FORM 10-KSB

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIESEXCHANGE ACT OF 1934**for the fiscal year ended March 31, 2001**
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIESEXCHANGE ACT OF 1934

for the transition period from to 

Commission File Number: 0-12716

Novitron International, Inc.(Name of small businessissuer in its charter)**Delaware                                                                                                                                                04-2573920(State of incorporation)                                                                                                                                                                  (IRS Employer ID Number)**One Gateway Center, Suite 411, Newton, Massachusetts                                                                    02458 (Address of principal executive offices)                                                                                                                                                (Zip Code)****
Issuer’s telephone number, including area code: **(617)527-9933**
Securities registered pursuant to Section 12(b) of the Exchange Act:        None

Securities registered pursuant to Section 12(g) of the Exchange Act:Common Stock, $.01 par value

Check whether the issuer (1) has filed all reports required to be filedby Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for suchshorter period that the registrant was required to file such reports), and (2) has beensubject to such filing requirement for the past 90 days.     Yes X     No __
Check if there is no disclosure of delinquent filers in response toItem 405 of Regulation S-B is not contained herein, and no disclosure will be contained,to the best of registrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-KSB or any amendment to this Form10-KSB. [ ]

Issuer’s revenues for the most recent fiscal year: $12,927,493

The aggregate market value of the voting Common Stock held bynon-affiliates of the registrant was approximately $5,551,950 based on the average priceof the Common Stock as reported by NASDAQ on June 20, 2001.

As of June 22, 2001, there were 1,445,227 shares of theRegistrant’s Common Stock outstanding.

Documents Incorporated by Reference: Portions of the Company’sProxy Statement for its 2001 Annual Meeting into Part III of Form 10-KSB.

Transitional Small Business Disclosure Format: Yes ___ No X 

** **
Novitron International, Inc**.**

ANNUAL REPORT ON FORM 10-KSB

For the Year Ended March 31, 2001

Table of Contents
 
Page
**PART I**
Item 1 Business1
Item 2Properties9
Item 3 Legal Proceedings 9
Item 4Submission of Matters to a Vote of Security    Holders9
**PART II**
Item 5 Market Price for Registrant’s Common    Equity and Related Stockholder Matters10
Item 6 Selected Financial Data11
Item 7 Management’s Discussion and Analysis of    Financial Condition and Results of Operations 12
Item 8 Financial Statements and Supplementary Data16
Item 9 Changes in and Disagreements with Accountants    on Accounting and Financial Disclosure16
**PART III**
Item 10 Directors and Executive Officers of the    Registrant 17
Item 11Executive Compensation17
Item 12 Security Ownership of Certain Beneficial Owners    and Management17
Item 13 Certain Relationships and Related Transactions 17
Item 14 Exhibits, Financial Statement Schedules and    Reports on Form 8-K17
**Signatures**18** 

PART I

Item 1. Business**
Novitron International, Inc. (the "Company") is amultinational corporation focusing on scientific instrumentation used in medical,veterinary, and analytical laboratories and in industrial process monitoring.**TheCompany’s Dutch subsidiary, Vital Scientific NV ("Vital Scientific"),designs and manufactures scientific and clinical laboratory instrumentation marketedworldwide through distributors and strategic partnerships.**The Company’sAustralian subsidiary, Vital Diagnostics Pty. Ltd. ("Vital Diagnostics")[formerly Clinical Data (Australia) Pty. Ltd.], distributes diagnostic instruments andassays in the South Pacific and has entered into a strategic alliance with MedicalInnovations Limited for the development of immunoassay diagnostics. The Company’sDutch subsidiary, NovaChem BV ("NovaChem"), develops and markets processmonitors with applications in petrochemical and pharmaceutical production and inenvironmental monitoring. 
**Company History**
Novitron International, Inc. was established in 1972 as Clinical Data,Inc. to offer ambulatory diagnostic physiological monitoring for clinical and researchapplications. In the 1980’s, through a series of strategic acquisitions, the Companygrew to over $14 million in revenue. As the Company believed that future growth waslimited, these businesses were divested in the early 1990’s. In April 1994, to betterreflect the Company’s international scope and diversification, the Company’sname was changed from Clinical Data, Inc. to Novitron International, Inc.

In 1984, the Company acquired a thirty-three percent (33%) equityinterest in Vital Scientific. From 1985 to 1991, the Company increased its equity positionin this Dutch company to ninety-four percent (94%) and in October 1997, Vital Scientificbecame a wholly owned subsidiary.

In June 1992, the Company invested in NovaChem, a Dutch company formedto develop and market spectrophotometric process monitoring technology. In March 1995,NovaChem became a wholly owned subsidiary of the Company.

The Company established Vital Diagnostics in July 1992 as Clinical Data(Australia) Pty. Ltd. to distribute diagnostic products in Australia and the SouthPacific. As described in Note 3 in the accompanying Notes to the Consolidated FinancialStatements, the Company has sold 7.5% of this subsidiary to an officer of the Company. InDecember 2000, the name of the subsidiary was changed to Vital Diagnostics Pty. Ltd.
** 

VITAL SCIENTIFIC NV**
Established in 1956 and headquartered in Spankeren/Dieren, TheNetherlands, Vital Scientific is the nucleus of the Company’s operations. VitalScientific designs, develops, manufactures, and distributes scientific instrumentation formedical, veterinary, and industrial applications.

