SECURITIES AND EXCHANGE COMMISSION                         FORM 10-K
Washington, DC 20549


               ANNUAL REPORT PURSUANT TO SECTION 13 or 15(D)
                  OF THE SECURITIES EXCHANGE ACT OF 1934


               For the fiscal year ended September 30, 1998


                       Commission File Number 1-9788


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



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


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


            Registrants 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              AMERICAN STOCK EXCHANGE
(Title of each class)                          (Name of exchange on which
                                               registered)


      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 registrants 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.

      As of December 10, 1998, 8,609,299 common shares were outstanding,
and the aggregate market value of the voting and non-voting common equities
(based upon the closing price on the American Stock Exchange) held by non-
affiliates was approximately $220,000,000.

      Certain portions of the registrants definitive Proxy Statement in
connection with the February 3, 1999 Annual meeting of Stockholders (the
Proxy Statement) are incorporated by reference into Part III of this Annual
Report on Form 10-K.




<PAGE>


                                   INDEX

ITEM                                                               Page

PART I

1.    Business
            General Description                                       3
            Marketing and Sales                                       3
            Patents                                                   4
            Raw Materials                                             4
            Competition                                               4
            Research and Development                                  5
            Environmental Regulations                                 5
            Employees and Labor Relations                             5

2.    Properties                                                      5

3.    Legal Proceedings                                               5

4.    Submission of Matters to a Vote of Security Holders             5

4A.   Executive Officers of the Registrant                            6

PART II

5.    Market for Registrants Common Stock 
      and Related Stockholder Matters                                 7

6.    Selected Financial Data                                         7

7.    Management's Discussion and Analysis of Financial Condition 
      and Results of Operations                                       7

8.    Financial Statements and Supplementary Data
            Consolidated Balance Sheets                              11
            Consolidated Statements of Income                        12
            Consolidated Statements of Stockholders 
              Investment and Comprehensive Income                    13
            Consolidated Statements of Cash Flows                    14
            Notes to Financial Statements                            15
            Report of Independent Public Accountants                 24

9.    Changes in and Disagreements With Accountants
      on Accounting and Financial Disclosure                         25

PART III

10.   Directors and Executive Officers of the Registrant             26

11.   Executive Compensation                                         26

12.   Security Ownership of Certain Beneficial Owners 
      and Management                                                 26

13.   Certain Relationships and Related Transactions                 26

PART IV

14.   Exhibits, Financial Statement Schedules, 
        and Reports on Form 8-K                                      27
      Financial Statements                                           27
      Financial Statement Schedules                                  27
      List of Exhibits                                               27
      Reports on Form 8-K                                            28
      Signatures of Registrant and Directors                         29



<PAGE>


                                  PART I

ITEM 1. BUSINESS

GENERAL DESCRIPTION

      Landauer, Inc. is a Delaware corporation organized on December 22,
1987 to carry on the radiation monitoring business previously carried on by
Tech/Ops, Inc. (Tech/Ops).  On February 6, 1991, the Company changed its
name from Tech/Ops Landauer, Inc. to Landauer, Inc.

      The Company offers a service for measuring, primarily through
optically stimulated luminescent, film and thermoluminescent badges worn by
client personnel, the dosages of x-ray, gamma radiation and other
penetrating ionizing radiations to which the wearer has been exposed. 
While most of the Company's revenues are domestic, these services are also
marketed in the United Kingdom and Canada.  As of October 1, 1998, the
Company acquired a 75% interest in SAPRA-Landauer, Ltda., which provides
radiation dosimetry services in Brazil.  As of December 28, 1998, SAPRA-
Landauer acquired the radiation dosimetry service business formerly
conducted by REM in Sao Paulo, Brazil.

      Landauer's operations also include services for detecting radon gas
and for monitoring nitrous oxide anesthetic gases.  At present, these
services make up a small part of revenues.

      Landauer's wholly-owned subsidiary, HomeBuyers Preferred, Inc.,
offers a radon monitoring service and when warranted, remediation to
purchasers of personal residences.  The service is targeted to corporate
employee relocation programs which have generally regarded radon as a
serious environmental hazard.

      Landauer's activities also include the operations of a 50%-owned
subsidiary in Japan involved in radiation monitoring in that country.

      Landauer also operates a crystal manufacturing facility in
Stillwater, Oklahoma which it acquired in an asset purchase in August,
1998.

      The Company's shares are listed on the American Stock Exchange.  As
of September 30, 1998, there were 8,609,299 shares outstanding.

      As used herein, the "Company" or "Landauer" refers to Landauer, Inc.
and its wholly-owned subsidiary.

MARKETING AND SALES

      Landauer's dosimetry services are marketed primarily by full-time
Company personnel located in Illinois, California, Maryland, New York,
Georgia, Texas, and the United Kingdom.  U.S. sales personnel also market
these services in Canada. Other firms and individuals market the Company's
services on a commission basis, primarily to small customers.

      The Company has more than 45,000 customers representing more than
900,000 individuals who use the Company's services.  Typically, a client
will contract for a years service in advance, representing twelve monthly
badges, readings, and reports.  Sales are made principally on a
subscription basis and deferred income as shown on the balance sheet
represents advance payment for services to be rendered.  At September 30,
1998 and 1997, deferred income was $8,845,000 and $8,710,000, respectively.

      Radon gas detection kits are marketed primarily to institutional
customers and government agencies.

      The HomeBuyers Preferred Radon Protection Plan service agreement is
marketed to companies and to their corporate relocation service providers
for the benefit of purchasers of residences incident to transfers of
personnel.


<PAGE>


PATENTS

      The Company holds exclusive world-wide licenses to patent rights for
certain technologies which 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
from the years 2011 through 2015.

      At this time the Company is using the optically stimulated
luminescent (OSL) technology to provide dosimetry services to approximately
30% of its customers.  The Company is near completion of installation of
equipment and systems to make this technology available to virtually all of
its customers over the next eighteen months.  These licenses and systems
represent an important proprietary component of the OSL commercial service
known as Luxel.

      Additionally, the Company holds certain patent rights which relate to
various designs of alpha-track radon detection devices.  These patents
expire from the years 2000 through 2010.

      The Company believes that its business is primarily dependent upon
the Company's technical competence, the quality and reliability of its
services, and its prompt and responsive performance.

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

RAW MATERIALS

      The Company has many sources for most of its 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.  Although the Company
purchases most of its photographic film from a single supplier, the
Company's introduction of OSL technology is expected to replace film as the
predominant method for providing radiation dosimetry services.

COMPETITION

      Landauer has one major competitor as well as a number of smaller
competitors that operate in the U.S.  During 1996, the Company's two
largest competitors merged to form the second largest personnel dosimetry
service in the U.S.

      With the exception of Japan, the United Kingdom, and Brazil,
radiation monitoring activities in many foreign countries are generally
conducted by government agencies.  The Japanese market is served by the
Company through its 50%-owned joint venture, Nagase-Landauer, Ltd. 
Customers in the United Kingdom are served by the Company's facility in
Oxford.  In early 1995, the Company began offering radiation monitoring
services to customers in Canada following approval of the Company's devices
by Canadian authorities.  Customers in Brazil are served through the
Company's joint venture, SAPRA-Landauer, Ltda. 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. 
Additionally, many large private nuclear power plants also have their own
in-house radiation monitoring services.  As stated above, the Company
competes on the basis of advanced technologies, competent execution of
these technologies, the quality and reliability of its services, and its
prompt and responsive performance.



