SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K


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

                   For the fiscal year ended March 31, 2001


                          COMMISSION FILE NUMBER 1-9601

                           K-V PHARMACEUTICAL COMPANY
                             2503 SOUTH HANLEY ROAD
                            ST. LOUIS, MISSOURI 63144
                                 (314) 645-6600

Incorporated in Delaware                 I.R.S. Employer Identification
                                         No. 43-0618919

           Securities registered pursuant to Section 12(b) of the Act:

Class A Common Stock                                     New York Stock Exchange
par value $.01 per share

Class B Common Stock                                     New York Stock Exchange
par value $.01 per share

          Securities registered pursuant to Section 12(g) of the Act:

          7% Cumulative Convertible Preferred, par value $.01 per share

         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 and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [  ]

         The aggregate market value of the 14,733,910 shares of Class A and
5,113,593 shares of Class B Common Stock held by nonaffiliates of the Registrant
as of May 14, 2001, was $290,110,688 and $101,402,549, respectively. As of May
14, 2001, the Registrant had outstanding 18,865,093 and 10,596,445 shares of
Class A and Class B Common Stock, respectively, exclusive of treasury shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

         The following document is incorporated into this Report by reference:

         Part III: Portions of the definitive proxy statement of the Registrant
(to be filed pursuant to Regulation 14A for Registrant's 2001 Annual Meeting of
Shareholders, which involves the election of directors), are incorporated by
reference into Items 10, 11, 12 and 13 to the extent stated in such items.

<PAGE>


Item 1.  Description of Business
         -----------------------

         (a) General Development of Business

         KV Pharmaceutical Company ("KV", or the "Company") was incorporated
under the laws of Delaware in 1971 as a successor to a business originally
founded in 1942. Victor M. Hermelin, KV's Chairman and founder, obtained initial
patents for early controlled release and enteric coated technologies in the
early 1950's.

         KV is a pioneer in the area of advanced drug delivery technologies
which enhance the effectiveness of new therapeutic agents, existing
pharmaceutical products and nutritional supplements. The Company has developed
and patented a wide variety of drug delivery and formulation technologies in
four principal areas; controlled release, oral and topical site-specific, quick
dissolving tablets and tastemasking systems. The Company uses these systems in
the development of the branded and generic products it markets as well as the
products of its pharmaceutical marketing licensees. Controlled release systems,
for example, improve and control the human body's absorption and utilization of
active pharmaceutical compounds. This allows the compounds to be administered
less frequently with potentially reduced side effects, improved drug efficacy
and/or enhanced patient compliance.

         In 1990, the Company established a generic marketing capability through
a wholly-owned subsidiary, ETHEX Corporation ("ETHEX"), which makes it one of
the only drug delivery research and development companies that also markets
"technologically distinguished" generic products.

         In 1999, the Company established a wholly-owned subsidiary, Ther-Rx
Corporation ("Ther-Rx"), to market branded pharmaceuticals directly to physician
specialists.

         KV's wholly-owned operating subsidiary, Particle Dynamics, Inc.
("PDI"), was incorporated in New York in 1948 and acquired by KV in 1972.
Through PDI, the Company develops and markets specialty value added raw
materials, including drugs, directly compressible and microencapsulated
products, and other products used in the pharmaceutical, nutritional, food and
personal care industries.

         The Company also licenses the marketing rights for products developed
with KV drug delivery technologies to major domestic and international brand
name pharmaceutical marketers in return for license fees, milestone payments,
research reimbursement and manufacturing and royalty revenues.

         (Hereinafter, KV, ETHEX, PDI and Ther-Rx are sometimes referred to
collectively as "KV" or the "Company").

         (b) Industry Segments

          The Company operates principally in four industry segments, consisting
of branded products marketing, specialty generics marketing, manufacturing and
marketing of specialty materials and pharmaceutical manufacturing. Revenues are
derived primarily from directly marketing its own technologically distinguished
generic and brand-name products. Revenues may also be received in the form of
licensing revenues and/or royalty payments based upon a percentage of the
licensee's sales of the product, in addition to manufacturing revenues, when
marketing rights to products using its advanced drug delivery technologies are
licensed (See Note 19 to the Company's financial statements).

         (c) Narrative Description of Business

         For the fiscal year ended March 31, 2001, approximately 89% of the
Company's net revenues were derived from the sale of technology distinguished
branded and generic products, approximately 2% from manufacturing and licensing,
and approximately 9% from the sale of specialty value added raw material
products.

         The Company is a fully integrated specialty pharmaceutical company that
develops, acquires, manufactures and markets technologically distinguished
branded and generic prescription pharmaceutical products. KV conducts its
branded pharmaceutical operations through Ther-Rx, which began operations in
March 1999. Ther-Rx currently markets products focused on the women's health and
cardiovascular therapeutic areas, although its therapeutic focus may expand as
we continue to evaluate development and acquisition opportunities. KV conducts
generic pharmaceutical operations through ETHEX, which focuses principally on
technologically distinguished generic products in four main therapeutic areas:
women's health, cardiovascular, pain management, and respiratory. Through PDI,
the Company also develops, manufactures and markets technologically advanced,
value-added raw material products for the pharmaceutical, nutritional, food and
personal care industries.

         KV established Ther-Rx to market brand name pharmaceutical products
that KV internally develops using our proprietary technologies or otherwise
acquires. In March 1999, Ther-Rx launched its first brand name product,
Micro-K(R), a prescription potassium supplement. KV acquired Micro-K(R) from
Wyeth Ayerst Laboratories, the pharmaceutical division of American Home Products
Corporation, for $36 million. The Micro-K(R) product line had worldwide annual
net sales of approximately $18.5 million in 1998, of which $13.3 million were
branded product sales. Micro-K(R) competes in a market of more than $300 million
in annual sales. In August 1999, KV acquired PreCare(R), a prescription prenatal
vitamin, from UCB Pharma for $8.4 million. PreCare(R) had annual net sales of
approximately $4.3 million in 1998 and competes in a market of more than $100
million in annual sales.