The subsidiary’s principal products are automated andsemi-automated analytical instruments used in medical and veterinary laboratories,marketed under the "Vitalab" tradename and under strategic OEM agreements withmajor diagnostic companies. These instruments include:
- The Vitalab Selectra E, Selectra II, and Vitalab Flexor "walk-away" clinical    chemistry analyzers, capable of performing over 70 different diagnostic tests using    reagents from almost all manufacturers. Over four thousand Selectra units have been placed    worldwide.
- The Vitalab Viva, a dedicated system designed for therapeutic drug monitoring    ("TDM") and for the detection of drugs of abuse ("DOA"), marketed by    Behring Diagnostics in over thirty countries worldwide. The distribution agreement    originally signed in 1997, was extended in March 2000 for an additional four years. This    Viva analyzer was designed specifically for use with the Dade Behring Emit line of    diagnostic assays for TDM and DOA.
- The HY-TEC 288 is a fully automated enzyme immunoassay system that was developed and is    manufactured for Hycor Biomedical, Inc. of Garden Grove, California. In April 2000, Hycor    began shipping the HY-TEC 288 with a reagent system that permits the testing of up to    eight (8) different autoimmune tests or over nine hundred (900) specific allergies in a    single run. Autoimmune disease is the underlying cause of more than 80 chronic illnesses.    An estimated 50 million Americans suffer from autoimmune diseases. In addition, with more    than 40 million Americans suffering from allergies, allergy symptoms are responsible for    more visits domestically to doctors than any other single disease. 

Since fiscal 1998, Vital Scientific has been certified as an ISO 9001facility.
**Marketing and Distribution**
Vital Scientific markets its product line through a direct dealernetwork in Europe, the United States, the Far East, Latin America, Eastern Europe, andChina.

In February 2001, Vital Scientific and AMP Medizintechnik Handels GmbHof Graz, Austria executed an agreement for the distribution of Vital Scientificinstruments in certain Eastern European countries, including Poland and the Balkan States.The territory was formerly covered under an agreement with AVL Medical Instruments AG,Schaffhausen, Switzerland, which was acquired by F. Hoffmann-La Roche AG. Newly formed,AMP Medizintechnik Handels employs many of the sales professionals and service personnelfrom AVL Medical Instruments, who have an in-depth knowledge of the clinical laboratorymarket in Eastern Europe.

In January 2000, the Company signed an agreement with LandmarkScientific, Inc. of Greensboro, North Carolina, for the distribution of the VitalabSelectra in the United States. Landmark Scientific is offering Vital Scientific'sautomated clinical chemistry analyzer to the "point-of-care" market. 

In June 1998, Vital Scientific signed an agreement with the WienerLaboratorios SAIC of Rosario, Argentina, for the exclusive distribution for Latin Americaof the Vitalab series of clinical chemistry analyzers. Established in 1960, Wiener Lab isthe leading independent manufacturer of reagents in South America and is a major marketerof clinical chemistry instrumentation and reagents in the region. Wiener Lab isresponsible for both the sales and service of Vital Scientific instrumentation in theterritory. In April 2001, this agreement was extended for a two (2) year period. 

A complete description of the products can be found at thecompany’s Web site, www.vitalscientific.com.
**Product Development**
To develop new products, Vital Scientific maintains a research team ofmechanical, electronic and systems engineers, augmented by contract personnel, and furthersupported by a staff of professionals from a Slovenian-based software group. The companymaintains mechanical prototyping and assembly operations that are highly automated.

During fiscal 2001, 2000, and 1999, the Company spent approximately$1,480,000, $1,985,000, and $1,825,000, respectively, on research and development at VitalScientific.

In August 2000, the Company announced a strategic alliance withBioMedica Diagnostics Inc. of Windsor, Nova Scotia, for the technology transfer of a bloodclotting detection analyzer and related reagents being developed by BioMedica Diagnostics.The instrument and accessories are to be manufactured by Vital Scientific and the reagentsby BioMedica Diagnostics, and the product jointly distributed by the two companies. Theinstrument and reagents are designed for use in the doctor's office, clinics, for nearpatient testing, and for use in developing countries. The product is scheduled fordelivery in the second half of fiscal 2002.

In July 2001, at the American Association of Clinical Chemistrymeetings in Chicago, the company plans to introduce the Selectra-XL, a new four hundred(400) test per hour patient selective, high throughput clinical chemistry analyzer,capable of a wide range of routine, immunologic, and esoteric testing. This instrument,with twice the throughput of the Selectra-E, is designed for use with reagent diagnosticsfrom different sources, and targets larger medical facilities. Vital Scientific believesthat the unique robotic features, the user-friendly, windows-based interface and the widerange of applicable reagents available from several manufacturers for this instrument willprovide its target market with state-of-the-art affordable "walk-away" testingcapability.

In April 2001, the Company executed a joint venture agreement withBoston Innovation Inc. of Cambridge, Massachusetts, for the collaborative development anddistribution of a non-contacting, micro-volume fluid dispenser that can be used fordispensing reagents, diluents, calibrators, standards, samples or similar liquids in humanor veterinary diagnostics. The dispensing element, trademarked "Micro-Jet", maybe configured in disposable and non-disposable, microliter and nanoliter formats.Prototypes are planned for demonstration at the American Association of Clinical Chemistrymeetings in July 2001.

Research and development efforts at Vital Scientific are expected to bemaintained at a constant level during fiscal 2002. The Company intends to develop newproducts where the Company perceives a demand and believes the product may be effectivelymarketed. There is no assurance that any developments or enhancements will be successfullycompleted or that, if developed, any of the products will be successfully marketed.
**Competition**
In developing instruments for dual-label and private label sales bythird parties, and in marketing directly to distributors, the Company competes withnumerous other companies. These include the direct marketers such as Bayer, RocheDiagnostics, and Kone Instruments, and in the OEM field with Sequa Corporation, IntegratedTechnologies Ltd., Medical Innovations, Inc., and many other smaller European and Americancompanies. The Company believes that it competes on its capabilities, the quality of itsproducts, and its ability to produce in a timely fashion.

