UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, DC 20549

                                  FORM 10-K

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

                For the fiscal year ended September 30, 2009

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

                        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 whether the registrant has submitted
electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).  Yes [   ]  No [   ]

      Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (229.405) 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 ]



<PAGE>


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

  Large accelerated filer [   ]          Accelerated filer         [ X ]
  Non-accelerated filer   [   ]          Smaller reporting company [   ]

      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, 2009 the aggregate market value, based upon the
closing price on the New York Stock Exchange, of the voting and nonvoting
common equity held by non-affiliates was approximately $469,000,000. The
number of shares of common stock ($0.10 par value) outstanding as of
December 1, 2009 was 9,348,011.

                     DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the Registrant's definitive Proxy Statement in connection
with the February 11, 2010 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                                    5
                Seasonality                                            6
                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
                Executive Officers of the Company                      9
1A.        Risk Factors                                               10
1B.        Unresolved Staff Comments                                  14
2.         Properties                                                 14
3.         Legal Proceedings                                          15
4.         Submission of Matters to a Vote of Security Holders        15

PART II
5.         Market for Registrant's Common Equity,
           Related Stockholder Matters and
           Issuer Purchases of Equity Securities                      15
6.         Selected Financial Data                                    16
7.         Management's Discussion and Analysis of
           Financial Condition and Results of Operations              17
7A.        Quantitative and Qualitative Disclosures
           about Market Risk                                          29
8.         Consolidated Financial Statements and
             Supplementary Data
                Consolidated Balance Sheets                           30
                Consolidated Statements of Income                     32
                Consolidated Statements of Stockholders' Equity
                  and Comprehensive Income                            33
                Consolidated Statements of Cash Flows                 35
                Notes to Consolidated Financial Statements            37
                Report of Independent Registered
                  Public Accounting Firm                              56
9.         Changes in and Disagreements with Accountants on
           Accounting and Financial Disclosure                        58
9A.        Controls and Procedures                                    58
9B.        Other Information                                          58

PART III
10.        Directors, Executive Officers and
           Corporate Governance                                       59
11.        Executive Compensation                                     59
12.        Security Ownership of Certain Beneficial Owners
           and Management and Related Stockholder Matters             59
13.        Certain Relationships and Related Transactions,
           and Director Independence                                  59
14.        Principal Accounting Fees and Services                     59

Part IV
15.        Exhibits, Financial Statement Schedules
                Financial Statements                                  60
                List of Exhibits                                      60
                Signatures                                            64
                Quarterly Financial Data (Unaudited)                  65



<PAGE>


                                   PART I
                           (Dollars in thousands)

ITEM 1.  BUSINESS

GENERAL DESCRIPTION

      Landauer is a leading global provider of technical and analytical
services to determine occupational and environmental radiation exposure and
is the leading domestic provider of outsourced medical physics services.
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 customers, and the
analysis and reporting of exposure findings. These services are provided to
approximately 1.6 million individuals in the United States, Australia,
Brazil, Canada, China, France, Japan, Mexico, the United Kingdom 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. Through its Global Physics Solutions, Inc. ("GPS") subsidiary,
which was acquired in November 2009, the Company provides therapeutic and
diagnostic physics services and educational services to the medical physics
community.

      Landauer, Inc. is a Delaware corporation organized on December 22,
1987. 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, 2009, there were
9,381,098 shares outstanding.

      The majority 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 generally have a high renewal rate.
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 to its customers radiation detection badges, which are
produced and owned by the Company. 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 customer
personnel. This technology is marketed under the trade names Luxel+(r) and
InLight(r).

      A key component of the Company's dosimetry system is OSL crystal
material. Landauer operates a crystal manufacturing facility in Stillwater,
Oklahoma that it acquired in August 1998. The Company's base OSL material
is manufactured utilizing a proprietary process to create aluminum oxide
crystals in a unique structure that is able to retain charged electrons
following the crystal's exposure to radiation.







                                      3


<PAGE>


      Landauer's InLight dosimetry system, introduced in 2003, provides
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 Panasonic Communications 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 for fiscal 2009. 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.

      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 service.

      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 following table summarizes the Company's international
affiliates and the territories each serves:

                                                          Service
Company                                      Ownership   Territory
-------                                      ---------   ---------

Consolidated Subsidiaries:
  Landauer-Europe, Ltd.                        100%       Europe
  SAPRA-Landauer, Ltda.                         75%    South America
  Beijing-Landauer, Ltd.                        70%        China
  Landauer Australasia Pty Ltd.                 51%      Australia
  ALSA Dosimetria, S. de R.L. de C.V.         56.25%  Central America

Equity Method Joint Venture:
  Nagase-Landauer, Ltd.                         50%        Japan

      In November 2009, Landauer completed the acquisition of GPS. GPS is
based in Texas with operations throughout the Midwest and provides medical
physics services to hospitals and radiation therapy centers. Also, in
November 2009, Landauer completed the acquisition of Gammadata Metteknik AB
("GDM"), a Swedish provider of radon measurement services. GDM is based
near Stockholm, Sweden and provides measurement services throughout the
Scandinavian region and Europe. In October 2009, Landauer acquired a
dosimetry service in Sweden, now called Landauer Persondosimetri AB.














                                      4


<PAGE>


      The Company completed the acquisition of GPS as a platform to expand
into the Medical Physics Services Market, serving domestic hospitals and
radiation therapy centers. Based in Texas, GPS is the leading nationwide
service provider of clinical physics support, equipment commissioning and
accreditation support, diagnostic equipment testing and educational
services. Clinical physics support is provided by medical physicists, who
are either diagnostic or therapeutic physicists. Diagnostic physicists are
concerned primarily with the radiation delivered by imaging equipment,
image quality and compliance with safe practices in nuclear pharmacies. In
many ways diagnostic physicists perform a certification function.
Therapeutic physicists are concerned with the safe delivery of radiation in
cancer treatment. Therapeutic physicists contribute to the development of
therapeutic techniques, collaborate with radiation oncologists to design
treatment plans, and monitor equipment and procedures to ensure that cancer
patients receive the prescribed dose of radiation to the correct location.
Both specialties are aligned with critical treatment trends in the
continued increased utilization of radiation for the diagnosis and
treatment of disease. The ability to target treatments and reduce the
impact of surgical procedures is often aided by imaging and therapeutic
techniques.

      A summary of selected financial data for Landauer for the last five
fiscal years is set forth in Item 6 of Part II of this Annual Report on
Form 10-K.

MARKETING AND SALES

      Landauer's dosimetry services are marketed in the United States and
Canada primarily by full-time Company personnel located in five sales
regions with support from telesales representatives. The Company's
non-domestic services are marketed through its wholly owned subsidiary
operating in the United Kingdom and France, as well as its venture in Japan
and subsidiaries in Brazil, Australia, Mexico and China. Other firms and
individuals market the Company's services on a commission basis, generally
to small customers or in geographic regions in which the Company does not
have a direct presence.

      Worldwide, the Company and its affiliates serve approximately 67,000
customers representing approximately 1.6 million dosimeters annually. The
customer base is diverse and fragmented with no single customer
representing greater than 2% of revenue. Typically, a customer will
contract on a subscription basis for one year of service in advance,
representing monthly, bimonthly 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, 2009 and
2008, deferred contract revenue was $15,632 and $15,626, respectively.
Further details of the Company's revenue recognition and deferred contract
revenue policy are set forth in the "Critical Accounting Policies" section
of Item 7 of this Annual Report on Form 10-K.

      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. The Company's InLight dosimetry
system enables certain customers to make their own measurements using OSL
technology. InLight is marketed to domestic and international radiation
measurement laboratories found at nuclear power plants, military
installations, the Department of Homeland Security, 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.



                                      5


<PAGE>


      .     The sale of radiation detection monitors and analytical
            instruments and the provision of 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(r) system, a miniaturized OSL reader
            based on InLight technology, to hospitals, laboratories and
            others that require specialized radiation measurements for a
            variety of purposes.

      .     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 upfront dosimetry system and adds the convenience
of on-time delivery of devices. InLight also forms the basis for Landauer's
operations in Europe, Asia, and Mexico 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(r) 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.

      Medical physics outsourced services are marketed to hospitals and
free-standing cancer centers or free-standing imaging centers primarily in
the Midwest. The services are marketed by two full-time business
development professionals supported by GPS' senior leadership and
physicists.

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.


                                      6


<PAGE>


INTERNATIONAL ACTIVITIES

      Information regarding the Company's activities by geographic region
is contained under the footnote "Geographic Information" on page 54 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 ("Battelle") and
Oklahoma State University ("OSU") as part of collaborative efforts to
develop and commercialize a new generation of radiation dosimetry
technology. The underlying patents for these licenses expire in years 2010
through 2024. The Battelle patents, which address specific OSL materials
and basic aspects of use, expire in 2014. The OSU patents are specific to
the stimulation process, imaging and data interpretation. The last of these
patents expires in 2024.

      As of September 30, 2009, the Company is using OSL technology to
provide dosimetry services to essentially its entire domestic and the
majority of its international customers. These patents 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 between
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 these
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 Panasonic
Communications Company under an exclusive agreement. If the Company were to
lose availability of its Stillwater facility or materials from Panasonic
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. Most government agencies in the United States, 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. Outside of the United States, radiation monitoring activities are
conducted by a combination of private entities and government agencies.

      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. Landauer's InLight
dosimetry system competes with other dosimetry systems based on the
technical advantages of OSL methods combined with an integrated systems
approach featuring comprehensive software, automation and value.


                                      7


<PAGE>


      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.

      Medical physics outsourced services represents a large fragmented
market where GPS has many small competitors. In addition many facilities
directly employ full-time physicists as an alternative from obtaining
services from an outsourced provider.

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. Current 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. In addition, the Company is evaluating
new badge and InLight reader configurations that have military application
and is designing a badge that will support global standardization.

      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 2009, 2008 and 2007, the Company spent $1,948, $1,837 and
$1,831, 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.












                                      8


<PAGE>


EMPLOYEES AND LABOR RELATIONS

      As of September 30, 2009, the Company employed approximately 430
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. Requests should be
submitted to the following address: Landauer, Inc., Attention: Corporate
Secretary, 2 Science Road, Glenwood, Illinois 60425.

      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.


EXECUTIVE OFFICERS OF THE COMPANY

      The executive officers of the Company are as follows:

NAME OF OFFICER               AGE          POSITION
---------------               ---          --------

William E. Saxelby            53           President and
                                           Chief Executive Officer

Jonathon M. Singer            45           Senior Vice President,
                                           Treasurer, Secretary,
                                           and Chief Financial Officer

R. Craig Yoder                57           Senior Vice President-Marketing
                                           and Technology

Richard E. Bailey             63           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.




                                      9


<PAGE>


      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.

      Dr. Yoder was elected to his position in February 2001, 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.

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 DOSIMETRY PRODUCTS AND SERVICES.

      Landauer conducts its primary dosimetry 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.

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 Panasonic
Communications Company under an exclusive agreement. If the Company were to
lose availability of its Stillwater facility or materials from Panasonic
due to a fire, natural disaster or other disruptions, such loss could have
a material adverse effect on the Company and its operations.








                                     10


<PAGE>


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.

IF WE ARE UNABLE TO SUCCESSFULLY EXECUTE BUSINESS DEVELOPMENT ACTIVITIES
SUCH AS THE ACQUISITION AND INTEGRATION OF STRATEGIC BUSINESSES, OUR
ON-GOING BUSINESS AND RESULTS OF OPERATIONS MAY BE ADVERSELY AFFECTED.

      A principal growth strategy of Landauer is to explore opportunities
to selectively enhance its business through development activities, such as
strategic acquisitions, investments and alliances. In furtherance of this
objective, in November 2009, Landauer acquired GPS and GDM and intends to
continue to pursue other acquisition and business development initiatives
in the future. Acquisitions and other business development activities
involve various significant challenges and risks, including the following:

      .     Difficulty in acquiring desired businesses or assets on
            economically acceptable terms;

      .     Difficulty in integrating new employees, business systems and
            technology;

      .     Difficulty in consolidating facilities and infrastructure;

      .     Potential need to operate and manage new lines of business;

      .     Potential loss of key personnel;

      .     Diversion of management's attention from on-going operations;

      .     Realization of satisfactory returns on investments; and

      .     Disputes with strategic partners, due to conflicting priorities
            or conflicts of interest.

      Development activities could result in the incurrence of debt,
contingent liabilities, interest and amortization expenses or periodic
impairment charges related to goodwill and other intangible assets as well
as significant charges related to integration costs. If the Company is
unable to successfully integrate and manage businesses that it acquires
within expected terms and in a timely manner, its business and results of
operations could be adversely affected.











                                     11


<PAGE>


CERTAIN OF OUR INTERNATIONAL OPERATIONS ARE CONDUCTED THROUGH JOINT
VENTURES IN WHICH WE RELY SIGNIFICANTLY ON OUR JOINT VENTURE PARTNERS.

      A substantial portion of the Company's international operations are
conducted through joint ventures with third parties. In Australia, Brazil,
China, and Mexico, the Company has a controlling interest in the related
joint ventures. In Japan, the Company has a 50% interest in
Nagase-Landauer, Ltd. In all of these joint ventures, Landauer relies
significantly on the services and skills of its joint venture partners to
manage and conduct the local operations and ensure compliance with local
laws and regulations. If the joint venture partners were unable to perform
adequately these functions, Landauer's operations in such regions could be
adversely affected.

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
Australia, Brazil, Canada, China, France, Japan, Mexico, and the United
Kingdom. 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. The equipment
commissioning business of GPS, which Landauer acquired in November 2009,
and the employment of physicists and other healthcare professionals also
are subject to federal, state and international governmental regulation and
licensing requirements.

      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
reporting 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.




