minority interest. .      (117)     (102)      (85)
    Dividends paid to stockholders . . . .   (17,163)  (16,044)  (15,002)
    Proceeds from the exercise of
      stock options. . . . . . . . . . . .     3,011     3,465       111
    Excess tax benefit from stock-based
      compensation arrangements. . . . . .       829       244         -
                                            --------  --------  --------
    Net cash used by financing
      activities . . . . . . . . . . . . .   (15,157)  (15,036)  (16,069)
                                            --------  --------  --------

                                     29


<PAGE>


                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (CONTINUED)
                       LANDAUER, INC. AND SUBSIDIARIES
                      FOR THE YEARS ENDED SEPTEMBER 30,


(Dollars in Thousands)                        2007      2006      2005
----------------------                      --------  --------  --------

    Effects of foreign
      currency translation . . . . . . . .       187       343       (17)

Net increase in cash and
  cash equivalents . . . . . . . . . . . .     5,649     5,822     1,003
Opening balance -
  cash and cash equivalents. . . . . . . .    15,420     9,598     8,595
                                            --------  --------  --------
Ending balance -
  cash and cash equivalents. . . . . . . .  $ 21,069  $ 15,420  $  9,598
                                            ========  ========  ========

Supplemental disclosure of
 cash flow information:
  Cash paid for income taxes . . . . . . .  $ 13,191  $ 12,713  $ 10,501
                                            ========  ========  ========

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











































                                     30


<PAGE>


                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       LANDAUER, INC. AND SUBSIDIARIES


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION

      The accompanying consolidated financial statements include the
accounts of Landauer, Inc.; Landauer-Europe, Ltd. and HomeBuyer's
Preferred, Inc., its wholly-owned subsidiaries; SAPRA-Landauer, Ltda., its
75%-owned subsidiary, Beijing-Landauer, Ltd., its 70%-owned subsidiary, and
Landauer Australasia Pty Ltd. its 51%-owned subsidiary ("Landauer" or the
"Company"). Nagase-Landauer, Ltd. (50%-owned) is a Japanese corporation
that is accounted for on the equity basis. All material intercompany
transactions have been eliminated.

CASH EQUIVALENTS

      Cash equivalents include investments with an original maturity of
three months or less. Primarily all investments are short-term money market
instruments.

INVENTORIES

      Inventories, principally the components associated with dosimetry
devices, are valued at lower of cost or market utilizing a first-in, first-
out method.

REVENUES AND DEFERRED CONTRACT REVENUE

      The source of revenues for the Company is radiation measuring and
monitoring services including other services incidental to measuring and
monitoring. The measuring and monitoring services provided by the Company
to its customers are of a subscription nature and are continuous. The
Company views its business as services provided to customers over a period
of time and the wear period is the period over which those services are
provided. Badge production, wearing of badges, badge analysis, and report
preparation are integral to the benefit that the Company provides to its
customers. These services are provided to customers on an agreed-upon
recurring basis (monthly, bi-monthly or quarterly) that the customer
chooses for the wear period. Revenue is recognized on a straight-line
basis, adjusted for changes in pricing and volume, over the wear period as
the service is continuous and no other discernible pattern of recognition
is evident. Revenues are recognized over the periods in which the customers
wear the badges irrespective of whether invoiced in advance or in arrears.

      Many customers pay for these services in advance. The amounts
recorded as deferred contract revenue in the consolidated balance sheets
represent customer deposits invoiced in advance during the preceding twelve
months for services to be rendered over the succeeding twelve months, and
are net of services rendered through the respective consolidated balance
sheet date. Management believes that the amount of deferred contract
revenue shown at the respective consolidated balance sheet date fairly
represents the level of business activity it expects to conduct with
customers invoiced under this arrangement.

      Other services incidental to measuring and monitoring augment the
basic radiation measurement services that the Company offers, providing
administrative and informational tools to customers for the management of
their radiation detection programs. Other service revenues are recognized
upon delivery of the reports to customers or as other such services are
provided.

      The Company sells radiation monitoring products to its customers,
principally InLight products, for their use in conducting radiation
measurements or managing radiation detection programs. Revenues from
product sales are recognized when shipped.


                                     31


<PAGE>


      Revenues are shown net of nominal sales allowance adjustments.

RESEARCH AND DEVELOPMENT

      The cost of research and development programs is charged to selling,
general and administrative expense as incurred and amounted to
approximately $1,831,000 in fiscal 2007, $1,769,000 in fiscal 2006 and
$1,704,000 in fiscal 2005. Research and development costs include salaries
and allocated employee benefits, third-party research contracts,
depreciation and supplies.

DEPRECIATION, AMORTIZATION AND MAINTENANCE

      Property, plant and equipment are recorded at cost. Plant, equipment
and custom software are depreciated on a straight-line basis over their
estimated useful lives, which are primarily 30 years for buildings and
three to eight years for equipment and custom software. Dosimetry devices
(principally badges) and software are amortized on a straight-line basis
over their estimated lives, which are three to five years. Maintenance and
repairs are charged to expense, and renewals and betterments are
capitalized.

ADVERTISING

      The Company expenses the costs of advertising as incurred.
Advertising expense, primarily related to product shows and exhibits,
amounted to $403,000 in fiscal 2007, $317,000 in fiscal 2006 and  $408,000
in fiscal 2005.

INCOME TAXES

      Landauer files income tax returns in the jurisdictions in which it
operates. For financial statement purposes, provisions for federal, state,
and foreign income taxes have been computed in accordance with the
provisions of SFAS No. 109, "Accounting for Income Taxes."

USE OF ESTIMATES

      The preparation of financial statements in conformity with generally
accepted accounting principles 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
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

RECLASSIFICATIONS

      Certain reclassifications have been made in the financial statements
for comparative purposes. These reclassifications have no effect on the
results of operations or financial position.

STOCK-BASED COMPENSATION

      Prior to fiscal 2006, the Company accounted for stock-based
compensation under the recognition and measurement principles of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations ("APB 25"), and adopted the
disclosure-only provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation". Under APB 25, as stock options were granted with an exercise
price equal to the market value of the stock on the date of grant, no
stock-based compensation cost was reflected in net income for grants of
stock options prior to fiscal 2006.







                                     32


<PAGE>


      Effective October 1, 2005, the Company adopted SFAS No. 123 (Revised
2004), "Share-Based Payment," ("SFAS 123R"), which requires the measurement
and recognition of compensation cost at fair value for all share-based
payments, including stock options. Stock-based compensation expense,
primarily for grants of restricted stock, totaled approximately $801,000,
$888,000 and $61,000 for fiscal 2007, 2006 and 2005, respectively. The
total income tax benefit recognized in the consolidated statements of
income related to expense for stock-based compensation was approximately
$322,000, $353,000 and $24,000 during fiscal 2007, 2006 and 2005,
respectively.

      Under APB 25, pro-forma expense for stock options was recorded
ratably over the applicable vesting period, which generally ranged from 0
to 4 years. Upon adoption of SFAS 123R, compensation expense is recorded
ratably over the vesting period. Had the fair value based accounting method
for stock-based compensation prescribed by SFAS No. 123 been used, the
Company's net income and earnings per share for fiscal 2005 would have been
reduced to the pro-forma amounts illustrated as follows:

      (Dollars in Thousands, Except per Share)              2005
      ----------------------------------------            --------
      Net income - as reported . . . . . . . . . . . .    $ 17,208
      Deduct:  Fair value based compensation expense,
        net of taxes . . . . . . . . . . . . . . . . .      (1,849)
                                                          --------
      Net income - pro forma . . . . . . . . . . . . .    $ 15,359
                                                          ========
      Earnings per share:
         Basic - as reported . . . . . . . . . . . . .    $   1.92
         Basic - pro forma . . . . . . . . . . . . . .    $   1.71

         Diluted - as reported . . . . . . . . . . . .    $   1.90
         Diluted - pro forma . . . . . . . . . . . . .    $   1.70
                                                          ========

      The weighted average fair value of option grants was $10.76 during
fiscal 2005. No stock options were granted in fiscal 2007 or 2006. The fair
value of stock options is estimated using the Black-Scholes option-pricing
model with the following weighted average assumptions for fiscal 2005:
expected volatility of 23.73%; risk-free interest rate of 4.27%; expected
lives of 10 years; and dividend yield of 3.44%.

