U. S. SECURITIES AND
EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10–Q xQUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For
the quarterly period ended March 31, 2001 OR oTRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from____ to
____ Commission file number  001-13543  ANGEION CORPORATION(Exact name of
registrant as specified in its charter) Minnesota
  41-1579150(State
  or other jurisdiction of
  (I.R.S.
  Employerincorporation
  or organization)
  Identification
  No.)
 350Oak
Grove Parkway, Saint Paul, Minnesota 
55127-8599(Address of principal executive offices) Registrants telephone number, including
area code:(651) 484-4874  Indicate by check mark whether the issuer
(1) filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the past 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.
     YesxNoo As of May 10, 2001, the Company had
outstanding 3,481,584 shares of common stock, $.01 par value.   PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ANGEION CORPORATION AND SUBSIDIARIESConsolidated Balance
  Sheets(unaudited, in thousands except share
  data)March 31,2001
  December 31,2000AssetsCurrent assets:Cash and cash equivalents
  $6,055
  $6,350Accounts receivable, net of allowance for
  doubtful accounts of $179 and $153, respectively
  4,161
  4,631Inventories
  4,224
  3,979Prepaid expenses and other current assets
  207
  218Total current assets
  14,647
  15,178Net
  non-current assets of discontinued operations
  212
  236Equipment
  and fixtures, net
  1,772
  1,895Intangible
  assets, net
  11,824
  12,000Other
  assets
  592
  724Goodwill,
  net
  518
  524$29,565
  $30,557Liabilities and
  Shareholders' EquityCurrent liabilities:Accounts payable
  $670
  $812Employee compensation
  636
  549Deferred income
  1,029
  984Warranty reserve
  231
  239Net current liabilities of discontinued
  operations
  384
  457Other liabilities and accrued expenses
  896
  474Total current liabilities
  3,846
  3,515Long-term debt
  20,198
  20,198Shareholders' equity:Common stock, $.01 par value. Authorized
  10,000,000 shares; issued and outstanding 3,481,584 shares in 2001 and 2000
  35
  35Additional paid-in capital
  123,905
  123,905Cumulative translation adjustment
  (9)
  (9)Accumulated deficit
  (118,410)
  (117,087)Total shareholders' equity
  5,521
  6,844$29,565
  $30,557See
accompanying notes to financial statements

ANGEION CORPORATION AND SUBSIDIARIESConsolidated Statements of Operations(unaudited, in thousands except
  per share amounts)Three Months EndedMarch 31,2001
  2000RevenuesEquipment and supply sales
  $3,419
  $4,210Service revenue
  642
  6964,061
  4,906Cost of goods soldCost of equipment and supplies
  2,255
  2,909Cost of service revenue
  129
  1232,384
  3,032Gross margin
  1,677
  1,874Operating expenses:Selling and marketing
  1,150
  1,159General and administrative
  650
  705Research and development
  420
  376Amortization of intangibles
  324
  2852,544
  2,525Operating loss
  (867)
  (651)Other income (expense):Interest income
  83
  80Interest expense
  (510)
  (574)Loss before taxes
  (1,294)
  (1,145)Provision for taxes
  -
  -Loss from continuing
  operations
  (1,294)
  (1,145)Income (loss) from
  discontinued operations, net of taxes
  (29)
  11,029Net income (loss)
  $(1,323)
  $9,884Net income (loss) per share -
  basic and dilutedContinuing operations
  $(0.37)
  $(0.28)Discontinued operations
  (0.01)
  2.71Net income (loss)
  (0.38)
  2.43Weighted average common
  shares outstandingBasic and diluted
  3,482
  4,060See
accompanying notes to financial statements