                                     12


<PAGE>


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. The Company has
and likely will continue to incur substantial costs associated with the
implementation and additional costs associated with maintenance of the new
systems. 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. In addition, the Company has
engaged third-party consultants for the development and implementation of
the new systems. If the consultants fail to perform on their obligations,
development and implementation of the project could be further delayed. 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.

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, physicists
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.

      The GPS business involves the delivery of professional services and
is highly labor-intensive. Its success depends largely on its general
ability to attract, develop, motivate and retain highly skilled licensed
medical physicists ("physicists"). Further, the Company must successfully
maintain the right mix of physicists with relevant experience and skill
sets as the Company continues to grow, as it expands into new service
offerings, and as the market evolves. The loss of a significant number of
its physicists, the inability to attract, hire, develop, train and retain
additional skilled personnel, or not maintaining the right mix of
professionals could have a serious negative effect on the Company,
including its ability to manage, staff and successfully complete its
existing engagements and obtain new engagements. Qualified physicists are
in great demand, and the Company faces significant competition for both
senior and junior physicists with the requisite credentials and experience.
The Company's principal competition for talent comes from other outsource


                                     13


<PAGE>


medical physicist firms, hospitals and free-standing radiation therapy
centers. Many of these competitors may be able to offer significantly
greater compensation and benefits or more attractive lifestyle choices,
career paths or geographic locations than those of the Company. Therefore,
the Company may not be successful in attracting and retaining the skilled
physicists it requires to conduct and expand its operations successfully.
Increasing competition for these revenue-generating medical physicists may
also significantly increase the Company's labor costs, which could
negatively affect its margins and results of operations.

THE CURRENT UNITED STATES AND STATE HEALTH REFORM LEGISLATIVE INITIATIVES
COULD ADVERSELY AFFECT OUR OPERATIONS AND BUSINESS CONDITION.

      The Obama Administration and Congress are considering federal
legislation to reform the U.S. healthcare system. The current proposed
federal health reform legislation includes various bills with various
Congressional sponsors. A common issue addressed in the proposed federal
health reform initiatives is increasing access to health benefits for the
uninsured or underinsured populations. Some of the current proposed federal
health reform legislation includes reforms and reductions that could affect
Medicare reimbursements and health insurance coverage for certain services
and treatments. Some states also have pending health reform legislative
initiatives. Changes in reimbursements and coverages could adversely affect
hospitals and medical services providers, which could result in reduced
demand for certain services offered by the Company, including services
offered by our recently acquired GPS subsidiary. At this time, Landauer is
unable to determine the ultimate content or timing of any health reform
legislation. Landauer will not be able to determine the effect that any
such legislation may have on its operations and business condition until
such legislation is enacted, but such legislation may adversely affect the
operations and business condition of Landauer and its subsidiaries.

WE COULD BE SUBJECT TO PROFESSIONAL LIABILITY LAWSUITS, SOME OF WHICH WE
MAY NOT BE FULLY INSURED AGAINST OR RESERVED FOR, WHICH COULD ADVERSELY
AFFECT OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

      In recent years, physicians, hospitals and other participants in the
healthcare industry have become subject to an increasing number of lawsuits
alleging medical malpractice and related legal theories such as negligent
hiring, supervision and credentialing, and vicarious liability for acts of
their employees or independent contractors. Many of these lawsuits involve
large claims and substantial defense costs. The acquisition of GPS
increases the Company's presence in the healthcare industry. As the Company
increases its focus on the healthcare industry, it could be exposed to
litigation or subject to fines, penalties or suspension of services
relating to the compliance with regulatory requirements.


ITEM 1B.  UNRESOLVED STAFF COMMENTS

      At September 30, 2009, 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, and 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, Mexico and
France, as well as a sales office in England. GPS leases offices in Ohio,
Indiana, Michigan and Texas.


                                     14


<PAGE>


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, 2009, 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, 2009.


                                   PART II
                (Dollars in thousands, except per share data)

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. A summary of high and low market prices of
the Company's common stock for the last two fiscal years is set forth in
the table on page 65 of this Annual Report on Form 10-K. As of December 1,
2009, there were approximately 343 shareholders of record. There were no
sales of unregistered securities of the Company and no repurchases of
equity securities of the Company during fiscal 2009 by the Company.

      On November 27, 2009, the Company declared an increase of the regular
quarterly cash dividend by 2.4% to $0.5375 per share for the first quarter
of fiscal 2010. This increase represents an annual rate of $2.15 per share
compared with $2.10 paid in fiscal 2009. A summary of cash dividends paid
for the last two fiscal years is set forth in the table on page 65 of this
Annual Report on Form 10-K.

      Information pursuant to this Item relating to securities authorized
for issuance under equity compensation plans, contained under the heading
"Equity Compensation Plan Information" in the Proxy Statement, is
incorporated herein by reference.

PERFORMANCE GRAPH

      The following graph reflects a comparison of the cumulative total
return (change in stock price plus reinvested dividends) assuming $100
invested in: (a) Landauer's common stock, (b) the Standard & Poor's ("S&P")
industry index represented by a group of health care services companies and
(c) the S&P SmallCap 600 Index during the period from September 30, 2004
through September 30, 2009. 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.

      Landauer's common stock was added to the S&P SmallCap 600 Index on
September 16, 2008. The S&P SmallCap 600 Index consists of stocks of U.S.
companies with market capitalizations between $200 million and $1.0
billion. New stocks are not only based on size, but also financial
viability, liquidity, adequate public float and other trading requirements.










                                     15


<PAGE>


[ LINE CHART INDICATING THE FOLLOWING ]


                               Value of Investment at September 30,
                              ---------------------------------------
(Dollars)                     2004   2005   2006   2007   2008   2009
---------                     ----   ----   ----   ----   ----   ----

Landauer, Inc. . . . . . .    $100   $108   $116   $121   $180   $141
S&P Health Care Services .     100    144    169    229    240    263
S&P SmallCap 600 Index . .     100    121    130    149    129    115


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)        2005(1)   2006(2)   2007(3)   2008(4)    2009(5)
----------------------  --------  --------  --------  --------  --------

Operating results
    Net revenues . . .  $ 75,221  $ 79,043  $ 83,716  $ 89,954  $ 93,827
    Operating income .    26,551    29,505    28,603    34,075    32,518
    Net income . . . .    17,208    19,046    19,316    22,983    23,366
    Diluted net income
      per share. . . .  $   1.90  $   2.09  $   2.10  $   2.47  $   2.49
Cash dividends per
  share. . . . . . . .  $   1.70  $   1.80  $   1.90  $   2.00  $   2.10
Total assets . . . . .  $ 85,859  $ 90,674  $ 97,340  $118,690  $125,205

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

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

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

(4)   Fiscal 2008 includes accelerated depreciation charges of $376,
      reducing net income by $225 (after income tax benefit of $151) or
      $0.02 per diluted share.

(5)   Fiscal 2009 includes pension curtailment and transition costs of
      $2,236, reducing net income by $1,478 (after income tax benefit
      of $758) or $0.16 per diluted share, and reorganization charges
      of $416, reducing net income by $275 (after income tax benefit of
      $141) or $0.03 per diluted share.
















                                     16


<PAGE>


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

OVERVIEW

      Landauer is a leading global provider of technical and analytical
services to determine occupational and environmental radiation exposure and
is the leading domestic provider of outsourced medical physics services.
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 customers, and the
analysis and reporting of exposure findings. These services are provided to
approximately 1.6 million individuals in the United States, Australia,
Brazil, Canada, China, France, Japan, Mexico, the United Kingdom 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. Through its Global Physics Solutions, Inc. ("GPS") subsidiary,
which was acquired in November 2009, the Company provides therapeutic and
diagnostic physics services and educational services to the medical physics
community.

      Landauer's occupational and environmental monitoring business is 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, nuclear power facilities, tactical military monitoring and
hospitals to support monitoring of patient exposure to radiation. Revenue
growth in recent years has occurred as a result of entry into new markets
through joint ventures and acquisitions, modest unit growth, sale of
InLight equipment and badges, 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.

      On November 9, 2009, the Company completed the acquisition of GPS.
Based in Texas with operations throughout the Midwest, GPS is the leading
nationwide provider of medical physics services to hospitals and radiation
therapy centers. Medical physics services is a large fragmented market.
Market growth is expected to be driven by: the utilization of radiation in
the provision of healthcare; trends towards outsourcing; and a limited
domestic supply of qualified medical physicists. Also, in November 2009,
Landauer completed the acquisition of GDM, a Swedish provider of radon
measurement services. GDM is based near Stockholm, Sweden and provides
measurement services throughout the Scandinavian region and Europe. In
October 2009, Landauer acquired a dosimetry service in Sweden, now called
Landauer Persondosimetri AB.















                                     17


<PAGE>


RESULTS OF OPERATIONS

FISCAL 2009 COMPARED TO FISCAL 2008

      Revenues for fiscal 2009 were $93,827, an increase of 4.3% compared
with revenues of $89,954 for fiscal 2008. Domestic revenue growth for
fiscal 2009 was $3,002, or 4.5%, attributable primarily to gains in the
core radiation monitoring business driven by increased pricing for certain
services and increases in domestic InLight equipment revenue. International
revenue increased $871, or 3.7%, as a result of growth in volume in most
regions, InLight equipment revenue, and the sale of InLight badges to
Nagase-Landauer to support its fiscal 2010 transition of the Japanese
service market from the current Luxel badge to a next generation badge
based upon the InLight platform. The impact of the strengthening of the
dollar against most foreign currencies reduced revenue by approximately
$2,745.

      The domestic InLight equipment sales increase was driven primarily by
sales to the Canadian government agency responsible for occupational
monitoring and radiation emergency preparedness for the citizens of Canada.
In March 2009, the Company executed a multi-year contract valued at
approximately $8,000, which represents an estimate of purchases over the
contract term, with commitments to be established annually, subject to
annual funding by the Canadian government. In fiscal 2008, the Company
initiated a similar contract in the amount of $2,000 with the agency.
During fiscal 2009, the Company recognized revenue of approximately $2,700
under these agreements, compared with approximately $800 in fiscal 2008.
The Company recorded deferred revenue of $486 under the contract as of
September 30, 2009.

      Total cost of sales for fiscal 2009 was $30,766, an increase of
$1,852, or 6.4%, compared with cost of sales of $28,914 for fiscal 2008,
due to increased cost of materials to support growth in InLight product
sales. Gross margins for fiscal 2009 were 67.2% of revenues, compared with
67.9% in fiscal 2008.

      Selling, general and administrative expenses for fiscal 2009 were
$27,891, an increase of $1,302 or 4.9%, compared with selling, general and
administrative expenses of $26,589 for fiscal 2008. Factors contributing to
the increase included: $487 for increased incentive compensation costs and
higher salary and benefits related to staff additions; $346 of increased
professional fees related primarily to international patent and trademark
activities; and $132 of increased expense spending to replace the Company's
information technology systems that support customer relationship
management and the order-to-cash cycle.

      On February 5, 2009, the Board of Directors approved changes to the
Company's retirement benefit plans to transition from a defined benefit
philosophy for retirement benefits to a defined contribution approach. The
Company anticipates that the redesign of its retirement plans will result
in future cost savings while offering market based retirement benefits to
its employees. As a result of the changes, the Company recognized $2,236
($1,478 after-tax) of non-recurring pension curtailment and transition
costs during the second fiscal quarter of 2009. In addition, the Company
initiated a management reorganization plan to strengthen selected roles in
the organization. As a result, the Company recognized $489 ($322 after-tax)
of non-recurring reorganization charges during the second fiscal quarter of
2009. The estimated reorganization charges were reduced by $73 ($47
after-tax) in the fourth fiscal quarter of 2009 based on actual payments to
severed employees.

      Operating income for fiscal 2009 was $32,518, a decrease of $1,557,
or 4.6%, compared with operating income of $34,075 for fiscal 2008. Fiscal
2009 operating income was impacted negatively by $2,652 due to the effect
of the pension curtailment and transition costs and the reorganization
charges.




                                     18


<PAGE>


      Net other income, including equity in income of joint venture, for
fiscal 2009 was $2,199, a decrease of $157, or 6.7%, compared with net
other income of $2,356 for fiscal 2008. The decrease in net other income
was due to lower interest and investment income as a result of declines in
market rates, substantially offset by increased Nagase-Landauer, Ltd.
equity earnings, favorably impacted by foreign exchange, during fiscal
2009.

      The effective tax rate was 31.9% and 36.0% in fiscal 2009 and 2008,
respectively. The reduction was due primarily to a change in the state tax
rate driven by changes in the Illinois state tax law effective for fiscal
2009. Additional benefits were realized from the reduction of state tax
reserves related to the filing of voluntary disclosures in certain states
and the tax benefit of funding the frozen pension plan.

      Net income for the 2009 fiscal year was $23,366, an increase of 1.7%,
compared with net income of $22,983 for fiscal 2008, with resulting diluted
earnings per share for the current year of $2.49, compared with $2.47
reported a year ago. The fiscal 2009 net income increase was minimized by
the effect of the pension curtailment and transition costs and the
reorganization charges, in the amount of $1,753, or $0.19 per diluted
share.

FISCAL 2008 COMPARED TO FISCAL 2007

      Revenues for fiscal 2008 were $89,954, an increase of 7.5% compared
with revenues of $83,716 for fiscal 2007. Domestic revenue growth for
fiscal 2008 was $1,735, or 2.7%, attributable primarily to continued growth
of domestic InLight equipment and services. International revenue increased
$4,503, or 24.0%, as a result of growth in volume in most regions, lead by
increased InLight service revenues; revenues attributable to the addition
of a new 56.25% owned subsidiary in Mexico; and favorable currency exchange
rates. Favorable currency, primarily the strengthening of the Euro and
Brazilian Real against the dollar, contributed approximately $2,064 of the
revenue growth.