      Expected volatility and the expected life of stock options are based
on historical experience. The risk free interest rate was derived from the
implied yield available on U.S. Treasury zero-coupon issues with a
remaining term, as of the date of grant, equal to the expected term of the
option. The dividend yield was based on annual dividends and the fair
market value of the Company's stock on the date of grant.

      In addition to stock options, key employees and/or non-employee
directors are eligible to receive performance shares and restricted stock,
under the Company's 2005 Long-Term Incentive Plan. Performance shares
represent a right to receive shares of common stock upon satisfaction of
performance goals or other specified metrics. Restricted stock represents a
right to receive shares of common stock upon the passage of a specified
period of time. The fair value of performance shares and restricted stock
is based on the average of the Company's high and low stock prices on the
date of grant. Compensation expense for performance shares is recorded
ratably over the vesting period, assuming that achievement of performance
goals is deemed probable. Compensation expense for restricted stock is
recognized ratably over the vesting period. The weighted average fair
values of restricted share grants, including restricted stock and
performance shares, were $49.27, $46.32 and $47.48 during fiscal 2007, 2006
and 2005, respectively.






                                     33


<PAGE>


EMPLOYEE BENEFIT PLANS

      Landauer sponsors postretirement benefit plans to provide pension,
supplemental retirement funds, and medical expense reimbursement to
eligible retired employees, as well as a directors' retirement plan that
provides for certain retirement benefits payable to non-employee directors.
Refer to the footnote "Employee Benefit Plans" on page 40 of this Annual
Report on Form 10-K for further information on these benefit plans.

      Effective September 30, 2007, the Company adopted SFAS No. 158,
"Employers' Accounting for Defined Benefit Pension and Other Postretirement
Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)". The
statement requires companies to recognize on their balance sheet the funded
status of their defined benefit pension and other postretirement benefit
plans and to recognize changes in the funded status of these plans through
comprehensive income in the year in which the changes occur. The statement
also requires that plan measurement dates coincide with the Company's
fiscal year-end.

      The adoption of SFAS No. 158 will not impact the Company's plan
measurement dates, as its plans historically have used a plan measurement
date of September 30. The following table illustrates the incremental
effect of applying SFAS No. 158 on individual line items in the
consolidated balance sheet at September 30, 2007. The adoption of SFAS
No. 158 had no effect on the Company's consolidated statement of income.

                                        Before                  After
                                      Application             Application
                                        of SFAS     Adjust-     of SFAS
(Dollars in Thousands)                  No. 158     ments       No. 158
----------------------                ----------  ----------  ----------
Goodwill and other intangible
  assets, net. . . . . . . . . . . .    $ 18,514    $   (187)   $ 18,327
Deferred income taxes, net . . . . .        (191)        524         333
Assets . . . . . . . . . . . . . . .      97,003         337      97,340
                                        --------    --------    --------
Accrued pension and post-
  retirement costs . . . . . . . . .         863        (557)        306
Current liabilities. . . . . . . . .      28,524        (557)     27,967
                                        --------    --------    --------
Pension and postretirement
  obligations. . . . . . . . . . . .       7,901       1,674       9,575
Non-current liabilities. . . . . . .       7,901       1,674       9,575
                                        --------    --------    --------
Accumulated other comprehensive
  loss, net. . . . . . . . . . . . .         271        (780)       (509)
Stockholders' equity . . . . . . . .      60,290        (780)     59,510
                                        --------    --------    --------
Liabilities and
  stockholders' equity . . . . . . .    $ 97,003    $    337    $ 97,340
                                        ========    ========    ========

RECENT ACCOUNTING PRONOUNCEMENTS

      In June 2006, the Financial Accounting Standards Board (FASB) issued
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes"
(FIN No. 48). FIN No. 48 clarifies the accounting for uncertainty in income
taxes by prescribing a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. FIN No. 48 also provides guidance
on de-recognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. In addition, the FASB released
Staff Position No. FIN 48-1 (FSP 48-1) to provide guidance on how an
enterprise should determine whether a tax position is effectively settled
for the purpose of recognizing previously unrecognized tax benefits. FIN
No. 48 is effective for fiscal years beginning after December 15, 2006, and




                                     34


<PAGE>


will become effective for the Company in the first quarter of fiscal 2008.
The Company continues to evaluate the impact of FIN No. 48 to its financial
position, results of operations and financial disclosures.

      In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements." SFAS No. 157 defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements.
SFAS No. 157 applies under other accounting pronouncements that require or
permit fair value measurements. SFAS No. 157 is effective for the Company
for fiscal year 2009. The Company is currently evaluating the impact of
SFAS No. 157 to its financial position, results of operations and financial
disclosures.

      In February 2007, the FASB issued SFAS No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities, including an
Amendment of FASB Statement No. 115."  SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at
fair value on an instrument-by-instrument basis, with unrealized gains and
losses related to these financial instruments reported in earnings at each
subsequent reporting date. SFAS No. 159 also establishes presentation and
disclosure requirements to facilitate comparisons between companies that
choose different measurement attributes for similar assets and liabilities.
SFAS No. 159 is effective for fiscal years beginning after November 15,
2007. The Company is currently evaluating the impact of SFAS No. 159 to its
financial position, results of operations and financial disclosures.

      In March 2007, the FASB ratified the Emerging Issues Task Force
(EITF) Issue No. 06-10, "Accounting for the Deferred Compensation and
Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life
Insurance Arrangements."  The EITF affirmed as a final consensus that an
employer should recognize a liability for the postretirement benefit
related to a collateral assignment split-dollar life insurance arrangement
in accordance with either SFAS No. 106 or APB Opinion No. 12. Issue No. 06-
10 applies only when the arrangement is determined to provide a
postretirement benefit. The final consensus on Issue No. 06-10 will also
require an employer to recognize and measure the asset under a collateral
assignment arrangement based on the substance of the arrangement. The Issue
is effective for fiscal years beginning after December 15, 2007, including
interim periods within those fiscal years. The Company is currently
evaluating the impact of Issue No. 06-10 to its financial position, results
of operations and financial disclosures.

      In June 2007, the FASB ratified EITF Issue No. 06-11, "Accounting for
Income Tax Benefits of Dividends on Share-Based Payment Awards."  EITF No.
06-11 requires companies to recognize the realized tax benefit from
dividends or dividend equivalents that are charged to retained earnings and
paid to employees for nonvested or outstanding equity-classified employee
share-based payment awards as an increase to additional paid-in-capital.
The EITF also addresses the accounting for these tax benefits if an
entity's estimate of forfeitures changes in subsequent periods. The Issue
is to be applied prospectively to dividends declared in fiscal years
beginning after December 15, 2007, including interim periods within those
fiscal years. The Company has evaluated Issue No. 06-11 and does not expect
it to have a material impact on its consolidated financial statements.


2.    IMPAIRMENT AND ACCELERATED DEPRECIATION CHARGES

      During fiscal 2007, the Company began implementation of an
information technology initiative to re-engineer various business processes
and replace components of its information technology systems that support
customer relationship management and the order-to-cash cycle. As part of
this information technology initiative, management conducted an evaluation
of its different information technology platforms and the usefulness of its
investments made in legacy information systems' hardware and software; this
evaluation was concluded in the quarter ending June 30, 2007. Management
identified certain legacy assets with a net book value of approximately
$3,500,000 that were either subject to immediate impairment or retirement


                                     35


<PAGE>


once the full system implementation has been completed. Management
currently anticipates that the assets subject to retirement will be
utilized through March 31, 2008, and therefore, the Company will record
accelerated depreciation through the newly determined remaining useful
lives.

      As of September 30, 2007, the Company recorded a pretax non-cash
charge of $2,875,000 ($1,725,000, after tax at a marginal tax rate of 40%),
or $0.19 per diluted share. The non-cash charge included an impairment of
$2,185,000 for those assets management determined have no future value and
$690,000 of incremental depreciation expense for those assets that will be
utilized through March 31, 2008. The Company expects also to recognize
accelerated depreciation of approximately $188,000 in each of the quarters
ending December 31, 2007 and March 31, 2008.