ANGEION CORPORATION AND SUBSIDIARIESConsolidated Statements of Cash Flows(unaudited, in thousands)Three Months EndedMarch 31,2001
  2000Cash Flows From Operating
  Activities:Net income (loss)
  $(1,323)
  $9,884Adjustments to reconcile net income
  (loss) to net cash flows used in operating activities, net of operating
  assets and liabilities acquired:(Income) loss from discontinued
  operations
  29
  (11,029)Depreciation and amortization
  492
  452Changes in operating assets and
  liabilities:Accounts receivable
  470
  411Inventory
  (245)
  518Prepaid expenses and other
  current assets
  143
  29Accounts payable
  (142)
  (826)Employee compensation
  87
  (163)Other liabilities and accrued
  expenses
  459
  427Net cash used in continuing
  operations
  (30)
  (297)Net cash used in discontinued
  operations
  (102)
  (1,650)Net cash used in operating
  activities
  (132)
  (1,947)Cash Flows From Investing
  Activities:Purchase of equipment and fixtures
  (45)
  (186)Investment in proprietary software
  (142)
  (153)Acquisition of operating assets
  -
  (468)Net cash used in continuing operations
  (187)
  (807)Net cash provided by discontinued
  operations
  24
  9,064Net cash provided by (used in) in
  investing activities
  (163)
  8,257Cash Flows From Financing
  Activities:Borrowings under bank line of credit
  -
  6,927Payments under bank line of credit
  -
  (6,927)Net cash provided by financing
  activities
  -
  -Effect of exchange rate on
  cash and cash equivalents
  -
  -Net increase (decrease) in
  cash and cash equivalents
  (295)
  6,310Cash and cash equivalents at
  beginning of period
  6,350
  5,263Cash and cash equivalents at
  end of period
  $6,055
  $11,573Cash paid for interest
  expense
  $-
  $54See
accompanying notes to financial statements


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTSMarch 31, 2001(Unaudited)  1.Basis of Presentation The
consolidated balance sheet as of March 31, 2001, the consolidated statements of
operations and cash flows for the three months ended March 31, 2001 and 2000,
and the related information presented in these notes have been prepared by
management in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X, without audit.  Accordingly, they do not include all of the
information and notes required by accounting principles generally accepted in
the United States of America for complete financial statements.  In the opinion of management, all
adjustments considered necessary for a fair presentation of results have been
included.  The balance sheet at December
31, 2000 was derived from the audited financial statements as of that
date.  Operating results for the three
month period ended March 31, 2001 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2001.  For further information, refer to the
financial statements and notes thereto included in Angeion Corporations Annual
Report on Form 10-K for the fiscal year ended December 31, 2000. During March
2000, Angeion Corporation discontinued its historical business, the research,
development, manufacturing and marketing of implantable cardioverter
defibrillators (ICD).  Consequently,
the accompanying consolidated statements of operations present all activities
of the ICD business under discontinued operations accounting rules.  Although the last sales of ICD products were
made during the second quarter of 2000, the Company continues to pursue the
license or transfer of its ICD technology. 
As a result of the December 21, 1999 acquisition of Medical Graphics
Corporation and discontinuance of the ICD business, Medical Graphics now
comprises a majority of the Companys total assets and generates all of its
sales.  Moreover, the Company is now
focusing its efforts on the markets served by and business operations of its
wholly-owned subsidiary, Medical Graphics Corporation, and the acquisition and
development of future businesses that contribute to shareholder value. Comprehensive
income is a measure of all non-owner changes in shareholders equity and
includes such items as net income, certain foreign currency translation items,
minimum pension liability adjustments and changes in the value of
available-for-sale securities.  For the
three months ended March 31, 2001 and 2000, comprehensive income (loss) for
Angeion Corporation was equivalent to net income (loss) as reported. 2.Reclassifications Certain amounts
in Angeions Form 10-Q for the three month period ended March 31, 2000 have
been reclassified to conform to the 2001 presentation.  These reclassifications had no effect on net
income or shareholders equity as previously reported. 3.          Net Income
(Loss) Per Share Basic net
income per share is calculated by dividing net income (loss) by the
weighted-average common shares outstanding during the period. Net income (loss)
per share assuming dilution reflects the potential dilution to basic net income
per share that could occur upon conversion or exercise of securities, options,
or other such items, to common shares using the if-converted and treasury stock
methods based upon the weighted-average fair value of the Companys common
shares during the period. 4.          New
Accounting Pronouncements