      The domestic InLight equipment increase was driven primary by a sale
to the Canadian government agency responsible for occupational monitoring
and radiation emergency preparedness for the citizens of Canada. The
Company completed a $2,000 contract during the quarter ended March 31, 2008
with the agency, under which $1,850 of product was delivered.
Approximately, $1,100 of the product delivered required additional
processing by Landauer to be fully utilized for its intended purpose. Per
the terms of the agreement, the Canadian agency was given the option to
obtain additional processing of the dosimetry materials from the Company or
to exchange the materials for finished product. In fiscal 2008, the Company
recorded $1,100 of deferred revenue related to the portion of the sale that
required additional performance by the Company, which was subsequently
recognized in fiscal 2009.

      Total cost of sales for fiscal 2008 was $28,914, an increase of
$1,387, or 5.0%, compared with cost of sales of $27,527 for fiscal 2007.
Gross margins for fiscal 2008 were 67.9% of revenues, compared with 67.1%
in fiscal 2007. The improvement was a result primarily of increased
revenues without a corresponding increase to the fixed cost structure, as
well as lower depreciation expense.

      Selling, general and administrative expenses for fiscal 2008 were
$26,589, an increase of $1,878 or 7.6%, compared with selling, general and
administrative expenses of $24,711 for fiscal 2007. Factors contributing to
the increase in selling, general and administrative costs included: $695
for domestic sales and marketing resources; $1,800 for incentive
compensation programs; and approximately $700 for foreign operations,
primarily relating to increased foreign exchange rates and the addition of
a new subsidiary in Mexico. These increases were partially offset by $1,409
in reduced expense spending for the Company's project to reengineer
business processes and to replace its information technology systems that
support improved business relationship management and the order-to-cash
cycle.

                                     19


<PAGE>


      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
is replacing the Company's information technology system. The project was
initiated during fiscal 2007 and was targeted to be completed during fiscal
2008. The project extended beyond its initial timeline due to increased
customization of the software to capture the unique business requirements
of the Company.

      As part of the information technology 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. Of these assets, approximately $3,500 was
determined to be either impaired or subject to accelerated depreciation.
This resulted in a fiscal 2008 charge of $376 ($225, after-tax) for
accelerated depreciation and a fiscal 2007 charge of $2,875 ($1,725,
after-tax), of which $2,185 was for impaired assets.

      Operating income for fiscal 2008 was $34,075, an increase of $5,472,
or 19.1%, compared with operating income of $28,603 for fiscal 2007. The
increase in operating income was due to the growth in revenue and gross
profit, reduced spending in fiscal 2008 for the systems initiative and
reduced impact of the charge for accelerated depreciation and impaired
assets.

      Net other income, including equity in income of joint venture, for
fiscal 2008 was $2,356, an increase of $129, or 5.8%, compared with net
other income of $2,227 for fiscal 2007. The increase in net other income
was primarily due to increases in interest and investment income.
Nagase-Landauer, Ltd. equity earnings were approximately $1,400 in each
fiscal 2008 and 2007.

      Income tax expense for fiscal 2008 and 2007 was $13,118 and $11,413,
respectively. The effective tax rate was 36.0% and 37.0% in fiscal 2008 and
2007, respectively. The decline in the effective tax rate was driven by a
number of factors including the increased impact of foreign and state tax
credits and foreign source income.

      Net income for the 2008 fiscal year was $22,983, an increase of
19.0%, compared with net income of $19,316 for fiscal 2007, with resulting
diluted earnings per share for fiscal 2008 of $2.47, compared with $2.10
reported in fiscal 2007.

FOURTH QUARTER RESULTS OF OPERATIONS

      Revenues for the fourth fiscal quarter of 2009 were $22,967, an
increase of $467, or 2.1%, compared with $22,500 in the fourth fiscal
quarter of 2008. Domestic revenue growth for the fourth quarter was $284,
or 1.7%, resulting from gains in the core radiation monitoring business
driven by increased pricing for certain services. International revenue in
the fourth fiscal quarter of 2009 increased $184, or 3.0%. Growth in volume
in most regions, InLight product revenue, and the sale of InLight badges to
Nagase-Landauer to support its fiscal 2010 transition to the InLight
platform, were partially offset by the impact of the strengthening of the
dollar against most foreign currencies which reduced revenue by
approximately $234.











                                     20


<PAGE>


      Cost of sales for the fourth quarter of fiscal 2009 was $7,373,
compared to $7,269 for the fourth quarter of fiscal 2008. Selling, general
and administrative expenses for the fourth quarter of fiscal 2009 were
$8,098, an increase of $839, or 12%, compared with expense of $7,259 for
the fourth quarter of fiscal 2008. Factors contributing to the increase
included: $346 of increased professional fees related primarily to
international patent and trademark activities; $315 of increased expense
spending to re-engineer business processes and to replace the Company's
information technology systems that support customer relationship
management and the order-to-cash cycle; and $207 increased international
selling, general and administrative expenses generally for the Company's
operations in France.

      Operating income for the fourth fiscal quarter of 2009 was $7,569, a
decrease of $403, or 5.1%, compared with $7,972 in the fourth fiscal
quarter of 2008. Net other income for the fourth quarter increased by $33
to $471 in fiscal 2009 due to higher Nagase-Landauer, Ltd. equity earnings.
Income tax expense and the effective tax rates, respectively, were $2,718
and 33.8% in the fiscal fourth quarter 2009, and $2,859 and 34.0% in the
fiscal fourth quarter 2008.

      Net income for the fiscal fourth quarter of 2009 was $5,250, compared
with net income of $5,484 for fourth quarter fiscal 2008, with resulting
diluted earnings per share for the 2009 quarter of $0.56 compared with
$0.59 reported in the fiscal fourth quarter of 2008.

OUTLOOK FOR FISCAL 2010

      Landauer's business plan for fiscal 2010 includes projections
currently for aggregate revenue growth for the year to be in the range of
25 to 30 percent, with the recently completed acquisitions contributing 20
to 23 percent of the growth. The business plan includes expense spending of
$2,400 to $2,800 to support the successful completion of the Company's
systems initiative and the related post implementation support. The Company
projects a net income increase in the range of 4 to 8 percent, excluding
the impact of transaction related fees in fiscal 2010 and the fiscal 2009
after tax impact of pension curtailment and transition costs and management
reorganization charges of $1,800. In addition, the Company expects capital
spending to be in the range of $7,000 to $9,000, primarily for the
completion of our systems initiative.

LIQUIDITY AND CAPITAL RESOURCES

      Landauer generated $2,555 in cash during fiscal year 2009 to end the
year with $36,493 in cash on hand. The Company had no outstanding
borrowings throughout the year.

      The Company completed the acquisition of GPS on November 9, 2009 for
a purchase price of $22,000 in cash. Landauer also completed the
acquisition of GDM for $6,700 in cash. The Company funded the purchase
prices through borrowings under its credit agreement of $18,000, with the
remainder paid from the Company's cash on hand. Under the credit agreement,
the Company elects to pay an annualized interest rate based on LIBOR plus
2.9%. In addition, the Company must maintain a fixed charge coverage ratio,
as calculated pursuant to the terms of the amended credit agreement, as of
the end of each calendar quarter of not less than 1.35 to 1.00, and a
funded debt to EBITDA ratio less than or equal to 1.5 to 1.00.

      Cash flows provided by operating activities for fiscal 2009 were
$30,209, a decrease of $4,442, or 13%, from fiscal 2008. The decline in
operating cash flow was driven primarily by contributions of $6,400 in
excess of the required annual pension plan payments to fund the remainder
of the plan's current unfunded balance. Other factors contributing to the
change in operating cash flow include decreased prepaid taxes and decreased
net current deferred taxes.





                                     21


<PAGE>


      During the 2007 fiscal year, the Company initiated a project to
replace its information technology systems. The project has extended beyond
its initial timeline and planned costs due to increased customization of
the software to capture the unique business requirements of the Company.
The total project cost is estimated currently to be approximately $25,000
to $27,000 and is targeted currently to be completed during calendar 2010.

      Investing activities included acquisitions of property, plant and
equipment in the amounts of $9,126, $7,533 and $7,386 in fiscal 2009, 2008
and 2007, respectively. Included in these costs were $5,856, $5,656 and
$5,263 in fiscal 2009, 2008 and 2007, respectively, for the Company's
systems initiative. In addition, Landauer invested $498 in fiscal 2008 for
its acquisition of 56.25% ownership in a subsidiary in Mexico. Capital
expenditures for fiscal 2010 are expected to be approximately $7,000 to
$9,000 principally for the project to replace the Company's information
systems. 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 2009, 2008 and 2007, the Company paid cash dividends of
$19,360, or $2.10 per share, $18,270, or $2.00 per share, and $17,163, or
$1.90 per share, respectively, and such amounts have been provided from
operations.

      Cash paid for income taxes was $7,515, $10,213 and $13,191 in fiscal
2009, 2008 and 2007, respectively.

      As described in Note 9 to the financial statements, the Company
amended its credit agreement in June 2009, which originally had an
expiration date of October 31, 2009 and permitted borrowings up to $15,000.
The amendment, among other changes to the original terms, extended the
maturity date to June 16, 2011 and increased the aggregate amount of funds
available to $30,000; subject, with respect to amounts borrowed in excess
of $20,000, to certain criteria outlined in the agreement. The Company
renegotiated the credit facility because it was able to obtain favorable
terms, and the Company wanted to ensure it had committed access to capital
in support of anticipated strategic expansion activities, given the current
credit environment. The Company completed the acquisition of GPS on
November 9, 2009 for a purchase price of $22,000 in cash. Landauer also
completed the acquisition of GDM for $6,700 in cash. The Company funded the
purchase prices through borrowings under its credit agreement of $18,000,
with the remainder paid from the Company's cash on hand. Under the credit
agreement, the Company elects to pay an annualized interest rate based on
LIBOR plus 2.9%. In addition, the Company must maintain a fixed charge
coverage ratio, as calculated pursuant to the terms of the amended credit
agreement, as of the end of each calendar quarter of not less than 1.35 to
1.00, and a funded debt to EBITDA ratio less than or equal to 1.5 to 1.00.

      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
$15,632 and $15,626, respectively, as of September 30, 2009 and 2008. While
these amounts represent approximately 42% and 46% of current liabilities,
respectively as of September 30, 2009 and 2008, such amounts generally do
not represent a future cash obligation. Customers are invoiced generally in
accordance with the Company's standard terms, with payment due thirty days
from date of invoice.



                                     22


<PAGE>


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

      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
reporting 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.

CONTRACTUAL OBLIGATIONS

      As of September 30, 2009, the expected resources required for
scheduled payment of contractual obligations were as follows:


                                   Scheduled payments by fiscal year
                              -------------------------------------------
                                                                   There-
(Dollars in Thousands)       Total      2010   2011-12  2013-14    after
----------------------      -------   -------  -------  -------   -------

Purchase obligations (1) .  $14,718   $14,718  $     -   $    -    $    -

Dividends (2). . . . . . .    4,996     4,996        -        -         -

Pension and postretirement
  benefits (3) . . . . . .    3,706       297      686      766     1,957

Operating leases (4) . . .    1,003       393      262      187       161
                            -------   -------  -------  -------   -------
                            $24,423   $20,404  $   948  $   953   $ 2,118
                            =======   =======  =======  =======   =======


(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 information
      systems upgrade.

(2)   Cash dividends in the amount of $0.525 per share were declared on
      August 28, 2009.

(3)   Includes 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.

      The Company is not able to reasonably estimate the timing of the
payments or the amount by which its gross unrecognized tax benefits of $532
will increase or decrease over time. Therefore, the liability is excluded
from the preceding table. Refer to footnote 8, "Income Taxes" for further
information.











                                     23


<PAGE>


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In December 2007, the Financial Accounting Standards Board ("FASB")
issued authoritative guidance that amends the accounting for business
combinations, and the accounting and reporting for a noncontrolling
interest in a subsidiary. The amended guidance aims to improve, simplify,
and converge internationally the accounting for and reporting of business
combinations and noncontrolling interests in consolidated financial
statements. The revised provisions are effective, and should be applied
prospectively, for the Company beginning in fiscal 2010. The Company will
apply the amended guidance for any business combinations beginning in
fiscal 2010, including the first quarter acquisitions of GPS, GDM and
Landauer Persondosimetri AB. The Company does not expect the amended
guidance for accounting and reporting for noncontrolling interests to have
a significant impact on the Company's financial statements.

      In September 2009, the FASB approved the issuance of new guidance for
arrangements with multiple deliverables and arrangements that include
software elements. By providing another alternative for determining the
selling price of deliverables, the new guidance will allow companies to
allocate arrangement consideration in multiple deliverable arrangements in
a manner that better reflects the transaction's economics and will often
result in earlier revenue recognition. In addition, the residual method of
allocating arrangement consideration is no longer permitted under the new
guidance. The new guidance for arrangements that include software elements
removes non-software components of tangible products and certain software
components of tangible products from the scope of existing software revenue
guidance, resulting in the recognition of revenue similar to that for other
tangible products. The new guidance requires expanded qualitative and
quantitative disclosures. The new guidance is effective for fiscal years
beginning on or after June 15, 2010. The guidance may be applied either
prospectively from the beginning of the fiscal year for new or materially
modified arrangements or retrospectively. The Company is currently
evaluating the impact of this new guidance to its financial position,
results of operations and financial disclosures.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

      Effective October 1, 2008, the Company adopted the FASB authoritative
guidance for the accounting for the deferred compensation and
postretirement benefit aspects of collateral assignment split-dollar life
insurance arrangements. The guidance requires that an employer recognize a
liability for the postretirement benefit related to a collateral assignment
split-dollar life insurance arrangement. As a result of the implementation
of the guidance, the Company recognized a decrease of $362 in its long-term
asset recorded for its collateral assignment split-dollar life insurance
arrangement and recorded a liability of $538 for premiums payable under the
arrangement. The October 1, 2008 balance of retained earnings was reduced
by $900. The Company's liability for this arrangement is expected to be
settled in fiscal 2014.