3.    INCOME PER COMMON SHARE

      Basic earnings per share were computed by dividing net income by the
weighted average number of shares of common stock outstanding during each
year. Diluted earnings per share were computed by dividing net income by
the weighted average number of shares of common stock that would have been
outstanding assuming dilution during each year. The Company considered the
impact of SFAS 123R on the computation of diluted shares. The Company
adopted SFAS 123R using the modified prospective method and elected to use
the alternative transition method ("short-cut method") to determine its
pool of windfall tax benefits.

      Following is a table that shows the weighted average number of shares
of common stock for the years ended September 30:

(Amounts in Thousands)                        2007      2006      2005
----------------------                      --------  --------  --------
Weighted average number of shares of
    common stock outstanding . . . . . . .     9,127     9,045     8,966
Effect of dilutive securities:
    stock-based awards issued to
    employees and non-employee directors .        69        67        72
                                            --------  --------  --------
Weighted average number of shares of
    common stock assuming dilution . . . .     9,196     9,112     9,038
                                            ========  ========  ========

      Following is a table that provides net income and earnings per share
for the years ended September 30:

(Dollars in Thousands,
Except per Share)                             2007      2006      2005
----------------------                      --------  --------  --------
Net income . . . . . . . . . . . . . . . .  $ 19,316  $ 19,046  $ 17,208
  Basic EPS. . . . . . . . . . . . . . . .  $   2.12  $   2.11  $   1.92
  Diluted EPS. . . . . . . . . . . . . . .  $   2.10  $   2.09  $   1.90


4.    EQUITY IN JOINT VENTURE

      Landauer's 50% interest in the common stock of Nagase-Landauer, Ltd.,
a Japanese corporation located in Tokyo and engaged in providing radiation
monitoring services in Japan, is accounted for on the equity basis. The
related equity in earnings of this joint venture is included in its own
caption in the accompanying Statements of Income. Landauer received
dividend payments of $560,000 for fiscal year 2007. During fiscal 2006,
Landauer received divided payments of $1,386,000 and $581,000 for fiscal
years 2006 and 2005, respectively.






                                     36


<PAGE>


      Condensed unaudited results of operations for Nagase-Landauer, Ltd.
are as follows, converted into U.S. dollars at the average rate of
exchange, for the years ended September 30:

(Dollars in Thousands)                        2007      2006      2005
----------------------                      --------  --------  --------
Revenues . . . . . . . . . . . . . . . . .  $ 16,472  $ 15,192  $ 13,892
Income before income taxes . . . . . . . .     4,833     4,168     4,261
Net income . . . . . . . . . . . . . . . .     2,828     2,282     2,704
                                            --------  --------  --------
Average exchange rate  (<yen>/$) . . . . .     118.5     116.3     107.3
                                            ========  ========  ========

      Condensed unaudited balance sheets for the years ended September 30,
2007 and 2006, converted into U.S. dollars at the then-current rate of
exchange, are as follows:

(Dollars in Thousands)                        2007      2006
----------------------                      --------  --------
Current assets . . . . . . . . . . . . . .  $ 14,530  $ 12,844
Other assets . . . . . . . . . . . . . . .     2,285     1,757
                                            --------  --------
Total assets . . . . . . . . . . . . . . .  $ 16,815  $ 14,601
                                            ========  ========

Liabilities. . . . . . . . . . . . . . . .  $  6,859  $  6,638
Stockholders' equity . . . . . . . . . . .     9,956     7,963
                                            --------  --------
Total liabilities and
  stockholders' equity . . . . . . . . . .  $ 16,815  $ 14,601
                                            ========  ========


5.    GOODWILL AND OTHER INTANGIBLE ASSETS

      The components of goodwill and other intangible assets for the years
ended September 30, 2007 and 2006 were as follows:

(Dollars in Thousands)                        2007      2006
----------------------                      --------  --------
Goodwill, net of pre-2002 amortization
  of $3,298 in 2007 and $3,283 in 2006
  (no longer amortized). . . . . . . . . .  $ 13,364  $ 13,273
Customer lists, net of amortization
  of $2,530 in 2007 and $2,000 in 2006
  (useful life of 10-15 years) . . . . . .     4,295     4,825
Licenses and patents, net of amortization
  of $490 in 2007 and $438 in 2006
  (useful life of 10-17 years) . . . . . .       592       458
Deferred pension costs (not amortized) . .         -       962
Other intangibles, net of amortization
  of $501 in 2007 and $445 in 2006
  (useful life of 10 years). . . . . . . .        76       132
                                            --------  --------
Total. . . . . . . . . . . . . . . . . . .  $ 18,327  $ 19,650
                                            ========  ========

      The intangible asset amounts noted above are presented net of
accumulated amortization of $6,819,000 at September 30, 2007 and $6,166,000
at September 30, 2006. Amortization of intangible assets was $640,000,
$652,000 and $642,000, for the years ended September 30, 2007, 2006 and
2005, respectively. Estimated annual aggregate amortization expense related
to intangible assets will be approximately $643,000, $585,000, $579,000,
$509,000 and $509,000, respectively, for each of the next five years.






                                     37


<PAGE>


6.    INCOME TAXES

      The components of the provision for income taxes for the years ended
September 30, 2007, 2006 and 2005 were as follows:

                                                      2007
(Dollars in Thousands)                  Current     Deferred     Total
----------------------                  --------    --------    --------
Federal. . . . . . . . . . . . . . .    $  9,752    $   (520)   $  9,232
State. . . . . . . . . . . . . . . .       2,349        (168)      2,181
                                        --------    --------    --------
Total. . . . . . . . . . . . . . . .    $ 12,101    $   (688)   $ 11,413
                                        ========    ========    ========

                                                      2006
(Dollars in Thousands)                  Current     Deferred     Total
----------------------                  --------    --------    --------
Federal. . . . . . . . . . . . . . .    $ 10,932    $ (1,455)   $  9,477
State. . . . . . . . . . . . . . . .       2,657        (351)      2,306
                                        --------    --------    --------
Total. . . . . . . . . . . . . . . .    $ 13,589    $ (1,806)   $ 11,783
                                        ========    ========    ========

                                                      2005
(Dollars in Thousands)                  Current     Deferred     Total
----------------------                  --------    --------    --------
Federal. . . . . . . . . . . . . . .    $ 10,916    $ (2,151)   $  8,765
State. . . . . . . . . . . . . . . .       2,292        (434)      1,858
                                        --------    --------    --------
Total. . . . . . . . . . . . . . . .    $ 13,208    $ (2,585)   $ 10,623
                                        ========    ========    ========

      The provision for taxes on income in each period differs from that
which would be computed by applying the statutory U.S. federal income tax
rate to income before taxes. The following is a summary of the major items
affecting the provision:

(Dollars in Thousands)                    2007        2006        2005
----------------------                  --------    --------    --------
Statutory federal income tax rate. .          35%         35%         35%
Computed tax provision at
  statutory rate . . . . . . . . . .    $ 10,791    $ 10,849    $  9,776
Increases (decreases) resulting from:
  State income tax provision net
    of federal benefit . . . . . . .       1,418       1,499       1,208
  Taxes on non-U.S. earnings . . . .        (206)        (74)        (16)
  Other. . . . . . . . . . . . . . .        (590)       (491)       (345)
                                        --------    --------    --------
Income tax provision in the
  statement of income. . . . . . . .    $ 11,413    $ 11,783    $ 10,623
                                        ========    ========    ========

      The Company has adopted SFAS No. 109, "Accounting For Income Taxes."
Accordingly, the Company recognizes certain income and expense items in
different years for financial and tax reporting purposes. These temporary
differences are primarily attributable to (a) utilization of accelerated
depreciation methods for tax purposes, (b) amortization of badge holder and
software development costs, (c) limitations on deductibility of pension
costs, (d) accrued benefit claims, vacation pay, and other compensation-
related costs, and (e) allowances for obsolete inventory.










