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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|/x/ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|--- | ---------------------------------------------------------------------------------------

For the Quarterly period ended July 1, 2000 or

|/ / | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|--- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number 0-11278

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MINNTECH CORPORATION(Exact name of registrant as specified in its charter)

Minnesota(State or other jurisdiction of
incorporation or organization)

41-1229121(I.R.S. Employer
Identification No.)


14605 - 28th Avenue North
Minneapolis, Minnesota 55447(Address of principal executive offices)

Registrant's
telephone number, including area code:(612) 553-3300

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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
the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class

Outstanding at July 1, 2000Common Stock, $0.05 par value

6,678,016 shares


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Minntech Corporation

Quarterly Report on Form 10-Q

July 1, 2000

Index

|                               |         |                                                      |                                                                                       | Page
|------------------------------ | ------- | ---------------------------------------------------- | ------------------------------------------------------------------------------------- | ----
|Part I.  Financial Information |         |                                                     
|                               | Item 1. |                                                      | Financial Statements                                                                  |     
|                               |         | Condensed Consolidated Statements of Operations      |                                                                                       | 3   
|                               |         | Condensed Consolidated Balance Sheets                |                                                                                       | 4   
|                               |         | Condensed Consolidated Statements of Cash Flows      |                                                                                       | 5   
|                               |         | Notes to Condensed Consolidated Financial Statements |                                                                                       | 6   
|                               | Item 2. |                                                      | Management's Discussion and Analysis of Financial Condition and Results of Operations |     
|Part II.  Other Information    |         |                                                     
|                               | Item 4. |                                                      | Submission of Matters to a Vote of Security Holders                                   |     
|                               | Item 6. |                                                      | Exhibits and Reports on Form 8-K                                                      |     
|Signatures                     |         | 15                                                  
|                               |         |                                                      |                                                                                       |     

2

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## 

Part IFinancial Information

Item 1.  Financial Statements

Minntech Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

|                                           |                                     | Thirteen
weeks ended July 1, 2000  |        | Three
months ended June 30, 1999
|------------------------------------------ | ----------------------------------- | ---------------------------------- | ------ | --------------------------------
|Net salesproduct                          |                                     | $                                  | 17,033 |                                 
|Contract revenue                           |                                     |                                    |       |                                 
|                                           |                                     |                                    |        |                                 
|Net sales                                  |                                     |                                    | 17,033 |                                 
|                                           |                                     |                                    |        |                                 
|Operating costs and expenses               |                                     |                                    |        |                                 
|                                           | Cost of product sales               |                                    |        | 10,992                          
|                                           | Research and development            |                                    |        | 1,014                           
|                                           | Selling, general and administrative |                                    |        | 5,051                           
|                                           | Amortization of intangible assets   |                                    |        | 59                              
|                                           |                                     |                                    |        |                                 
|                                           |                                     | Total operating costs and expenses |        |                                 
|                                           |                                     |                                    |        |                                 
|Earnings (loss) from operations            |                                     |                                    | (83    | )                               
|Other income, net                          |                                     |                                    | 52     |                                 
|                                           |                                     |                                    |        |                                 
|Earnings (loss) before income taxes        |                                     |                                    | (31    | )                               
|Provision (benefit) for income taxes       |                                     |                                    | (10    | )                               
|Net earnings (loss)                        |                                     | $                                  | (21    | )                               
|                                           |                                     |                                    |        |                                 
|Net earnings per share                     |                                     |                                    |        |                                 
|                                           |                                     | Basic                              |        | $                               
|                                           |                                     |                                    |        |                                 
|                                           |                                     | Diluted                            |        | $                               
|                                           |                                     |                                    |        |                                 
|Weighted average common shares Outstanding |                                     |                                    |        |                                 
|                                           |                                     | Basic                              |        |                                 
|                                           |                                     |                                    |        |                                 
|                                           |                                     | Diluted                            |        |                                 
|                                           |                                     |                                    |        |                                 