         Ther-Rx also has launched three internally developed products as
product line extensions to PreCare(R) since October 1999. The second product
launched, Premisis Rx(TM) is the first prescription vitamin mineral product
designed for women with morning sickness. The third product launched, PreCare(R)
Conceive(TM), is the first nutritional supplement with essential nutrients for
conception for both women and men planning to conceive. In June 2000, Ther-Rx
launched its first New Drug Application ("NDA") approval, Gynazole-1(R), a
one-dose prescription treatment for vaginal yeast infections caused by candida
albicans.

         Ther-Rx has over 150 specialty sales representatives. Ther-Rx's sales
force focuses on physician specialists who are identified through available
market research as frequent prescribers of the therapeutic category that our
prescription products fall within. Ther-Rx intends to continue to increase the
sales force to accommodate our strategic objectives.

         ETHEX is the Company's technologically distinguished generic drug
business. KV established ETHEX in 1990 to utilize our portfolio of drug delivery
systems to develop and market technologically enhanced generic pharmaceuticals.
ETHEX's current product line includes approximately 70 products, approximately
60% of which are identified by IMS America as the leading product in their
respective generic category. KV believes many of our generic products create
higher gross margins than those of other generic manufacturers due to the
benefits of our drug delivery systems, our marketing approach and our specialty
manufacturing capabilities which enable the Company to produce pharmaceuticals
which are difficult to replicate. For example, KV has incorporated our METER
RELEASE(R) technology into the only generic equivalent to Norpace(R) CR
(Searle), an antiarrhythmic that is taken twice daily. KV has used our KV/24(TM)
once daily technology in the generic equivalent to IMDUR(R) (Schering-Plough
Corporation) a cardiovascular drug that is taken once per day. Utilizing our
specialty manufacturing expertise and a sublingual delivery system, KV also
produced and marketed the first generic alternative to Nitrostat(R)
(Parke-Davis), used to treat angina.

         PDI is the Company's value-added raw material business. PDI
technologies, DESCOTE(R), DESTAB(TM) and MicroMask(TM), include value-added
pharmaceutical, vitamin or mineral raw material products that provide benefits
such as improved taste, enhanced product stability or a more efficient
manufacturing process.

Strategy

         The Company's goal is to enhance its position as a leading specialty
pharmaceutical company that utilizes its expanding drug delivery expertise to
bring technologically distinguished brand name and generic products to market.
The Company's strategy incorporates the following key elements:

         o     Capitalize on Acquisition Opportunities. KV plans to actively
               seek acquisition opportunities, especially through Ther-Rx. KV
               believes that consolidation among large pharmaceutical companies,
               coupled with cost-containment pressures, will lead to the
               divestiture of small or non-strategic products and product lines,
               which can be profitable for specialty pharmaceutical companies
               like KV to manufacture and market.

         o     Internally Develop Brand Name Products. KV plans to apply its
               existing drug delivery technologies, research and development,
               and manufacturing expertise to introduce new products which can
               expand our existing franchises.

         o     Pursue Attractive Growth Opportunities Within the Generic
               Industry. KV intends to continue to introduce generic
               counterparts to drugs whose patents have expired. When patents no
               longer protect a branded product, opportunities exist for ETHEX
               to introduce generic counterparts. KV believes it is uniquely
               positioned to capitalize on this dynamic given our suite of
               proprietary drug delivery technologies and ability to bring
               value-added products to market.

         o     Focus Sales Efforts on High Value Niche Markets. KV focuses its
               sales efforts on niche markets where the Company believes it can
               target a relatively narrow physician audience. KV plans to
               continue to build its sales force significantly to expand the
               coverage of frequent prescribers of its products.

         o     Advance Existing and Develop New Drug Delivery Technologies. KV
               expects to continue to develop its drug delivery technologies and
               has identified various technologies with substantial growth
               potential, such as systems for the oral delivery of bioactive
               peptides and proteins through the mucosal tissues of the
               esophagus and upper lung.

The Company's Proprietary Drug Delivery Technologies

         The Company is a pioneer in the development of proprietary drug
delivery systems and formulation technologies which enhance the effectiveness of
new therapeutic agents, existing pharmaceutical products and nutritional
supplements, such as vitamins and minerals. Many of these technologies have been
used successfully for the commercialization of products that the Company and its
pharmaceutical marketing company licensees are currently marketing.
Additionally, the Company continues to invest its resources in the development
of new technologies. The following describes the Company's principal drug
delivery technologies.

Oral Controlled Release Technologies

         The Company has developed a number of controlled release drug delivery
systems and formulation techniques that tailor the drug release profiles of
certain orally administered pharmaceuticals and nutritional supplements. These
systems, which provide for single oral doses that release the active ingredients
over periods ranging from 6 to 24 hours, are designed to improve patient
compliance, improve drug effectiveness and reduce potential side effects. The
Company's technologies have been used to formulate tablets, capsules and caplets
that deliver single therapeutic compounds as well as multiple active compounds,
each requiring different release patterns, within a single dosage form.

         o     KV/24(R) is a patented, multi-particulate drug delivery system
               that encapsulates one or more drug compounds into spherical
               particles which release the active drug or drugs systemically
               over an 18 to 24 hour period, permitting the development of
               once-a-day drug formulations. The Company believes that its
               KV/24(R) oral dosing system is the only commercialized 24 hour
               oral controlled release system that is successfully able to
               incorporate more than one active compound.

         o     METER RELEASE(R) is a polymer-based drug delivery system that
               offers different release characteristics than KV/24(R) and is
               used for products that require drug release rates of between 8
               and 12 hours. The Company has developed METER RELEASE(R) systems
               in tablet, capsule and caplet form that have been commercialized
               in ETHEX products in the cardiovascular, gastrointestinal and
               upper respiratory product categories.

         o     MICRO RELEASE(R) is a microparticulate formulation that
               encapsulates therapeutic agents, employing smaller particles than
               KV/24(R) and METER RELEASE(R). This system is used to extend the
               release of drugs in the body where precise release profiles are
               less important. MICRO RELEASE(R) has been commercialized in
               prescription products marketed by ETHEX and Ther-Rx as well as
               over-the-counter nutritional products.