<PAGE>


      Radon gas detection services represent a market in which Landauer has
many large and small competitors, many of whom use short-term charcoal
detectors rather than the Company's alpha-track detectors.

      The HomeBuyers Preferred Radon Protection Plan represents a product
sold exclusively to the corporate relocation market through firms providing
relocation services and directly to corporate customers.  The competitive
environment has changed over the past year with consolidation in the
corporate relocation industry and a trend toward single supplier
relationships for inspection services.

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 over the past two years and intends to make
this technology available to most of its customers by early 2000.

      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.

ENVIRONMENTAL REGULATIONS

      The Company believes that it complies with federal, state and local
provisions which 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
operation, or competitive position of Landauer.

EMPLOYEES AND LABOR RELATIONS

      As of September 30, 1998, the Company employed approximately 280
full-time employees.  Landauer believes its relations with its employees
are good.


ITEM 2. PROPERTIES

      Landauer owns three adjacent buildings totaling approximately 60,000
square feet in Glenwood, Illinois, about 30 miles south of Chicago.  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.


ITEM 3. LEGAL PROCEEDINGS

      Landauer is involved in various legal proceedings, but believes that
these matters will be resolved without a material effect on its liquidity,
results of operation, or financial position.


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

        None.




<PAGE>


ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

        The executive officers of the Company are as follows:


Name of Officer              Age                Position
--------------               ---                ----------

Brent A. Latta               55                 President and Chief
                                                Executive Officer

James M. O'Connell           51                 Vice President, Finance,
                                                Treasurer, Secretary,
                                                and Chief Financial
                                                Officer

R. Craig Yoder               46                 Vice President - 
                                                Operations

      Mr. Latta, Mr. O'Connell, and Dr. Yoder were elected to their
positions on September 18, 1998, November 7, 1990, and February 2, 1994,
respectively.  Mr. Latta, who joined the Company in April, 1987 as Vice
President, had for more than five years previously been Vice President,
Marketing of Sherwood Medical Company, a manufacturer and distributor of
medical products.  Mr. O'Connell, prior to joining the Company in September
1990, was, for two years, Vice President and Chief Financial Officer of
Darome, Inc., a telecommunications service and equipment manufacturing
company. Dr. Yoder was elected to his position after serving as the
Company's Technology Manager since 1983.  Prior to this he was a member of
the senior technical staff at Pennsylvania Power and Light, and at Battelle
Pacific Northwest Laboratory.

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



<PAGE>


                                  PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND 
         RELATED STOCKHOLDER MATTERS

      The Company's Common Stock has been traded on the American Stock
Exchange since 1988.  A summary of market prices of the Company's Common
Stock is set forth in the table on page 24 of this Annual Report on Form
10-K.  On December 10, 1998, there were approximately 600 shareholders of
record.  There were no sales of unregistered securities during fiscal 1998.

      The Company has paid regular quarterly cash dividends since January,
1990.  The Company has also paid special cash dividends in 1990 and 1992. 
A summary of cash dividends paid for the last two years is set forth in the
table on page 24 of this Annual Report on Form 10-K.


ITEM 6.  SELECTED FINANCIAL DATA

      A summary of selected financial data for the last six years is set
forth in the inside front cover of the Companys Annual Report to
Stockholders accompanying this Annual Report on Form 10-K.


ITEM 7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

FISCAL 1998 COMPARED TO FISCAL 1997

      Net revenues for fiscal 1998 were $42,692,000 an increase of
$2,778,000, or 7%, over fiscal 1997.  The growth in revenues resulted from
increased unit sales and pricing for personnel dosimetry services.

      Cost of sales as a percentage of net revenues decreased to 29.5% in
fiscal 1998 compared with 30% a year ago.

      Selling, general and administrative expenses for fiscal 1998
increased $886,000, or 8.5%, compared with fiscal 1997 as a result of
expenses for acquisition activities, new technology start-up costs and Year
2000 remediation costs.  As a percentage of net revenues, such expenses
increased to 26.6% in fiscal 1998 from 26.3% a year ago.

      Other income for fiscal 1998 decreased to $1,429,000 from $1,518,000
in fiscal 1997, primarily as a result of lower income from the Company's
Japanese venture due to a strong U.S. dollar in fiscal 1998.

      Income tax expense for fiscal 1998 was $7,402,000 compared with
$6,954,000 in fiscal 1997.  The effective tax rate was 36.7% for fiscal
1998 and 1997.

      As a result, net income for fiscal 1998 increased $740,000, or 6.2%,
to $12,759,000.  Basic income per share increased from $1.42 in fiscal 1997
to $1.49 in fiscal 1998.

FISCAL 1997 COMPARED TO FISCAL 1996

      Net revenues for fiscal 1997 were $39,914,000, an increase of
$3,398,000, or 9.3%, over fiscal 1996.  The growth in revenues resulted
from increased unit sales and pricing for personnel dosimetry services and
from increased sales of radon protection plan service agreements.

      Cost of sales as a percentage of net revenues decreased to 30% in
fiscal 1997 compared with 30.1% in fiscal 1996.



<PAGE>


      Selling, general and administrative expenses for fiscal 1997
increased $806,000, or 8.3%, compared with fiscal 1996.  As a percentage of
net revenues, such expenses decreased to 26.3% in fiscal 1997 from 26.5% in
fiscal 1996.

      Other income for fiscal 1997 decreased to $1,518,000 from $1,579,000
in fiscal 1996, primarily as a result of lower income from the Company's
Japanese venture due to a strong U.S. dollar in fiscal 1997.

      Income tax expense for fiscal 1997 was $6,954,000 compared with
$6,518,000 in fiscal 1996.  The fiscal 1997 effective tax rate was 36.7%
compared with 37.4% for fiscal 1996.

      As a result, net income for fiscal 1997 increased $1,120,000, or
10.3%, to $12,019,000.  Basic income per share increased from $1.29 in
fiscal 1996 to $1.42 in fiscal 1997.

FOURTH QUARTER RESULTS OF OPERATIONS

      Revenues in the fourth quarter of fiscal 1998 were $10,746,000 or
3.9% higher than $10,342,000 reported for the same period in fiscal 1997. 
The increase is primarily attributable to personnel dosimetry revenues. 
Net income for the quarter of $3,328,000 represented an 3.6% increase
compared with the same period in 1997.  Basic income per share for the
fourth quarters of 1998 and 1997 was $.39 and $.38, respectively.

      Revenues in the fourth quarter of fiscal 1997 were $10,342,000, or
10.9% higher than $9,328,000 reported for the same period in fiscal 1996. 
The increase is primarily attributable to personnel dosimetry revenues. 
Net income for the quarter of $3,211,000 represented an 11.4% increase
compared with the same period in 1996.  Basic income per share for the
fourth quarters of 1997 and 1996 was $.38 and $.34, respectively.