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

3

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Minntech Corporation

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share and per share amounts)

|                                           |                                                                                                                                 | July 1, 2000               |                   | March 31, 2000 |       
|------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ----------------- | -------------- | ------
|
|ASSETS                                     |                                                                                                                                
|Current assets                             |                                                                                                                                 |                            |                   |                |       
|                                           | Cash and cash equivalents                                                                                                       |                            | $                 | 9,635          |       
|                                           | Accounts receivable, less allowance for doubtful accounts of $438 and $422, respectfully                                        |                            |                   | 15,308         |       
|                                           | Inventories                                                                                                                     |                            |                   |                |       
|                                           |                                                                                                                                 | Finished goods             |                   |                | 5,762 
|                                           |                                                                                                                                 | Raw materials              |                   |                | 4,462 
|                                           |                                                                                                                                 | Work-in-process            |                   |                | 2,820 
|                                           |                                                                                                                                 |                            |                   |                |       
|                                           |                                                                                                                                 |                            | Total inventories |                |       
|                                           | Prepaid expenses and other current assets                                                                                       |                            |                   | 3,707          |       
|                                           |                                                                                                                                 |                            |                   |                |       
|                                           |                                                                                                                                 | Total current assets       |                   |                | 41,694
|Property and equipment                     |                                                                                                                                 |                            |                   |                |       
|                                           | Land, buildings and improvements                                                                                                |                            |                   | 10,425         |       
|                                           | Machinery and equipment                                                                                                         |                            |                   | 27,609         |       
|                                           |                                                                                                                                 |                            |                   |                |       
|                                           |                                                                                                                                 |                            | 38,034            |                |       
|                                           | Less accumulated depreciation                                                                                                   |                            |                   | (22,365        | )     
|                                           |                                                                                                                                 |                            |                   |                |       
|                                           |                                                                                                                                 | Net property and equipment |                   |                | 15,669
|Other assets                               |                                                                                                                                 |                            |                   |                |       
|                                           | Patent costs, net                                                                                                               |                            |                   | 456            |       
|                                           | Goodwill, net                                                                                                                   |                            |                   | 513            |       
|                                           | Other                                                                                                                           |                            |                   | 3,548          |       
|                                           |                                                                                                                                 |                            |                   |                |       
|Total assets                               |                                                                                                                                 | $                          | 61,880            |                | $     
|                                           |                                                                                                                                 |                            |                   |                |       
|LIABILITIES AND STOCKHOLDERS' EQUITY       |                                                                                                                                
|Current liabilities                        |                                                                                                                                 |                            |                   |                |       
|                                           | Accounts payable                                                                                                                |                            | $                 | 5,447          |       
|                                           | Income taxes payable                                                                                                            |                            |                   |               |       
|                                           | Accrued compensation                                                                                                            |                            |                   | 1,216          |       
|                                           | Other accrued expenses                                                                                                          |                            |                   | 2,114          |       
|                                           |                                                                                                                                 |                            |                   |                |       
|                                           |                                                                                                                                 | Total current liabilities  |                   |                | 8,777 
|Deferred compensation                      |                                                                                                                                 |                            | 887               |                |       
|                                           |                                                                                                                                 |                            |                   |                |       
|Total liabilities                          |                                                                                                                                 |                            | 9,664             |                |       
|Commitments and contingencies              |                                                                                                                                 |                            |                   |                |       
|Stockholders' equity                       |                                                                                                                                 |                            |                   |                |       
|                                           | Preferred stock, no par value; 5,000,000 shares authorized, none outstanding                                                    |                            |                   |               |       
|                                           | Common stock, $.05 par value; 20,000,000 shares authorized, 6,678,016 and 6,686,714 shares issued and outstanding, respectively |                            |                   | 334            |       
|                                           | Additional paid-in capital                                                                                                      |                            |                   | 12,084         |       
|                                           | Accumulated other comprehensive income                                                                                          |                            |                   | (1,068         | )     
|                                           | Retained earnings                                                                                                               |                            |                   | 40,866         |       
|                                           |                                                                                                                                 |                            |                   |                |       
|Total stockholders' equity                 |                                                                                                                                 |                            | 52,216            |                |       
|                                           |                                                                                                                                 |                            |                   |                |       
|Total liabilities and stockholders' equity |                                                                                                                                 | $                          | 61,880            |                | $     
|                                           |                                                                                                                                 |                            |                   |                |       