SITE-RELEASE(R) Technologies

         The Company's SITE-RELEASE(R)technologies are based on the concept that
isolating a drug in a specific location for an extended period of time offers
the opportunity to meaningfully increase the drug's efficacy. For example, a
vaginal yeast infection may be effectively treated using a single dose of an
anti-fungal medication by developing a drug formulation that will adhere the
anti-fungal compound to the infected area over a period of time sufficient to
maximize the drug's efficacy. The Company's site specific technologies use
advanced polyphasic (hydrophilic and lipophilic) principles that result in a
complex emulsion which adheres to the desired tissue and controls the release of
the drug. The Company has developed a number of site-specific systems and
formulations that it tailors to the desired route of administration. Of these
technologies, only products using VagiSite(TM) and DermaSite(TM) technologies
are currently being marketed. To date, the Company has applied its site-specific
technologies in cream, lotion, lozenge and suppository form to deliver
therapeutic agents to oral, skin, pharyngeal, esophageal, vaginal and rectal
tissue.

          o    VagiSite(TM) is a patented, controlled release bioadhesive
               delivery system that incorporates advanced polyphasic principles
               to create a bio-emulsion system delivering therapeutic agents to
               the vagina. VagiSite(TM) is the subject of licensing and
               development agreements to develop products for the treatment of
               vaginal fungal infections.

          o    OraSite(TM) is a controlled release mucoadhesive delivery system
               administered orally in a solid or liquid form. A drug formulated
               with the OraSite(TM) technology may be formulated as a liquid or
               as a lozenge in which the dosage form liquifies upon insertion
               and adheres to the mucosal surface of the mouth, throat and
               esophagus. OraSite(TM) possesses characteristics particularly
               advantageous to therapeutic categories such as oral hygiene, sore
               throat and periodontal and upper gastrointestinal tract
               disorders. The Company has been issued patents relating to its
               OraSite(TM) technology.

          o    DermaSite(TM) is a semi-solid SITE-RELEASE(R) configuration for
               topical applications to the skin. The bioadhesive and controlled
               release properties of the delivery platform have made possible
               the development of products requiring a significantly reduced
               frequency of application.

          o    TransCell (TM) is a novel bio-adhesive, controlled release
               delivery system that may permit oral delivery of compounds that
               normally would be degraded if administered orally, such as growth
               hormones, calcitonin, other protein/peptides and other complex
               compounds. TransCell (TM) was specifically designed to provide
               an oral delivery alternative to biotechnology and other compounds
               that currently are delivered as injections or infused. The
               Company has patents issued and pending relating to its TransCell
               (TM) technology.

Tastemasking Technologies

         The Company is a leader in the development of pharmaceutical
formulations capable of improving the flavor of unpleasant tasting drugs. The
Company first introduced tastemasking technologies in 1991 and has employed them
in the formulation of twelve commercially available products. The Company has
also developed numerous platforms for its tastemasking technologies, including
liquid, chewable and dry powder formulations.

         o     LIQUETTE(R) is a patented tastemasking system that incorporates
               unpleasant tasting drugs into a hydrophilic and lipophilic
               polymer matrix to suppress the taste of the drug. This technology
               is used for mildly to moderately distasteful drugs where low
               manufacturing costs are particularly important.

         o     FlavorTech(TM) is a liquid formulation technology designed to
               reduce the objectionable taste of a wide variety of therapeutic
               products. FlavorTech(TM) technology has been used in cough/cold
               syrup products sold by ETHEX and has special application to other
               products, such as antibiotic, geriatric and pediatric
               pharmaceuticals. The Company has received a patent for its
               FlavorTech(TM) technology.

         o     MicroMask(TM) is a patented tastemasking technology that
               incorporates a dry powder, microparticulate approach to reducing
               objectionable tastes by sequestering the unpleasant drug agent in
               a specialized matrix. This formulation technique has the effect
               of "shielding" the drug from the taste receptors without
               interfering with the dissolution and ultimate absorption of the
               agent within the gastrointestinal tract. MicroMask(TM) is a more
               potent tastemasking technology than LIQUETTE(R) and has been used
               in connection with two Ther-Rx products.

Marketing and Distribution

         The Company directly markets and distributes its branded and generic
products to national drug store chains, wholesalers and distributors, as well as
independent pharmacies and mail order firms. During fiscal 2001, the Company's
three largest customers were McKesson Drug Company, Cardinal Health and
Amerisource Corporation which accounted for 57% of total revenue, while in
fiscal 2000 and 1999, McKesson Drug Company and Cardinal Health accounted for
30% and 36%, respectively, of its total revenue.

Sales, Marketing and Distribution

         Ther-Rx has a national sales and marketing infrastructure which
includes more than 150 sales representatives dedicated to promoting and
marketing our branded pharmaceutical products to targeted physician specialists,
such as obstetricians and gynecologists for our women's healthcare products and
cardiologists for our Micro-K(R) product. By targeting physician specialists,
Ther-Rx believes it can compete successfully without the need to build a large
sales force. Ther-Rx also has a national sales management team, a sales team
dedicated to managed care and trade accounts and an inside sales team.