                                     38


<PAGE>


      Significant components of deferred taxes were as follows:

(Dollars in Thousands)                            2007        2006
----------------------                          --------    --------
Deferred tax assets:
  Tangible asset amortization. . . . . . . .    $  3,530    $  2,792
  Pension accrual. . . . . . . . . . . . . .       3,342       2,693
  Compensation expense . . . . . . . . . . .         709         643
  HomeBuyer's accrued radon mitigation . . .         298         211
  Medical insurance claims . . . . . . . . .         560         555
  Other. . . . . . . . . . . . . . . . . . .         489         811
                                                --------    --------
                                                $  8,928    $  7,705
                                                ========    ========
Deferred tax liabilities:
  Depreciation . . . . . . . . . . . . . . .    $    851    $  1,149
  Software development . . . . . . . . . . .       2,503       2,381
  Intangible asset amortization. . . . . . .         710         823
  Other. . . . . . . . . . . . . . . . . . .         453         270
                                                --------    --------
                                                $  4,517    $  4,623
                                                ========    ========

      During fiscal year 2007, the Internal Revenue Service completed its
field examination of the Company's fiscal 2004 tax return. The audit
resulted in no material adjustments.

      Deferred taxes are not provided on the undistributed earnings of
certain subsidiaries operating outside of the United States that have been
or are intended to be permanently reinvested outside of the United States.
If these earnings were distributed, foreign tax credits may become
available under current law to reduce or eliminate the resulting income tax
liability in the United States.


7.    CREDIT FACILITY

      In April 2004, the Company negotiated a $25 million line of credit
with a commercial bank and borrowed $7,724,000 (euro-denominated) under
this facility as part of funding the acquisition of the remaining 49%
minority interest in Landauer-Europe. The Company funded euro-based debt
service payments from euro-denominated cash flows. The credit agreement was
amended, effective March 25, 2005, to extend the maturity date to March 25,
2006 and reduce the aggregate loan commitment under the credit facility to
$15 million, with an option for the Company to increase to $25 million. A
second amendment was made effective March 25, 2006, to extend the maturity
date to March 25, 2007 and increase the minimum tangible net worth covenant
to $22.4 million. The Company did not renew the line upon its maturity in
March 2007. At September 30, 2006, outstanding borrowings under the credit
agreement were $1,649,000. In October 2007, the Company negotiated a new
credit facility, which expires on October 31, 2009. The new credit facility
permits borrowing up to $15,000,000. To date, no borrowings have been made
under this facility.


8.    CAPITAL STOCK

      Landauer has two classes of capital stock, preferred and common, with
a par value of $0.10 per share for each class. As of September 30, 2007 and
2006, there were 9,210,861 and 9,094,190 shares of common stock issued and
outstanding (20,000,000 shares are authorized), respectively. There are no
shares of preferred stock issued (1,000,000 shares are authorized). Cash
dividends of $1.90 per common share were declared in fiscal 2007. At
September 30, 2007, there were accrued and unpaid dividends of $4,375,000.

      Landauer has reserved 500,000 shares of common stock under its long-
term incentive plan approved on February 3, 2005.



                                     39


<PAGE>


9.    EMPLOYEE BENEFIT PLANS

      In the United States, Landauer maintains a qualified noncontributory
defined benefit pension plan covering substantially all full-time
employees. The Company also maintains a supplemental key executive
retirement plan that provides for certain retirement benefits payable to
key officers and managers. While charges for the supplemental plan are
expensed annually, the plan is not separately funded. The Company maintains
a directors' retirement plan that provides for certain retirement benefits
payable to non-employee directors. The directors' plan was terminated in
1997. Pensions for international employees are generally provided under
government sponsored programs funded by employment taxes. For the fiscal
years ended September 30, 2007, 2006 and 2005, expense for the Company's
defined benefit pension plans was $1,929,000, $1,888,000 and $2,334,000,
respectively.

      Landauer maintains a 401(k) savings plan covering substantially all
U.S. full-time employees. Qualified contributions made by employees to the
plan are partially matched by the Company. For the fiscal years ended
September 30, 2007, 2006 and 2005, $149,000, $148,000 and $143,000,
respectively, were provided to expense under the plan.

      The Company also maintains an unfunded retiree medical expense
reimbursement plan. Under the terms of the plan, which covers retirees with
ten or more years of service, the Company will reimburse retirees to age
70, or to age 65 in accordance with plan changes effective October 1, 2005,
for (i) a portion of the cost of coverage under the then-current medical
and dental insurance plans if the retiree is under age 65, or (ii) all or a
portion of the cost of Medicare and supplemental coverage if the retiree is
over age 64. The assumptions for health-care cost ultimate trend rates were
6% for those younger than 65, and 5% for those 65 and older. For the fiscal
years ended September 30, 2007, 2006 and 2005, expense for the Company's
postretirement medical plan was $82,000, $98,000 and $296,000,
respectively.

      The Company adopted SFAS No. 158 as of the end of its 2007 fiscal
year. The impact of the adoption is discussed in Note 1 "Summary of
Significant Accounting Policies". The standard generally requires an
employer to recognize the over- or underfunded status of its defined
benefit postretirement plans on its balance sheet and recognize changes in
the funded status, as the changes occur, through comprehensive income.
Prior periods do not require restatement. The Company uses its fiscal year
end, September 30, as the measurement date for its plans. The following
tables set forth the status of the combined defined benefit pension plans
and the postretirement medical plan, as pension benefits and other
benefits, respectively, at September 30, 2007 and 2006. The Company's
subsidiary in France maintains a pension plan, in the amount of
approximately $167,000 that has not been included in the following tables.

                                    Pension Benefits     Other Benefits
                                   ------------------  ------------------
(Dollars in Thousands)               2007      2006      2007      2006
----------------------             --------  --------  --------  --------
CHANGE IN BENEFIT OBLIGATION:
Benefit obligation at
  beginning of year. . . . . . . . $ 21,583  $ 21,349  $  1,481  $  2,007
Service cost . . . . . . . . . . .    1,143     1,246        58        20
Interest cost. . . . . . . . . . .    1,210     1,153        76        82
Special termination benefits (1) .      140         -         -         -
Effects of reorganizations . . . .        -      (325)        -         -
Plan amendments (2). . . . . . . .        -         -         -      (840)
Actuarial (gain) loss. . . . . . .   (2,178)   (1,510)     (172)      261
Benefits paid. . . . . . . . . . .     (440)     (330)      (88)      (49)
                                   --------  --------  --------  --------
Benefit obligation at
  end of year. . . . . . . . . . . $ 21,458  $ 21,583  $  1,355  $  1,481
                                   ========  ========  ========  ========



                                     40


<PAGE>


(1)   Represents benefit costs arising from the retirement of the Company's
      former CFO. Refer to Note 12 "Reorganization Charges" for additional
      information.

(2)   Plan provisions were changed, effective October 1, 2005 for future
      retirees, to increase the minimum age for early retirement under the
      plan from 55 to 62 and to reduce the age to which benefits continue
      from 70 to 65.


                                    Pension Benefits     Other Benefits
                                   ------------------  ------------------
(Dollars in Thousands)               2007      2006      2007      2006
----------------------             --------  --------  --------  --------
CHANGE IN PLAN ASSETS:
Fair value of assets at
  beginning of year. . . . . . . . $ 11,082  $ 10,034  $      -  $      -
Actual return on plan assets . . .    1,183       516         -         -
Employer contribution. . . . . . .    1,274       862        88        49
Benefits paid. . . . . . . . . . .     (440)     (330)      (88)      (49)
                                   --------  --------  --------  --------
Fair value of assets at
  end of year. . . . . . . . . . . $ 13,099  $ 11,082  $      -  $      -
                                   ========  ========  ========  ========

RECONCILIATION OF FUNDED STATUS:
Funded status. . . . . . . . . . . $ (8,359) $(10,501) $ (1,355) $ (1,481)
Unrecognized transition asset. . .        -        (6)        -         -
Unrecognized prior service cost
  (credit) . . . . . . . . . . . .        -     1,076         -      (555)
Unrecognized net actuarial loss. .        -     3,337         -       635
                                   --------  --------  --------  --------
Net amount recognized. . . . . . . $ (8,359) $ (6,094) $ (1,355) $ (1,401)
                                   ========  ========  ========  ========

AMOUNTS RECOGNIZED IN
  CONSOLIDATED BALANCE SHEETS:
Accrued benefit liability. . . . . $      -  $ (7,543) $      -  $ (1,401)
Intangible asset . . . . . . . . .        -       962         -         -
Accumulated other compre-
  hensive loss - minimum pension
  liability, pretax. . . . . . . .        -       487         -         -
Current liabilities - accrued
  pension and postretirement
  costs. . . . . . . . . . . . . .     (217)        -       (89)        -
Noncurrent liabilities -
  pension and postretirement
  obligations. . . . . . . . . . .   (8,142)        -    (1,266)        -
                                   --------  --------  --------  --------
Net amount recognized. . . . . . . $ (8,359) $ (6,094) $ (1,355) $ (1,401)
                                   ========  ========  ========  ========

      At September 30, 2007, prior to the application of SFAS No. 158, the
Company recognized on its balance sheet an additional minimum pension
liability of $409,000 along with a related deferred pension cost reported
in intangible assets of $187,000 and minimum pension liability charge in
accumulated other comprehensive loss of $133,000, net of tax. At
September 30, 2006, the Company recognized on its balance sheet an
additional minimum pension liability of $1,449,000 along with a related
deferred pension cost reported in intangible assets of $962,000 and minimum
pension liability charge in accumulated other comprehensive loss of
$293,000, net of tax.