LIQUIDITY AND CAPITAL RESOURCES

      Landauer's cash flows, as shown in the statement of cash flows, can
differ from year to year as a result of the Company's investment and
financing activities.  Investments in short-term instruments with a
maturity of greater than three months are classified separately from cash
and equivalents and investments with maturities of greater than one year
are classified as non-current assets.

      Net dispositions of U.S. treasury securities amounted to $8,366,000
in 1998 and net acquisitions amounted to $2,529,000 in 1997.  Investing
activities were limited to acquisitions of property, plant and equipment
(including amortizable dosimetry device components) and amounted to
$8,032,000 and $2,423,000, respectively, in fiscal 1998 and 1997.  The
Company's financing activities are limited to payments of regular cash
dividends, offset by small amounts of foreign dividends received and the
net effect of exercises of stock options.

      The Company has no significant long-term liabilities and its
requirement for cash flow to support investing activities is generally
limited.  Capital expenditures for fiscal 1999 are expected to amount to
$5,000,000, principally for equipment and software development.  The
Company anticipates that funds for these capital improvements will be
provided from operations.

      The Company presently maintains bank lines of credit totalling
$5,000,000.  In the opinion of management, resources are adequate for
projected operations and capital spending programs, as well as continuation
of the regular cash dividend program.



<PAGE>


      Landauer requires limited working capital for its operations since
many of its customers pay for annual services in advance.  Such advance
payments amounted  to $8,845,000 and $8,710,000 respectively, as of
September 30, 1998 and 1997, and are included in deferred contract revenue.

While these amounts represent approximately one-half of current
liabilities, such amounts generally do not represent a cash requirement.

      Landauer offers radiation monitoring services in the United Kingdom
and Canada.  The Company's operations in these markets do not depend on
significant capital resources.

INFLATION

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

COMPUTER SOFTWARE MODIFICATIONS

      During early 1996, the Company established an internal task force to
review the extent to which the Company's computer software, computer
hardware and non-information technology systems are Year 2000 compliant. 
This task force, assisted in certain instances by outside consultants, has
completed an internal assessment of the systems with a view to determining
whether any remediation or replacement is necessary for the continued
operation of such systems. The Company has focused its compliance efforts
on each of the software, hardware and non-information technology system
major categories or phases with six subsets related to computer software
systems.

      Remediation and/or replacement plans have been developed for each of
the phases identified.  Through September 30, 1998, the Company has
completed remediation and installation of two of the software systems
subsets and is in the process of remediating two additional subsets which
will be complete in mid-1999.  A fifth subset representing replacement
systems to be installed has resulted in the identification of software
products and vendors for the replacement systems with the installation and
conversion of several completed.  The sixth software subset represents non-
information technology systems software where individual users have assumed
responsibility for Year 2000 compliance.

      The computer hardware phase is essentially complete with the
installation of mainframe, network,  and peripheral equipment and related
operating systems.  Many of these installations were scheduled for
replacement or addition without regard to the Year 2000 compliance issue. 
Non-mainframe or network hardware systems have been or will be replaced or
modified in late 1998 or in 1999, as will those non-information technology
hardware systems or components.

      The Company relies upon certain vendors for critical supplies and
services and is in the process of contacting such vendors to determine
their Year 2000 compliance.

      The risks attendant to Year 2000 non-compliance are significant to
the Company if not addressed in a timely manner.  All mission critical
systems and hardware have been either remediated and/or replaced or are in
the process of undergoing remediation and/or replacement.  The Company has
numerous contingency strategies to deal with a variety of non-compliance
scenarios should a Year 2000 problem develop in these systems or hardware
despite the Company's remediation or replacement efforts.  Based on the
Company's analysis to date, the Company does not expect that the occurrence
of such a non-compliant event would have a material effect on its results
of operation, financial position or liquidity.



<PAGE>


      The Company currently estimates that the total cost of remediation
and replacement of its non-compliant systems will amount to $2,128,000. 
For the years ended September 30, 1998 and 1997, the amount of such expense
charged to operations was $337,000 and $418,000, respectively.  The total
estimated cost of compliance expenditures for systems treated as a capital
expenditure is $581,000 and is included in the above estimates.  Through
September 30, 1998, $211,000 of such capital expenditures have been made. 
For the year ended September 30, 1999, the Company estimates that $792,000
will be charged to operations related to the compliance effort, and that
$370,000 represents a capital expenditure.

      The Company's compliance efforts have required the allocation of
information technology resources to the Year 2000 project, as well as other
activities, most notably the Company's conversion to the Luxel dosimetry
system.  To the extent possible, such allocation of information technology
resources has been designed to optimize the progress of both projects and
to obviate the need to remediate redundant systems.  Additionally, such
allocation of resources has prioritized activities in a manner which does
not defer completion of any material systems beyond December 31, 1999. 
Management estimates that approximately 25% of its information technology
budget is devoted to the Year 2000 compliance effort.

      The responses set forth herein represent the subjective views of
members of management involved in Landauer's Year 2000 compliance efforts
and are based on information currently available to Landauer.  Landauer's
Year 2000 compliance efforts are ongoing and the views expressed herein are
subject to change.  In addition, the responses set forth herein are
dependent, in part, on advice received from vendors and other third parties
and, in certain cases, on events and matters outside of Landauer's control.

FORWARD LOOKING STATEMENTS

      Certain matters contained in this report are forward-looking
statements, including, without limitation, statements concerning the
development and introduction of new technologies, the costs of computer
software modifications and replacements, pending accounting announcements
and competitive conditions. The word "believe", "expect", anticipate", and
"estimate" and other similar expressions generally identify forward-looking
statements. All forward-looking statements contained herein are based
largely on the Company's current expectations and are subject to a number
of risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements.




<PAGE>


ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                        CONSOLIDATED BALANCE SHEETS
                       LANDAUER, INC. AND SUBSIDIARY
                                               (DOLLARS IN THOUSANDS)     

------------------------------------------------------------------------
As of September 30,                  Notes          1998          1997
------------------------------------------------------------------------
ASSETS
Current assets:
  Cash and cash equivalents              1       $ 6,501       $ 1,860
  Short-term investments                 1         1,998         8,381
  Receivables, net of allowances for
    doubtful accounts of $208,000 
    in 1998 and  $219,000 in 1997                  9,139         8,568
  Inventories                            1         1,258         1,108
  Prepaid expenses                                   214            96
  Deferred taxes on income               4         1,629         1,318
------------------------------------------------------------------------
Total current assets                              20,739        21,331
------------------------------------------------------------------------
Property, plant and equipment, 
 at cost:                                1
  Land and improvements                              538           571
  Buildings and improvements                       3,401         3,191
  Equipment                                       19,554        15,650
------------------------------------------------------------------------
                                                  23,493        19,412
    Less: accumulated depreciation and 
      amortization                                10,456        11,681
------------------------------------------------------------------------
Net property, plant and equipment                 13,037         7,731
------------------------------------------------------------------------
Investment in U.S. treasury securities   1         2,986         4,969
Cost of purchased businesses in 
  excess of net assets acquired          1         2,445         2,612
Equity in joint venture                  3         3,135         4,133
Other assets                                       3,995         2,959
------------------------------------------------------------------------
TOTAL ASSETS                                     $46,337       $43,735
========================================================================
LIABILITIES AND STOCKHOLDERS INVESTMENT
Current liabilities:
  Accounts payable                               $   681       $   573
  Dividends payable                                2,798         2,551
  Deferred contract revenue              1         8,845         8,710
  Accrued compensation and related costs           1,222         1,047
  Accrued pension costs                  6         1,937         1,491
  Accrued taxes on income            1 & 4           602           832
  Other accrued expenses                           1,915         1,911
------------------------------------------------------------------------
Total current liabilities                         18,000        17,115
------------------------------------------------------------------------
Commitments and contingencies            7
STOCKHOLDERS INVESTMENT              5 & 7
Preferred Stock                                    --            --   
Common Stock                                         861           850
Premium paid in on common stock                    8,486         7,860
Cumulative translation adjustments                 (563)          (59)
Retained earnings                                 19,553        17,969
------------------------------------------------------------------------
     Total stockholders investment                28,337        26,620
------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS INVESTMENT    $46,337       $43,735
========================================================================