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

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Minntech Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)

|                                                                   |                                                                                        | Thirteen
weeks ended July 1, 2000            |                      | Three
months ended June 30, 1999 |     
|------------------------------------------------------------------ | -------------------------------------------------------------------------------------- | -------------------------------------------- | -------------------- | -------------------------------- | ----
|Cash flows from operating activities                               |                                                                                        |                                              |                      |                                  |     
|                                                                   | Net earnings (loss)                                                                    |                                              | $                    | (21                              | )   
|                                                                   | Adjustments to reconcile net earnings (loss) to net cash used in operating activities: |                                              |                      |                                  |     
|                                                                   |                                                                                        | Depreciation and amortization                |                      |                                  | 802 
|                                                                   |                                                                                        | Tax benefit from stock option exercises      |                      |                                  |    
|                                                                   |                                                                                        | Foreign currency exchange loss/(gain)        |                      |                                  | (132
|                                                                   |                                                                                        | Gain on sale of land                         |                      |                                  |    
|                                                                   |                                                                                        | Other, net                                   |                      |                                  | 116 
|                                                                   |                                                                                        | Changes in operating assets and liabilities: |                      |                                  |     
|                                                                   |                                                                                        |                                              | Accounts receivable  |                                  |     
|                                                                   |                                                                                        |                                              | Inventories          |                                  |     
|                                                                   |                                                                                        |                                              | Prepaid expenses     |                                  |     
|                                                                   |                                                                                        |                                              | Accounts payable     |                                  |     
|                                                                   |                                                                                        |                                              | Accrued expenses     |                                  |     
|                                                                   |                                                                                        |                                              | Income taxes payable |                                  |     
|                                                                   |                                                                                        |                                              |                      |                                  |     
|                                                                   |                                                                                        |                                              | Total adjustments    |                                  |     
|                                                                   |                                                                                        |                                              |                      |                                  |     
|Net cash used in operating activities                              |                                                                                        |                                              | (20                  | )                                |     
|                                                                   |                                                                                        |                                              |                      |                                  |     
|Cash flows from investing activities                               |                                                                                        |                                              |                      |                                  |     
|                                                                   | Purchases of property and equipment                                                    |                                              |                      | (945                             | )   
|                                                                   | Patent application costs                                                               |                                              |                      | (42                              | )   
|                                                                   | Proceeds from sale of undeveloped land                                                 |                                              |                      |                                 |     
|                                                                   | Other                                                                                  |                                              |                      | 8                                |     
|                                                                   |                                                                                        |                                              |                      |                                  |     
|Net cash used in investing activities                              |                                                                                        |                                              | (979                 | )                                |     
|Cash flows from financing activities                               |                                                                                        |                                              |                      |                                  |     
|                                                                   | Payments on note payable                                                               |                                              |                      |                                 |     
|                                                                   | Proceeds from exercise of stock options                                                |                                              |                      |                                 |     
|                                                                   | Proceeds from employee stock purchase plan                                             |                                              |                      | 97                               |     
|                                                                   | Repurchase of common stock                                                             |                                              |                      | (194                             | )   
|                                                                   |                                                                                        |                                              |                      |                                  |     
|Net cash provided by (used in) financing activities                |                                                                                        |                                              | (97                  | )                                |     
|Effects of exchange rate changes on foreign currency cash balances |                                                                                        |                                              | 44                   |                                  |     
|                                                                   |                                                                                        |                                              |                      |                                  |     
|Net decrease in cash and cash equivalents                          |                                                                                        |                                              | (1,052               | )                                |     
|Cash and cash equivalents at beginning of period                   |                                                                                        |                                              | 10,687               |                                  |     
|                                                                   |                                                                                        |                                              |                      |                                  |     
|Cash and cash equivalents at end of period                         |                                                                                        | $                                            | 9,635                |                                  | $   
|                                                                   |                                                                                        |                                              |                      |                                  |     

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

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Minntech Corporation

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1Financial Information

The unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange
Commission; accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United
States have been condensed or omitted.

These
unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes in the Company's Annual Report
on Form 10-K for the year ended March 31, 2000 as filed with the Securities and Exchange Commission.

The
Company has adopted a universal calendar for financial reporting beginning in the first quarter of fiscal 2001. First quarter results will include the thirteen weeks ended
July 1, 2000. A fiscal year will include either 52 or 53 weeks in total. This change in reporting will not be materially different from prior years.

In
the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the interim periods.

NOTE 2Line of Credit

At July 1, 2000, the Company had a line of credit with a commercial bank which allowed the Company to borrow up to $10 million on an unsecured
basis at the prime rate of interest (9.5% at July 1, 2000) or the indexed London Interbank Offered Rate (LIBOR). As of July 1, 2000, the Company had no outstanding borrowings under the
line of credit. This credit line expires on August 31, 2000.