                                     41


<PAGE>


      Amounts recognized in accumulated other comprehensive loss, pre-tax,
at September 30, 2007 consist of:

                                              Pension      Other
(Dollars in Thousands)                        Benefits    Benefits
----------------------                        --------    --------
Net loss . . . . . . . . . . . . . . . . .    $    683    $    404
Prior service cost (credit). . . . . . . .         884        (444)
                                              --------    --------
Net amount recognized. . . . . . . . . . .    $  1,567    $    (40)
                                              ========    ========

      The estimated pre-tax amounts in accumulated other comprehensive loss
expected to be recognized in net periodic benefit cost over the next fiscal
year are:

                                              Pension      Other
(Dollars in Thousands)                        Benefits    Benefits
----------------------                        --------    --------
Net loss . . . . . . . . . . . . . . . . .    $      8    $     45
Prior service cost (credit). . . . . . . .         149        (111)
                                              --------    --------
Net amount expected to be recognized . . .    $    157    $    (66)
                                              ========    ========

      At September 30, 2007 and 2006, the accumulated benefit obligation
for all defined benefit pension plans was $18,592,000 and $18,572,000,
respectively. Information for pension plans with an accumulated benefit
obligation in excess of plans assets is set forth in the following table:

                                                  September 30,
(Dollars in Thousands)                          2007        2006
----------------------                        --------    --------
Projected benefit obligation . . . . . . .    $  6,393    $ 21,583
Accumulated benefit obligation . . . . . .       5,977      18,572
Fair value of plan assets. . . . . . . . .           -      11,082

      The significant decrease for fiscal 2007 is due primarily to
favorable asset returns for one of the Company's plans, resulting in plan
assets exceeding the accumulated benefit obligation; therefore, this plan
has not been included in fiscal 2007 in the above table.

      The components of net periodic benefit cost were as follows:

                                    Pension Benefits     Other Benefits
                                   ------------------  ------------------
(Dollars in Thousands)               2007      2006      2007      2006
----------------------             --------  --------  --------  --------
Service cost . . . . . . . . . . . $  1,143  $  1,246  $     58  $     20
Interest cost. . . . . . . . . . .    1,210     1,153        76        82
Expected return on plan assets . .     (747)     (772)        -         -
Amortization of transition asset .       (6)       (6)        -         -
Amortization of prior service
   cost (credit) . . . . . . . . .      149       156      (111)     (111)
Recognized net actuarial loss. . .       40       111        59       107
Special termination benefits . . .      140         -         -         -
                                   --------  --------  --------  --------
Net periodic benefit cost. . . . . $  1,929  $  1,888  $     82  $     98
                                   ========  ========  ========  ========











                                     42


<PAGE>


ASSUMPTIONS

      The weighted-average assumptions used to determine benefit
obligations at September 30 were as follows:

                                    Pension Benefits     Other Benefits
                                   ------------------  ------------------
                                     2007      2006      2007      2006
                                   --------  --------  --------  --------
Discount rate. . . . . . . . . . .    6.30%     5.90%     6.30%     5.90%
Rate of compensation increase. . .    3.50%     3.50%     3.50%     3.50%

      The weighted-average assumptions used to determine net periodic
benefit cost for years ended September 30 were as follows:

                                    Pension Benefits     Other Benefits
                                   ------------------  ------------------
                                     2007      2006      2007      2006
                                   --------  --------  --------  --------
Discount rate. . . . . . . . . . .    5.90%     5.75%     5.90%     5.75%
Expected long-term return
  on plan assets . . . . . . . . .    6.50%     7.50%     0.00%     0.00%
Rate of compensation increase. . .    3.50%     3.50%     3.50%     3.50%

      The expected long-term rate of return of plan assets is based on
historical and projected rates of return for current and planned asset
classes in the plan's investment portfolio. Based on the target asset
allocation for each asset class, the overall expected rate of return for
the portfolio was developed and adjusted for historical and expected
experience of the active portfolio management results compared to the
benchmark returns and for the effect of expenses paid from plan assets. The
Company reviews this long-term assumption on an annual basis.

      Assumed health care cost trend rates at September 30 were:

                                                      2007        2006
                                                    --------    --------
Health care cost trend rate assumed for
  next year. . . . . . . . . . . . . . . . . . .         12%         12%
Rate to which the cost trend rate is assumed
  to decline (the ultimate trend rate) . . . . .          6%          6%
Year that the rate reaches the ultimate
  trend rate . . . . . . . . . . . . . . . . . .        2013        2012

      Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plans. A one-percentage-point change
in assumed health care cost trend rates would have the following effects as
of September 30, 2007:

                                           1-Percentage-   1-Percentage-
(Dollars in Thousands)                     Point Increase  Point Decrease
----------------------                     --------------  --------------
Effect on aggregate of service and
  interest cost. . . . . . . . . . . . .          $    8         $    (8)
Effect on postretirement benefit
  obligation . . . . . . . . . . . . . .          $   69         $   (61)














                                     43


<PAGE>


PLAN ASSETS

      Landauer's pension plan weighted-average asset allocations by asset
category at September 30 were:

                                                       Plan Assets at
                                                        September 30,
                                                    ---------------------
Asset Category                                        2007        2006
--------------                                      --------    --------
Fixed income . . . . . . . . . . . . . . . . . .         51%         55%
Equity securities. . . . . . . . . . . . . . . .         48%         44%
Cash equivalents . . . . . . . . . . . . . . . .          1%          1%
                                                        ----        ----
Total. . . . . . . . . . . . . . . . . . . . . .        100%        100%
                                                        ====        ====

      Plan assets for the qualified defined benefit pension plan include
marketable equity securities, corporate and government debt securities, and
cash and short-term investments. The plan assets are not directly invested
in the Company's common stock. The supplemental key executive retirement
plan and the directors' retirement plan are not separately funded.

      The plan's investment strategy supports the objectives of the plan.
These objectives are to maximize returns in order to meet long-term cash
requirements within reasonable and prudent levels of risk. To achieve these
objectives, the Company has established a strategic asset allocation policy
which is to maintain approximately one half of plan assets in high quality
fixed income securities such as investment grade bonds and short term
government securities, with the other half containing large capitalization
equity securities. The plan's objective is to periodically rebalance its
assets to approximate weighted-average target asset allocations.
Investments are diversified across classes and within each class to
minimize the risk of large losses.

CONTRIBUTIONS

      To meet the IRS minimum funding standards, the Company expects to
contribute approximately $660,000 to its defined benefit pension plan
during fiscal 2008, of which approximately $218,000 is for the 2007 plan
year.

ESTIMATED FUTURE BENEFIT PAYMENTS

      The following benefit payments, which reflect expected future
service, as appropriate, are expected to be paid:

                                              Pension      Other
      (Dollars in Thousands)                  Benefits    Benefits
      ----------------------                  --------    --------
      2008 . . . . . . . . . . . . . . . .      $  636       $  89
      2009 . . . . . . . . . . . . . . . .         729          92
      2010 . . . . . . . . . . . . . . . .         730          89
      2011 . . . . . . . . . . . . . . . .         785          93
      2012 . . . . . . . . . . . . . . . .       1,000          64
      Years 2013-2017. . . . . . . . . . .       6,464         311


10.   COMMITMENTS AND CONTINGENCIES

      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 September 30, 2007, if adversely determined, would have a material
effect on its business, financial position, results of operations, or cash
flows.