         ETHEX has a sales and marketing team, which includes an outside sales
team of regional managers, national account managers and an inside sales team.
The outside sales team calls on wholesalers and distributors and national
drugstore chains, as well as hospitals, nursing homes, independent pharmacies
and mail order firms. The inside sales team calls on independent pharmacies to
create pull-through at the wholesale level. ETHEX's marketing strategy is to
provide customers with a broad product line of quality products at competitive
prices with high levels of customer service.

         The Company believes that industry trends favor generic product
expansion into the managed care, long-term care and government contract markets.
The Company further believes that its competitively priced, technologically
distinguished generic products can fulfill the increasing need of these markets
to contain costs and improve patient compliance. Accordingly, the Company
intends to continue to devote significant marketing resources to the penetration
of such markets.

         Particle Dynamics has a specialized technical sales group who calls on
the leading companies in the pharmaceutical, nutritional, food and personal care
industries in the United States and internationally in 50 countries in Europe,
the Pacific Rim, South America and North America.

         Although the Company sells internationally, it does not have material
operations or sales in foreign countries and its sales are not subject to
unusual geographic concentration.

Research and Development

         The Company's research and development activities include the
development of new and next generation drug delivery technologies, the
formulation of brand name proprietary products and the development of
technologically distinguished generic versions of previously approved brand name
pharmaceutical products.

         The Company continually applies its scientific and development
expertise to redefine and enhance our existing drug delivery systems and
formulation technologies and to create new technologies that may be used in our
drug development programs. Certain of these technologies, which currently are in
the developmental stage, include advanced oral controlled-release systems, quick
dissolving oral delivery systems (with and without tastemasking
characteristics), and transesophageal and intrapulmonary delivery technologies.

         In fiscal 2001, 2000 and 1999, total research and development expenses
were $9.3 million, $8.0 million and $6.9 million, respectively. Spending for
research and development is funded primarily from operations and was 5% of
revenues during fiscal 2001.

Patents and Proprietary Rights

         Our policy is to file patent applications in appropriate situations to
protect and preserve, for its own use, technology, inventions and improvements
that KV considers important to the development of its business. We currently
hold domestic and foreign issued patents expiring through 2018 relating to our
controlled release, site-specific, quick dissolve and tastemasking technologies.
A substantial portion of our patents begin to expire after 2007. We have been
granted 23 U.S. patents and have 19 U.S. patent applications pending. In
addition, we have 35 foreign issued patents and a total of 15 patent
applications pending in Canada, Europe, Australia, Japan and South Korea.

         The Company's success will also depend to a significant extent on our
ability to obtain and enforce patents, maintain trade secret protection and
operate without infringing on the proprietary rights of third parties. The
pharmaceutical industry is crowded and a substantial number of patents have been
issued. The patent position of pharmaceutical companies can be highly uncertain
and frequently involves complex legal and factual questions. As such, the
breadth of claims allowed in patents relating to pharmaceutical applications or
their enforceability cannot be predicted. To the extent KV endeavors to protect
its inventions outside the United States, statutory differences in patentable
subject matter may limit the protection it can obtain. For example, methods of
treating humans are not patentable in many countries outside the United States.
These and other issues may prevent KV from obtaining patent protection outside
the United States.

         The Company also relies upon trade secrets, unpatented proprietary
know-how and continuing technological innovation to develop and maintain its
competitive position. KV enters into confidentiality agreements with each of its
employees and consultants upon the commencement of an employment or consulting
relationship. These agreements generally provide that all inventions, ideas,
discoveries, improvements and copyrightable material made or conceived by the
individual arising out of the employment or consulting relationship and all
confidential information developed or made known to the individual during the
term of the relationship is the exclusive property of the Company. KV cannot
assure the enforceability of these agreements or that they will not be breached.
Furthermore, others may acquire or independently develop similar technology or,
if patents are not issued with respect to products arising from our research, KV
may not be able to maintain information pertinent to such research as
proprietary technology or trade secrets.

          The Company currently holds 47 trademarks and has also applied for
trademark protection for the trade names of our proprietary controlled-release,
tastemasking, site-specific and quick dissolve technologies. KV intends to
continue to trademark new technology and product names as they are developed.

Manufacturing and Facilities

         The Company's administrative, research, manufacturing and distribution
facilities aggregate 705,960 square feet of space located in three St. Louis
County areas. The Company manufactures drug products in liquid, semi-solid,
tablet, capsule and caplet forms for distribution by ETHEX, Ther-Rx and its
corporate licensees and value-added specialty materials for distribution by PDI.
The Company believes that all of its facilities comply with applicable
regulatory requirements.

         The Company's business is generally not seasonal, although a number of
cough/cold products marketed by ETHEX can be subject to seasonal demand. The
nature of the Company's business does not include unusual working capital
requirements. Inventories are maintained at sufficient levels to support current
production and sales levels. During fiscal 2001, the Company encountered no
serious shortage of any particular raw materials and has no indication that
significant shortages will occur.

         Other than three facilities totaling 299,370 square feet that the
Company owns, all facilities are leased at pre-determined annual rates under
agreements expiring from November 30, 2001, through April 30, 2012 subject in
most cases to renewal at its option.

Competition

         Competition in the development and marketing of pharmaceutical products
is intense and characterized by extensive research efforts and rapid
technological progress. Many companies, including those with financial and
marketing resources and development capabilities substantially greater than the
Company's, are engaged in developing, marketing and selling products that
compete with those the Company offers. Competitors may develop or acquire
products more rapidly than the Company does. Further, other products now in use
or under development by others may be more effective than its current or future
products. The Company believes that its patents, proprietary trade secrets,
technological expertise, product development and manufacturing capabilities
position it to maintain a leadership position in the field of advanced drug
delivery technologies and to continue to develop products to compete effectively
in the marketplace.