      Effective October 1, 2008, the Company adopted the FASB standards
which define fair value, establish a framework for measuring fair value and
expand disclosures about fair value measurements. The guidance applies
under other accounting standards that require or permit fair value
measurements. The adoption of these standards did not impact the Company's
consolidated financial statements for the year ended September 30, 2009.













                                     24


<PAGE>


      Effective October 1, 2008, the Company adopted the FASB authoritative
guidance which 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. The new guidance also establishes presentation and
disclosure requirements to facilitate comparisons between companies that
choose different measurement attributes for similar assets and liabilities.
The Company did not elect the fair value option and, therefore, the
adoption of the guidance did not impact the Company's financial position,
results of operations and financial disclosures for the year ended
September 30, 2009.

      Effective June 30, 2009, the Company adopted the new general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are
available to be issued. The standards require disclosure of the date
through which an entity has evaluated subsequent events and the basis for
that date. The adoption of the standards did not impact the consolidated
financial statements for the year ended September 30, 2009.

      Effective for the Company's financial statements issued for the
fiscal year ending September 30, 2009, the Company adopted the FASB
Accounting Standards Codification. The FASB established the Codification as
the source of authoritative accounting principles recognized by the FASB to
be applied by nongovernmental entities in the preparation of financial
statements in accordance with generally accepted accounting principles in
the United States. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative U.S.
GAAP for SEC registrants. The Codification supersedes all prior accounting
standard documents, and all other nongrandfathered non-SEC accounting
literature not included in the Codification became nonauthoritative. The
Codification does not change or alter existing U.S. GAAP and, therefore,
did not have any impact on the Company's 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.

FORWARD LOOKING STATEMENTS

      Certain matters contained in this report, including the information
contained under the heading "Outlook for Fiscal 2010" 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; continued 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 and costs associated with 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 ability to integrate the
operations of acquired businesses and to realize the expected benefits of
acquisitions; the risks associated with conducting business
internationally; costs incurred for potential acquisitions or similar
transactions; other anticipated financial events; the effects of changing
economic and competitive conditions; foreign exchange rates; government
regulations; accreditation requirements; changes in the trading


                                     25


<PAGE>


market that affect the cost of obligations under the Company's benefit
plans; and pending accounting pronouncements. These assumptions may not
materialize to the extent assumed, and risks and uncertainties may cause
actual results to be different from 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

      The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires that
management make assumptions and estimates that affect the results of
operations and the amounts of assets and liabilities reported in the
financial statements as well as related disclosures. 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. Below are the critical accounting policies which have been
applied in the preparation of the Company's financial statements and
accompanying notes.

REVENUE RECOGNITION AND DEFERRED CONTRACT REVENUE

      The majority of the services provided by the Company to its customers
is of a subscription nature and is 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 $15,632 and $15,626,
respectively, as of September 30, 2009 and September 30, 2008.

PROPERTY, PLANT & EQUIPMENT AND OTHER ASSETS

      Maintenance and repairs are charged to expense, and renewals and
betterments are capitalized. Plant and equipment and other assets,
primarily dosimetry badges, 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, three to eight years for equipment,
and thirty months to five years for other assets. Landauer assesses the
carrying value and the remaining useful lives of its property, plant,
equipment, and other assets when 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.








                                     26


<PAGE>


      Landauer capitalizes, as a component of equipment, costs of software
which is acquired, internally developed, or modified solely to meet the
Company's internal needs. In accordance with FASB authoritative guidance,
internal and external costs incurred to develop internal-use computer
software during the application development stage are capitalized. Costs
incurred during the preliminary project stage as well as training costs and
maintenance costs during the postimplementation-operation stage are
expensed. Capitalized costs amounted to $6,086, $10,645 and $4,532,
respectively, for fiscal years 2009, 2008 and 2007. In fiscal year 2009,
approximately $5,555 of the capitalized software costs was related to the
Company's 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 2009, the remainder of the costs was related to legacy
assets remaining in use by the Company. In fiscal years 2008 and 2007, some
of the legacy assets 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 42 of this Annual Report on Form 10-K.

GOODWILL AND OTHER INTANGIBLE ASSETS

      Landauer's intangible assets include purchased customer lists,
licenses, patents, trademarks, tradenames and goodwill. 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. The Company
acquired goodwill primarily from its acquisitions of Landauer-Europe and
SAPRA-Landauer as well as other smaller investments. Goodwill as well as
trademarks and tradenames have indefinite lives.

      FASB authoritative guidance requires that goodwill and certain
intangible assets with indefinite lives be reviewed periodically for
impairment. The impairment review of goodwill and other intangible assets
that are not being amortized, generally, is performed annually and is based
on fair values. The Company's methodology for testing goodwill for
impairment includes an initial review of potential impairment triggering
events and tests of fair market value. Should a triggering event be
identified, the Company performs a financial analysis of future
undiscounted cash flows projections by investment. Triggering events
include, but are not limited to, a current-period operating or cash flow
loss; a product, technology, or service introduced by a competitor; or a
loss of key personnel. As a result of its testing and review for
impairment, the Company determined that no impairment was required to be
recognized as of September 30, 2009. Information regarding the value of
goodwill and other intangible assets is presented under the footnote
"Goodwill and Other Intangible Assets" on page 44 of this Annual Report on
Form 10-K.

INCOME TAXES

      The Company estimates the income tax provision for income taxes that
are currently payable, and records deferred tax assets and liabilities for
the temporary differences in tax consequences between the financial
statements and tax returns. Temporary differences result from, among other
events, revenues, expenses, gains, or losses that are included in taxable
income of an earlier or later year than the year in which they are
recognized in financial income. These deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered
or settled. To the extent that deferred tax assets will not likely be
recovered from future taxable income, a valuation allowance is established
against such deferred tax assets.




                                     27


<PAGE>


      Management exercises significant judgment in the valuation of its
current and deferred tax assets and liabilities. The Company recognizes the
financial statement effects of its tax positions in its current and
deferred tax assets and liabilities when it is more likely than not that
the position will be sustained upon examination by a taxing authority.
Management considers, among other factors, the Company's current and past
performance, the market environment in which the Company operates, and tax
planning strategies. Further, the Company provides for income tax issues
not yet resolved with federal, state and local tax authorities. The Company
assesses and updates its tax positions when significant changes in
circumstances, which would cause a change in judgment about the likelihood
of realizing the deferred items, occur. Variations in the actual outcome of
these future tax consequences could materially impact the Company's
financial position, results of operations or cash flows. Further
information regarding the Company's income taxes is contained under the
footnote "Income Taxes" on page 44 of this Annual Report on Form 10-K.

DEFINED BENEFIT PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

      The pension expenses and benefit obligations recorded for the
Company's defined benefit plans are dependent on actuarial assumptions.
These assumptions include discount rates, expected return on plan assets,
interest costs, expected compensation increases, benefits earned, mortality
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.

      As a result of plan amendments during fiscal 2009 which led to plan
curtailments, the amended plans required remeasurement of benefit
obligations using prevailing rates at that time. For the period from
October 1, 2008, to January 31, 2009, the discount rate used for the
amended plans was 7.50%. For the period February 1, 2009, to September 30,
2009, the discount rate used for the amended plans was 6.38%. All other
assumptions determined as of October 1, 2008 remained appropriate for the
amended plans through the entire fiscal year. Including the impact of the
changes in discount rates, the weighted-average assumed discount rate used
to determine the fiscal 2009 plan expenses was 7.34% for pension benefits
and 7.50% for other benefits compared to 6.30% for all benefits in fiscal
2008. For fiscal 2009 expense, the expected long-term rate of return of
plan assets was 6.50%, unchanged from fiscal 2008. 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 2009 and 2008,
management considered historical Company increases, market expectations and
expected future Company increases. The weighted-average assumptions used to
determine benefit obligations at September 30, 2009 were: a discount rate
of 5.59% compared to the fiscal 2008 rate of 7.50%, 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, 2009;
and a rate of compensation increase of 3.50%, unchanged from fiscal 2008.

      The Company recognizes on its balance sheet the amount by which the
projected benefit obligations of its defined benefit plans exceed the fair
value of plan assets. Subsequent changes in the funded status of the plans
as a result of future transactions and events, amortization of previously
unrecognized costs, and changes to actuarial assumptions are recognized as
an asset or a liability and amortized as components of net periodic pension
cost or accumulated other comprehensive income. 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. Information regarding these plans is contained under the
footnote "Employee Benefit Plans" on page 47 of this Annual Report on
Form 10-K.




                                     28


<PAGE>


STOCK-BASED COMPENSATION

      The Company measures and recognizes compensation cost at fair value
for all stock-based awards, net of the estimated impact of forfeited
awards. The Company granted stock options in years prior to fiscal 2006.
The fair values of options were estimated using a Black-Scholes option
pricing model. In addition to stock options, key employees and/or
non-employee directors are eligible to receive performance shares and
restricted stock. The fair value of performance shares and restricted stock
granted under the Company's 2005 Long-Term Incentive Plan was based on the
average of the Company's high and low stock prices on the date of grant.
Upon the adoption of the Company's Incentive Compensation Plan in February
2008, the fair value of performance shares and restricted stock granted
under the new plan is based on the Company's closing stock price on the
grant date. The terms of performance share awards allow the recipients of
such awards to earn a variable number of shares based on the achievement of
the performance goals specified in the awards. Stock-based compensation
expense associated with performance share awards is recognized based on
management's best estimates of the achievement of the performance goals
specified in such awards and the resulting number of shares that are
expected to be earned. The Company evaluates on a quarterly basis the
progress towards achieving the performance criteria. The cumulative effect
on current and prior periods of a change in the estimated number of
performance share awards expected to be earned is recognized as
compensation cost or as a reduction of cost in the period of the revised
estimate. Compensation expense for restricted stock is recognized ratably
over the vesting period.

      Forfeitures of awards are estimated at the time of grant and
stock-based compensation cost is recognized only for those awards expected
to vest. The Company uses historical experience to estimate projected
forfeitures. The Company recognizes the cumulative effect on current and
prior periods of a change in the forfeiture rate, or actual forfeitures, as
compensation cost or as a reduction of cost in the period of the revision.
If revisions are made to management's assumptions and estimates or if
actual results vary considerably from those that are expected, stock-based
compensation expense could change significantly, impacting the Company's
results of operations or financial condition. Further information regarding
the Company's stock-based awards is presented under the footnote
"Stock-Based Compensation" on page 53 of this Annual Report on Form 10-K.


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 reporting 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 and markets becomes more volatile. The Company estimates that a 10%
and 20% adverse change in the underlying foreign currency exchange rates
would have decreased reported net income in fiscal 2009 by approximately
$450 and $825, respectively. Historically, the Company believes that
adverse changes in foreign exchange rates have not materially impacted its
financial condition.













                                     29


<PAGE>


ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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


(Dollars in Thousands)                                2009        2008
----------------------                              --------    --------

ASSETS
Current assets:
    Cash and cash equivalents. . . . . . . . . .    $ 36,493    $ 33,938
    Receivables, net of allowances of
      $622 in 2009 and $609 in 2008. . . . . . .      20,663      19,738
    Inventories. . . . . . . . . . . . . . . . .       4,063       3,550
    Prepaid expenses and other current assets. .       2,599       1,227
    Prepaid income taxes . . . . . . . . . . . .       3,743       7,964
    Deferred income taxes. . . . . . . . . . . .         976       2,312
                                                    --------    --------
Current assets . . . . . . . . . . . . . . . . .      68,537      68,729

Property, plant and equipment, at cost:
    Land and improvements. . . . . . . . . . . .         619         635
    Buildings and improvements . . . . . . . . .       4,346       4,349
    Internal software. . . . . . . . . . . . . .      31,226      25,271
    Equipment. . . . . . . . . . . . . . . . . .      31,159      27,340
                                                    --------    --------
                                                      67,350      57,595
Accumulated depreciation and amortization. . . .     (41,199)    (37,410)
                                                    --------    --------
Net property, plant and equipment. . . . . . . .      26,151      20,185
                                                    --------    --------
Equity in joint venture. . . . . . . . . . . . .       7,421       5,796
Goodwill . . . . . . . . . . . . . . . . . . . .      13,384      13,343
Intangible assets, net of amortization
  of $4,595 in 2009 and $4,065 in 2008 . . . . .       3,996       4,759
Dosimetry devices, net of amortization
  of $11,614 in 2009 and $10,632 in 2008 . . . .       4,583       4,454
Other assets . . . . . . . . . . . . . . . . . .       1,133       1,424
                                                    --------    --------
ASSETS . . . . . . . . . . . . . . . . . . . . .    $125,205    $118,690
                                                    ========    ========



























                                     30


<PAGE>


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


(Dollars in Thousands)                                2009        2008
----------------------                              --------    --------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable . . . . . . . . . . . . . .    $  5,193    $    981
    Dividends payable. . . . . . . . . . . . . .       4,996       4,686
    Deferred contract revenue. . . . . . . . . .      15,632      15,626
    Accrued compensation and related costs . . .       4,876       5,368
    Accrued pension and postretirement costs . .         346         366
    Other accrued expenses . . . . . . . . . . .       5,832       7,197
                                                    --------    --------
Current liabilities. . . . . . . . . . . . . . .      36,875      34,224
                                                    --------    --------
Non-current liabilities:
    Pension and postretirement obligations . . .       8,238       8,609
    Deferred income taxes. . . . . . . . . . . .       4,608       4,622
    Other non-current liabilities. . . . . . . .       1,030         935
                                                    --------    --------
Non-current liabilities. . . . . . . . . . . . .      13,876      14,166
                                                    --------    --------
Minority interest in subsidiary. . . . . . . . .         693         545