NOTE 3Net Earnings Per Share

The following table reconciles the numerators and denominators of the basic and diluted earnings per share computations for the thirteen weeks ended
July 1, 2000 and the three months ended June 30, 1999.

|                                           |                  | Basic
Earnings Per
Share |       | Effect of Dilutive
Stock Options |     | Diluted
Earnings Per
Share |  
|------------------------------------------ | ---------------- | ------------------------ | ----- | -------------------------------- | --- | -------------------------- | -
|
|Thirteen weeks ended July 1, 2000          |                  |                          |       |                                  |     |                            |  
|Net loss                                   |                  | $                        | (21   | )                                |     |                            | $
|Weighted average common shares outstanding |                  |                          | 6,682 |                                  |    |                            |  
|                                           | Per share amount |                          | $     | .00                              |     |                            |  
|Three months ended June 30, 1999           |                  |                          |       |                                  |     |                            |  
|Net earnings                               |                  | $                        | 1,168 |                                  |     |                            | $
|Weighted average common shares outstanding |                  |                          | 6,815 |                                  | 217 |                            |  
|                                           | Per share amount |                          | $     | .17                              |     |                            |  

Outstanding
stock options to purchase 588,049 and 43,788 shares of common stock as of July 1, 2000 and June 30, 1999, respectfully, were not included in the computation
of diluted earnings per

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share because the options' exercise prices were greater than the average market price of the common shares during the period.

NOTE 4Comprehensive Income

The components of comprehensive income are as follows:

Thirteen weeks ended
July 1, 2000

Three months ended
June 30, 1999(dollars in thousands)Net earnings (loss)

$
(21
)
$
1,168Other comprehensive income:Foreign currency translation, net


26


(162
)Total other comprehensive income


26


(162
)Total comprehensive income


5


1,006


NOTE 5Stockholders' Equity

Consolidated Statement of Stockholders' Equity
(dollars in thousands)

|                                                                 |  | Common Stock |   |   |     |   |   |        |  
|---------------------------------------------------------------- |  | ------------ | - | - | --- | - | - | ------ | -
|
|Balances at March 31, 2000                                       |  | 6,686,714    |   | $ | 334 |   | $ | 12,181 |  
|Net loss                                                         |  |              |   |   |     |   |   |        |  
|Foreign currency translation adjustment (including taxes of $14) |  |              |   |   |     |   |   |        |  
|Repurchase of common stock                                       |  | (24,100      | ) |   | (1  | ) |   | (194   | )
|Employee stock purchase plan                                     |  | 15,402       |   |   | 1   |   |   | 97     |  
|                                                                 |  |              |   |   |     |   |   |        |  
|Balances at July 1, 2000                                         |  | 6,678,016    |   | $ | 334 |   | $ | 12,084 |  
|                                                                 |  |              |   |   |     |   |   |        |  

NOTE 6Segment Data and Significant Customers

The Company's businesses are organized, managed, and internally reported as three segments. These segments, which are based upon products, services and
industry, are Dialysis Products, Cardiosurgery Products and Other Developing Businesses. Management of these segments includes responsibility for different product lines and services on a geographic
basis, including accountability for revenues as well as sales and marketing costs.

The
dialysis product segment includes supplies, concentrates and electronic equipment for hemodialysis treatment of patients with chronic kidney failure or end-stage renal
disease. Included in the cardiosurgery products segment are oxygenators, hemoconcentrators, and hemofilters which are

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used during open-heart surgery. Developing business products include filtration and separation products and endoscope reprocessing supplies.

Research
and development is managed at the corporate level. Resource decisions and performance assessment is managed by corporate officers. Research and development expenses are
monitored by project and allocated to their respective segments. Corporate Administration costs are not allocated to reportable segments. Therefore, management does not represent that these segments,
if operated independently, would report the operating income and other financial information shown below. The table below presents information about reportable segments for the first quarter (thirteen
weeks ended July 1, 2000) of fiscal 2001, and the first quarter (three months ended June 30, 1999) of fiscal 2000.