Employees

         As of March 31, 2001, the Company employed a total of 772 employees.
The Company is party to a collective bargaining agreement that expired in May
2001 and covers 116 employees and is currently conducting continuing
negotiations. The Company believes that its relations with its employees are
good.

Environment

         The Company does not expect that compliance with Federal, state or
local provisions regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment will have a material
effect on its capital expenditures, earnings or competitive position.

Regulation

         The design, development and marketing of pharmaceutical compounds are
intensively regulated by the Federal Food and Drug Administration ("FDA") and
comparable agencies in state, local and foreign governments. For example, the
Federal Food, Drug and Cosmetic Act, the Controlled Substances Act and other
United States federal statutes and regulations impose requirements on the
testing, manufacturing and approval of the Company's products before they can be
marketed in the United States. Obtaining FDA approval is a costly,
time-consuming process and there is no guarantee that such approval will be
obtained with respect to an individual product. All companies in the
pharmaceutical industry are subject to FDA inspections for compliance with
current Good Manufacturing Practice ("cGMP"), which encompasses all aspects of
the production process as interpreted by the FDA and involves changing and
evolving standards. FDA inspections are a part of a continuing effort by the FDA
to oversee and upgrade the level of industry-wide compliance with cGMP, with an
emphasis on increased validation of products and increased stringency of
Standard Operating Procedures. The Company undergoes FDA inspections at all of
its facilities.

         With respect to potential new products, there are two principal ways
the Company can obtain FDA approval of a new drug product: a New Drug
Application (an "NDA") and an Abbreviated New Drug Application (an "ANDA"). The
Company does not disclose information on the specific products covered by its
FDA applications in order to protect its competitive position and that of its
customers with respect to products which the Company has developed and expects
to market in the future.

         The Company has regulatory submissions filed with the FDA for approval
and received ANDA product approvals for a generic alternative to IMDUR(R) from
Schering-Plough Corporation in March 2000 and a generic alternative to
Cardura(R) from Pfizer Company in October 2000. As a consequence of the
uncertainties inherent in the drug approval process, an applicant is not in the
position to predict in advance all of the substantive and procedural
requirements for FDA approval of a particular product or to predict when or if
any particular product may be approved.

         The Company cannot predict whether future legislative or regulatory
developments might have an adverse effect on the Company. It is the Company's
belief that generic and branded drugs enhanced by drug delivery technologies can
provide increased patient compliance and cost savings opportunities for the
consumer, which the Company could benefit from through the growth of ETHEX and
Ther-Rx and in its drug delivery research business.


Item 2.  Properties
         ----------

         The Company's corporate headquarters is located at 2503 South Hanley
Road in St. Louis County, Missouri, and contains approximately 25,000 square
feet of floor space. The Company has a lease on the building for a period of ten
years expiring December 31, 2006, with one five-year option to renew.

         In addition, the Company leases or owns the facilities shown in the
following table:

         SQ FT                                           LEASE          RENEWAL
        LEASED        USAGE                              EXPIRES        OPTIONS
     ---------------------------------------------------------------------------

           31,630  PDI Office/Mfg./Whse.              11/30/02         5 Years2

           10,000  PDI/KV Lab/Whse.                   11/30/01         2 Years

           23,000  KV Office/R&D/Mfg.                 12/31/01         5 Years2

           16,800  KV Mfg. Oper.                      06/30/02         5 Years1

          122,350  KV Office/Whse./Lab                Owned            N/A

           90,000  KV Mfg. Oper.                      Owned            N/A

           87,020  ETHEX/Ther-Rx Office/Whse.         Owned            N/A

          260,160  ETHEX/Ther-Rx/PDI Distribution     04/30/12         5 Years2

           40,000  KV Warehouse                       11/30/01         N/A

------------------------------
1  Five-year option.
2  Two five-year options.

         Properties used in the Company's operations are considered suitable for
the purposes for which they are used and are believed to be adequate to meet the
Company's needs for the reasonably foreseeable future. However, the Company will
consider leasing or purchasing additional facilities from time to time, when
attractive facilities become available, to accommodate the consolidation of
certain operations and to meet future expansion plans.

Item 3.  Legal Proceedings
         -----------------

         Under a contract that the Company has with a supplier, issues arose
with respect to the timing of supply of a product and the supplier's failure to
pursue another product. The terms of the contract provided for binding private
arbitration between the parties which resulted in the Company receiving notice
of an award in December 1998 of $13,253,000. The Arbitration Panel subsequently
directed the parties to have further discussions including possible replacement
products. Payment of the award was deferred pending the outcome of these
discussions. Subsequent attempts to obtain replacement products were
unsuccessful and the Company was paid the arbitration award in June 1999. In
January 2000, the Company received an additional award of $6,973,000. All
pending claims and motions in the arbitration were resolved as of March 31,
2001.

         From time to time, the Company is subject to litigation and claims in
the ordinary course of business. Other than as described above, the Company
currently is not a party to any pending legal proceedings, other than ordinary
routine litigation incidental to its business, which individually or in the
aggregate is not material.

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

         No such matters were submitted during the fourth quarter of the
Company's fiscal year ended March 31, 2001.

Item 4(a).   Executive Officers of the Registrant

         The following is a list of the current executive officers of the
Company, their ages, their positions with the Company and their principal
occupations for at least the past five years.


NAME                     AGE     POSITION HELD AND PAST EXPERIENCE
-------------------------------- -----------------------------------------------

Victor M. Hermelin       87      Director, Chairman of the Board. (1)

Marc S. Hermelin         59      Director, Vice-Chairman of the Board and
                                 Chief Executive Officer.