In the sale of clinical chemistry and immuno-assay analyzers, theCompany experiences intense competition in the marketplace. Worldwide there are overfifteen companies, many of which have substantially greater resources than VitalScientific. The Company competes on the basis of specialized features of its technology,added value, simplicity of operation, high performance-to-cost ratio, compatibility ofinstruments with reagents of various manufacturers, and strategic marketing alliances.
** 

VITAL DIAGNOSTICS Pty. Ltd.**
Vital Diagnostics was formed in July 1992 under the name Clinical Data(Australia) Pty. Ltd. to distribute diagnostic products in Australia, New Zealand, and theSouth Pacific. In addition, Vital Diagnostics provides the Company with strategic accessto the diagnostics market for market research purposes. Australian medicine provides anideal blend of the characteristics found in Europe and the United States and is,therefore, an excellent site to develop and test product concepts. 

Although initially established to support strategic marketingactivities, the Company has aggressively expanded its product line and has cultivated agrowing third-party diagnostics distribution business that is ideally positioned torepresent European, American, and Australian companies. 

Vital Diagnostics currently represents the following companies:
Hycor Biomedical - Urinalysis systems and consumables
Axis-Shield - QC sera and cell biology products
R&R Mechatronics - ESR analyzers
Vital Scientific - Clinical chemistry analyzers
E. Merck - Clinical chemistry reagents
AI Analysinstrument AB - Closed tube ESR products
ABX Hematologie - Cell counters and related reagents
Psiron Ltd. - Tumor markers and autoimmune assays
Trinity Biotech - Autoimmune and infectious disease diagnostics
Cogent - Autoimmune reagents
Eurospital - Tissue transglutaminase reagents
Polymedco - IFA accessories
Diagnostic Grifols - ELISA processors
Zeus Scientific - ELISA reagents

 

The HycorTM Biomedical line was launched in 1995 and has provenhighly successful. The product is the leading urinalysis system in Australia with a marketshare of over 90 percent (90%). 

A detailed review of the product offerings of Vital Diagnostics may befound on their Web site, www.vitaldiagnostics.com.

In March 1999, Vital Diagnostics and Medical Innovations Limited("MIL") of Sydney, Australia, entered into a global strategic alliance for thedistribution of MIL’s current immunoassay diagnostics. MIL has developed a range ofunique tumor marker assays used in the management of breast and ovarian cancers and in thediagnosis of autoimmune diseases. Vital Diagnostics has used its strategic alliance withMIL to build a growing presence in the Australian and New Zealand immunodiagnostic market.The company is progressively expanding its product range to further this objective. 

 
**NOVACHEM BV**
Established in 1992, NovaChem has developed and markets the IPM-Mark IIProcess Analyzer. This solid-state instrument, which employs fiber-optic and diode-arrayspectroscopic technology, was specifically designed for the on-line and continuous processmonitoring of gases and liquids.

Using the IPM-Mark II, NovaChem has developed a series of applicationsthat include the monitoring of Claus Plant sulfur recovery; color analysis of petroleumproducts; and the measurement of sulfur dioxide, oxides of nitrogen, and ammonia in stackemissions. The technology has also been proven effective in controlling ethylene glycolmanufacture and in monitoring the production of pharmaceuticals. NovaChem’s productsare production engineered and manufactured by Vital Scientific.

A complete description of the products may be found on thecompany’s Web site www.novachembv.com.

During fiscal 2000, NovaChem completed installations in the UnitedStates in the monitoring of ethylene dichloride production in a major company in Louisianaand in the catalytic conversion of oxides of nitrogen for a chemical company. The unitsare performing reliably and to specification. In fiscal 2001, a NovaChem sulfur recoverymonitoring system underwent a successful factory acceptance test conducted by a major U.K.engineering company. The unit is scheduled for commissioning in the summer of 2001 at thetrailblazing Malampaya Deep Water Gas-to-Power project, which represents the largest andmost significant industrial investment in the history of the Philippines. The US$4.5billion Malampaya project is being developed by Shell Philippines Exploration B.V. (SPEX).It signals the birth of the country's natural gas industry that will enable the supply ofclean, environment-friendly fuel slated to provide 2,700 megawatts of power for a periodof 20 years starting January 2002.
**Marketing and Distribution**
The market for process monitoring instrumentation has evolved from ademand for on-line, real-time analytical techniques similar to those employed in theindustrial laboratory. The market, international in scope, is driven by solving specificprocessing application problems. The market is characterized by many small niches withspecialized vendors. Success factors in this market include an in-depth knowledge ofend-user processing, active product development, international market targeting, areputation for stability and service, and strategic planning.

NovaChem’s technology is primarily marketed from NovaChem’sWeb site and links from technical exposition web services and through established dealersand manufacturer’s representatives worldwide. Additional dealers were added this pastyear in North America and the Far East. 
**Product Development**
During fiscal 2001, 2000, and 1999, NovaChem spent approximately$73,000, $74,000, and $54,000 respectively, on research and development. Resources werealso employed for the development of related sampling systems necessary for the couplingof the diode-array monitor to the process line.
**Competition**
In developing and marketing instruments for process monitoring,NovaChem competes with many companies in Europe and the United States. These includeAmetek, Applied Automation, Zeiss, and numerous others, which have greater financial andmarketing resources than NovaChem. The Company believes that it competes on the basis ofspecialized features of its technology, simplicity of operation, high performance-to-costratio, and quality of its products. 
**OTHER BUSINESS MATTERS

Government Regulation**
Where necessary, the Company has obtained government approval to marketits products and may have to obtain prior approval of certain European regulatory bodies("EN46001") or the Food and Drug Administration ("FDA") to marketproducts that it may develop. Domestically, certain of the Company’s products areclassified as medical devices under the Federal Food, Drug and Cosmetics Act. As such, ifand when these products are offered for sale in the United States, these products aresubject to regulation by the FDA. The cost of obtaining such approvals may be high and theprocess lengthy, with no assurance that such approvals will be obtained.