Business Segment Information

|                                |  | Dialysis
Products |        | Cardiosurgery
Products |   | Other
Developing
Businesses |  | Corporate &
Unallocated(1) |       | Total
Company |  
|------------------------------- |  | ----------------- | ------ | ---------------------- | - | --------------------------- |  | -------------------------- | ----- | ------------- | -
|Revenues                        |  |                   |        |                        |   |                             |  |                            |       |               |  
|First quarter 2001              |  | $                 | 13,260 |                        | $ | 2,029                       |  | $                          | 1,744 |               | $
|First quarter 2000              |  | $                 | 13,816 |                        | $ | 3,673                       |  | $                          | 1,279 |               | $
|Earnings (loss) from Operations |  |                   |        |                        |   |                             |  |                            |       |               |  
|First quarter 2001              |  | $                 | 2,595  |                        | $ | 237                         |  | $                          | (98   | )             | $
|First quarter 2000              |  | $                 | 4,068  |                        | $ | 459                         |  | $                          | (318  | )             | $
|Identifiable assets(2)          |  |                   |        |                        |   |                             |  |                            |       |               |  
|First quarter 2001              |  | $                 | 22,141 |                        | $ | 13,656                      |  | $                          | 2,479 |               | $
|First quarter 2000              |  | $                 | 21,010 |                        | $ | 14,200                      |  | $                          | 2,910 |               | $

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Geographic Areas

Information in the table below is presented on the basis which the company uses it to manage the identifiable segments. International sales amounted to 18.4%
and 25.0% of revenues for the first quarter of fiscal 2001, and the first quarter of fiscal 2000, respectively. Substantially all of the Company's export sales are negotiated, invoiced and paid in
U.S. dollars.

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Geographic Area Information

|                                 |  | United States |        | International |   | Other |  | Eliminations |    | Total
|-------------------------------- |  | ------------- | ------ | ------------- | - | ----- |  | ------------ | -- | -----
|Revenues                         |  |               |        |               |   |       |  |              |    |      
|First quarter 2001               |  | $             | 15,728 |               | $ | 3,541 |  | $            | 0  |      
|First quarter 2000               |  | $             | 16,229 |               | $ | 5,441 |  | $            | 60 | (1)  
|Property, Plant & Equipment, net |  |               |        |               |   |       |  |              |    |      
|First quarter 2001               |  | $             | 13,164 |               | $ | 2,505 |  |              |   |      
|First quarter 2000               |  | $             | 12,405 |               | $ | 2,832 |  |              |   |      

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NOTE 7New Accounting Pronouncement

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements"("SAB 101") which provides guidance related to revenue recognition based on interpretations and practices followed by the SEC. The Company is in the process of analyzing the requirements of
SAB 101, as amended, and is required to comply no later than the fourth quarter of fiscal year 2001. The Company has not yet determined the impact of SAB 101 on its consolidated financial statements
but does not expect the adoption of SAB 101 to have a material impact on the results of operations.

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Item 2. Management's Discussion and Analysis of Financial 
Condition and Results of Operations

Results of Operations

Revenues in the first quarter of fiscal 2001 decreased 9.5 percent to $17.0 million, compared to $18.8 million in the first quarter of fiscal
2000. Dialysis product sales decreased 4.0 percent to $13.1 million in the first quarter of fiscal 2001, due primarily to a decline in dialyzer reprocessing sales. Sales of cardiosurgery
products declined by $1.6 million or 44.8 percent from the first quarter in the prior year as a result of divesting the Company's oxygenator product line, combined with lower
hemoconcentrator sales. The developing business product sales increase of 36.4 percent in the quarter is due to 18.4 percent growth in filtration and separation products combined with an
increase in endoscope reprocessing products. Foreign exchange rate movements had an unfavorable year-to-year impact of $.3 million on international product sales in the quarter.

Product
sales by group are summarized on the following table:

|                                   |  | Thirteen weeks
ended July 1,
2000 |        | % of total
sales |       | Three months
ended June 30,
1999 |   | % of total
sales | 
|---------------------------------- |  | --------------------------------- | ------ | ---------------- | ----- | -------------------------------- | - | ---------------- | 
|
|Dialysis products                  |  | $                                 | 13,260 |                  | 77.9  | %                                | $ | 13,816           | 
|Cardiosurgery products             |  |                                   | 2,029  |                  | 11.9  | %                                |   | 3,673            | 
|Other Developing Business products |  |                                   | 1,744  |                  | 10.2  | %                                |   | 1,279            | 
|                                   |  |                                   |        |                  |       |                                  |   |                  | 
|Total Company                      |  | $                                 | 17,033 |                  | 100.0 | %                                | $ | 18,768           | 
|                                   |  |                                   |        |                  |       |                                  |   |                  | 