                                     44


<PAGE>


11.   STOCK-BASED COMPENSATION

      The Company maintains three stock-based compensation plans for key
employees and/or non-employee directors: (i) the Landauer, Inc. 1996 Equity
Plan, as amended and restated through November 8, 2001 (the "1996 Equity
Plan"); (ii) the Landauer, Inc. 1997 Non-Employee Director's Stock Option
Plan, as amended and restated through November 8, 2001 (the "1997
Director's Plan"); and (iii) the Landauer, Inc. 2005 Long-Term Incentive
Plan (the "2005 LTI Plan"). For future grants, the 2005 LTI Plan replaced
the 1996 Equity Plan and the 1997 Director's Plan. The Company reserved
500,000 shares of its common stock for grant under the 2005 LTI Plan, and
any shares reserved for award and unused under the previous two plans were
cancelled. The Plans provide for grants of options to purchase the
Company's common stock, restricted stock, restricted stock units,
performance shares and units, and stock appreciation rights. Shares issued
upon settlement of stock-based compensation awards are issued from the
Company's authorized, unissued stock.

STOCK OPTIONS

      Expense related to stock options issued to eligible employees under
the Plans is recognized ratably over the vesting period. Stock options
generally vest over a period of 0 to 4 years and have 10-year contractual
terms.

      A summary of stock option activity during fiscal 2007 is presented
below (in thousands, except option prices):

                                                 Weighted-
                                                 Average
                                    Weighted-    Remaining
                         Number     Average     Contractual   Aggregate
                           of       Exercise       Term       Intrinsic
                         Options     Price        (Years)       Value
                         -------    ---------   -----------   ---------
Options outstanding at
  October 1, 2006. . .      468       $41.29
Exercised. . . . . . .     (154)       37.66
                         ------       ------
Options outstanding at
  September 30, 2007 .      314       $43.07           6.6      $2,476
                         ======       ======        ======      ======
Options exercisable at
  September 30, 2007 .      314       $43.07           6.6      $2,476
                         ======       ======        ======      ======

      As of September 30, 2007, all outstanding stock options were vested
and compensation expense related to stock options was recognized. The
intrinsic value of options exercised totaled approximately $2,181,000,
$590,000 and $2,250,000 during fiscal 2007, 2006 and 2005, respectively.
The total income tax benefit related to the exercise of stock options was
approximately $870,000 during fiscal 2007.

RESTRICTED SHARE AWARDS

      Restricted share awards consist of performance shares and time vested
restricted stock. Expense related to performance shares and restricted
stock is recognized ratably over the vesting period. Restricted stock
issued to eligible employees under the 2005 LTI plan vests, to date, over a
period from 6 months to 5 years, and performance shares contingently vest
over various periods, depending on the nature of the performance goal.

      Restricted share transactions during fiscal 2007 were as follows (in
thousands, except fair values):






                                     45


<PAGE>


                                          Number of      Weighted-
                                          Restricted     Average
                                            Share         Fair
                                            Awards        Value
                                          ----------    ----------
Restricted share awards outstanding
  at October 1, 2006 . . . . . . . . .            14        $46.57
Granted. . . . . . . . . . . . . . . .            30         49.27
Vested . . . . . . . . . . . . . . . .            (2)        47.80
                                                ----        ------
Restricted share awards outstanding
  at September 30, 2007. . . . . . . .            42        $48.41
                                                ====        ======

      As of September 30, 2007, unrecognized compensation expense related
to restricted share awards totaled approximately $1.2 million and is
expected to be recognized over a weighted average period of 1.5 years. The
total fair value of shares vested during fiscal 2007 and 2006 was $87,000
and $503,000, respectively. No restricted share awards vested in fiscal
2005.


12.   REORGANIZATION CHARGES

      In March 2006, the Company recognized expenses of approximately
$600,000 for costs associated with the implementation of a profit
improvement plan. In September 2006, the Company recognized expenses in the
amount of approximately $1,050,000 associated with management
organizational changes, including retirement incentives and related pension
benefit expenses, arising from the retirement of the Company's former chief
financial officer and the resignation of the vice president of operations,
recruitment expenses related to the recent election of a new chief
financial officer, severance charges, and other costs related to additional
personnel changes.

      In September 2005, the Company recognized expense in the amount of
$2,300,000 associated with various management organizational changes,
including early retirement incentives and related pension benefit expenses
arising from the retirement of the Company's former chief executive
officer, recruitment expenses related to the recent election of a new chief
executive officer and severance and other costs related to additional
personnel changes.


13.   GEOGRAPHIC INFORMATION

      The Company operates in a single business segment, radiation
monitoring services. The Company provides these services primarily to
customers in the United States, as well as to customers in other geographic
markets. The Company does not have any significant long-lived assets in
foreign countries. The following table shows the geographical distribution
of revenues for the fiscal years ended September 30, 2007, 2006 and 2005:

(Dollars in Thousands)                        2007      2006      2005
----------------------                      --------  --------  --------
Domestic . . . . . . . . . . . . . . . . .  $ 64,928  $ 63,966  $ 61,056
Europe - France and UK . . . . . . . . . .    12,046    10,114    10,068
Other countries. . . . . . . . . . . . . .     6,742     4,963     4,097
                                            --------  --------  --------
                                            $ 83,716  $ 79,043  $ 75,221
                                            ========  ========  ========

      Revenues of Nagase-Landauer, Ltd., the Company's joint venture in
Japan, are not consolidated and are not included in the above table.
Audited revenues of Nagase-Landauer, Ltd. for fiscal years 2007, 2006 and
2005 were $16,472,000 $15,192,000 and $13,892,000, respectively. See Note 4
for additional information on Nagase-Landauer, Ltd.



                                     46


<PAGE>


           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To Stockholders and Board of Directors of Landauer, Inc.:

      In our opinion, the consolidated financial statements listed in the
index appearing under Item 15(a)(1) present fairly, in all material
respects, the financial position of Landauer, Inc. and its subsidiaries at
September 30, 2007 and September 30, 2006, and the results of their
operations and their cash flows for each of the three years in the period
ended September 30, 2007 in conformity with accounting principles generally
accepted in the United States of America. Also in our opinion, the Company
maintained, in all material respects, effective internal control over
financial reporting as of September 30, 2007, based on criteria established
in INTERNAL CONTROL - INTEGRATED FRAMEWORK issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). The Company's
management is responsible for these financial statements, for maintaining
effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting, included
in "Management's Report on Internal Control over Financial Reporting",
under Item 9A. Our responsibility is to express opinions on these financial
statements and on the Company's internal control over financial reporting
based on our integrated audits (which were integrated audits in 2007 and
2006). We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatement
and whether effective internal control over financial reporting was
maintained in all material respects. Our audits of the financial statements
included examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. Our audit of
internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk.
Our audits also included performing such other procedures as we considered
necessary in the circumstances. We believe that our audits provide a
reasonable basis for our opinions.

      As discussed in Note 1, to the consolidated financial statements, the
Company began recording their pension and post retirement benefits in
accordance with Statement of Financial Accounting Standards No. 158
"Employers' Accounting for Defined Benefit Pension and Other Post-
Retirement Plans - an amendment of FASB Statements No. 87, 88, 106 and 132
(R)" as of September 30, 2007.

      A company's internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles. A company's internal control over financial reporting includes
those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of management and
directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or
disposition of the company's assets that could have a material effect on
the financial statements.





                                     47


<PAGE>


      Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.



/s/ PricewaterhouseCoopers LLP

Chicago, IL
December 11, 2007


























































                                     48


<PAGE>


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE

      None.