Statement of
Financial Accounting Standards No. 133 (SFAS No. 133), Accounting for Derivative Instruments and Hedging
Activities, (as amended by SFAS No. 137 with respect to the
effective date and SFAS No. 138 with respect to certain hedging activities)
requires all derivatives to be recognized as assets or liabilities on the
balance sheet and measured at fair value on a mark-to-market basis.  The adoption of SFAS No. 133 in January 2001
did not have a material effect on the Companys financial statements.


Item 2.  Management's
Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements Statements
included in this Quarterly Report on Form 10-Q that are not historical or
current facts are forward-looking statements made pursuant to the safe harbor
provision of the Private Securities Litigation Reform Act of 1995.  The words believe, expect, will,
can, estimate, anticipate, and similar expressions are intended to
identify forward-looking statements. 
Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially, including
the factors set forth in the Section entitled Certain Risk Factors in Part I,
Item 1, Business of the Companys Form 10-K for the year ended December 31,
2000 as well as others not now anticipated. 
Various forward-looking statements have been made in this Quarterly
Report on Form 10-Q and may also be made in other Angeion reports filed under
the Securities Exchange Act of 1934, in its press releases and in other
documents.  In addition, from time to
time, the Company through its management may make oral forward-looking
statements.  The Company undertakes no
obligation to update any forward-looking statement. Results of Operations Angeion
Corporation recorded a net loss of $1,323,000 for the three months ended March
31, 2001 compared to net income of $9,884,000 for the same period in 2000.  These amounts included losses from
continuing operations of $1,294,000 and $1,145,000 for the three months ended
March 31, 2001 and 2000, respectively. 
Discontinued operations reported a loss of $29,000 for 2001 compared to
income of $11,029,000 for 2000. Income from discontinued operations for the
three months ended March 31, 2000 included a gain of $11,696,000, net of taxes,
from the non-exclusive licensing of patent rights and sale of certain assets,
offset by $667,000 of discontinued operating expenses. Revenues Revenues
consist of product sales and service revenues. 
Product sales reflect sales of Medical Graphics non-invasive
cardio-respiratory diagnostic systems and related software and aftermarket
sales of peripherals and supplies. 
Service revenues reflect contract revenues from extended warranties,
non-warranty service visits and training. Total revenue
decreased 17.2% to $4,061,000 from $4,906,000 for the three months ended March
31, 2001 and 2000, respectively.  The
decrease was primarily due to domestic product revenue which decreased by 21.6%
to $2,473,000 in 2001 compared to $3,153,000 in 2000.  International revenue decreased by 10.5% to $946,000 in 2001
compared to $1,057,000 in 2000.  Service
revenue decreased by 7.8% to $642,000 in 2001 from $696,000 in 2000. Domestic
revenue decreased due to 1999 software upgrade orders associated with year 2000
compliance and 1999 system orders that were shipped in the first quarter of
2000 as well as the loss of $583,000 in sales from sleep diagnostics
products.  The Company discontinued
selling sleep diagnostic products in the second quarter of 2000 in order to
focus on other products with larger market sizes and profit potential.  The domestic order rate for systems
increased by 31.5% when comparing the first three months of 2001 to 2000. International
revenue decreased due to 1999 orders for system sales that were shipped in the
first quarter of 2000.  The
international order rate for systems increased by 11.6% when comparing the
first three months of 2001 to 2000.  The
service revenue decrease reflects the carryover of non-warranty service calls
from 1999 to 2000 due to the heavy demand and limited resources associated with
installation of year 2000 upgrades late in 1999.