Alan G. Johnson          66      Director, Senior Vice President-Strategic
                                 Planning and Corporate Growth since September
                                 27, 1999 and Secretary of the Company; Chairman
                                 of Johnson Research & Capital, Inc., an
                                 investment banking and institutional research
                                 firm from January to September 1999; Member of
                                 the law firm Gallop, Johnson & Neuman, L.C.
                                 1976 to 1998; Director of SIBONEY Corporation.

Raymond F. Chiostri      67      Vice President and Group President of KV since
                                 1986 and Chief Executive Officer of Particle
                                 Dynamics, Inc. since 1995; President,
                                 Pharmaceutical Division of KV 1986 to 1995.

Gerald R. Mitchell       62      Vice President, Treasurer and Chief Financial
                                 Officer since 1981.

         The term of office for each executive officer of the Company expires at
the next annual meeting of the directors or at such time as his successor has
been elected and qualified.

--------------------
(1)  Victor M. Hermelin is the father of Marc S. Hermelin.


                                     PART II

Item 5.   Market for the Company's Common Stock and Related Security Holder
          Matters
          -----------------------------------------------------------------

         a) Principal Market

         The Company's Class A Common Stock and Class B Common Stock are traded
on the New York Stock Exchange under the symbols KV.A and KV.B, respectively.

         b) Stock Price and Dividend Information

         The high and low closing sales prices of the Company's Class A and
Class B Common Stock, as reported on the New York Stock Exchange, during each
quarter of fiscal 2001 and 2000 were as follows:

CLASS A COMMON STOCK

                           FISCAL 2001                      FISCAL 2000
                   ----------------------------    -------------------------
QUARTER               High            Low               High            Low
--------           -----------    -------------    --------------- ---------

First               $17.88          $12.63            $11.75         $  8.67
Second               35.13           17.29             12.75            9.83
Third                40.00           18.44             14.63           10.08
Fourth               30.40           16.60             21.54           13.17



CLASS B COMMON STOCK

                           FISCAL 2001                      FISCAL 2000
                   ----------------------------   --------------------------
QUARTER               High            Low              High              Low
--------           -----------    -------------   ---------------- ---------

First               $18.17          $13.17            $11.71         $  8.75
Second               34.50           17.25             12.63           10.00
Third                39.88           18.63             14.29           10.54
Fourth               30.50           16.70             21.83           13.21

         All per share data reflects the three-for-two stock split effected in
the form of a 50% stock dividend that occurred on September 7, 2000.

         No dividends may be paid on Class A or Class B Common Stock unless all
dividends on the Cumulative Convertible Preferred Stock have been declared and
paid. Undeclared and unaccrued cumulative preferred dividends at both March 31,
2001 and 2000 were approximately $2.2 million or $9.14 per share on 240,000
shares of Preferred Stock. Also, under the terms of the Company's credit
agreement, the Company may not pay cash dividends in excess of 25% of the prior
year's consolidated net income. The Company historically has not paid cash
dividends on common stock and does not plan to do so in the near future. The
Company intends to use cash generated from operations to support future growth.
Dividends on Cumulative Convertible Preferred Stock in the amount of $420,000
were paid during each of fiscal 2001 and 2000.

         c) Approximate Number of Holders of Common Stock

         The number of holders of record of Class A and Class B Common Stock as
of May 14, 2001 was 687 and 509, respectively (not separately counting
shareholders whose shares are held in "nominee" or "street" names, which are
estimated to represent approximately 5,000 of Class A and 2,000 of Class B
additional shareholders).


Item 6.   Selected Financial Data
          -----------------------


<TABLE>
<CAPTION>

                                 ($ in 000's, except per share data)
                                        Years Ended March 31,
                    ---------------------------------------------------------------------
                        2001          2000           1999            1998         1997
                        ----          ----           ----            ----         ----
<S>                <C>           <C>            <C>             <C>         <C>

BALANCE SHEET DATA:

Total assets        $ 151,417     $ 140,385      $ 127,990       $ 68,361      $ 41,362

Long-term debt      $   5,080     $  16,779      $  31,491       $  4,902      $  2,158

Shareholders'
equity              $ 125,942     $  97,799      $  67,548       $ 44,164      $ 33,084


INCOME STATEMENT DATA:

Revenues            $ 182,909    $ 145,970       $ 114,860       $ 98,486      $ 57,891

% Increase               25.3         27.1            16.6           70.1          16.4

Net income (a)      $  23,625    $  24,308(a)    $  23,340(a)    $ 11,304      $  8,924

Net income
per common share-
diluted (b)            $ 0.74        $0.80(a)       $ 0.78(a)      $ 0.39        $ 0.31

<FN>

(a)  Net income in fiscal 2000 and 1999 includes non-recurring gains associated
     with $7.0 million and $13.3 million arbitration awards, respectively. The
     awards net of applicable income taxes and expenses (See Note 17 of Notes to
     Consolidated Financial Statements) were as follows:

</FN>

</TABLE>


<TABLE>
<CAPTION>

                                                   Net Income                     Per Diluted Share
                                             ---------------------------     -----------------------------
                                              2001      2000      1999         2001      2000      1999
                                              ----      ----      ----         ----      ----      ----
<S>                                      <C>         <C>        <C>        <C>       <C>        <C>
Net income without nonrecurring gain         $23,625   $20,430   $15,385      $0.74     $0.67     $0.51
Nonrecurring gain                                  -     3,878     7,955          -      0.13      0.27
                                             -------   -------   -------      -----     -----     -----
  Total net income                           $23,625   $24,308   $23,340      $0.74     $0.80     $0.78

<FN>

(b)  Previously reported amounts give effect to the three-for-two stock splits
     effected in the form of a 50% stock dividend that occurred on September 7,
     2000 and April 17, 1998.