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


<PAGE>


                     CONSOLIDATED STATEMENTS OF INCOME
                       LANDAUER, INC. AND SUBSIDIARY

                             (DOLLARS IN THOUSANDS, EXCEPT PER SHARE)     
--------------------------------------------------------------------------
For the years ended 
  September 30,              Notes      1998        1997        1996  
--------------------------------------------------------------------------

Net revenues                          $42,692     $39,914     $36,516 
--------------------------------------------------------------------------

Costs and expenses
  Cost of sales                        12,592      11,977      11,002 
  Selling, general, and 
    administrative               1     11,368      10,482       9,676 
--------------------------------------------------------------------------
                                       23,960      22,459      20,678 
--------------------------------------------------------------------------

Operating income                       18,732      17,455      15,838 
Equity in income of 
  joint venture                  3        653         722         781 
Other income                              776         796         798 
--------------------------------------------------------------------------

Income before taxes                    20,161      18,973      17,417 
Income taxes                 1 & 4     (7,402)     (6,954)     (6,518)
--------------------------------------------------------------------------

Net income                            $12,759    $ 12,019     $10,899 
==========================================================================

Net income per share:            2
  Basic                                 $1.49       $1.42       $1.29 

  Diluted                               $1.47       $1.39       $1.26 
==========================================================================



<PAGE>


<TABLE>                        CONSOLIDATED STATEMENTS OF STOCKHOLDERS INVESTMENT
                                            AND COMPREHENSIVE INCOME
                                                                                     (DOLLARS IN THOUSANDS)     
------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                            Premium     Cumulative                     Total  
                                            Paid in      Transla-                      Stock  
                                               on          tion                       holders'      Compre- 
                               Common        Common      Adjust-        Retained      Invest-       hensive 
                                Stock        Stock         ments        Earnings        ment        Income  
<S>                           <C>         <C>           <C>           <C>           <C>           <C>       
------------------------------------------------------------------------------------------------------------------
Balance September 30, 1995      $ 848       $ 7,561         $ 819      $ 14,557      $ 23,785 
Net income                        --           --            --          10,899        10,899      $ 10,899 
Foreign currency
  translation adjustment          --           --            (581)        --             (581)         (581)
Dividends                         --           --            --          (9,325)       (9,325)         --   
Compensatory effect of 
  stock options                   --             81          --            --              81          --   
------------------------------------------------------------------------------------------------------------------
Comprehensive Income                                                                                $10,318 
                                                                                                    ======= 
Balance September 30, 1996      $ 848       $ 7,642         $ 238      $ 16,131      $ 24,859 
Options exercised, 
 net of repurchases                 2            73           --           --              75          --   
Net income                        --            --            --         12,019        12,019      $ 12,019 
Foreign currency
 translation adjustment           --            --           (297)         --            (297)         (297)
Dividends                         --            --            --        (10,181)      (10,181)         --   
Compensatory effect of 
 stock options                    --            145           --           --             145          --   
------------------------------------------------------------------------------------------------------------------
Comprehensive income                                                                               $ 11,722 
                                                                                                   ======== 
BALANCE SEPTEMBER 30, 1997      $ 850       $ 7,860        $ ( 59)     $ 17,969      $ 26,620 
OPTIONS EXERCISED,
 NET OF REPURCHASES                11           475           --           --             486 
NET INCOME                        --           --                        12,759        12,759      $ 12,759 
FOREIGN CURRENCY 
 TRANSLATION ADJUSTMENT           --           --            (504)         --            (504)         (504)
DIVIDENDS                         --           --             --        (11,175)      (11,175)         --   
COMPENSATORY EFFECT OF
 STOCK OPTIONS                    --             151          --           --              151         --   
------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME                                                                               $ 12,255 
                                                                                                   ======== 
BALANCE SEPTEMBER 30, 1998      $ 861       $ 8,486        $ (563)     $ 19,553      $ 28,337 
==================================================================================================================
<FN>
                   The accompanying notes are an integral part of these financial statements.
</TABLE>


<PAGE>


                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                       LANDAUER, INC. AND SUBSIDIARY

                             (DOLLARS IN THOUSANDS, EXCEPT PER SHARE)     
--------------------------------------------------------------------------
For the years ended 
  September 30,                         1998        1997        1996  
--------------------------------------------------------------------------
Cash flow from operating activities:
  Net income                          $12,759     $12,019     $10,899 

  Non-cash expenses, revenues, 
   and gains reported in income
    Depreciation and amortization       2,635       2,541       2,469 
    Equity in income of joint venture    (653)       (722)       (781)
    Compensatory effect of stock 
     options                              151         145          81 
    Deferred income taxes                (311)        181        (753)
--------------------------------------------------------------------------
                                        1,822       2,145       1,016 
--------------------------------------------------------------------------
  Net increase in other current assets   (844)     (1,191)       (369)
  Net increase in current liabilities     638         151       1,568 
  Net increase in net long-term assets   (778)       (141)       (259)
--------------------------------------------------------------------------
                                         (984)     (1,181)        940 
--------------------------------------------------------------------------
  Net cash generated from operating 
   activities                          13,597      12,983      12,855 

Cash flow from investing activities:
  Disposition of investments           11,319      12,273      10,873 
  Acquisition of investments           (2,953)    (14,802)    (11,260)
  Acquisition of property, plant 
   and equipment                       (8,032)     (2,423)     (2,297)
--------------------------------------------------------------------------
  Net cash provided by (used by) 
   investing activities                   334      (4,952)     (2,684)

Cash flow from financing activities:
  Exercise of stock options - net         486          75        --   
  Dividend received from foreign 
   affiliate                            1,152         356         386 
  Dividends paid                      (10,928)     (9,961)     (9,113)
--------------------------------------------------------------------------
  Net cash used by financing 
   activities                          (9,290)     (9,530)     (8,727)
--------------------------------------------------------------------------
Net increase (decrease) in cash         4,641      (1,499)      1,444 
Opening balance - cash and 
  cash equivalents                      1,860       3,359       1,915 
--------------------------------------------------------------------------
Ending balance - cash and 
  cash equivalents                    $ 6,501     $ 1,860     $ 3,359 
==========================================================================
Supplemental Disclosure of Cash 
 Flow Information:
   Cash paid for income taxes         $ 6,508     $ 7,289     $ 7,523 
==========================================================================
Supplemental Disclosure of 
 Non-cash Financing Activity:
  Dividend declared                   $ 2,798     $ 2,551     $ 2,331 
  Foreign currency translation 
   adjustment                            (504)       (297)       (581)
==========================================================================

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


<PAGE>


       NOTES TO FINANCIAL STATEMENTS, LANDAUER, INC. AND SUBSIDIARY

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

      The accompanying financial statements include the accounts of
Landauer, Inc. and HomeBuyers Preferred, Inc., its wholly-owned subsidiary
("Landauer" or the "Company").  Nagase-Landauer, Ltd. (50%-owned), is a
Japanese corporation which is accounted for on the equity basis.  All
material intercompany transactions have been eliminated.