To date, neither the FDA nor the European medical regulatory bodieshave developed industry-wide performance standards with respect to the safety andeffectiveness of the products presently marketed by the Company. Although the Companyintends to use reasonable efforts to comply with international standards, when and ifdeveloped, there can be no assurance that all the Company’s products will so comply.Any failure to receive approvals for the Company’s future products, or noncompliancewith any international performance standards promulgated in the future, could have amaterial adverse effect on the Company. Furthermore, any material change in the existingrules and regulations or any new regulations developed might adversely affect the Company.

The Company’s subsidiaries comply with European CE regulations andVital Scientific is ISO 9001 approved.

The instruments developed by NovaChem for the environmental market maynow or in the future require certification by governmental authorities. Any failure toreceive approvals for such products could have a material adverse effect on thisinvestment.
**Patents**
The Company or its subsidiaries either**own or have applied forpatents and trademarks on certain of their products. However, the Company does not believethat its business as a whole is or will be materially dependent upon the protectionafforded by such patents or trademarks, and a substantial majority of the Company’srevenues are attributable to products without patent protection. 
**Warranty and Product Liability**
Warranty expenses were approximately two-tenths of one percent (0.20%)during fiscal 2001 and one-tenth of one percent (0.10%) during fiscal 2000.

Vital Scientific maintains product liability insurance in the amount ofNLG10 million ($4.0 million) for the international sales of its laboratoryinstrumentation. The Company believes that this level of coverage is adequate, given itspast sales levels and its anticipated sales levels for the fiscal year ending March 31,2002. The Company will reevaluate the adequacy of this coverage when and if its saleslevel substantially increases. No product liability claims have been brought against theCompany to date. However, there can be no assurance that product liability insurance willcontinue to be available to the Company on acceptable terms, or that product liabilityclaims in excess of the Company’s insurance coverage, if any, will not besuccessfully asserted against the Company.
**Production and Availability of Raw Materials**
The Company’s manufacturing operations require a variety ofpurchased components. The Company purchases these components in sufficient quantities totake advantage of price discounts and currently has an adequate inventory. Most of thecomponents are available from multiple sources and the Company anticipates that they willcontinue to be readily available. Certain components and supplies are available fromsingle sources only. If such suppliers should fail in deliveries, delays in productioncould result. However, these components and supplies are generally not manufactured to theCompany’s specifications, but are produced for other applications, and the Companybelieves that they will continue to be available in the foreseeable future. In addition,the Company, where appropriate, has placed scheduled blanket purchase orders, has placed asufficient number of such components in inventory, or has provided vendors with greaterlead time for filling orders for such components.
**Backlog**
At the close of the fiscal year ended March 31, 2001, the Company had abacklog of approximately $1,449,000 as compared to $2,625,000 in 2000. It is anticipatedthat all of the existing backlog will be filled by shipments during fiscal 2002.Deliveries are generally made within 30 days after the receipt of an order.
**Seasonality**
The Company does not believe that its business has any significantseasonal factors.
**Employees**
The Company had eighty-eight (88) full, part-time, and contractemployees as of March 31, 2001. Seventy-seven (77) of these employees are employed byVital Scientific, one (1) by NovaChem, nine (9) by Vital Diagnostics, and one (1) byNovitron International, Inc. 
**Environmental matters**
The Company does not believe that compliance with Federal, State orLocal regulations relating to the protection of the environment have any material effecton the Company’s financial or competitive position.
**Significant Customers**
The loss of any of the Company’s major customers would have asignificant material adverse impact on the Company.
**Industry Segments**
The information required by this section is specified in Note 14 in theaccompanying Notes to the Consolidated Financial Statements.
** 

Executive Officers of the Registrant**
Subject to the discretion of the Board of Directors, officers serve fora one (1) year term expiring with the meeting of the Board of Directors following the nextAnnual Meeting of Stockholders and until their respective successors are elected andqualified.

Israel M. Stein, M.D., 58, has served as Chairman of the Board since1972 and as President from 1972 until February 1988, and again since February 1989. Dr.Stein is a graduate of the Albert Einstein College of Medicine, a member of Alpha OmegaAlpha, and is a Salk Scholar of the City University of New York. Before joining theCompany, Dr. Stein served as Senior Assistant Surgeon at the National Institutes of Healthand as a resident at Harvard Medical School.

Adrian Tennyenhuis, 50, Senior Vice President of the Company, iscurrently also the Managing Director of Vital Diagnostics Pty. Ltd. Mr. Tennyenhuis wasformerly the Managing Director of Vital Scientific NV from 1989 to 1991. Before joiningthe Company, he held increasingly senior sales and marketing positions with BehringDiagnostics.

Emile Hugen, 56, has been the Managing Director of Vital Scientific NVsince October 1991. With over 25 years of increasing management responsibility inmanufacturing and operations at Vital Scientific, Mr. Hugen is an experienced operatingofficer of the Company.
**Item 2. Properties**
The Company leases approximately 500 square feet of office space inNewton, Massachusetts, under a series of short-term leases.

Vital Scientific leases approximately 35,000 square feet in Dieren, TheNetherlands. The facility was designed specifically for the Company’s needs, but wasfinanced entirely by an unrelated third party. The facility is leased until 2008 withrenewal and expansion options. 

NovaChem occupies approximately 500 square feet of office space inNewton and in Dieren, The Netherlands, under a series of short-term leases.

Vital Diagnostics occupies approximately 3,000 square feet of officeand warehousing space in Castle Hill, New South Wales, under a lease expiring in December2003.

The Company believes its current facilities are adequate for itsplanned needs in the near future.
**Item 3. Legal Proceedings**
None.
**Item 4. Submission of Matters to a Vote of Security Holders**
None.
**PART II

Item 5. Market for Registrant’s Common Equity and RelatedStockholder Matters**
a) Market information: The Company’s Common Stock trades on theNASDAQ Stock Market under the symbol NOVI. The following table sets forth the range ofhigh and low sale prices per share of Common Stock for each quarter in fiscal 2001 and2000 as reported by the NASDAQ Stock Market.