</FN>

</TABLE>

<PAGE>


"Safe Harbor" Statement

         The materials in this Form 10-K may contain various forward-looking
statements within the meaning of the United States Private Securities Litigation
Reform Act of 1995 ("PSLRA") and which may be based on or include assumptions,
concerning KV's operations, future results and prospects. Such statements may be
identified by the use of words like "plans", "expect", "aim", "believe",
"projects", "anticipate", "intend", "estimate", "will", "should", "could" and
other expressions that indicate future events and trends. All statements that
address expectations or projections about the future, including without
limitation, statements about the Company's strategy for growth, product
development, market positions, expenditures and financial results, are
forward-looking statements.

         All forward-looking statements are based on current expectations and
are subject to risk and uncertainties. In connection with the "safe harbor"
provisions, KV provides the following cautionary statements identifying
important economic, political and technology factors which, among others, could
cause the actual results or events to differ materially from those set forth or
implied by the forward looking statements and related assumptions.

         Such factors include (but are not limited to) the following: (1)
changes in the current and future business environment, including interest rates
and capital and consumer spending; (2) the difficulty of predicting FDA
approvals; (3) acceptance and demand for new pharmaceutical products; (4) the
impact of competitive products and pricing; (5) new product development and
launch; (6) reliance on key strategic alliances; (7) the availability of raw
materials; (8) the regulatory environment; (9) fluctuations in operating
results; (10) the difficulty of predicting the pattern of inventory movements by
the Company's customers; (11) the impact of competitive response to the
Company's efforts to leverage its brand power with product innovation,
promotional programs, and new advertising; and, (12) the risks detailed from
time to time in the Company's filings with the Securities and Exchange
Commission.

         This discussion of uncertainties is by no means exhaustive, but is
designed to highlight important factors that may impact the Company's outlook.


<PAGE>


Item 7.  Management's Discussion and Analysis of Results of Operations, and
         Liquidity and Capital Resources
         ------------------------------------------------------------------

         (a)   Results of Operations

              The following table summarizes the Company's historical results of
operations, with revenue contribution by operating segment after inter-company
eliminations, and consolidated costs and expenses as a percent of total net
revenue. This information should be read in conjunction with the Company's
financial statements and related notes.

<TABLE>
<CAPTION>

                                                                  Fiscal Year Ended March 31,
                                               2001                      2000                        1999
                                               ----                      ----                        ----
                                       Amount      Percent        Amount     Percent        Amount     Percent
                                       ------      -------        ------     -------          ------   -------
                                                                          (Dollars in thousands)

<S>                               <C>            <C>       <C>           <C>         <C>           <C>

Net Revenues
Generic Products                      $137,296     75.1%        $101,342      69.4%       $ 91,833      80.0%
Branded Products                        25,206     13.8           23,469      16.1           1,795       1.6
Specialty Materials                     17,088      9.3           17,181      11.8          13,405      11.6
Contract Services/Licenses               3,319      1.8            3,978       2.7           7,827       6.8
                                      --------    -----         --------     -----        --------     -----
   Total Net Revenues                 $182,909    100.0%        $145,970     100.0%       $114,860     100.0%
                                      --------    -----         --------     -----        --------     -----

Costs and Expenses
Manufacturing Costs                   $ 70,663     38.6%       $ 63,446      43.5%        $ 61,415      53.5%
Research and Development                 9,282      5.1           8,043       5.5            6,884       6.0
Selling and Administrative              62,622     34.2          37,982      26.0           22,201      19.3
Other Expense (Income), net (a)            908      0.5          (4,907)     (3.4)         (13,516)    (11.8)
Amortization                             2,370      1.3           2,307       1.6              244       0.2
                                      --------    -----       ---------      -----        --------     -----
   Total Costs and Expenses           $145,845     79.7%       $106,871      73.2%        $ 77,228      67.2%
                                      --------    -----       ---------      ----         --------     -----

Earnings before Taxes                 $ 37,064     20.3%       $ 39,099      26.8%        $ 37,632      32.8%
Provision for Income Taxes              13,439      7.3          14,791      10.1           14,292      12.4
                                      --------     ----       ---------     -----         --------     -----
Net Income (a)                        $ 23,625     13.0%      $  24,308      16.7%        $ 23,340      20.4%
                                      ========     =====      =========     =====         ========     =====

<FN>

(a)  Other income, net in fiscal 2000 and 1999 includes non-recurring gains
     associated with $7 million and $13.3 million arbitration awards,
     respectively. (See Note 17 of Notes to Consolidated Financial Statements).

</FN>
</TABLE>


Fiscal 2001 Compared to Fiscal 2000

         Revenues. Net revenues for fiscal 2001 increased $36.9 million, or
25.3%, over the prior fiscal year. The increase in revenues was due primarily to
higher sales of specialty generic and branded products.

         Branded product sales were up $1.7 million, or 7.4%, over the prior
fiscal year. The increase in sales was due to the introduction of
Gynazole-1(R), a vaginal antifungal product, at the end of the first quarter of
the fiscal year and higher sales of existing women's healthcare products. These
increases were partially offset by lower sales of the Micro-K(R) cardiovascular
potassium supplement. The introduction of Gynazole-1(R) contributed $6.0
million of incremental sales to the fiscal year on increases in market share.
Since its June 2000 launch, the product has captured 8.4% of total prescriptions
written for vaginal antifungal creams. Existing women's healthcare products
increased 101%, or $5.3 million, over last year due primarily to higher volume
associated with increased market share of the PreCare(R) brand prenatal vitamin
line. Including Gynazole-1(R), total sales of women's health care products
increased 216% over last year. Micro-K(R) sales were down $9.6 million compared
to last year as a result of speculative customer buying during the latter half
of the prior year in anticipation of a year-end price increase.