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; 9,381,098
      and 9,332,508 issued and outstanding,
      respectively, in 2009 and 2008 . . . . . .         938         933
     Additional paid in capital. . . . . . . . .      30,834      28,826
     Accumulated other comprehensive
       income (loss) . . . . . . . . . . . . . .        (515)        289
     Retained earnings . . . . . . . . . . . . .      42,504      39,707
                                                    --------    --------
    Stockholders' equity . . . . . . . . . . . .      73,761      69,755
                                                    --------    --------
LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . .    $125,205    $118,690
                                                    ========    ========






















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

                                     31


<PAGE>


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


(Dollars in Thousands,
Except per Share)                           2009       2008       2007
----------------------                    --------   --------   --------

Net revenues . . . . . . . . . . . . . .  $ 93,827   $ 89,954   $ 83,716
                                          --------   --------   --------
Costs and expenses:
    Cost of sales. . . . . . . . . . . .    30,766     28,914     27,527
    Selling, general, and
      administrative . . . . . . . . . .    27,891     26,589     24,711
    Net defined benefit plan
      curtailment loss and transition
      costs. . . . . . . . . . . . . . .     2,236          -          -
    Impairment and accelerated
      depreciation charges . . . . . . .         -        376      2,875
    Reorganization charges . . . . . . .       416          -          -
                                          --------   --------   --------
                                            61,309     55,879     55,113
                                          --------   --------   --------
Operating income . . . . . . . . . . . .    32,518     34,075     28,603

Equity in income of joint venture. . . .     1,575      1,351      1,414
Other income, net. . . . . . . . . . . .       624      1,005        813
                                          --------   --------   --------
Income before taxes. . . . . . . . . . .    34,717     36,431     30,830
Income taxes . . . . . . . . . . . . . .    11,071     13,118     11,413
                                          --------   --------   --------
Income before minority interest. . . . .    23,646     23,313     19,417
Minority interest. . . . . . . . . . . .       280        330        101
                                          --------   --------   --------
Net income . . . . . . . . . . . . . . .  $ 23,366   $ 22,983   $ 19,316
                                          ========   ========   ========

Net income per share:
    Basic. . . . . . . . . . . . . . . .  $   2.51   $   2.49   $   2.12
    Weighted average basic shares
      outstanding. . . . . . . . . . . .     9,293      9,237      9,127

    Diluted. . . . . . . . . . . . . . .  $   2.49   $   2.47   $   2.10
    Weighted average diluted shares
      outstanding. . . . . . . . . . . .     9,366      9,302      9,196
                                          ========   ========   ========





















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

                                     32


<PAGE>


<table>
                                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                              AND COMPREHENSIVE INCOME
                                           LANDAUER, INC. AND SUBSIDIARIES
<caption>

                                                    Addi-      Accumulated                  Total      Compre-
                                                   tional         Other                     Stock-     hensive
                                        Common     Paid In     Comprehensive   Retained    holders'    Income
(Dollars in Thousands)                  Stock      Capital     Income (Loss)   Earnings     Equity     (Loss)
----------------------                 --------    --------    -------------   --------   ----------   --------

                                    <c>         <c>         <c>             <c>        <c>          <c>
BALANCE SEPTEMBER 30, 2006 . . . . .   $    909    $ 19,641        $   (498)   $ 33,647    $ 53,699
Adoption of new benefit plan
    accounting guidance. . . . . . .          -           -            (780)          -        (780)
Stock-based compensation
   arrangements. . . . . . . . . . .         12       3,940               -           -       3,952
Net income . . . . . . . . . . . . .          -           -               -      19,316      19,316    $ 19,316
Foreign currency translation
   adjustment. . . . . . . . . . . .          -           -             609           -         609         609
Dividends. . . . . . . . . . . . . .          -           -               -     (17,446)    (17,446)          -
Minimum pension liability
   adjustment. . . . . . . . . . . .          -           -             160           -         160         160
                                       --------    --------        --------    --------    --------    --------
Comprehensive Income . . . . . . . .                                                                   $ 20,085
                                                                                                       ========

BALANCE SEPTEMBER 30, 2007 . . . . .        921      23,581            (509)     35,517      59,510

Adoption of new income tax
   accounting guidance . . . . . . .          -           -               -        (231)       (231)
Stock-based compensation
    arrangements . . . . . . . . . .         12       5,245               -           -       5,257
Net income . . . . . . . . . . . . .          -           -               -      22,983      22,983    $ 22,983
Foreign currency translation
   adjustment. . . . . . . . . . . .          -           -            (235)          -        (235)       (235)
Dividends. . . . . . . . . . . . . .          -           -               -     (18,562)    (18,562)          -
Defined benefit pension plans
   activity. . . . . . . . . . . . .          -           -             964           -         964         964
Other postretirement benefit plans
   activity. . . . . . . . . . . . .          -           -              69           -          69          69
                                       --------    --------        --------    --------    --------    --------
Comprehensive Income . . . . . . . .                                                                   $ 23,781
                                                                                                       ========








                                                         33


<PAGE>


                                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                              AND COMPREHENSIVE INCOME
                                                     (CONTINUED)
                                           LANDAUER, INC. AND SUBSIDIARIES


                                                    Addi-      Accumulated                  Total      Compre-
                                                   tional         Other                     Stock-     hensive
                                        Common     Paid In     Comprehensive   Retained    holders'    Income
(Dollars in Thousands)                  Stock      Capital     Income (Loss)   Earnings     Equity     (Loss)
----------------------                 --------    --------    -------------   --------   ----------   --------

BALANCE SEPTEMBER 30, 2008 . . . . .   $    933    $ 28,826        $    289    $ 39,707    $ 69,755

Adoption of new postretirement
   life insurance arrangements
   accounting guidance . . . . . . .          -           -               -        (900)       (900)

Stock-based compensation
   arrangements. . . . . . . . . . .          5       2,008               -           -       2,013
Net income . . . . . . . . . . . . .          -           -               -      23,366      23,366    $ 23,366
Foreign currency translation
   adjustment. . . . . . . . . . . .          -           -           1,243           -       1,243       1,243
Dividends. . . . . . . . . . . . . .          -           -               -     (19,669)    (19,669)          -
Defined benefit pension plans
   activity. . . . . . . . . . . . .          -           -          (2,017)          -      (2,017)     (2,017)
Other postretirement benefit
   plans activity. . . . . . . . . .          -           -             (30)          -         (30)        (30)
                                       --------    --------        --------    --------    --------    --------
Comprehensive Income . . . . . . . .                                                                   $ 22,562
                                                                                                       ========
BALANCE SEPTEMBER 30, 2009 . . . . .   $    938    $ 30,834        $   (515)   $ 42,504    $ 73,761
                                       ========    ========        ========    ========    ========















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

                                                         34
</table>


<PAGE>


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


(Dollars in Thousands)                        2009      2008      2007
----------------------                      --------  --------  --------
Cash flows from operating activities:
  Net income . . . . . . . . . . . . . . .  $ 23,366  $ 22,983  $ 19,316
  Adjustments to reconcile net income
    to net cash provided by operating
    activities:
      Asset impairment and accelerated
        depreciation charges . . . . . . .         -       376     2,875
      Depreciation . . . . . . . . . . . .     5,230     5,719     6,851
      Amortization . . . . . . . . . . . .       615       658       640
      Equity in net income of joint
        venture. . . . . . . . . . . . . .    (1,575)   (1,351)   (1,414)
      Dividends from joint venture . . . .     1,062       894       560
      Stock-based compensation . . . . . .     2,152     1,200       801
      Tax benefit from stock-based
        compensation arrangements. . . . .     1,089     1,408       925
      Excess tax benefit from stock-
        based compensation arrangements. .      (228)   (1,019)     (829)
      Defined benefit plans net
        curtailment loss . . . . . . . . .     1,350         -         -
      (Increase) decrease in accounts
        receivable, net. . . . . . . . . .      (872)       55     1,101
      Decrease (increase) in prepaid
        taxes. . . . . . . . . . . . . . .     3,357    (6,198)   (1,343)
      Decrease (increase) in current
        deferred taxes, net. . . . . . . .     2,457     1,107    (2,219)
      Increase in dosimetry devices
        at cost. . . . . . . . . . . . . .    (1,856)   (1,235)   (1,190)
      (Increase) decrease in long-term
        deferred taxes, net. . . . . . . .      (384)    5,084       889
      Increase (decrease) in accounts
        payable and other current
        liabilities. . . . . . . . . . . .     1,229     3,286      (309)
      (Decrease) increase in deferred
        contract revenue . . . . . . . . .       (59)    1,782       (84)
      (Decrease) increase in long-term
        pension and postretirement
        obligations. . . . . . . . . . . .    (4,934)      666       697
      Other operating activities, net. . .    (1,790)     (764)      738
                                            --------  --------  --------
      Net cash provided by
        operating activities . . . . . . .    30,209    34,651    28,005
                                            --------  --------  --------
Cash flows used by investing activities:
    Acquisition of businesses,
      net of cash acquired . . . . . . . .         -      (498)        -
    Acquisition of property, plant &
      equipment. . . . . . . . . . . . . .    (9,126)   (7,533)   (7,386)
                                            --------  --------  --------
    Net cash used by investing activities.    (9,126)   (8,031)   (7,386)
                                            --------  --------  --------
Cash flows used by financing activities:
    Payments on revolving credit
      facilities . . . . . . . . . . . . .         -         -    (1,717)
    Dividends paid to minority interest. .      (151)     (167)     (117)
    Dividends paid to stockholders . . . .   (19,360)  (18,270)  (17,163)
    Proceeds from the exercise of
      stock options. . . . . . . . . . . .       590     4,011     3,011
    Excess tax benefit from stock-based
      compensation arrangements. . . . . .       228     1,019       829
                                            --------  --------  --------
    Net cash used by financing activities.   (18,693)  (13,407)  (15,157)
                                            --------  --------  --------

                                     35


<PAGE>


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

(Dollars in Thousands)                        2009      2008      2007
----------------------                      --------  --------  --------

    Effects of foreign currency
      translation. . . . . . . . . . . . .       165      (344)      187

Net increase in cash and
  cash equivalents . . . . . . . . . . . .     2,555    12,869     5,649
Opening balance -
  cash and cash equivalents. . . . . . . .    33,938    21,069    15,420
                                            --------  --------  --------

Ending balance -
  cash and cash equivalents. . . . . . . .  $ 36,493  $ 33,938  $ 21,069
                                            ========  ========  ========


Supplemental disclosure of cash flow
 information:
    Cash paid for income taxes . . . . . .  $  7,515  $ 10,213  $ 13,191
                                            ========  ========  ========










































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

                                     36


<PAGE>


                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       LANDAUER, INC. AND SUBSIDIARIES
                           (Dollars in thousands)


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,
ALSA Dosimetria, S. de R.L. de C.V. its 56.25%-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 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.





                                     37


<PAGE>


      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.

      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 $1,948 in fiscal 2009, $1,837 in fiscal 2008 and $1,831 in
fiscal 2007. 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 thirty months 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 $572 in fiscal 2009, $532 in fiscal 2008 and $403 in fiscal
2007.

INCOME TAXES

      Landauer files income tax returns in the jurisdictions in which it
operates. The Company estimates the income tax provision for income taxes
that are currently payable, and records deferred tax assets and liabilities
for the temporary differences in tax consequences between the financial
statements and tax returns. The Company would record a valuation allowance
in situations where the realization of deferred tax assets is not more
likely than not. The Company recognizes the financial statement effects of
its tax positions in its current and deferred tax assets and liabilities
when it is more likely than not that the position will be sustained upon
examination by a taxing authority. Further information regarding the
Company's income taxes is contained in the footnote "Income Taxes" on page
44 of this Annual Report on Form 10-K.

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.






                                     38


<PAGE>


STOCK-BASED COMPENSATION

      The Company measures and recognizes 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 $2,152, $1,200 and $801 for fiscal 2009, 2008 and 2007,
respectively. The total income tax benefit recognized in the consolidated
statements of income related to expense for stock-based compensation was
approximately $777, $484 and $322 during fiscal 2009, 2008 and 2007,
respectively.

      The Company has not granted stock options subsequent to fiscal 2005.
Awards of stock options in prior fiscal years were granted with an exercise
price equal to the market value of the stock on the date of grant. The fair
value of stock options was estimated using the Black-Scholes option-pricing
model. Expected volatility and the expected life of stock options were
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. Compensation
expense was recognized ratably over the vesting period of the stock option.

      Subsequent to fiscal 2005, key employees and/or non-employee
directors have been granted restricted share awards that consist of
performance shares and time vested restricted stock. 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
granted under the Company's 2005 Long-Term Incentive Plan was based on the
average of the Company's high and low stock prices on the date of grant.
Upon the adoption of the Company's Incentive Compensation Plan in February
2008, the fair value of performance shares and restricted stock granted
under the new plan is based on the Company's closing stock price 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 per share weighted average
fair value of restricted shares, including restricted stock and performance
shares, granted during fiscal 2009, 2008 and 2007 was $59.12, $51.41 and
$49.27, respectively.

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 47 of this Annual
Report on Form 10-K for further information on these benefit plans.

      Effective September 30, 2007 the Company adopted the FASB
authoritative guidance related to defined benefit pension and other
postretirement plans that requires companies to recognize on their balance
sheet the funded status of their defined benefit and other post-retirement
plans and to recognize changes in the funded status of these plans through
comprehensive income in the year in which the changes occur. This guidance
also requires that plan measurement dates coincide with the Company's
fiscal year end. The adoption of this guidance did not impact the Company's
plan measurement dates, as its plans historically have used a plan
measurement date of September 30.