Prices
**Fiscal Year Ended March 31, 2001      **
**High  **
**Low**
     First Quarter       
$ 3.50
$ 2.50
     Second Quarter       
$ 3.00
$ 1.94
     Third Quarter       
$ 2.38
$ 1.50
     Fourth Quarter       
$ 3.75
$ 2.06
**Fiscal Year Ended March 31, 2000      **
**High  **
**Low**
     First Quarter       
$ 1.75   
$ 0.81
     Second Quarter       
$ 2.38   
$ 1.06
     Third Quarter       
$ 3.50   
$ 1.75
     Fourth Quarter       
$ 4.22   
$ 1.50
b) The approximate number of holders of record and beneficial owners ofthe Company’s Common Stock at March 31, 2001 and March 31, 2000 were 221 and 550 and226 and 600, respectively.

c) The Company paid a quarterly dividend of $0.01 per share in March2001 and will consider continuing this practice on a quarterly basis depending uponfinancial results and other relevant factors to be considered by the board of directors.
**Item 6. Selected Financial Data**
The following table summarizes certain selected consolidated data andshould be read in conjunction with the consolidated financial statements and related notesappearing elsewhere in this Form 10-KSB.

**Fiscal Year Ended March 31**
(In thousands, except per share amounts)
**2001**2000**1999**1998**1997**Income Statement Data
Revenues
  $ 12,927
$  14,183
$    15,418
$ 11,802
$ 13,845
Gross profit
  $    3,840
$     4,830
$      4,153
$    3,277
$  3,713
Net income (loss)
$      403
$           108
$      (470)
$      104
$    (583)
Basic net income (loss) per share
       $     .28
$           .07
$     (.32)
$     .08
$     (.44)
Diluted net income (loss) per share
$     .27
$      .07
$     (.32)
$     .08
$     (.44)
Cash dividends per share
$     .01
$     .00
$       .00
$     .00
$     .00 
Basic weighted average common shares    outstanding
1,443
1,442
1,453
1,323
1,322
Diluted weighted average common shares    outstanding
1,493
1,531
1,453
1,323
1,322**Balance Sheet Data**
Working Capital
$  3,018$  2,555
$         2,595$    3,099$    4,206
Total Assets
$  8,315$  8,279
$         9,659$    9,405$    8,568
Long-Term Debt    Obligations 
$           19$             0
$              23$             30$             41
Stockholders’    Investment
$  4,059
$  3,999$         4,300$    4,641$    4,973** **
**Item 7. Management’s Discussion and Analysis of FinancialCondition and Results of Operations**
**Liquidity and Capital Resources  The Company has cash and cashequivalents of approximately $1.5 million and working capital of approximately $3.0million at March 31, 2001. The Company generated approximately $698,000 of cash fromoperations during the fiscal year ended March 31, 2001. The increase in funds generatedcomes from net income, the increase in accrued income taxes and deferred income taxes anda decrease in accounts receivable offset by the capitalization of software developmentcosts and an increase in inventory levels. During fiscal 2001, approximately $448,000 wasused in investing activities chiefly for the purchase of fixed assets. Approximately$38,000 was used in financing activities. The funds were used to purchase treasury stock,pay a cash dividend and pay down short-term debt and were offset by an increase inlong-term borrowings.

In April 1998, the Company entered into a relationship with a majorDutch bank that provides for a 4,000,000 Dutch Guilder (approximately $1,599,000) line ofcredit. Interest on this facility is set at 1.25% above the base rate as reported by theNetherlands Central Bank, presently 5.5%. Trade receivables and inventory of VitalScientific are provided as security for this facility. The line continues as long ascertain capital covenants are met. As of March 31, 2001, the Company was in fullcompliance with all capital covenants of the credit line and no amounts were outstandingunder this loan facility.

In May 1999, Vital Diagnostics entered into an agreement for a 450,000Australian dollar (approximately $218,000) line of credit with an Australian bank.Interest on this facility is set at prime plus 3.0%; the prime rate is presently 9.75%.Trade receivables and inventory of Vital Diagnostics are provided as security for thisfacility; the line also requires the maintenance of certain capital ratios. As of March31, 2001, the Company was in full compliance with all capital covenants of the credit lineand no amounts were outstanding.

The Company’s sources of cash include cash balances and theaforementioned lines of credit from Dutch and Australian banks. The Company believes thatavailable funds will provide it with sufficient working capital through fiscal year 2002.

The effect of foreign currency transaction exchange on the results ofoperations is included in other income (expense) and is not material to the financialstatements. (See Note 11 in the accompanying Notes to the Consolidated FinancialStatements.) Any impact on the Company’s liquidity is largely dependent on theexchange rates in effect at the time the Company’s predominant foreign functionalcurrency, the Dutch Guilder, is translated into U.S. dollars. Approximately $181,000 ofthe March 31, 2001 balance of $1,538,000 of cash and cash equivalents is denominated inU.S. dollars. The effect of translation into U.S. dollars of the amounts held in localcurrencies is reflected as a separate component of stockholders’ investment on thebalance sheet. The cumulative translation adjustment in stockholders’ investment isapproximately 10.1% of total assets on the March 31, 2001 consolidated balance sheet. Theeffects of currency exchange rates on future quarterly or fiscal periods on the results ofoperations are difficult to estimate.