ITEM 9A. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

      As of the end of the period covered by this report, an evaluation was
performed under the supervision and with the participation of the Company's
management, including the Chief Executive Officer ("CEO") and the 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 Rule 13(a)-15(e) and 15d-15(e) under the Securities and Exchange
Act of 1934, as amended (the "Exchange Act"). Based upon that evaluation,
the Company's CEO and CFO concluded that the Company's disclosure controls
and procedures as of September 30, 2007 were effective.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

      Management of the Company is responsible for establishing and
maintaining adequate internal control over financial reporting, as such
term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The
Company's internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles in the United
States of America. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

      Our Management evaluated the effectiveness of our internal control
over financial reporting based on the framework in Internal Controls-
Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission. Based on this evaluation, our management concluded
that the Company's internal control over financial reporting was effective
as of September 30, 2007. The effectiveness of the Company's internal
control over financial reporting as of September 30, 2007 has been audited
by PricewaterhouseCoopers LLP, an independent registered public accounting
firm, as stated in their attestation report which appears under Item 8 of
this Annual Report on Form 10-K.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

      There have been no changes in the Company's internal control over
financial reporting that occurred during the period ended September 30,
2007 that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.


ITEM 9B.  OTHER INFORMATION

      None.











                                     49


<PAGE>


                                  PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

      Information pursuant to this Item relating to the directors of the
Company, contained under the headings "Election of Directors" and
"Beneficial Ownership of Common Stock" in the Proxy Statement, is
incorporated herein by reference. Information pursuant to this Item
relating to the Company's Audit Committee and the Company's code of ethics,
contained under the heading "Board of Directors and Committees" in the
Proxy Statement, is incorporated herein by reference.

      The executive officers of the Company are as follows:

NAME OF OFFICER               AGE          POSITION

William E. Saxelby            51           President and
                                             Chief Executive Officer
Jonathon M. Singer            43           Senior Vice President, Treasurer,
                                             Secretary, and
                                             Chief Financial Officer
Gerard P. Bilek               45           Vice President, Controller
R. Craig Yoder                55           Senior Vice President
                                             -Marketing and Technology
Richard E. Bailey             61           Senior Vice President
                                             -Operations

      Mr. Saxelby joined the Company in September 2005 as President and
Chief Executive Officer. Previously, he served as Chief Executive Officer
of Medical Research Laboratories, a manufacturer of defibrillators, prior
to its sale to Welch Allyn in 2003, and consulted with certain private
equity firms between 2003 and 2005. Prior to joining Medical Research
Laboratories, he served as a Corporate Vice President of Allegiance
Healthcare from 1996 to 1999, and from 1978 to 1996 he held executive
positions at Baxter International and its American Hospital Supply
subsidiary.

      Mr. Singer joined the Company in October 2006 as Senior Vice
President, Treasurer, Secretary, and Chief Financial Officer. Previously,
he served as Vice President Global Finance, Chief Financial Officer for the
Medical segment of Teleflex Incorporated. From 2004 to 2005, he served as
Vice President, Strategy and Business Development for Teleflex's Medical
segment. From 1998 through 2004, he worked in a number of positions within
the Medical Products and Services business segment of Cardinal Health,
Inc., most recently as its Vice President, Strategy and Business
Development.

      Mr. Bilek was elected to his position in October 2006, after serving
as the Company's Controller since 1999. Prior to joining the Company, he
held various financial/accounting positions with increasing levels of
responsibility. He is a Certified Public Accountant.

      Dr. Yoder was elected to his position after serving as the Company's
Vice President of Operations since 1994 and Technology Manager since
joining in 1983. Prior to joining the Company, he was a member of the
senior technical staff at Pennsylvania Power and Light, and at Battelle
Pacific Northwest Laboratory.

      Mr. Bailey was elected to his position in May 2006. Prior to joining
the Company, he was President and Chief Operating Officer of Dean Foods
Company and held senior executive positions with Philip Morris Company,
Kraft Foods, Inc., and Total Logistic Control.

      There are no family relationships between any director or executive
officer and any other director or executive officer of the Company.





                                     50


<PAGE>


ITEM 11.  EXECUTIVE COMPENSATION

      Except for the information relating to Item 13 hereof, the
information contained under the headings "Executive Compensation" and
"Compensation Committee Report" in the Proxy Statement is incorporated
herein by reference.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT AND RELATED STOCKHOLDER MATTERS

      The information contained under the headings "Beneficial Ownership of
Common Stock" and "Equity Compensation Plan Information" in the Proxy
Statement is incorporated herein by reference.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
          AND DIRECTOR INDEPENDENCE

      Except for the information relating to Item 11 hereof, the
information contained under the headings "Election of Directors" and
"Independence of Directors" in the Proxy Statement is incorporated herein
by reference.


ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

      The information contained under the heading "Fees Billed by
Independent Auditors" in the Proxy Statement is incorporated herein by
reference.


                                   PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)   The following documents are filed as part of this report:

      (1)       Financial Statements - The financial statements of
                Landauer listed under Item 8 herein.

      (2)       Financial Statement Schedules - None.

      (3)       Exhibits - The following exhibits:

      (3)(a)    Certificate of Incorporation of the Registrant, as amended
                through February 4, 1993, is incorporated by reference to
                Exhibit (3)(a) to the Annual Report on Form 10-K for the
                fiscal year ended September 30, 1993.

      (3)(b)    By-laws of the Registrant are incorporated by reference to
                Exhibit (3)(b) to the Annual Report on Form 10-K for the
                fiscal year ended September 30, 1992.

      (4)(a)    Specimen common stock certificate of the Registrant
                incorporated by reference to Exhibit (4)(a) to the Annual
                Report on Form 10-K for the fiscal year ended September 30,
                1997.

      (10)(a)   The Landauer, Inc. 1996 Equity Plan, as amended and
                restated through November 8, 2001, is incorporated by
                reference to Exhibit (10)(a) to the Annual Report on
                Form 10-K for the fiscal year ended September 30, 2002.

      (10)(b)   Amendment No. 1 to the Landauer, Inc. 1996 Equity Plan,
                as amended and restated through November 8, 2001, is
                incorporated by reference to Exhibit 10.1 to the Quarterly
                Report on Form 10-Q for the quarter ended March 31, 2006.


                                     51


<PAGE>


      (10)(c)   Liability Assumption and Sharing Agreement among Tech/Ops,
                Inc., Tech/Ops Sevcon, Inc., and the Registrant is
                incorporated by reference to Exhibit (10)(d) to the Annual
                Report on Form 10-K for the fiscal year ended September 30,
                1993.

      (10)(d)   Form of Indemnification Agreement between the Registrant
                and each of its directors is incorporated by reference to
                Exhibit (10)(e) to the Annual Report on Form 10-K for the
                fiscal year ended September 30, 1993.

      (10)(e)   Landauer, Inc. Directors' Retirement Plan dated March 21,
                1990 is incorporated by reference to Exhibit (10)(f) to the
                Annual Report on Form 10-K for the fiscal year ended
                September 30, 1996.

      (10)(f)   Form of Supplemental Key Executive Retirement Plan of
                Landauer, Inc., as amended and restated effective
                October 1, 2003, is incorporated by reference to
                Exhibit (10)(e) to the Annual Report on Form 10-K for the
                fiscal year ended September 30, 2003.

      (10)(g)   The Landauer, Inc. Incentive Compensation Plan for
                Executive Officers is incorporated by reference to Exhibit
                10(h) to the Annual Report on Form 10-K for the fiscal year
                ended September 30, 2000.

      (10)(h)   The Landauer, Inc. 1997 Non-Employee Director's Stock
                Option Plan, as amended and restated through November 8,
                2001, is incorporated by reference to Exhibit (10)(g) to
                the Annual Report on Form 10-K for the fiscal year ended
                September 30, 2003.

      (10)(i)   Amendment No. 1 to the Landauer, Inc. 1997 Non-Employee
                Director's Stock Option Plan, as amended and restated
                through November 8, 2001, is incorporated by reference to
                Exhibit 10.2 to the Quarterly Report on Form 10-Q for the
                quarter ended March 31, 2006.

      (10)(j)   Employment agreement dated February 29, 1996 between the
                Registrant and R. Craig Yoder is incorporated by reference
                to the Annual Report on Form 10-K for the fiscal year ended
                September 30, 1998.

      (10)(k)   The Landauer, Inc. Executive Special Severance Plan dated
                May 22, 2003 is incorporated by reference to Exhibit
                (10)(j) to the Annual Report on Form 10-K for the fiscal
                year ended September 30, 2003.

      10)(l)    Form of stock option award pursuant to the Landauer, Inc.
                1996 Equity Plan, as amended and restated through
                November 8, 2001, is incorporated by reference to
                Exhibit 10(l) to the Annual Report on Form 10-K for the
                fiscal year ended September 30, 2004.