      The cost of purchased businesses included in the accompanying
financial statements exceeded the fair value of net assets at the date of
acquisition in the amount of $4,408,000 and has been charged to "Cost of
purchased business in excess of net assets acquired."  The excess is being
amortized on a straight-line basis over fifteen years, except for an
acquisition initiated prior to 1971 ($942,000), where in the opinion of
management there has been no diminution in value.  As of September 30, 1998
and 1997, accumulated amortization was $1,420,000 and $1,253,000,
respectively.

CASH EQUIVALENTS

      Cash equivalents include investments with an original maturity of
three months or less.

INVESTMENT IN U.S. TREASURY SECURITIES

      Investments in U.S. Treasury Securities having an original maturity
of longer than three months but less than one year are classified as
current assets.  Those having an original maturity of longer than one year
are classified as non-current assets.

      The Company's policy is to hold investments until maturity and
accordingly are carried at cost, adjusted for accretion of discount and
amortization of premium in accordance with the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities."

INVENTORIES

      Inventories are priced at the lower of cost or market, and costs are
relieved from inventory on a first-in, first-out basis.

REVENUES AND DEFERRED CONTRACT REVENUE

      The Company recognizes revenues and the related costs for its
services in the periods for which such services are provided. Many
customers pay for these services in advance.  The amounts recorded as
deferred contract revenue in the balance sheet 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 balance sheet date.  Management believes that the
amount of deferred contract revenue shown at the respective balance sheet
date fairly represents the level of business activity it expects to conduct
with customers invoiced under this arrangement.

RESEARCH AND DEVELOPMENT

      The cost of research and development programs is charged to selling,
general and administrative expense as incurred and amounted to
approximately $1,445,000 in 1998, $1,516,000 in 1997, and  $1,534,000 in
1996.



<PAGE>


DEPRECIATION AND MAINTENANCE

      Plant and equipment are depreciated on a straight-line basis over
their estimated useful lives, which are primarily thirty years for
buildings and five to eight years for equipment. Maintenance and repairs
are charged to expense, and renewals and betterments are capitalized.

INCOME TAXES

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

USE OF ESTIMATES

      Management has made certain estimates and assumptions that affect the
reported amount of assets and liabilities during the preparation of the
financial statements.  Actual results could differ from these estimates. 
However, management does not believe they would have a material effect on
operating results.

2.    INCOME PER COMMON SHARE

      Earnings per share computations have been made in accordance with the
provisions of SFAS No. 128, "Earnings Per 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.

      Following is a table which shows the weighted average number of
shares of common stock  for the years ended September 30:
----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                  1998        1997        1996  
----------------------------------------------------------------------
Weighted average number of shares
  of common stock outstanding           8,586       8,483       8,477 
Options issued to executives 
  (Note 5)                                 97         132         153 
                                      ------------------------------- 
Weighted average number of shares
  of common stock assuming
  dilution                              8,683       8,615       8,630 
                                      =============================== 

3.    EQUITY IN JOINT VENTURE

      The 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 and fees earned therefrom
are included in other income in the accompanying Statements of Income.

      Condensed unaudited results of operations for Nagase-Landauer, Ltd.
for the three years ended September 30, 1998 are as follows, converted into
U.S. dollars at the then-current rate of exchange:
----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                  1998        1997        1996  
----------------------------------------------------------------------
REVENUES                             $ 10,669    $ 11,616    $ 12,116 
INCOME BEFORE INCOME TAXES              2,627       3,093       3,234 
NET INCOME                              1,303       1,416       1,563 
                                      =============================== 
AVERAGE EXCHANGE RATE (YEN/$)           136.7       120.0       108.3 
                                      =============================== 




<PAGE>


      Condensed unaudited balance sheets for the years ended September 30,
1998 and 1997 are as follows:
----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                              1998        1997  
----------------------------------------------------------------------
CURRENT ASSETS                                   $  9,876    $ 12,323 
OTHER ASSETS                                          935       1,035 
                                                 -------------------- 
TOTAL ASSETS                                     $ 10,811    $ 13,358 
                                                 ==================== 

LIABILITIES                                      $  4,479    $  5,188 
STOCKHOLDERS' INVESTMENT                            6,332       8,170 
                                                 -------------------- 
TOTAL LIABILITIES AND
STOCKHOLDERS' INVESTMENT                         $ 10,811    $ 13,358 
                                                 ==================== 

4.    INCOME TAXES

      The components of the provision for income taxes for the years ended
September 30, 1998, 1997 and 1996 are as follows:
-----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                 1998
-----------------------------------------------------------------------
                                       CURRENT     DEFERRED     TOTAL  
                                       ------------------------------- 
FEDERAL                                $ 6,313    $   (255)    $ 6,058 
STATE                                    1,400         (56)      1,344 

    TOTAL                              $ 7,713    $   (311)    $ 7,402 
                                       =============================== 

-----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                 1997
-----------------------------------------------------------------------
                                       CURRENT     DEFERRED     TOTAL  
                                       ------------------------------- 
FEDERAL                                $ 5,445     $   146     $ 5,591 
STATE                                    1,328          35       1,363 
                                       ------------------------------- 
    TOTAL                              $ 6,773     $   181     $ 6,954 
                                       =============================== 

-----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                                 1996
-----------------------------------------------------------------------
                                       CURRENT     DEFERRED     TOTAL  
                                       ------------------------------- 
FEDERAL                                $ 5,843    $   (605)    $ 5,238 
STATE                                    1,428        (148)      1,280 
                                       ------------------------------- 
    TOTAL                              $ 7,271    $   (753)    $ 6,518 
                                       =============================== 



<PAGE>


      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 the income before taxes.  The following is a summary of the major
items affecting the provision:

-----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                  1998        1997        1996  
-----------------------------------------------------------------------
STATUTORY FEDERAL INCOME
 TAX RATE                                 34%         34%         34% 

COMPUTED TAX PROVISION
 STATUTORY RATE                       $ 6,855     $ 6,451     $ 5,922 
                                      ------------------------------- 
INCREASES (DECREASES)
 RESULTING FROM:
    STATE INCOME TAX PROVISION,
     NET OF FEDERAL BENEFIT               875         888         833 
    OTHER                                (328)       (385)       (237)
                                      ------------------------------- 
INCOME TAX PROVISION IN THE
  STATEMENT OF INCOME                 $ 7,402     $ 6,954     $ 6,518 
                                      =============================== 

      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.  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) reserves for obsolete inventory.