The primary risk is to monetary assets and liabilities denominated incurrencies other than the U.S. dollar. Approximately $6.89 million of $6.99 million ofcurrent assets reside in the Company’s foreign subsidiaries.
**Results of Operations***Forward-looking statements, within the meaning of the SecuritiesExchange Act of 1934 (Section 21E), may be made throughout this Discussion and Analysis.For this purpose, any statements contained herein that are not statements of historicalfact may be deemed to be forward-looking statements. Without limiting the foregoing, suchwords as, "anticipates", "plans", "expects","believes", "estimates", and similar expressions are intended toidentify such forward-looking statements. Such statements involve risk and uncertainties,including but not limited to competitive, governmental, economic, and technologicalfactors that may affect the Company's operations, products, markets, and services. Actualresults could differ materially from those expressed in such statements and readers arereferred to the Company’s other Securities and Exchange Commission reports andfilings.***Fiscal Year Ended March 31, 2001 Compared to Fiscal Year Ended March 31,2000**
When analyzing the comparative revenue and expense figures presentedbelow for the fiscal years ended March 31, 2001 and 2000, consideration should be given tothe 13.8% weakening of the Company’s principal functional currency, the DutchGuilder, against the U.S. dollar.

Consolidated revenues for fiscal year 2001 decreased 8.8% as comparedto fiscal year 2000. Revenues, when expressed in the Company’s principal functionalcurrency, the Dutch Guilder, were 3.8% higher than in fiscal year 2000. As expressed inDutch Guilders, sales at Vital Scientific increased 3.1% over the prior year. Whenexpressed in Australian Dollars, sales at Vital Diagnostics increased 7.0% over the prioryear. Sales at NovaChem increased 6.8% over the prior year.

The gross margin decreased from 34.1% for the year ended March 31, 2000to 29.7% for the year ended March 31, 2001. The decreased margin resulted from (i) areduction in contract research revenues, the associated costs of which were not includedin cost of revenues, from fiscal 2000 to fiscal 2001, (ii) a write-down of inventoryrelated to a terminated research and development project, and (iii) an adjustment ofamortization of capitalized software development costs. (See Note 1(m) in the accompanyingNotes to the Consolidated Financial Statements.)

Sales and marketing expenses increased 25.7% on a consolidated basis ascompared to the prior year. The increase is primarily the result of increasing salesactivities at Vital Scientific and NovaChem offset by a decrease in sales expenses atVital Diagnostics.

Research and development expenses were $1,552,000, of which $111,000was capitalized onto the balance sheet pursuant to the precepts of Statement of FinancialAccounting Standards No. 86,"Accounting for Computer Software to be Sold, Leased orOtherwise Marketed", (see Note 1(m) in the accompanying Notes to the ConsolidatedFinancial Statements), resulting in $1,442,000 of research and development expendituresshown on the fiscal year 2001 consolidated statements of operations. The overall decreasein research and development expenditures of $460,000, or 22.9%, as compared to fiscal year2000 is principally due to cost savings from contracting certain software developmentactivities to lower cost providers and a realignment of development spending consistentwith revenues.

General and administrative expenses increased 3.5% from last yearprimarily from the write-off of a receivable.

Interest income increased $28,000 as a result of increased fundsavailable for investment. Interest expense increased $1,300. 

Other income in fiscal 2001 results principally from payments receivedfor the termination of distribution agreements between AVL Medical Instruments AG and theCompany’s subsidiaries, Vital Diagnostics and Vital Scientific. In fiscal 2000, theamount for other income and expense was principally for an adjustment for interest in asubsidy.

The minority interest, as shown on the fiscal year 2001 and 2000financial statements, represents 7.5% and 5% of Vital Diagnostics, respectively, sold toan officer of the Company. The details of this transaction are disclosed in Note 3 in theaccompanying Notes to the Consolidated Financial Statements. 
**Fiscal Year Ended March 31, 2000 Compared to Fiscal Year Ended March 31,1999**
When analyzing the comparative revenue and expense figures presentedbelow for the fiscal years ended March 31, 2000 and 1999, consideration should be given tothe 8.9% weakening of the Company’s principal functional currency, the Dutch Guilder,against the U.S. dollar.

Consolidated revenues for fiscal 2000 decreased 8.0% as compared tofiscal year 1999. Revenues, when expressed in the Company’s principal functionalcurrency, the Dutch Guilder, were approximately the same as in fiscal year 1999. Asexpressed in Dutch Guilders, sales at Vital Scientific decreased 8.5% between yearsbecause of lower unit sales of certain products. This was offset by an increase in salesat Vital Diagnostics of 71.2% when expressed in Australian dollars and impacted by adecrease of 18.4 % in revenues at NovaChem.

The gross margin increased from 26.9% for the year ended March 31, 1999to 34.1% for the year ended March 31, 2000. The increased margin is the consolidatedresult of improved performance at each of the operating subsidiaries and is a consequenceof improved product pricing, reduced product costs, and the effect of a sponsored researchand development contract.

Sales and marketing expenses decreased 15.3% on a consolidated basis ascompared to the prior year. The decrease is primarily the result of a cost containmentprogram at Vital Scientific and NovaChem offset by an increase in sales expenses at VitalDiagnostics commensurate with their increase in revenues.

Research and development expenses increased 9.0% as compared to fiscalyear 1999. This increase is principally due to the aforementioned sponsored research anddevelopment contract at Vital Scientific.

General and administrative expenses decreased 1.5% over the prior year.

During the fourth quarter of fiscal 1999, the Company beganimplementation of a restructuring plan at the Company’s subsidiary, Vital Scientific.As of March 31, 2000, the restructuring plan was completed and all amounts charged againstthe profit and loss statements have been paid out.

Interest expense decreased 79.6% from fiscal 1999. The decrease isprincipally due to fewer unit sales of the HYTEC-288 that was financed under agovernmental development subsidy. This loan is repaid as units of the product are sold.Interest income decreased, as fewer funds were available during the year for investment.

Other income and expense in fiscal 2000 results principally from anadjustment for interest in a subsidy. In fiscal 1999, the amount for other income andexpense was principally due to the effect of foreign currency transaction gains and losseson the results of operations.