Following
is a summary of earnings (loss) from operations before income taxes by business segment:

|                            |  | Thirteen weeks
ended July 1,
2000 |        | % of segment
revenues |      | Three months
ended June 30,
1999 |   | % of segment
revenues |  
|--------------------------- |  | --------------------------------- | ------ | --------------------- | ---- | -------------------------------- | - | --------------------- | -
|
|Dialysis products           |  | $                                 | 2,595  |                       | 19.6 | %                                | $ | 4,068                 |  
|Cardiosurgery products      |  |                                   | 237    |                       | 11.7 | %                                |   | 459                   |  
|Other Developing Businesses |  |                                   | (98    | )                     |     |                                  |   | (318                  | )
|Corporate & Unallocated     |  |                                   | (2,817 | )                     |     |                                  |   | (2,667                | )
|                            |  |                                   |        |                       |      |                                  |   |                       |  
|Total Company               |  | $                                 | (83    | )                     |     |                                  | $ | 1,542                 |  
|                            |  |                                   |        |                       |      |                                  |   |                       |  

Gross
margin on net product sales as a percentage of sales in the period ended July 1, 2000 decreased to 35.5 percent from 43.1 percent in the comparable period
last year. The decrease in gross margins this quarter is attributable to start-up costs for two major distribution centers, higher overhead costs resulting from lower sales volumes, higher
fuel costs, and lower selling prices in the Company's hemoconcentrator and dialyzer reprocessing sterilant product lines. The hemoconcentrator average selling prices decline is attributable to
distributing the product under an OEM structure this year as compared to the same period in the prior year when the Company was a direct marketer of this product.

Research
and development expenses in the period ended July 1, 2000 were $1.0 million or 6.0 percent of revenues compared to $1.2 million or
6.5 percent of revenues in the prior year. The Company expects
that research and development spending in fiscal 2001 will range between 5.3 and 6.0 percent of revenues.

Selling,
general and administrative expenses for the quarter ended July 1, 2000 were $5.1 million or 29.7 percent of revenues, compared to $5.2 million or
27.6 percent of revenues, in the comparable

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period last year. The decrease in absolute dollars in fiscal 2001 is attributable to reduced sales and marketing spending in cardiosurgery products, partially offset by severance costs tied to
management changes in the current period combined with sales force expansion costs.

Other
income in the prior year reflects a $.176 million gain related to the sale of a parcel of undeveloped land.

The
Company's effective tax rate was 32.3 percent for the quarter ended July 1, 2000 compared to an effective tax rate of 34.0 percent in the quarter one year
ago. The Company expects the effective tax rate to range between 32.0 and 33.5 percent for fiscal 2001.

The
Company reported a net loss of $21,000 for the quarter ended July 1, 2000, compared to net earnings of $1.17 million in the first quarter one year ago. The decrease
in net earnings is attributable to lower product sales, start-up costs for two new dialysis distribution centers, higher fuel costs, lower average selling prices in two key product lines,
severance costs, and dialysis sales force expansion expenses.

Liquidity and Capital Resources

Operating activities used $20,000 of cash and cash equivalents for the first quarter ended July 1, 2000. In addition, the Company invested
$1.0 million in capital equipment and patents in the first quarter. At July 1, 2000 the Company held $9.6 million in cash and cash equivalents.

The
Company initiated a stock repurchase program in August 1998 and has spent $3.85 million to repurchase a total of 388,100 shares to date under the program. During the
first quarter of fiscal 2001 the Company expended $.193 million to repurchase 24,100 shares.

Working
capital at July 1, 2000 was $32.9 million as compared to $32.7 million as of March 31, 2000. The current ratio at July 1, 2000 was 4.8,
compared to 4.9 at March 31, 2000.

In
April 1998, the Company signed a finite risk insurance policy to cover potential future product liability and legal defense exposures. Premium payments of
$1.7 million were made in fiscal 1999 and 2000. In the event that these exposures do not materialize, the Company will recover a portion of these premiums. The Company is currently evaluating
its exposures covered under this policy and the need to maintain coverage which could result in return of a portion of premiums paid.