      (10)(m)   The Landauer, Inc. 2005 Long-Term Incentive Plan is
                incorporated by reference to Exhibit (10)(m) to the Annual
                Report on Form 10-K for the fiscal year ended September 30,
                2005.

      (10)(n)   Amendment No. 1 to the Landauer, Inc. 2005 Long-Term
                Incentive Plan is incorporated by reference to Exhibit 10.3
                to the Quarterly Report on Form 10-Q for the quarter ended
                March 31, 2006.

      (10)(o)   Form of stock option award pursuant to the Landauer, Inc.
                2005 Long-Term Incentive Plan is incorporated by reference
                to Exhibit (10)(n) to the Annual Report on Form 10-K for
                the fiscal year ended September 30, 2005.

                                     52


<PAGE>


      (10)(p)   Form of director's restricted share award pursuant to the
                Landauer, Inc. 2005 Long-Term Incentive Plan is
                incorporated by reference to Exhibit (10)(o) to the Annual
                Report on Form 10-K for the fiscal year ended September 30,
                2005.

      (10)(q)   Form of key employee restricted share award pursuant to the
                Landauer, Inc. 2005 Long-Term Incentive Plan is
                incorporated by reference to Exhibit (10)(p) to the Annual
                Report on Form 10-K for the fiscal year ended September 30,
                2005.

      (10)(r)   Employment agreement dated September 28, 2005 between the
                Registrant and William E. Saxelby is incorporated by
                reference to Exhibit (10)(q) to the Annual Report on
                Form 10-K for the fiscal year ended September 30, 2005.

      (10)(s)   Amendment to Employment Agreement dated May 2, 2006 between
                the Registrant and R. Craig Yoder is incorporated by
                reference to Exhibit 10.1 to the Quarterly Report on
                Form 10-Q for the quarter ended June 30, 2006.

      (10)(t)   Employment agreement dated September 8, 2006 between the
                Registrant and Jonathon M. Singer is incorporated by
                reference to Exhibit 10.1 to the Current Report on Form 8-K
                dated September 8, 2006.

      (10)(u)   Form of Performance Stock Grant under the Landauer, Inc.
                2005 Long-Term Incentive Plan is incorporated by reference
                to Exhibit 10.1 to the Current Report on Form 8-K dated
                February 16, 2006.

      (10)(v)   Form of Restricted Stock Award under the Landauer, Inc.
                2005 Long-Term Incentive Plan is incorporated by reference
                to Exhibit 99.1 to the Current Report on Form 8-K dated
                March 19, 2007.

      (10)(w)   Form of Performance Stock Award under the Landauer, Inc.
                2005 Long-Term Incentive Plan as attached hereto as Exhibit
                (10) (w).

      (10)(x)   Form of Restricted Stock Award under the Landauer, Inc.
                2005 Long-Term Incentive Plan as attached hereto as Exhibit
                (10) (x).

      (21)      Subsidiaries of the registrant are:

                Beijing-Landauer, Ltd. (70%)
                Beijing, P.R. China

                HomeBuyer's Preferred, Inc. (100%)
                Glenwood, IL

                Landauer Australasia Pty Ltd. (51%)
                Sydney, Australia

                Landauer-Europe, Ltd. and subsidiary (100%)
                Paris, France
                Oxford, United Kingdom

                Nagase-Landauer, Ltd. (50%)
                Tokyo, Japan

                SAPRA-Landauer, Ltda. (75%)
                Sao Carlos - SP, Brazil





                                     53


<PAGE>


      31.1      Certification of William E. Saxelby, President and Chief
                Executive Officer, as adopted pursuant to Section 302 of
                the Sarbanes-Oxley Act of 2002 filed herewith.

      31.2      Certification of Jonathon M. Singer, Chief Financial
                Officer, as adopted pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002 filed herewith.

      32.1      Certification of William E. Saxelby, 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 furnished herewith.

      32.2      Certification of Jonathon M. Singer, Chief Financial
                Officer, pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                furnished herewith.

                Exhibits 10(a), 10(b), 10(e), 10(f), 10(g), 10(h), 10(i),
                10(j), 10(k), 10(l), 10(m), 10(n), 10(o), 10(p), 10(q),
                10(r), 10(s), 10(t), 10(u), 10(v), 10(w), and 10(x) listed
                above are management contracts and compensatory plans or
                arrangements required to be filed as exhibits hereto
                pursuant to the requirements of Item 601 of Regulation S-K.














































                                     54


<PAGE>


                                 SIGNATURES


      Pursuant to the requirements of Section 13 or 15(d) 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.


                  LANDAUER, INC.


                  By:   /s/ William E. Saxelby            December 12, 2007
                        --------------------------
                        William E. Saxelby
                        President and
                        Chief Executive Officer


      Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

      Signature                        Title                     Date
      ---------                        -----                     ----


/s/ William E. Saxelby        President and Director      December 12, 2007
William E. Saxelby         (Principal Executive Officer)


/s/ Jonathon M. Singer        Senior Vice President,      December 12, 2007
Jonathon M. Singer            Treasurer and Secretary
                             (Principal Financial and
                                Accounting Officer)


/s/ Robert J. Cronin                 Director             December 12, 2007
Robert J. Cronin


/s/ E. Gail de Planque               Director             December 12, 2007
E. Gail de Planque


/s/ Stephen C. Mitchell              Director             December 12, 2007
Stephen C. Mitchell


/s/ Richard R. Risk                  Director             December 12, 2007
Richard R. Risk


/s/ Thomas M. White                  Director             December 12, 2007
Thomas M. White


/s/ Michael D. Winfield              Director             December 12, 2007
Michael D. Winfield












                                     55


<PAGE>


<table>

                                        QUARTERLY FINANCIAL DATA (UNAUDITED)

<caption>

(Amounts in Thousands,                                 First      Second       Third       Fourth       Total
Except per Share)                                     Quarter     Quarter     Quarter      Quarter      Year
----------------------                                -------     -------     -------      -------     -------

                            <c>          <c>       <c>         <c>         <c>          <c>         <c>

Net revenues                    2007                  $20,160     $21,633     $20,589      $21,334     $83,716
                                2006                  $18,647     $20,621     $19,591      $20,184     $79,043


Gross profit                    2007                  $13,069     $14,503     $13,993      $14,624     $56,189
                                2006                  $11,214     $13,135     $12,449      $13,511     $50,309


Operating income (1, 2)         2007                  $ 7,300     $ 8,953     $ 5,472      $ 6,878     $28,603
                                2006                  $ 6,060     $ 8,034     $ 7,762      $ 7,649     $29,505


Net income                      2007                  $ 4,859     $ 5,940     $ 3,907      $ 4,610     $19,316
                                2006                  $ 4,007     $ 5,248     $ 5,121      $ 4,670     $19,046

Diluted net income per          2007                  $  0.53     $  0.65     $  0.42      $  0.50     $  2.10
  share (1, 2)                  2006                  $  0.44     $  0.58     $  0.56      $  0.51     $  2.09

Cash dividends per share        2007                  $ 0.475     $ 0.475     $ 0.475      $ 0.475     $  1.90
                                2006                  $ 0.450     $ 0.450     $ 0.450      $ 0.450     $  1.80

Common stock price per share    2007         high     $ 57.29     $ 54.46     $ 52.65      $ 54.35     $ 57.29
                                              low     $ 48.20     $ 46.00     $ 46.90      $ 45.50     $ 45.50
                                2006         high     $ 52.18     $ 52.24     $ 50.25      $ 53.00     $ 53.00
                                              low     $ 43.90     $ 44.42     $ 43.11      $ 44.45     $ 43.11

Weighted average diluted shares outstanding

                                2007                    9,195       9,184       9,208        9,223       9,196
                                2006                    9,104       9,098       9,104        9,142       9,112

<fn>

(1)   Includes accelerated depreciation and impairment charges of $2,875,000, reducing net income by $1,725,000
      (after income tax benefit of $1,150,000) or $0.19 per diluted share in fiscal year 2007.

(2)   Includes reorganization charges and management transition charges of $1,650,000, reducing net income by
      $994,000 (after income tax benefit of $656,000) or $0.11 per diluted share in fiscal year 2006.


                                                         56
</table>