The minority interest as shown on the fiscal year 2000 financialstatements is the 5% of Vital Diagnostics sold to an officer of the Company on May 19,1999. The details of this transaction are disclosed in Note 3 in the accompanying Notes tothe Consolidated Financial Statements.
**Item 7A. Quantitative and Qualitative Disclosure about Market Risk**
*Foreign Exchange Risk Management.*As a multinationalcorporation, the Company is exposed to changes in foreign currency rates, which could havea material adverse impact on the Company's financial results. The Company uses forwardexchange contracts to manage the risk of exchange rate fluctuations relating to certainaccounts receivable. The Company uses these derivative instruments to reduce its foreignexchange rate risk essentially by creating offsetting market exposures. The instrumentsheld by the Company are not leveraged and are not held for trading purposes.

The accounts of the Company’s foreign subsidiaries are translatedin accordance with SFAS No. 52, "Foreign Currency Translation". In translatingthe accounts of the foreign subsidiaries into U.S. dollars, assets and liabilities aretranslated at the rate of exchange in effect at year-end, while stockholders’investment is translated at historical rates. Revenue and expense accounts are translatedusing the weighted average exchange rate in effect during the year. Gains and losses fromtranslating assets and liabilities that are denominated in currencies other than thesubsidiaries’ respective functional currency are included in other income (expense)in the consolidated statements of operations. The translation adjustment required toreport those subsidiaries whose functional currency is other than the U.S. dollar intoU.S. dollars is credited or charged to cumulative translation adjustment, included as aseparate component of stockholders’ investment in the accompanying consolidatedbalance sheets. Substantially all of the Company’s sales were denominated in foreigncurrencies during fiscal 2001. The Company recognized a loss of approximately $293,000related to such foreign currency transactions and translations in fiscal 2001, which isincluded in cumulative translation adjustment in the accompanying consolidated statementsof stockholders’ investment.
***Investment Portfolio.* The Company's investment policyguidelines limit the amount of credit exposure of any issue, issuer, and type ofinvestment. See Note 1 – Summary of Significant Accounting Policies – in theaccompanying Notes to the Consolidated Financial Statements.****
**Item 8. Financial Statements and Supplementary Data**

See Index to the Company’s Financial Statements filed as part ofthis Form 10-KSB.
**Item 9. Changes in and Disagreements with Accountants on Accounting andFinancial Disclosure**
None.
** 

PART III

Item 10. Directors and Executive Officers of the Registrant**
The information required by this item is contained in part under thecaption "Executive Officers of the Registrant" in Part I hereof and theremainder is incorporated herein by reference to the table appearing under the caption"Election of Directors" in the Company’s definitive 2001 Proxy Statementfor its Annual Meeting of Stockholders to be held on September 11, 2001.
**Item 11. Executive Compensation**
The information required by this item is incorporated herein byreference to the section entitled "Compensation of Executive Officers" in theCompany’s definitive 2001 Proxy Statement for its Annual Meeting of Stockholders tobe held on September 11, 2001.
**Item 12. Security Ownership of Certain Beneficial Owners and Management**
The information required by this item is incorporated herein byreference to the tables appearing under the captions "Principal and ManagementStockholders" in the Company’s definitive 2001 Proxy Statement for its AnnualMeeting of Stockholders to be held on September 11, 2001.
**Item 13. Certain Relationships and Related Transactions**
The information required by this item is incorporated herein byreference to the section entitled "Certain Transactions and Relationships" inthe Company’s definitive 2001 Proxy Statement for its Annual Meeting of Stockholdersto be held on September 11, 2001.
**Item 14. Exhibits, Financial Statement Schedules and Reports on Form8-K
(a) Documents filed as part of this Form 10-KSB 
1. Financial Statements. The Financial Statements listed in        the Index to Consolidated Financial Statements are filed as part of this Form 10-KSB.

2. Financial Statement Schedules. The Financial Statement        Schedules listed in the Index to Consolidated Financial Statements are filed as part of        this Form 10-KSB.

3. Exhibits. The exhibits which are filed with this Report or        which are incorporated herein by reference are listed in the Exhibit Index filed as part        of this Form 10-KSB.

(b) Reports on Form 8-K
None.
**SIGNATURES**
Pursuant to the requirements 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.
NOVITRON INTERNATIONAL, INC.
Israel M. Stein, M.D.
Israel M. Stein, M.D.Dated: June 22, 2001
Chairman of the Board
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 inthe capacities and on the dates indicated.
Date: June 22, 2001
Israel M. Stein, M.D.
Israel M. Stein, M.D.
Chairman of the Board
Principal Executive OfficerDate: June 22, 2001
Arthur B. Malman
Arthur B. Malman
DirectorDate: June 22, 2001
Alexander Sherman
Alexander Sherman
Director
 

 

Novitron International, Inc.AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

**Consolidated Financial Statements**       
Page
Report of Independent Public Accountants   
20
Consolidated Balance Sheets at March 31, 2001 and 2000       
21
Consolidated Statements of Operations for the Years    Ended March 31, 2001, 2000, and 1999   
23
Consolidated Statements of Stockholders’    Investment for the Years Ended March 31, 2001, 2000, and 1999   
24
Consolidated Statements of Cash Flows for the Years    Ended March 31, 2001, 2000, and 1999   
25
Notes to Consolidated Financial Statements   
27**Consolidated Financial Statement Schedule**
Schedule II -Valuation and Qualifying Accounts       
41
 

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Novitron International, Inc.:

We have audited the accompanying consolidated balance sheets ofNovitron International, Inc. (a Delaware corporation) and subsidiaries as of March 31,2001 and 2000, and the related consolidated statements of operations, stockholders’investment and cash flows for each of the three years in the period ended March 31, 2001.These financial statements and the accompanying schedule are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these financialstatements based on our audits. 