      Significant components of deferred taxes are as follows:

----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                              1998        1997  
----------------------------------------------------------------------
DEFERRED TAX ASSETS:
  BADGE HOLDER AMORTIZATION                       $   950     $   848 
  PENSION ACCRUAL                                     765         590 
  COMPENSATION EXPENSE                                556         437 
  INVENTORY RESERVE                                    64          64 
  OTHER                                               378         350 
                                                  ------------------- 
                                                  $ 2,713     $ 2,289 
                                                  =================== 
                                                                      
DEFERRED TAX LIABILITIES
  DEPRECIATION                                    $   448     $   354 
  SOFTWARE DEVELOPMENT                                636         617 
                                                  ------------------- 
                                                  $ 1,084     $   971 
                                                  =================== 

      Management does not believe that a valuation allowance is required
for the net deferred tax asset.

5.    CAPITAL STOCK

      Landauer has two classes of capital stock, preferred and common, with
a par value of $.10 per share for each class.  As of September 30, 1998 and
1997 there were 8,609,299 and 8,504,091 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).


<PAGE>


      Landauer has reserved 850,000 shares of common stock for grants under
its stock bonus and option plans.  Recipients of grants or options must
execute a standard form of noncompetition agreement.  As of September 30,
1998, there have been no bonus shares issued.  Options granted under these
plans may be either incentive stock options or non-qualified options. 
Options granted through fiscal 1998 become exercisable over a four-year
period at a price not less than fair market value on the date of grant. 
The options expire ten years from the date of grant.

      During fiscal 1998, options for 30,000 shares were granted and
options for 181,000 shares were exercised.  As of September 30, 1998, non-
qualified options for 374,000 shares had been granted at prices from $10.50
- $24.63 per share.  At year-end, 248,220 shares were exercisable.  This
plan also provides for the grant of restricted shares or the grant of stock
appreciation rights, either separately or in relation to options granted. 
During fiscal 1998, grants for 12,000 restricted shares were made to key
employees.  As of September 30, 1998, no stock appreciation rights had been
granted.

      On February 22, 1989, the Company entered into an agreement with its
President under which options to purchase up to 100,000 shares of the
Companys common stock were granted, at a price of $10.50 per share,
exercisable over a ten-year period subject to the attainment of certain
financial goals.  For the years ended September 30, 1998, 1997, and 1996,
options for the purchase of 36,531, 10,000, and 9,870, respectively, became
exercisable under this agreement.

      The Company has paid regular quarterly cash dividends since January,
1990.  Summaries of cash dividends paid are set forth in the tables on the
inside front cover and on page 24 of this report.  It is the Company's
intention to continue the regular quarterly cash dividend policy under
currently foreseeable circumstances.

6.    EMPLOYEE BENEFIT PLAN

      Landauer maintains a noncontributory defined benefit pension and
retirement plan covering substantially all full-time employees.  The
Company also maintains a Supplemental Key Executive Retirement Plan which
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 which provides for certain retirement benefits payable to
non-employee directors.  The directors plan was terminated in 1997.

      The following table sets forth the status of these plans at
September 30, 1998 and 1997 in accordance with SFAS No.87:

----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                              1998        1997  
----------------------------------------------------------------------
ACTUARIAL PRESENT VALUE OF
 BENEFIT OBLIGATIONS
  VESTED BENEFITS                                $  4,633    $  4,151 
  UNVESTED BENEFITS                                    79          60 
                                                 -------------------- 
ACCUMULATED BENEFIT OBLIGATION                      4,712       4,211 
EFFECT OF PROJECTED FUTURE
  COMPENSATION LEVELS                               2,425       2,377 
                                                 -------------------- 
PROJECTED BENEFIT OBLIGATION                        7,137       6,588 
PLAN ASSETS AT FAIR VALUE                           6,082       5,232 
                                                 -------------------- 
PLAN ASSETS LESS THAN PROJECTED
  BENEFIT OBLIGATION                               (1,055)     (1,356)
UNRECOGNIZED NET LOSS                                (958)         91 
UNRECOGNIZED TRANSITION AMOUNT                        101         112 
                                                 -------------------- 
ACCRUED PENSION COST                             $ (1,912)   $ (1,153)
                                                 ==================== 


<PAGE>


      The Landauer net pension expense for 1998 and 1997 included the
following components as defined by SFAS No. 87:

----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                              1998        1997  
----------------------------------------------------------------------
SERVICE COSTS/BENEFITS EARNED
  DURING THE YEAR                                $    409    $    396 
INTEREST COST ON PROJECTED BENEFIT
  OBLIGATION                                          477         440 
ACTUAL RETURN ON PLAN ASSETS                         (455)       (352)
NET AMORTIZATION AND DEFERRED ITEMS                   (13)         70 
                                                 -------------------- 
NET PENSION EXPENSE                              $    418    $    554 
                                                 ==================== 

      Plan assets for the defined benefit pension plan include marketable
equity securities, corporate and government debt securities, and cash and
short-term investments.  The average discount rate and rate of increase in
future compensation levels used in determining the actuarial present value
of the projected benefit obligation were 7.5% and 5.5%, respectively, and
the expected long-term rate of return on assets was 8.0%.  The Supplemental
Key Executive Retirement Plan and the director's retirement plan are not
separately funded.  The maximum liabilities for these unfunded plans
included in the table above amounted to $1,007,000 and $864,000 at
September 30, 1998 and 1997, respectively.

      Landauer maintains a 401(k) savings plan covering substantially all
full-time employees.  Qualified contributions made by employees to the plan
are partially matched by the Company.  $83,000 and $80,000 was provided to
expense for the years ended September 30, 1998 and 1997, respectively,
under this plan.

      Landauer has adopted SFAS No. 106, "Accounting for Postretirement
Benefits Other than Pensions" to account for the Company's 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 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
coverages if the retiree is over age 64.  The assumption for health-care
cost trend rates were 7% for those younger than 65, and 5% for those 65 and
older.  The effect of a one percent increase on service and interest costs
and postretirement benefit obligation would be $7,000 and $50,000,
respectively.  For a one percent decrease, the effect would be a reduction
to service and interest costs and postretirement benefit obligation of
$6,000 and $43,000, respectively.  The amount of the Companys unrecognized
transition obligation resulting from the adoption of SFAS No. 106 is
$318,000 as of September 30, 1998.  This liability is included in "Other
accrued expenses."

7.    COMMITMENTS AND CONTINGENCIES

      The Company is involved in various legal proceedings, but believes
that the outcome of these proceedings will not have a materially adverse
effect on its financial condition.