The Company
anticipates that domestic product orders will continue to increase over the
2000 level.  As a result, the Company
expects that revenue in the second quarter of 2001 will show an increase
compared to second quarter 2000 revenue and a sequential increase over first
quarter 2001 revenue.

Gross Margin

Gross margin
percentage increased to 41.3% of revenue for the three months ended March 31,
2001  compared to 38.2% for the same
period of 2000.  The margin increase
reflects the impact of cost reduction programs, higher sales of higher margin
cardiopulmonary exercise testing systems and discontinuance of lower margin
sleep diagnostics products, partially offset by lower sales of high margin
software upgrade products associated with year 2000 compliance.

Selling and Marketing

Selling and
marketing expenses decreased 0.8% to $1,150,000 for the three months ended
March 31, 2001 from $1,159,000 in 2000. 
Increased expenses associated with the Companys focus on the cardiac
rehabilitation and disease prevention markets along with additional costs in
support of the focus on international revenue were more than offset by lower
commissions due to lower sales and generally lower domestic selling expenses.

General and Administrative

General and
administrative expenses decreased by 7.8% to $650,000 for the three months
ended March 31, 2001 from $705,000 in 2000. 
Lower personnel costs and shareholder communications expenses were
partially offset by higher legal expenses associated with on-going litigation.

Research and Development

Research and
development expenses increased by 11.7% to $420,000 from $376,000 for the three
months ended March 31, 2001 and 2000, respectively.  The first quarter of 2001 includes additional expenses associated
with the AeroSport products that were acquired in March 2000.  One of those products is instrumental in the
Companys current growth initiative for the cardiac rehabilitation and disease
prevention markets.  The current quarter
also reflects the Companys continuing effort to transition its software
products to a Windows 98/NT/2000 platform.

Amortization of Intangibles

Amortization of
intangibles represents the amortization of goodwill and other intangible assets
associated with acquisitions. 
Amortization expenses increased by 13.7% to $324,000 from $285,000 for
the three months ended March 31, 2001 and 2000, respectively.  The increase reflects the acquisition of
AeroSports technology in March 2000 and the capitalization of eligible costs
associated with on-going enhancement of the Companys proprietary software
products.

Other Income (Expense)

Interest income
increased to $83,000 for the three months ended March 31, 2001 compared to
$80,000 for 2000.  The increase reflects
higher excess cash balances available for short term investment partially
offset by lower interest rates.

Interest
expense for the three months ended March 31 decreased to $510,000 in 2001
compared to $574,000 in 2000.  The
decrease represents the minimum interest charges incurred during the first quarter
of 2000 for the Medical Graphics bank line of credit that expired by its terms
on March 31, 2000.

Income From Discontinued Operations

The loss from
discontinued operations of $29,000 for the three months ended March 31, 2001
represents  expenses related to
discontinued operations.

Income from
discontinued operations of $11,029,000 for the three months ended March 31,
2000, includes a one-time gain of $11,696,000, net of taxes, related to the
non-exclusive licensing of patent rights and sale of certain assets.  The gain was partially offset by $593,000 of
rental expenses associated with the building previously used for ICD products
as well as other expenses of $74,000 related to discontinued operations.

Liquidity and Capital Resources

The Company had
cash of $6,055,000 and working capital of $10,801,000 as of March 31,
2001.  During the three months ended
March 31, 2001, the Company used $30,000 in cash for continuing
operations.  Cash was provided by a
$470,000 decrease in accounts receivable and an increase of $459,000 in other
liabilities and accrued expenses, which were offset by a $245,000 increase in
inventory and a $142,000 decrease in accounts payable.  In addition, the Company used $102,000 in
cash for discontinued operations which included $73,000 for rental of the
facility formerly used for the Companys ICD products.

During the
three months ended March 31, 2001, the Company used $163,000 in cash for
investing activities.  Cash was used to
increase the Companys investment in proprietary software by $142,000 and to
purchase $45,000 of equipment and fixtures. 
Cash of $24,000 was generated from the sale of assets related to
discontinued operations.