We conducted our audits in accordance with auditing standards generallyaccepted in the United States. Those standards require that we plan and perform the auditto obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Novitron International, Inc.and subsidiaries as of March 31, 2001 and 2000, and the results of their operations andtheir cash flows for each of the three years in the period ended March 31, 2001, inconformity with accounting principles generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the basicconsolidated financial statements taken as a whole. The schedule listed in the index tothe consolidated financial statements is presented for purposes of complying with theSecurities and Exchange Commission’s rules and is not part of the basic financialstatements. The schedule has been subjected to the auditing procedures applied in theaudits of the basic financial statements and, in our opinion, fairly states, in allmaterial respects, the financial data required to be set forth therein in relation to thebasic financial statements taken as a whole.

/s/ ARTHUR ANDERSEN LLP

Boston, MassachusettsJune 20, 2001
** 

 

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2001 AND 2000

                   ASSETS

**2001**
**2000**
CURRENT ASSETS:
Cash and cash equivalents
$1,538,295
$1,326,513**Accounts receivable, less    reserves of $203,845 and $99,127 in 2001 and 2000, respectively
2,259,115
2,601,814**Inventories 
2,775,196
2,360,177**Prepaid expenses 
363,369
276,911**Other current assets
50,254
127,653**Total current assets
6,986,229
6,693,068******EQUIPMENT**,    at cost: **Manufacturing and computer    equipment
2,406,497
2,356,535**Leasehold improvements
373,882
371,538**Furniture and fixtures
365,179
352,399**Vehicles
60,639
61,896**3,206,197
3,142,368**Less: Accumulated    depreciation and amortization
2,375,637
2,226,638**830,560
915,730******OTHER ASSETS**,    net
498,091
670,618****$ 8,314,880**
**$ 8,279,416***The accompanying notes are an integral part of these consolidatedfinancial statements.

 

 

 *
 
**CONSOLIDATED BALANCE SHEETS

MARCH 31, 2001 AND 2000**
(Continued)
**                 LIABILITIES AND STOCKHOLDERS’ INVESTMENT** 
**2001**
**2000****CURRENT LIABILITIES:  
Short-term notes payable and current    portion of long-term debt
$ 11,701
$ 16,825
Accounts payable
2,277,399
2,425,514
Accrued expenses
1,477,301
1,573,527
Customer advances
14,351
65,886
Accrued income taxes
187,012
56,457
Total current liabilities
3,967,764
4,138,209**MINORITY INTEREST
37,747
17,463**LONG-TERM DEBT, net of current portion
19,263
- **DEFERRED TAXES
231,368
124,774   **COMMITMENTS AND CONTINGENCIES: (Note    6)   **STOCKHOLDERS’ INVESTMENT:  
Preferred stock, $.01 par value,      Authorized: 1,000,000 shares      Issued and outstanding: none
- 
- 
Common stock, $.01 par value,      Authorized: 6,000,000 shares      Issued: 1,452,227 and 1,445,227 in 2001 and          2000, respectively      Outstanding: 1,438,427 and 1,445,227 in 2001        and 2000, respectively 
14,522
14,452
Capital in excess of par value
4,866,785
4,862,481
Cumulative translation adjustment
(841,241)
(548,100)
Retained earnings (deficit)
58,998
(329,863)
Treasury stock, 13,800 and 0 shares at cost    in            2001 and 2000, respectively
(40,326) 
- 
Total stockholders’ investment
4,058,738
3,998,970 
**$ 8,314,880**
**$ 8,279,416***The accompanying notes are an integral part of these consolidatedfinancial statements.*
 

 
**CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999** 
**2001**
**2000**
**1999**
REVENUES
$12,927,493
$14,182,636
$15,417,896
COST OF REVENUES 
9,087,066
9,352,611
11,265,352
Gross profit
3,840,427
4,830,025
4,152,544
OPERATING EXPENSES:   
Sales and marketing
1,067,269
848,818
1,002,107
Research and development
1,441,762
2,012,237
1,845,813
General and administrative
1,886,475
1,823,131
1,851,910
Restructuring
- 
74,876
50,946 
4,395,506
4,759,062
4,750,776
(Loss) income from operations
(555,079)
70,963
(598,232)
Interest expense
(27,138)
(25,779)
(126,280)
Interest income 
39,381
11,823
22,327
Other income (expense), net
1,283,860
113,711
(3,969) 
741,024
170,718
(706,154)
Provision for (benefit from) income taxes
321,000
53,000
(236,000) 
420,024
117,718
(470,154)
Minority interest expense
(16,930)
(10,139)
-
Net income (loss)
$403,094
$107,579
$ (470,154)    Basic net income (loss) per share
$ 0.28
$0.07
$ (0.32) Diluted net income (loss) per share$ 0.27$ 0.07$ (0.32) Basic Weighted Average Common Shares Outstanding1,443,0611,442,0461,453,091    Diluted Weighted Average Common and Common Equivalent Shares    Outstanding1,493,4631,511,6851,453,091*The accompanying notes are an integral part of these consolidatedfinancial statements.*** 

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ INVESTMENT

FOR THE YEARS ENDED MARCH 31, 2001, 2000 AND 1999****Common    Stock**Number of    Shares**Par Value**Capital in    Excess of Par Value**Treasury Stock**Retained    Earnings (Deficit)
**Cumulative    Translation Adjustment****Comprehensive    Income (Loss)
BALANCE at March    31, 1998
1,454,211 
$ 14,542
$ 4,881,068
$ - 
$ 32,712
$(287,384)
$ -
Issuance of common    stock in connection with a 10% stock dividend of March 27, 1998
214
2
(2)
- 
- 
- 
-
Purchase of    treasury stock
- 
- 
- 
(10,177)
- 
- 
Translation    adjustment
- 
-************************************************************************************