                                     39


<PAGE>


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In December 2007, the FASB issued authoritative guidance that amends
the accounting for business combinations, and the accounting and reporting
for a noncontrolling interest in a subsidiary. The amended guidance aims to
improve, simplify, and converge internationally the accounting for and
reporting of business combinations and noncontrolling interests in
consolidated financial statements. The revised provisions are effective,
and should be applied prospectively, for the Company beginning in fiscal
2010. The Company will apply the amended guidance for any business
combinations beginning in fiscal 2010, including the first quarter
acquisitions of GPS, GDM and Landauer Persondosimetri AB. The Company does
not expect the amended guidance for accounting and reporting for
noncontrolling interests to have a significant impact on the Company's
financial statements.

      In September 2009, the FASB approved the issuance of new guidance for
arrangements with multiple deliverables and arrangements that include
software elements. By providing another alternative for determining the
selling price of deliverables, the new guidance will allow companies to
allocate arrangement consideration in multiple deliverable arrangements in
a manner that better reflects the transaction's economics and will often
result in earlier revenue recognition. In addition, the residual method of
allocating arrangement consideration is no longer permitted under the new
guidance. The new guidance for arrangements that include software elements
removes non-software components of tangible products and certain software
components of tangible products from the scope of existing software revenue
guidance, resulting in the recognition of revenue similar to that for other
tangible products. The new guidance requires expanded qualitative and
quantitative disclosures. The new guidance is effective for fiscal years
beginning on or after June 15, 2010. The guidance may be applied either
prospectively from the beginning of the fiscal year for new or materially
modified arrangements or retrospectively. The Company is currently
evaluating the impact of this new guidance to its financial position,
results of operations and financial disclosures.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

      Effective October 1, 2008, the Company adopted the FASB authoritative
guidance for the accounting for the deferred compensation and
postretirement benefit aspects of collateral assignment split-dollar life
insurance arrangements. The guidance requires that an employer recognize a
liability for the postretirement benefit related to a collateral assignment
split-dollar life insurance arrangement. As a result of the implementation
of the guidance, the Company recognized a decrease of $362 in its long-term
asset recorded for its collateral assignment split-dollar life insurance
arrangement and recorded a liability of $538 for premiums payable under the
arrangement. The October 1, 2008 balance of retained earnings was reduced
by $900. The Company's liability for this arrangement is expected to be
settled in fiscal 2014.

      Effective October 1, 2008, the Company adopted the FASB standards
which define fair value, establish a framework for measuring fair value and
expand disclosures about fair value measurements. The guidance applies
under other accounting standards that require or permit fair value
measurements. The adoption of these standards did not impact the Company's
consolidated financial statements for the year ended September 30, 2009.













                                     40


<PAGE>


      Effective October 1, 2008, the Company adopted the FASB authoritative
guidance which 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. The new guidance also establishes presentation and
disclosure requirements to facilitate comparisons between companies that
choose different measurement attributes for similar assets and liabilities.
The Company did not elect the fair value option and, therefore, the
adoption of the guidance did not impact the Company's financial position,
results of operations and financial disclosures for the year ended
September 30, 2009.

      Effective June 30, 2009, the Company adopted the new general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are
available to be issued. The standards require disclosure of the date
through which an entity has evaluated subsequent events and the basis for
that date. The adoption of the standards did not impact the consolidated
financial statements for the year ended September 30, 2009.

      Effective for the Company's financial statements issued for the
fiscal year ending September 30, 2009, the Company adopted the FASB
Accounting Standards Codification. The FASB established the Codification as
the source of authoritative accounting principles recognized by the FASB to
be applied by nongovernmental entities in the preparation of financial
statements in accordance with generally accepted accounting principles in
the United States. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative U.S.
GAAP for SEC registrants. The Codification supersedes all prior accounting
standard documents, and all other nongrandfathered non-SEC accounting
literature not included in the Codification became nonauthoritative. The
Codification does not change or alter existing U.S. GAAP and, therefore,
did not have any impact on the Company's consolidated financial statements.

SUBSEQUENT EVENTS REVIEW

      Management evaluated material subsequent events through December 11,
2009, the date the report on Form 10-K which contained the accompanying
financial statements was filed with the SEC. No material subsequent events,
other than those disclosed in footnote 15, "Subsequent Events", occurred
since September 30, 2009, which required recognition or disclosure in the
financial statements.

2.    NET DEFINED BENEFIT PLAN CURTAILMENT LOSS AND TRANSITION COSTS

      On February 5, 2009, the Board of Directors approved changes to the
Company's retirement benefit plans. The objective of the changes is to
transition from a defined benefit strategy for retirement benefits to a
defined contribution approach. These changes, effective March 31, 2009,
include the following actions:

      .     cease all accruals for future years of service in the Company's
            defined benefit retirement plans and supplemental retirement
            plans and to freeze benefits provided under the plans effective
            March 31, 2009;

      .     provide supplemental transition benefits to participants who
            satisfy certain age and service requirements;

      .     provide enhanced benefits in the existing 401(k) retirement
            savings plan; and

      .     adopt a new nonqualified deferred compensation plan for the
            benefit of certain executives.

      The Company anticipates that the re-design of its retirement plans
will result in future cost savings while offering market based retirement
benefits to its employees.

                                     41


<PAGE>


      In connection with the redesign of its retirement benefit plans, the
Company recognized charges of $2,236 ($1,478 after-tax) during its second
fiscal quarter. The charges include a one-time net curtailment loss, in
accordance with FASB authoritative guidance, in the amount of $1,125. In
addition, the charge also includes costs of $1,111 pre-tax related to the
transition of the contractual retirement benefit obligation of the
Company's Chief Executive Officer to a defined contribution obligation and
professional fees directly associated with the benefit plan transitions.
During fiscal 2009, the Company made contributions of approximately $6,400
in excess of the required annual pension plan payments to fund the
remainder of the plan's current unfunded balance.


3.    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 that were either subject to immediate impairment or retirement once
the full system implementation has been completed. Management anticipated
that the assets subject to retirement would be utilized through March 31,
2008, and therefore, the Company recorded 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 ($1,725, after tax), or $0.19 per diluted share. The
non-cash charge included an impairment of $2,185 for those assets
management determined have no future value and $690 of incremental
depreciation expense for those assets whose remaining useful lives were
adjusted. In fiscal 2008, the Company recognized a non-cash charge of $376
($225, after tax), or $0.02 per diluted share, for the remaining
accelerated depreciation on the assets to be retired.


4.    REORGANIZATION CHARGES

      During the second quarter of fiscal 2009, the Company initiated a
management reorganization plan to strengthen selected roles in the
organization. As a result, in March 2009, the Company recognized expense,
including severance, in the amount of $489 ($322 after-tax) associated with
these management organizational changes. The estimated reorganization
charges were reduced by $73 ($47 after-tax) in the fourth fiscal quarter of
2009 based on actual payments to severed employees.


5.    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 maintains a
pool of windfall tax benefits which is available to offset shortfalls of
current and deferred taxes on stock-based compensation transactions.










                                     42


<PAGE>


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

(Amounts in Thousands)                        2009      2008      2007
----------------------                      --------  --------  --------

Weighted average number of shares of
    common stock outstanding . . . . . . .     9,293     9,237     9,127
Effect of dilutive stock-based
    compensation awards. . . . . . . . . .        73        65        69
                                            --------  --------  --------
Weighted average number of shares of
    common stock assuming dilution . . . .     9,366     9,302     9,196
                                            ========  ========  ========


6.    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 $1,062, $894 and $560 during fiscal years 2009, 2008
and 2007, respectively.

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

(Dollars in Thousands)                        2009      2008      2007
----------------------                      --------  --------  --------

Revenues . . . . . . . . . . . . . . . . .  $ 20,886  $ 19,235  $ 16,472
Gross profit . . . . . . . . . . . . . . .    11,554    10,062     8,599
Income before income taxes . . . . . . . .     5,804     4,885     4,833
Net income . . . . . . . . . . . . . . . .     3,150     2,701     2,828
                                            ========  ========  ========

      Condensed balance sheet information for the years ended September 30,
2009 and 2008, converted into U.S. dollars at the then-current rate of
exchange, was as follows:

(Dollars in Thousands)                        2009      2008
----------------------                      --------  --------
Current assets . . . . . . . . . . . . . .  $ 15,406  $ 15,136
Other assets . . . . . . . . . . . . . . .    12,459     4,185
                                            --------  --------
Total assets . . . . . . . . . . . . . . .  $ 27,865  $ 19,321
                                            ========  ========

Current liabilities. . . . . . . . . . . .  $ 11,184  $  6,266
Other liabilities. . . . . . . . . . . . .     1,839     1,465
Stockholders' equity . . . . . . . . . . .    14,842    11,590
                                            --------  --------
Total liabilities and
  stockholders' equity . . . . . . . . . .  $ 27,865  $ 19,321
                                            ========  ========












                                     43


<PAGE>


7.    GOODWILL AND OTHER INTANGIBLE ASSETS

      The components of goodwill and other intangible assets for the years
ended September 30, 2009 and 2008 were as follows:

(Dollars in Thousands)                        2009      2008
----------------------                      --------  --------

Goodwill . . . . . . . . . . . . . . . . .  $ 13,384  $ 13,343
Customer lists, net of amortization
  of $3,636 in 2009 and $3,078 in 2008
  (useful life of 10-15 years) . . . . . .     3,576     4,134
Licenses and patents, net of
  amortization of $402 in 2009 and
  $430 in 2008 (useful life of
  10-17 years) . . . . . . . . . . . . . .       203       606
Other intangibles, net of amortization
  of $557 in 2009 and $557 in 2008 . . . .       217        19
                                            --------  --------
Total. . . . . . . . . . . . . . . . . . .  $ 17,380  $ 18,102
                                            ========  ========

      The intangible asset amounts noted above are presented net of
accumulated amortization of $7,897 at September 30, 2009 and $7,359 at
September 30, 2008. Amortization of intangible assets was $615, $658 and
$640, for the years ended September 30, 2009, 2008 and 2007, respectively.
Estimated annual aggregate amortization expense related to intangible
assets will be approximately $580, $520, $520, $520 and $490, respectively,
for each of the next five years. As a result of its annual testing and
review for impairment of goodwill and other intangible assets, the Company
determined that no impairment was required to be recognized as of
September 30, 2009.


8.    INCOME TAXES

      The breakdown of pretax income for the years ended September 30,
2009, 2008 and 2007 was as follows:

(Dollars in Thousands)                        2009      2008      2007
----------------------                      --------  --------  --------
Pretax income:
    U.S. . . . . . . . . . . . . . . . . .  $ 29,377  $ 30,767  $ 27,009
    Foreign. . . . . . . . . . . . . . . .     5,340     5,664     3,821
                                            --------  --------  --------
Total pretax income. . . . . . . . . . . .  $ 34,717  $ 36,431  $ 30,830
                                            ========  ========  ========

      The components of the provision for income taxes for the years ended
September 30, 2009, 2008 and 2007 were as follows:

(Dollars in Thousands)                        2009      2008      2007
----------------------                      --------  --------  --------
Current:
    Federal. . . . . . . . . . . . . . . .  $  8,867  $  5,340  $  9,752
    State. . . . . . . . . . . . . . . . .      (275)      958     2,349
                                            --------  --------  --------
      Current tax provision. . . . . . . .  $  8,592  $  6,298  $ 12,101
                                            ========  ========  ========
Deferred:
    Federal. . . . . . . . . . . . . . . .  $  2,381  $  5,379  $   (520)
    State. . . . . . . . . . . . . . . . .        98     1,441      (168)
                                            --------  --------  --------
      Deferred tax provision (benefit) . .  $  2,479  $  6,820  $   (688)
                                            ========  ========  ========

Income tax provision . . . . . . . . . . .  $ 11,071  $ 13,118  $ 11,413
                                            ========  ========  ========


                                     44


<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 of 35.0% to income before taxes. Significant items affecting the
provision were as follows:

(Dollars in Thousands)                        2009      2008      2007
----------------------                      --------  --------  --------

Income tax provision at statutory
  rate of 35.0%. . . . . . . . . . . . . .  $ 12,151  $ 12,751  $ 10,791
Increases (decreases) resulting from:
    State income taxes, net of
      federal benefit. . . . . . . . . . .       326     1,559     1,418
    Foreign rate differences . . . . . . .      (241)     (481)     (206)
    Non-taxed equity earnings. . . . . . .      (551)     (473)     (495)
    Foreign tax credit impact, net . . . .      (378)     (386)     (342)
    Other. . . . . . . . . . . . . . . . .      (236)      148       247
                                            --------  --------  --------
    Income tax provision as reported . . .  $ 11,071  $ 13,118  $ 11,413
                                            ========  ========  ========

    Effective income tax rate. . . . . . .     31.9%     36.0%     37.0%
                                            ========  ========  ========

      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 employee benefits and other compensation related costs, and (e)
allowances for obsolete inventory.

      Significant components of deferred taxes at September 30 were as
follows:

(Dollars in Thousands)                        2009      2008
----------------------                      --------  --------

Deferred tax assets:
    Pension accrual. . . . . . . . . . . .  $  2,617  $  1,967
    Compensation expense . . . . . . . . .       665       722
    HomeBuyer's accrued mitigation costs .       234       290
    Medical insurance claims . . . . . . .       496       528
    Other. . . . . . . . . . . . . . . . .       437       613
                                            --------  --------
                                            $  4,449  $  4,120
                                            ========  ========
Deferred tax liabilities:
    Tangible asset amortization. . . . . .  $    803  $    506
    Depreciation . . . . . . . . . . . . .       500       553
    Software development . . . . . . . . .     5,678     3,928
    Intangible asset amortization. . . . .       406       632
    Other. . . . . . . . . . . . . . . . .       694       811
                                            --------  --------
                                            $  8,081  $  6,430
                                            ========  ========

Net deferred tax liability . . . . . . . .  $ (3,632) $ (2,310)
                                            ========  ========

      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.




                                     45


<PAGE>


      The Company believes that the realization of the deferred tax assets
is more likely than not based upon the expectation that it will generate
the necessary taxable income in the future periods and no valuation
reserves have been provided.