At March 31,
2001 the Company had no material commitments for capital expenditures.  The Company believes that its cash flows
from operations together with its existing cash will be adequate to satisfy its
liquidity and capital resource needs through March 2002.

Item 3.  Quantitative
and Qualitative Disclosures About Market Risk

The Company
invests its cash in money market instruments or short-term investment grade
securities.  The Company believes that a
decrease of 100 basis points in prevailing interest rates would not have an
adverse effect on its net income or financial position.

The Companys
product sales outside the United States are denominated in United States
dollars.  Accordingly, the Company
believes its exposure to foreign exchange rate fluctuation is minimal.


PART II - OTHER INFORMATION Item 1.  Legal
Proceedings Note Holder Litigation On September
24, 1999, U.S. Bank National Association, as Trustee on behalf of holders of
Angeion 71⁄2% Senior Convertible Notes due April, 2003 brought suit against the
Company in Hennepin County District Court in the State of Minnesota.  The lawsuit sought injunctive relief, a
declaratory judgment, and breach of contract and related relief, alleging that
certain actions taken by Angeion in 1998 and 1999 constituted a sale of all or
substantially all of Angeions assets, and thereby constituted a Designated
Event under terms of the Indenture governing the Notes, thereby requiring
repayment of the Notes. On November 30,
1999, the District Court denied the Trustees request for a temporary
injunction in this matter.  On February
7, 2000, the District Court dismissed the suit against Angeion, ruling that
these transactions did not constitute the sale of all or substantially all of
the assets of Angeion, that no Designated Event had occurred, and that the Note
holders were not entitled to prepayment of their Notes.  The Trustee appealed both Orders to the
Minnesota Court of Appeals. On August 15,
2000, the Minnesota Court of Appeals upheld the decision of the District Court
denying injunctive relief, but ruled that the District Court determination that
the transaction did not constitute a sale of all or substantially all of the
assets of Angeion was premature and reversed and remanded the case for further
discovery on that issue.  The Court of
Appeals also stated that the sale or license of patent rights could constitute a
sale of all or substantially all of the assets of a corporation.  The Court of Appeals also determined,
however, that the January 1999 Restructuring, the April 1999 Restructuring and
the Withdrawal Agreement did not convey, transfer, or lease assets and that
therefore,  as a matter of law these
actions could not trigger an obligation to make a repurchase offer. On September
14, 2000, Angeion petitioned the Minnesota Supreme Court for review of the
decision of the Court of Appeals.  In an
order dated October 25, 2000, Angeions petition for further review was
denied.  Accordingly, the case has been
returned to the District Court for further discovery.  Discovery has been conducted since that date. On March 23,
2001, the District Court issued a scheduling order that, among other things,
requires the parties to complete discovery by August 1, 2001 and to complete
mediation by September 1, 2001. Other Legal Matters The Company is
also subject to certain claims and lawsuits that have been filed in the
ordinary course of business.  It is
managements opinion that the settlement of all litigation arising in the
ordinary course of business would not have a material effect on the financial
position of the Company. Item 2.  Changes in
Securities and Use of Proceeds None. Item 3.  Defaults Upon
Senior Securities None.


Item 4.  Submission of
Matters to a Vote of Security Holders None Item 5.  Other
Information None Item 6.  Exhibits and
Reports on Form 8-K (a)         Exhibits List None (b)        Reports on Form 8-K No reports on Form 8-K were filed
during the three months ended March 31, 2001.


SIGNATURES In accordance
with the requirements of the Exchange Act, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.  Angeion Corporation(Registrant)Date: May 14, 2001
  /s/ Richard E. JahnkeRichard E. Jahnke, President and ChiefExecutive Officer(Principal Executive Officer)Date: May 14, 2001
  /s/ Dale H. JohnsonDale H. Johnson, Chief Financial Officer(Chief Accounting Officer)


INDEX TO EXHIBITS  ExhibitNumberDescription None