<PAGE>


      In connection with the 1988 transfer of the personnel dosimetry
business to Landauer, the Company has entered into a Liability Assumption
and Sharing Agreement with Tech/Ops, Inc. ("Tech/Ops") providing for, among
other things, (i) assumption by Landauer of all determinable and contingent
liabilities and obligations of Tech/Ops relating to the personnel dosimetry
and radon detection business, (ii) assumption by the other former
subsidiary of all determinable and contingent liabilities and obligations
of Tech/Ops relating to its electronic controller business, (iii) joint and
several assumption by Landauer and the other former subsidiary of all
contingent liabilities of Tech/Ops and (iv) the allocation of other
liabilities jointly and severally assumed to the business in which they
relate or, if they relate to neither business, in ratios reflective of
relative profit contributions of the respective businesses for the five
years ended September 30, 1987.  As a result of this Agreement, $22,000 was
provided to expense in fiscal 1996.

      The Illinois Department of Revenue has determined that the Company's
Illinois income tax returns were deficient in certain prior years because,
in the Departments view, all income from the Company's dosimetry services
should be apportionable to Illinois.  The Company believes that only income
attributable to Illinois customers should be apportionable to Illinois for
income tax purposes and, prior to the Departments determination, had filed
its state income tax returns in Illinois and in other states applying this
methodology.  In fiscal 1998, an Illinois circuit court ruled in favor of
the Department and the Company has appealed the matter to an Illinois
appellate court.  The Company intends to continue to pursue an appeal or
other satisfactory resolution of this matter.  Since the Department's
initial determination, the Company has filed its tax returns in accordance
with the Departments position and, therefore, only the few specific tax
years subject to the Department's initial determination are subject to this
alleged deficiency.  Given the Company's current level of reserves and its
current tax policies, the Company believes that its failure to successfully
appeal the Department's deficiency determination will not have a material
adverse effect on its financial condition or results of operations.

8.    STOCK-BASED COMPENSATION PLANS

      The Company maintains two stock option plans for key employees, the
Landauer, Inc. Key Employee Stock Bonus and Option Plan ("The 1988 Plan"). 
It also maintains a stock option plan for its non employee directors (The
Directors' Plan).  The Company accounts for these plans under APB Opinion
No. 25, under which no compensation cost has been recognized except for a
performance-based grant for 100,000 shares (See Note 5 above).  Had
compensation cost for these plans been determined consistent with FASB
Statements No. 123, "Accounting for Stock-Based Compensation," the
Company's net income and earnings per share would have been as follows:

----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                  1998        1997        1996  
----------------------------------------------------------------------
NET INCOME:
            AS REPORTED              $ 12,759    $ 12,019    $ 10,899 
            PRO FORMA                  12,813      12,090      10,942 

BASIC EPS:
            AS REPORTED              $   1.49   $    1.42    $   1.29 
            PRO FORMA                    1.49        1.42        1.29 

DILUTED EPS:
            AS REPORTED                  1.47        1.39        1.26 
            PRO FORMA                    1.48        1.39        1.26 

Because the Statement 123 method of accounting has not been applied to
options granted prior to October 1, 1996, the resulting pro forma
compensation cost may not be representative of that to be expected in
future years.



<PAGE>


      The Company may grant options for up to 800,000 shares under the 1988
Plan (now terminated with respect to additional grants) and the 1996 Plan. 
The Company may grant options for up to 50,000 shares under the Directors'
Plan.  The Company has granted options on 640,000 and 35,000 shares,
respectively, under these plans through September 30, 1998. Under each plan
the option exercise price equals the stocks fair market value on the date
of grant. Options granted under the Employees' Plans vest ratably over four
years and options granted under the Directors' Plan vest ratably over ten
years.

      A summary of the status of these plans at September 30, 1998, 1997,
and 1996 and changes for the years then ended is presented in the table and
narrative below:

-----------------------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE)                    1998       
-----------------------------------------------------------------------
                                                               Weighed 
                                                               Average 
                                                              Exercised
                                                 Shares         Price  
-----------------------------------------------------------------------
OUTSTANDING AT BEGINNING OF YEAR                    530        $ 12.24 
GRANTED                                              30          24.63 
EXERCISED                                          (181)          6.68 
FORFEITED                                            (5)         22.31 
                                                  -------------------- 
OUTSTANDING AT END OF YEAR                          374        $ 15.78 
                                                  ==================== 
EXERCISABLE AT END OF YEAR                          248        $ 14.63 
                                                  ==================== 

-----------------------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE)                    1997       
-----------------------------------------------------------------------
                                                               Weighed 
                                                               Average 
                                                              Exercised
                                                 Shares         Price  
-----------------------------------------------------------------------
OUTSTANDING AT BEGINNING OF YEAR                    535        $ 11.33 
GRANTED                                              35          22.31 
EXERCISED                                           (35)          7.84 
FORFEITED                                            (5)         16.50 
                                                  -------------------- 
OUTSTANDING AT END OF YEAR                          530        $ 12.24 
                                                  ==================== 
EXERCISABLE AT END OF YEAR                          380        $ 10.61 
                                                  ==================== 

-----------------------------------------------------------------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE)                    1996       
-----------------------------------------------------------------------
                                                               Weighed 
                                                               Average 
                                                              Exercised
                                                 Shares         Price  
-----------------------------------------------------------------------
OUTSTANDING AT BEGINNING OF YEAR                    525       $  11.33 
GRANTED                                              10          21.06 
                                                  -------------------- 
OUTSTANDING AT END OF YEAR                          535       $  11.33 
                                                  ==================== 
EXERCISABLE AT END OF YEAR                          370       $   9.72 
                                                  ==================== 



<PAGE>


The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted average
assumptions used for grants in fiscal 1998, 1997, and 1996:

----------------------------------------------------------------------
                                        1998        1997        1996  
----------------------------------------------------------------------
RISK FREE INTEREST RATES                6.09%       6.79%       5.72% 
EXPECTED DIVIDEND YIELD                 4.75%       4.75%       4.75% 
EXPECTED LIFE (YEARS)                    9.0         9.0         9.0  
EXPECTED VOLATILITY                     20.1%       22.3%       22.3% 

9.    NEW ACCOUNTING PRONOUNCEMENTS

      The Financial Accounting Standards Board (FASB) has issued a new
pronouncement, Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which is required to be adopted in fiscal 2000. At
the present time, this pronouncement should have no effect on the Company.

      FASB has also issued Statement of Position ("SOP") 98-5, "Reporting
of the Costs of Start-Up Activities" and SOP 97-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal use". The
Company will adopt these SOP's in fiscal 1999 which will be immaterial to
its financial statements.

10.   SUBSEQUENT EVENTS

      As of October 1, 1998, the Company entered into an agreement whereby
it acquired a 75% interest in the largest private radiation dosimetry
service business in Brazil, Servico de Assessoria e Protecao Radiologica
S/C Ltda. (SAPRA), located in Sao Carlos. The new company, SAPRA-Landauer
Ltda., has negotiated the acquisition of an additional radiation dosimetry
service formerly conducted by REM.



<PAGE>








                 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



TO THE STOCKHOLDERS AND DIRECTORS OF
LANDAUER, INC.