INCOME TAX UNCERTAINTIES

      Landauer operates in numerous taxing jurisdictions and is subject to
regular examinations by various U.S. federal, state and foreign
jurisdictions for various tax periods. The Company's income tax positions
are based on research and interpretations of the income tax laws and
rulings in each of the jurisdictions in which it does business. Due to the
subjectivity of interpretations of laws and rulings in each jurisdiction,
the differences and interplay in tax laws between those jurisdictions as
well as the inherent uncertainty in estimating the final resolution of
complex tax audit matters, the Company's estimates of income tax
liabilities may differ from actual payments or assessments.

      The Company recognized a $231 decrease in stockholders' equity as of
October 1, 2007 related to a change in accounting for uncertain tax
positions. The liability for income tax uncertainties recognized as of
October 1, 2007 was $421.

      A reconciliation of gross unrecognized tax benefits, exclusive of
interest and penalties, is as follows:

(Dollars in Thousands)                        2009      2008
----------------------                      --------  --------

Balance at beginning of year . . . . . . .  $    694  $    421
Increases based on tax positions
  for the current year . . . . . . . . . .       158        91
Increases based on tax positions
  for prior years. . . . . . . . . . . . .         -       307
Decreases based on tax positions
  for prior years. . . . . . . . . . . . .       (64)      (49)
Settlements. . . . . . . . . . . . . . . .      (219)      (26)
Lapse of statute of limitations. . . . . .       (37)      (50)
                                            --------  --------
  Balance at end of year . . . . . . . . .  $    532  $    694
                                            ========  ========

      The total amount of unrecognized tax benefits that, if recognized,
would affect the effective tax rate was $493 (net of federal tax benefit)
as of September 30, 2009 and $516 (net of federal tax benefit) as of
September 30, 2008.

      As of September 30, 2009, the Company believes that it is reasonably
possible that its liability for income tax uncertainties will decrease,
exclusive of interest and penalties, by approximately $89, due to the
lapsing of the statutes of limitations within the next twelve months.

      The Company recognizes accrued interest and penalties related to
unrecognized tax benefits in the provision for income taxes. The Company
recognized $44 and $145 in interest and penalties during fiscal years 2009
and 2008, respectively. As of September 30, 2009 and 2008, the gross amount
of interest accrued was $49 and $90, respectively, and the accrual for the
potential payment of penalties was $5 and $151, respectively.  The decrease
in accrued interest and penalties between September 30, 2009 and
September 30, 2008 is primarily attributable to the settlement of certain
state tax liabilities.









                                     46


<PAGE>


      As of September 30, 2009, the Company's U.S. income tax returns for
fiscal years 2005 and subsequent years remain subject to examination by the
Internal Revenue Service. The Company has no on-going examinations of any
tax year by the Internal Revenue Service. State income tax returns
generally have statute of limitations for periods between three and five
years from the date of filing. During fiscal year 2009, the State of New
York began an income tax audit of the returns for the fiscal tax years
ending September 30, 2005, 2006 and 2007. The audit resulted in no material
adjustments. For the Company's major foreign jurisdictions, its tax returns
in the UK and France for fiscal years 2006 and subsequent years remain open
and subject to examination by taxing officials.


9.    CREDIT FACILITY

      In October 2007, the Company negotiated a credit facility, which
originally had an expiration date of October 31, 2009 and permitted
borrowings up to $15,000. In June 2009, the Company amended its credit
agreement. The amendment, among other changes to the original terms,
extended the maturity date to June 16, 2011 and increased the aggregate
amount of funds available to $30,000; subject, with respect to amounts
borrowed in excess of $20,000, to certain criteria outlined in the
agreement. No borrowings were outstanding as of September 30, 2009.

      The Company completed the acquisition of GPS on November 9, 2009 for
a purchase price of $22,000 in cash. Landauer also completed the
acquisition of GDM for $6,700 in cash. The Company funded the purchase
prices through borrowings under its credit agreement of $18,000, with the
remainder paid from the Company's cash on hand. Under the credit agreement,
the Company elects to pay an annualized interest rate based on LIBOR plus
2.9%. In addition, the Company must maintain a fixed charge coverage ratio,
as calculated pursuant to the terms of the amended credit agreement, as of
the end of each calendar quarter of not less than 1.35 to 1.00, and a
funded debt to EBITDA ratio less than or equal to 1.5 to 1.00.


10.   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, 2009 and
2008, there were 9,381,098 and 9,332,508 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 $2.10 per common share were declared in fiscal 2009. At
September 30, 2009, there were accrued and unpaid dividends of $4,996.

      Landauer has reserved 500,000 shares of common stock under the
Landauer, Inc. Incentive Compensation Plan approved on February 7, 2008.
Previously, Landauer had reserved 500,000 shares of common stock for grants
under its 2005 Long-Term Incentive Plan. Upon approval of the new plan in
2008, all shares reserved under the prior plan were cancelled.


11.   EMPLOYEE BENEFIT PLANS

      Historically the Company provided, to substantially all full-time
employees in the U.S, a qualified noncontributory defined benefit pension
plan to provide a basic replacement income benefit upon retirement. For key
executives, the basic benefit was supplemented with a supplemental
executive retirement plan to address United States tax law limitations
placed on the benefits under the qualified pension plan. The supplemental
plan is not separately funded and costs of the plan are expensed annually.
Landauer formerly maintained a directors' retirement plan that provides
certain retirement benefits for non-employee directors. The directors' plan
was terminated in January 1997 and benefits accrued under the retirement
plan are frozen.




                                     47


<PAGE>


      During 2009, the Company redesigned its retirement benefit plans for
U.S. salaried employees to reflect a change in philosophy from a defined
benefit structure to a defined contribution structure. The Company
anticipates that the redesign of its retirement plans will result in future
cost savings while offering market based retirement benefits to its
employees. As part of the redesign, the qualified noncontributory defined
benefit pension plan and the supplemental executive retirement plan were
amended to, among other changes, cease all benefit accruals under such
plans. The Company also adopted a new supplemental defined contribution
plan for certain executives, which allows participating executives to make
voluntary deferrals and provides for employer contributions at the
discretion of the Company.

      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. The 401(k) savings plan was
amended effective April 1, 2009 to enhance the Company's matching
contribution, along with certain other changes. Amounts expensed for
company contributions under the plan during the fiscal years ended
September 30, 2009, 2008 and 2007 were $461, $123 and $149, respectively.

      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.

      Pensions for international employees are generally provided under
government sponsored programs funded by employment taxes. The Company's
subsidiary in France maintains a pension plan, in the amount of
approximately $134 and $144 as of September 30, 2009 and 2008,
respectively, which has not been included in the following tables.

      The Company recognizes the over- or underfunded status of its defined
benefit pension and postretirement plans on its balance sheet and
recognizes changes in the funded status, as the changes occur, through
comprehensive income. 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.

                                    Pension Benefits     Other Benefits
                                   ------------------ -------------------
(Dollars in Thousands)               2009      2008      2009      2008
----------------------             --------  --------  --------  --------
CHANGE IN BENEFIT OBLIGATION:
Benefit obligation at beginning
  of year. . . . . . . . . . . . . $ 19,860  $ 21,458  $  1,134  $  1,355
Service cost . . . . . . . . . . .      977     1,084        40        43
Interest cost. . . . . . . . . . .    1,412     1,347        71        68
Effect of amendments,
  curtailments, settlements (1). .   (2,728)        -         -         -
Actuarial loss (gain). . . . . . .    7,364    (3,400)      (64)     (284)
Benefits paid. . . . . . . . . . .     (759)     (629)      (31)      (48)
                                   --------  --------  --------  --------
Benefit obligation at
  end of year. . . . . . . . . . .   26,126    19,860     1,150     1,134
                                   --------  --------  --------  --------







                                     48


<PAGE>


                                    Pension Benefits     Other Benefits
                                   ------------------ -------------------
(Dollars in Thousands)               2009      2008      2009      2008
----------------------             --------  --------  --------  --------

CHANGE IN PLAN ASSETS:
Fair value of plan assets at
  beginning of year. . . . . . . .   12,163    13,099         -         -
Actual return on plan assets . . .    1,258    (1,189)        -         -
Employer contributions . . . . . .    7,354       882        31        48
Benefits paid. . . . . . . . . . .     (759)     (629)      (31)      (48)
                                   --------  --------  --------  --------
Fair value of plan assets at
  end of year. . . . . . . . . . .   20,016    12,163         -         -
                                   --------  --------  --------  --------
Funded status at end of year . . . $ (6,110) $ (7,697) $ (1,150) $ (1,134)
                                   ========  ========  ========  ========

  (1) Represents benefit costs arising from the amendments and related
      curtailments and settlements to the Company's plans in the second
      quarter of fiscal 2009. Refer to Note 2 "Net Defined Benefit Plan
      Curtailment Loss and Transition Costs" for additional information.

                                    Pension Benefits     Other Benefits
                                   ------------------ -------------------
(Dollars in Thousands)               2009      2008      2009      2008
----------------------             --------  --------  --------  --------

AMOUNTS RECOGNIZED IN
  CONSOLIDATED BALANCE SHEETS:
Current liabilities - accrued
  pension and postretirement
  costs. . . . . . . . . . . . . . $   (297) $   (286) $    (50) $    (80)
Noncurrent liabilities - pension
  and postretirement obligations .   (5,813)   (7,411)   (1,100)   (1,054)
                                   --------  --------  --------  --------
Net amount recognized. . . . . . . $ (6,110) $ (7,697) $ (1,150) $ (1,134)
                                   ========  ========  ========  ========

AMOUNTS RECOGNIZED IN ACCUMULATED
  OTHER COMPREHENSIVE INCOME
  (LOSS):
Net loss (gain). . . . . . . . . . $  3,212  $   (677) $     47  $    110
Prior service cost (credit). . . .        -       734      (222)     (333)
                                   --------  --------  --------  --------
Net amount recognized in
  accumulated other compre-
  hensive income (loss). . . . . . $  3,212  $     57  $   (175) $   (223)
                                   ========  ========  ========  ========

      At September 30, 2009 and 2008, the accumulated benefit obligation
for all defined benefit pension plans was $26,126 and $17,975,
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)                        2009      2008
----------------------                      --------  --------

Projected benefit obligation . . . . . . .  $ 26,126  $  6,424
Accumulated benefit obligation . . . . . .    26,126     6,352
Fair value of plan assets. . . . . . . . .    20,016         -
                                            ========  ========






                                     49


<PAGE>


      The components of net periodic benefit cost were as follows:

                         Pension Benefits            Other Benefits
                     -------------------------  -------------------------
(Dollars in
Thousands)            2009     2008     2007     2009    2008      2007
------------         -------  -------  -------  ------- -------   -------

Service cost . . . . $   977 $  1,084  $ 1,143  $    40 $    43   $    58
Interest cost. . . .   1,412    1,347    1,210       71      68        76
Expected return on
  plan assets. . . .    (983)    (859)    (747)       -       -         -
Amortization of
  transition asset .       -        -       (6)       -       -         -
Amortization of
  prior service
  cost (credit). . .      45      149      149     (111)   (111)     (111)
Recognized net
  actuarial loss . .       5        9       40        -       10       59
Special termination
  benefits . . . . .       -        -      140        -       -         -
Curtailment loss . .   1,350        -        -        -       -         -
Settlement gain. . .    (225)       -        -        -       -         -
                     -------  -------  -------  ------- -------   -------
Net periodic
  benefit cost . . . $ 2,581  $ 1,730  $ 1,929  $     - $    10   $    82
                     =======  =======  =======  ======= =======   =======

      Other changes in plan assets and benefit obligations recognized in
other comprehensive income, pre-tax, during fiscal 2009 and 2008 were as
follows:

                                    Pension Benefits     Other Benefits
                                   ------------------  ------------------
                                     2009      2008      2009      2008
                                   --------  --------  --------  --------
Net loss (gain). . . . . . . . . . $  3,895  $ (1,351) $    (64) $   (284)
Amortization of net gain . . . . .       (5)       (9)        -       (10)
Prior service credit . . . . . . .     (689)        -         -         -
Amortization of prior service
   cost (credit) . . . . . . . . .      (45)     (149)      111       111
                                   --------  --------  --------  --------
Total recognized in other
   comprehensive income. . . . . . $  3,156  $ (1,509) $     47  $   (183)
                                   ========  ========  ========  ========

Total recognized in net
   periodic benefit cost and
   other comprehensive income. . . $  5,737  $    221  $     47  $   (173)
                                   ========  ========  ========  ========

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

                                                    Pension      Other
(Dollars in Thousands)                              Benefits    Benefits
----------------------                              --------    --------

Net loss . . . . . . . . . . . . . . . . . . . .    $     49    $      -
Prior service credit . . . . . . . . . . . . . .           -        (111)
                                                    --------    --------
Net amount expected to be recognized . . . . . .    $     49    $   (111)
                                                    ========    ========






                                     50


<PAGE>


ASSUMPTIONS

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

                                    Pension Benefits     Other Benefits
                                   ------------------  ------------------
                                     2009      2008      2009      2008
                                   --------  --------  --------  --------

Discount rate. . . . . . . . . . .    5.59%     7.50%     5.59%     7.50%
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
                                   ------------------  ------------------
                                     2009      2008      2009      2008
                                   --------  --------  --------  --------

Discount rate. . . . . . . . . . .    7.34%     6.30%     7.50%     6.30%
Expected long-term return
  on plan assets . . . . . . . . .    6.50%     6.50%     6.50%     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:

                                                      2009        2008
                                                    --------    --------

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. . . . . . . . . . . . . .        2015        2014

      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, 2009.