In
May 2000, the Company signed a letter of intent to acquire Di-Chem Concentrate, Inc., an OEM manufacturer of hemodialysis concentrates. The Company
expects its cash balances, cash flow from operation, and line of credit to be adequate to meet its obligations to complete this acquisition and other anticipated operating cash needs, including
planned capital expenditures, in its core business in fiscal 2001.

Year 2000 issues

The Company's computer systems and equipment successfully transitioned to the year 2000 with no significant issues. The Company continues to keep the year 2000
project management in place to monitor latent problems that could surface at key dates or events in the future. The Company does not anticipate any significant problems related to these events.
However, there can be no assurances that failure to address the year 2000 issues by significant business partners will not have a material adverse effect on the Company.

Euro Conversion

Effective January 1, 1999, the European Economic and Monetary Union created a single Eurocurrency (the euro) for its member countries. A transition
period is in effect that began January 1, 1999, and goes through December 31, 2001, during which time transactions will be executed in both the

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euro and the member country currencies. Effective January 1, 2002, euro bank notes will be introduced and on July 1, 2002, the euro will be the sole legal tender of the European Economic
and Monetary Union countries.

In
general, the adoption of a single currency for the participating countries is expected to result in greater transparency of pricing, making Europe a more competitive environment
for businesses. However, conversion to the euro is expected to affect many financial systems and business applications.

The
Company will switch all European business to the euro as the functional currency as of April 1, 2001. The Company's current European price list is maintained in euros. This
conversion should require only minimal information system modifications. It is not anticipated at this time, that the euro will have a material impact on our fundamental risk management philosophy.
Any costs incurred associated with the adoption of the euro will be expensed as incurred, and are not anticipated to be material to the Company's results of operations, financial condition, or
liquidity.

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Part IIOther Information

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

None.

Item 6.Exhibits and reports on Form 8K



3
(a)
Restated Articles of Incorporation, as amended(1)3
(b)
Restated By-Laws(2)3
(c)
Amendment to By-Laws(3)4
(a)
Form of Specimen Common Stock Certificate(4)4
(b)
Rights Agreement, dated as of July 1, 1999, between the Company and Norwest Bank Minnesota, National Association(5)10
(a)
1989 Stock Plan, as amended(6)*10
(b)
Amendment to 1989 Stock Plan effective February 25, 1998(7)*10
(c)
Amendment to 1989 Stock Plan effective September 30, 1998(8)*10
(d)
Employment Agreement with Barbara A. Wrigley dated September 1, 1996*10
(e)
1990 Employee Stock Purchase Plan, as amended June 1, 1993(10)*10
(f)
Supplemental Executive Retirement Plan effective April 1, 1995(11)*10
(g)
First Amendment to Supplemental Executive Retirement Plan effective December 6, 1997(18)*10
(h)
Second Amendment to Supplemental Executive Retirement Plan effective April 1, 1998(12)*10
(i)
Emeritus Director Consulting Plan(13)*10
(j)
Amendment to Emeritus Director Consulting Plan effective September 26, 1996(14)*10
(k)
1998 Stock Option Plan, as amended(15)*10
(l)
Separation and Consulting Agreement with Richard P. Goldhaber dated April 1, 2000(16)*10
(m)
Separation and Consulting Agreement with Thomas J. McGoldrick dated July 17, 2000*10
(n)
Amendment to Separation and Consulting Agreement with Thomas J. McGoldrick dated August 1, 2000*10
(o)
Separation and Consulting Agreement with Daniel H. Schyma dated July 31, 2000*10
(p)
Third Amendment to Supplemental Executive Retirement Plan effective April 1, 2000*10
(q)
Employment Agreement with Robert W. Johnson dated September 1, 1996, as amended April 1, 1997*10
(r)
Employment Agreement with Paul E. Helms dated September 1, 1996, as amended April 1, 1997*10
(s)
Employment Agreement with Jules L. Fisher dated December 11, 1996, as amended April 1, 1997*


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21

Subsidiaries of the Registrant(17)27

Financial Data Schedule


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## 

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.

|                      | MINNTECH CORPORATION                                                                                             
|--------------------- | -----------------------------------------------------------------------------------------------------------------
|Date: August 14, 2000 |                                                                                                                  
|                      | /s/JULES L. FISHERJules L. Fisher
Chief Financial Officer
(Duly authorized officer)
(Principal financial officer)

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