      We have audited the consolidated balance sheets of Landauer, Inc. and
Subsidiary, a Delaware corporation (see Note 1), as of September 30, 1998
and 1997 and the related consolidated statements of income, stockholders'
investment and comprehensive income, and cash flows for each of the three
years in the period ended September 30, 1998.  These financial statements
are the responsibility of the Company's management.  Our responsibility is
to express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Landauer, Inc. and Subsidiary as of September 30, 1998 and 1997, and the
consolidated results of its operations, and the changes in stockholders'
investment and cash flows for each of the three years in the period ended
September 30, 1998 in conformity with generally accepted accounting
principles.




                                    ARTHUR ANDERSEN LLP
                                    Chicago, Illinois
                                    October 30, 1998



<PAGE>


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

      None.




<PAGE>


                                 PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The information contained under the headings Election of Directors
and Beneficial Ownership of Certain Voting Securities in the Proxy
Statement relating to the directors of the Company is incorporated herein
by reference.  The information contained in Item 4A hereof relating to the
executive officers of the registrant is incorporated herein by reference.


ITEM 11. EXECUTIVE COMPENSATION

      Except for the information relating to Item 13 hereof and except for
information referred to in Item 402(a)(8) of Regulation S-K, 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

      The information contained under the heading Beneficial Ownership of
Certain Voting Securities in the Proxy Statement is incorporated herein by
reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Except for the information relating to Item 11 hereof and except for
information referred to in Item 402(a)(8) of Regulation S-K, the
information contained under the headings Election of Directors, and Certain
Relationships and Related Transactions in the Proxy Statement is
incorporated herein by reference.




<PAGE>


                                  PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON 
         FORM 8-K

A-1.  FINANCIAL STATEMENTS

      The financial statements of Landauer, Inc. filed as part of this
Annual Report on Form 10-K are indexed at page 5.


A-2.  FINANCIAL STATEMENT SCHEDULES

      The Financial statement schedules filed as part of this Annual Report
on Form 10-K have been included elsewhere in the financial statements or
the notes thereto.

A-3.  LIST OF 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)     Landauer, Inc. Key Employee Stock Bonus and Option Plan,
as amended through June 17, 1992, is incorporated by reference to Exhibit
(10) (a) to the Annual Report on Form 10-K for the fiscal year ended
September 30, 1992.

      (10)(b)     The Landauer, Inc. 1996 Equity Plan is incorporated by
reference to Exhibit (10) (b) to the Annual Report on Form 10-K for the
fiscal year ended September 30, 1996.

      (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)     Employment and Compensation Agreement dated February 22,
1989 between the Registrant and Thomas M. Fulton, as amended through
June 17, 1992, is incorporated by reference to Exhibit (10) (f) to the
Annual Report on Form 10-K for the fiscal year ended September 30, 1992.

      (10)(f)     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)(g)     Form of Supplemental Key Executive Retirement Plan is
incorporated by reference to Exhibit (10) (h) to the Annual Report on Form
10-K for the fiscal year ended September 30, 1993.

      (10)(h)     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, 1996.



<PAGE>


      (10)(i)     The Landauer, Inc. 1997 Non-Employee Director's Stock
Option Plan is incorporated by reference to Exhibit (10)(i) to the Annual
Report on Form 10-K for the fiscal year ended September 30, 1997.

      (10)(j)     Employment agreements dated February 29, 1996 between the
Registrant and Brent A. Latta, James M. O'Connell and R. Craig Yoder are
attached hereto as Exhibit (10)(j).

      (21)  Subsidiaries of the registrant are incorporated by reference to
Exhibit (22) to the Annual Report on Form 10-K for the fiscal year ended
September 30, 1993.

      Exhibits 10(a), 10(b), 10(e), 10(f), 10(g), 10(h), 10(i) and 10(j)
listed above are the 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.

B. Reports on Form 8-K

      The Company did not file a Report on Form 8-K during the fiscal
quarter ended September 30, 1998.



<PAGE>


                  SIGNATURES OF REGISTRANT AND DIRECTORS


      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/ Brent A. Latta      December 18, 1998
                                --------------------
                                Brent A. Latta
                                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/ Brent A. Latta         President and Director       December 18, 1998
-----------------------    (Principal Executive 
Brent A. Latta             Officer)

/s/ James M. O'Connell     Vice President, Finance      December 18, 1998
-----------------------    Treasurer and Secretary
James M. O'Connell         (Principal Financial and
                           Accounting Officer)

/s/ Robert J. Cronin       Director                     December 18, 1998
-----------------------
Robert J. Cronin

/s/ Gary D. Eppen          Director                     December 18, 1998
-----------------------
Gary D. Eppen

/s/ Thomas M. Fulton       Director                     December 18, 1998
-----------------------
Thomas M. Fulton

/s/ Richard R. Risk        Director                     December 18, 1998
-----------------------
Richard R. Risk

/s/ Paul B. Rosenberg      Director                     December 18, 1998
-----------------------
Paul B. Rosenberg

/s/ Marvin G. Schorr       Director                     December 18, 1998
-----------------------
Marvin G. Schorr

/s/ Michael D. Winfield    Director                     December 18, 1998
-----------------------
Michael D. Winfield



<PAGE>


QUARTERLY FINANCIAL DATA (UNAUDITED)
------------------------------------------------------------------------
                           (DOLLARS IN THOUSANDS, EXCEPT PER SHARE)       
------------------------------------------------------------------------
                 First       Second      Third       Fourth      Total  
                 Quarter     Quarter     Quarter     Quarter     Year   
------------------------------------------------------------------------
Net revenues
        1998    $ 10,328    $ 10,965    $ 10,653    $ 10,746    $ 42,692
        1997    $  9,147    $ 10,441    $  9,984    $ 10,342    $ 39,914
------------------------------------------------------------------------
Operating income
        1998    $  4,378    $  4,819    $  4,535    $  5,000    $ 18,732
        1997    $  3,918    $  4,638    $  4,063    $  4,836    $ 17,455
------------------------------------------------------------------------
Net income
        1998    $  3,036    $  3,297    $  3,098    $  3,328    $ 12,759
        1997    $  2,765    $  3,183    $  2,860    $  3,211    $ 12,019
========================================================================
Basic net income 
 per share (a)
        1998    $    .36    $    .38    $    .36    $    .39    $   1.49
        1997    $    .33    $    .37    $    .34    $    .38    $   1.42
========================================================================
Cash dividends 
 per share
        1998    $ .321/2    $ .321/2    $ .321/2    $ .321/2    $   1.30
        1997    $    .30    $    .30       $ .30       $ .30    $   1.20
------------------------------------------------------------------------
Common stock 
 price per 
 share
      1998 high $  29.56    $  30.75    $  30.00    $  30.75    $  30.75
           low     24.25       26.75       26.50       23.75       23.75
      1997 high $  24.88    $  24.50    $  23.88    $  26.38    $  26.38
           low     19.25       20.38       20.13       22.13       19.25
------------------------------------------------------------------------

(a)   Based upon a weighted average of 8,477,285 common shares outstanding
      for the first two quarters of 1997; 8,482,285 for the third quarter
      of 1997; 8,496,154 for the fourth quarter of 1997; 8,556,325 for the
      first quarter of 1998; 8,601,761 for the second quarter of 1998; and
      8,609,299 for the third and fourth quarters of 1998.