                                           1-Percentage-   1-Percentage-
(Dollars in Thousands)                     Point Increase  Point Decrease
----------------------                     --------------  --------------
Effect on aggregate of service
  and interest cost. . . . . . . . . . .          $    7          $   (6)
Effect on postretirement
  benefit obligation . . . . . . . . . .          $   62          $  (57)











                                     51


<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                                        2009        2008
--------------                                      --------    --------

Fixed income . . . . . . . . . . . . . . . . . .         75%         57%
Equity securities. . . . . . . . . . . . . . . .         25%         40%
Cash equivalents . . . . . . . . . . . . . . . .          0%          3%
                                                        ----        ----
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 executive retirement plans
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

      The Company, under IRS minimum funding standards, is not required to
make contributions to its defined benefit pension plan during fiscal 2010.

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
----------------------                        --------    --------

2010 . . . . . . . . . . . . . . . . . . .    $    797    $     51
2011 . . . . . . . . . . . . . . . . . . .         804          59
2012 . . . . . . . . . . . . . . . . . . .       1,039          60
2013 . . . . . . . . . . . . . . . . . . .       1,064          44
2014 . . . . . . . . . . . . . . . . . . .       1,204          44
Years 2015-2019. . . . . . . . . . . . . .       7,345         187


12.   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, 2009, if adversely determined, would have a material
effect on its business, financial position, results of operations, or cash
flows.




                                     52


<PAGE>


13.   STOCK-BASED COMPENSATION

      The Company maintains stock-based compensation awards for key
employees and/or non-employee directors under four plans: (i) the Landauer,
Inc. 1996 Equity Plan, as amended and restated through November 8, 2001;
(ii) the Landauer, Inc. 1997 Non-Employee Director's Stock Option Plan, as
amended and restated through November 8, 2001; (iii) the Landauer, Inc.
2005 Long-Term Incentive Plan; and (iv) the Landauer, Inc. Incentive
Compensation Plan (the "IC Plan") which was approved by shareholders in
February 2008. For future grants, the IC Plan replaced the previous three
plans. The Company reserved 500,000 shares of its common stock for grant
under the IC Plan, and shares reserved for award and unused under the
previous three 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 and
directors 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 2009 is
presented below (in thousands, except option prices):

                                                 Weighted-
                                                 Average
                                    Weighted-    Remaining
                         Number     Average     Contractual   Aggregate
                           of       Exercise       Term       Intrinsic
                         Options     Price        (Years)       Value
                         -------    ---------   -----------   ---------
Outstanding at
  October 1, 2008. . . .    163      $ 44.94
Exercised. . . . . . . .    (24)       44.25
                         ------      -------
Outstanding at
  September 30, 2009 . .    139      $ 45.06             5     $ 1,375
                         ======      =======       =======     =======
Exercisable at
  September 30, 2009 . .    139      $ 45.06             5     $ 1,375
                         ======      =======       =======     =======

      As of September 30, 2009, all outstanding stock options were vested
and compensation expense related to stock options was recognized. The
Company has not granted stock options subsequent to fiscal 2005. The
intrinsic value of options exercised totaled approximately $401, $2,273 and
$2,181 during fiscal 2009, 2008 and 2007, respectively. The total income
tax benefit recognized in the consolidated statements of income related to
the exercise of stock options was approximately $145, $915 and $870 during
fiscal 2009, 2008 and 2007, respectively.

















                                     53


<PAGE>


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 and directors under the Plans 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 2009 were as follows (in
thousands, except fair values):

                                          Number of      Weighted-
                                          Restricted     Average
                                            Share         Fair
                                            Awards        Value
                                          ----------    ----------
Outstanding at October 1, 2008 . . . .            47       $ 50.41
Granted. . . . . . . . . . . . . . . .            80         59.12
Vested . . . . . . . . . . . . . . . .           (48)        50.52
Forfeited. . . . . . . . . . . . . . .            (7)        51.79
                                              ------       -------
Outstanding at September 30, 2009. . .            72       $ 59.89
                                              ======       =======

      As of September 30, 2009, unrecognized compensation expense related
to restricted share awards totaled approximately $2,008 and is expected to
be recognized over a weighted average period of 2.1 years. The total fair
value of shares vested during fiscal 2009, 2008 and 2007 was $2,442, $986
and $87, respectively.

14.   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, 2009, 2008 and 2007:

(Dollars in Thousands)                        2009      2008      2007
----------------------                      --------  --------  --------
Domestic . . . . . . . . . . . . . . . . .  $ 69,666  $ 66,663  $ 64,928
Europe - France and UK . . . . . . . . . .    13,743    14,581    12,046
Other countries. . . . . . . . . . . . . .    10,418     8,710     6,742
                                            --------  --------  --------
                                            $ 93,827  $ 89,954  $ 83,716
                                            ========  ========  ========

      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 2009, 2008 and
2007 were $20,886, $19,235 and $16,472, respectively. See Note 6 "Equity in
Joint Venture" for additional information on Nagase-Landauer, Ltd.

















                                     54


<PAGE>


15.   SUBSEQUENT EVENTS

      On November 9, 2009, Landauer, Inc. completed the acquisition of all
of the issued and outstanding capital stock of Global Physics Solutions,
Inc. ("GPS"). GPS is based in Texas with operations throughout the Midwest
and provides medical physics services to hospitals and radiation therapy
centers. Pursuant to a stock purchase agreement by and among Landauer, GPS,
the stockholders of GPS and DW Management Services, L.L.C., as the
stockholders representative, Landauer purchased all of the issued and
outstanding shares of preferred stock and common stock of GPS for an
aggregate purchase price of $22,000 in cash. This purchase price includes
amounts applied by Landauer at the closing to repay all of the outstanding
indebtedness of GPS and to pay certain costs and expenses incurred by GPS
as a result of the transaction. Landauer also deposited $1,000 of the
purchase price into an escrow account to be held for a period of 18 months
and applied to the settlement of the GPS stockholders' indemnification
obligations, if any, in connection with the transaction.

      On November 2, 2009, Landauer completed the acquisition of Gammadata
Matteknik AB ("GDM"), a Swedish provider of radon measurement services, for
$6,700 in cash. GDM is based near Stockholm, Sweden and provides
measurement services throughout the Scandinavian region and Europe.
Landauer previously acquired a dosimetry service in Sweden, now called
Landauer Persondosimetri AB.

      The Company funded the purchase prices through borrowings under its
credit agreement of $18,000, with the remainder paid from the Company's
cash on hand. Under the credit agreement, the Company elects to pay an
annualized interest rate based on LIBOR plus 2.9%. In addition, the Company
must maintain a fixed charge coverage ratio, as calculated pursuant to the
terms of the amended credit agreement, as of the end of each calendar
quarter of not less than 1.35 to 1.00, and a funded debt to EBITDA ratio
less than or equal to 1.5 to 1.00.

      The initial accounting for these acquisitions will be completed in
the first quarter of fiscal 2010, and will result in the recognition of
intangible assets and goodwill.

































                                     55


<PAGE>




           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



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

      In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of stockholders' equity and
comprehensive income, and of cash flows present fairly, in all material
respects, the financial position of Landauer, Inc. and its subsidiaries at
September 30, 2009 and September 30, 2008, and the results of their
operations and their cash flows for each of the three years in the period
ended September 30, 2009 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, 2009, 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,
appearing 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. 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 changed the manner in which it accounts for its defined benefit
pension and other post-retirement plans in 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.





                                     56


<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
PricewaterhouseCoopers LLP
Chicago, IL
December 11, 2009


























































                                     57


<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 13a-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, 2009 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 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, 2009. The effectiveness of the
Company's internal control over financial reporting as of September 30,
2009 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,
2009 that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.


ITEM 9B.  OTHER INFORMATION

      None.











                                     58


<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", "Beneficial
Ownership of Common Stock", and "Process for Nominating Directors" in the
Proxy Statement, is incorporated herein by reference. Information pursuant
to this Item relating to the officers of the Company, contained under the
heading "Executive Officers of the Company" in this Annual Report on
Form 10-K, is incorporated herein by reference.

      Disclosure pursuant to this Item regarding Section 16(a) reporting
compliance, contained under the heading "Section 16(a) Beneficial Ownership
Reporting Compliance" 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.


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 Public Accountants" in the Proxy Statement is incorporated
herein by reference.



















                                     59


<PAGE>


                                   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, as amended and restated
                  effective February 5, 2009, are incorporated by reference
                  to Exhibit 3.1 to the Current Report on Form 8-K dated
                  February 5, 2009.

      (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.

      (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.





                                     60


<PAGE>


      (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 as
                  amended and restated on November 12, 2009 as attached
                  hereto as Exhibit (10)(k).

      (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.

      (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.


                                     61


<PAGE>


      (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 is incorporated by
                  reference to Exhibit (10)(w) to the Annual Report on
                  Form 10-K for the fiscal year ended September 30, 2007.

      (10)(x)     Form of Restricted Stock Award under the Landauer, Inc.
                  2005 Long-Term Incentive Plan is incorporated by
                  reference to Exhibit (10)(x) to the Annual Report on
                  Form 10-K for the fiscal year ended September 30, 2007.

      (10)(y)     The Loan Agreement between Landauer, Inc. and U.S. Bank,
                  N.A. is incorporated by reference to Exhibit 10.1 to the
                  Current Report on Form 8-K dated October 11, 2007.

      (10)(z)     The Landauer, Inc. Incentive Compensation Plan is
                  incorporated by reference to Exhibit A to the Proxy
                  Statement for the Annual Meeting of Shareholders dated
                  January 4, 2008.

      (10)(aa)    Form of Restricted Stock Award under the Landauer, Inc.
                  Incentive Compensation Plan is incorporated by reference
                  to Exhibit 10.1 to the Current Report on Form 8-K dated
                  February 7, 2008.

      (10)(ab)    Form of Performance Stock Award under the Landauer, Inc.
                  Incentive Compensation Plan is incorporated by reference
                  to Exhibit 10.2 to the Current Report on Form 8-K dated
                  February 7, 2008.

      (10)(ac)    Amendment dated as of May 1, 2009 to the Employment
                  Agreement between the Registrant and William E. Saxelby
                  is incorporated by reference to Exhibit 10.1 to the
                  Current Report on Form 8-K dated May 1, 2009.

      (10)(ad)    First Amendment, dated June 17, 2009, to Loan Agreement
                  between Landauer, Inc. and U.S. Bank, N.A. is
                  incorporated by reference to Exhibit 10.1 to the Current
                  Report on Form 8-K dated June 17, 2009.

      (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

                                     62


<PAGE>


                        ALSA Dosimetria, S. de R.L. de C.V. (56.25%)
                        Mexico City, Mexico

                        Global Physics Solutions, Inc. (100%)
                        Cypress, Texas

                        Gammadata Matteknik AB (100%)
                        Uppsala, Sweden

                        Landauer Persondosimetri AB (100%)
                        Solna, Sweden

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), 10(x), 10(z), 10(aa), 10(ab)
            and 10(ac) 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.

































                                     63


<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 11, 2009
                        --------------------------
                        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 11, 2009
-------------------------  (Principal Executive Officer)
William E. Saxelby


/s/ Jonathon M. Singer        Senior Vice President,      December 11, 2009
-------------------------     Treasurer and Secretary
Jonathon M. Singer           (Principal Financial and
                                Accounting Officer)


/s/ Robert J. Cronin                 Director             December 11, 2009
-------------------------
Robert J. Cronin


/s/ William G. Dempsey               Director             December 11, 2009
-------------------------
William G. Dempsey


/s/ Michael T. Leatherman            Director             December 11, 2009
-------------------------
Michael T. Leatherman


/s/ David E. Meador                  Director             December 11, 2009
-------------------------
David E. Meador


/s/ Stephen C. Mitchell              Director             December 11, 2009
-------------------------
Stephen C. Mitchell


/s/ Thomas M. White                  Director             December 11, 2009
-------------------------
Thomas M. White





                                     64


<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                    2009                  $22,438     $24,954     $23,468      $22,967     $93,827
                                2008                  $21,809     $23,743     $21,902      $22,500     $89,954

Gross profit                    2009                  $15,298     $16,575     $15,594      $15,594     $63,061
                                2008                  $14,608     $16,228     $14,973      $15,231     $61,040

Operating income (1, 2)         2009                  $ 8,805     $ 7,162     $ 8,982      $ 7,569     $32,518
                                2008                  $ 7,820     $ 9,781     $ 8,502      $ 7,972     $34,075

Net income                      2009                  $ 6,142     $ 5,428     $ 6,546      $ 5,250     $23,366
                                2008                  $ 5,276     $ 6,430     $ 5,793      $ 5,484     $22,983

Diluted net income per          2009                  $  0.66     $  0.58     $  0.70      $  0.56     $  2.49
  share (1, 2)                  2008                  $  0.57     $  0.69     $  0.62      $  0.59     $  2.47

Cash dividends per share        2009                  $ 0.525     $ 0.525     $ 0.525      $ 0.525     $  2.10
                                2008                  $ 0.500     $ 0.500     $ 0.500      $ 0.500     $  2.00

Common stock price per
  share                         2009         high     $ 74.51     $ 73.99     $ 63.00      $ 68.96     $ 74.51
                                              low     $ 46.82     $ 46.08     $ 49.37      $ 52.17     $ 46.08

                                2008         high     $ 52.17     $ 54.39     $ 62.83      $ 73.52     $ 73.52
                                              low     $ 47.20     $ 47.00     $ 49.74      $ 54.89     $ 47.00

Weighted average diluted        2009                    9,310       9,328       9,347        9,393       9,366
  shares outstanding            2008                    9,227       9,268       9,307        9,342       9,302

<fn>

(1)   Includes accelerated depreciation of $376, reducing net income by $225 (after income tax benefit of $151)
      or $0.02 per diluted share in fiscal year 2008.

(2)   Includes pension curtailment and transition costs of $2,236, reducing net income by $1,478 (after income
      tax benefit of $758) or $0.16 per diluted share, and reorganization charges of $416, reducing net income
      by $275 (after income tax benefit of $141) or $0.03 per diluted share in fiscal year 2009.





                                                         65
</table>