         Specialty generic sales were up $36 million, or 35.5%, over the prior
fiscal year. The increase was due to incremental volume from new products
introduced during the year ($18 million), a full year of sales of products
introduced in the prior year ($2.2 million), net volume increases across the
existing product line ($8.2 million), and higher pricing ($7.5 million)
primarily on cardiovascular products. The company introduced 10 new products
during the fiscal year. The increase in volume of the existing products was
attributable to higher generic substitution rates, increased sales associated
with trade shows, and price increase buy-ins.

         Sales of specialty materials were flat for the year due to a soft
market in the general industry.

         Contract services and licensing revenues declined $.7 million, or
16.6%, due to lower contract manufacturing volume, reflecting a smaller customer
base as the Company has purposefully de-emphasized lower margin contract
manufacturing in its business strategy.

         While the Company anticipates continued overall growth in sales of the
products it markets, there are no assurances that the annual percentage rate of
sales growth will continue at past levels.

         Costs and Expenses. Manufacturing costs as a percentage of revenue
declined from 43.5% to 38.6% due to favorable product mix and lower costs within
the specialty generic line, and higher pricing in the branded and generic
product lines. The improvement in product mix in the specialty generic line was
due primarily to higher margin new product sales. Lower costs in specialty
generics were due to efficiencies from increased volume and lower prices for
material and ingredients. Of the 4.9 percentage-point net decrease, changes in
product mix accounted for 2.4%, higher pricing accounted for 1.8% and lower
costs accounted for .7% of the improvement.

         Research and development expenses increased $1.2 million, or 15.4%,
compared to the prior year, due primarily to payments made in connection with
product co-development agreements and expansion of the research and development
staff. The Company plans to continue its new product and technology development
efforts and to rely on new products as an important part of its overall growth
strategy.

         Selling and administrative expenses increased $24.6 million, or 64.9%,
compared to the prior year. The increase was due primarily to higher corporate
administrative expenses, incremental marketing expenses in support of the
specialty generics product line, and marketing expenses and continued investment
in expanding the sales force for the branded products marketing division.
Corporate administrative expenses were higher due to increases in payroll
related expenses of $2.7 million associated with expanding the Company's
management and administrative infrastructure to keep pace with its continued
growth, higher professional fees of $2.1 million for various legal and
consulting services, and increased lease expense of $1.0 million from the
acquisition of a leased facility for future expansion of the Company's
distribution operations and administrative offices. Marketing expenses
associated with the specialty generics product line were up $2.8 million for the
year, primarily due to promotional programs. Marketing and selling expenses
associated with branded products were $14.7 million higher compared to last year
primarily due to expenses associated with the increase in the branded sales
force and increased sampling costs in connection with the introduction of
Gynazole-1 in the current fiscal year.

         Amortization expense is primarily attributed to the product
acquisitions of Micro-K(R)and PreCare(R). These product acquisitions are being
amortized on a straight-line basis over 20 years and there was no change when
compared to the prior year.

         Operating Income. As a result of the factors described above, operating
income increased $3.8 million, or 11.1%, compared to the prior year.

         Interest Expense. Interest expense decreased $.9 million, or 44.5%, for
the year due to lower long-term debt outstanding on the Company's line of
credit.

         Other income, decreased $6.7 million for the year, due primarily to a
non-recurring gain related to an arbitration award of $6.1 million received in
fiscal 2000 and a decrease in interest income of .6 million. (See Note 17 of
Notes to Consolidated Financial Statements).

         Net Income. As a result of the factors described above, net income
decreased $.7 million, or 2.8%, compared to the prior year. Excluding the effect
of the non-recurring gain, net income increased $3.2 million, or 15.6% over the
prior year.


Fiscal 2000 Compared to Fiscal 1999

         Revenues. Net revenues for fiscal 2000 increased $31.1 million, or 27%,
over the prior fiscal year. The increase in revenues, after elimination of
inter-segment revenues, was due to higher sales in all three marketing divisions
(generic products, branded products and specialty materials) as shown in the
following table:

                                        Increase (Decrease)
                                           vs Prior Year
                                        Amount         Percent
                                        ------         -------
     Net Revenues
     Generic products                   $ 9,509         10.4%
     Branded products                    21,674         nm
     Specialty materials                  3,776         28.2
     Contract services/licenses          (3,849)       (49.2)
                                        -------
       Total net revenues               $31,110         27.1%
                                        =======

         Branded product sales through Ther-Rx in its first full marketing year
grew to $23.5 million versus $1.8 million for the fourth quarter of fiscal year
1999, when the business began operations. This branded business was started by
acquiring products with established brand name recognition and existing
distribution, and through the subsequent introduction of internally developed
products. Acquired products include Micro-K(R) Extencaps acquired in March 1999
and the PreCare(R) prenatal caplet that was acquired in August 1999. Ther-Rx
also introduced three internally developed products since October 1999 under the
PreCare(R) family of women's health care pharmaceuticals. These products include
PreCare(R) Chewables, a chewable prenatal vitamin; PremisisRx(TM), a product
designed for use along with a physician-supervised program to reduce
pregnancy-related nausea; and PreCare(R) Conceive(TM), a nutritional supplement
specifically designed for use by both men and women prior to conception.

         Of the $9.5 million increase, or 10%, in specialty generic net sales by
ETHEX, volume increases in existing products and new products contributed $6.7
million while $2.8 million was from price increases. ETHEX introduced seven new
products during the year and in March, 2000 received ANDA approval for a generic
alternative to IMDUR(R) by Schering-Plough Corporation.

         Specialty materials sales by Particle Dynamics increased by $3.8
million, or 28%, due primarily to higher volume in existing product lines on an
expanded customer base.

         Contract services and licensing revenues decreased $3.8 million, or
49%, since the prior fiscal year included a $3 million licensing payment and due
to lower volume, reflecting a smaller customer base as the Company de-emphasized
lower margin contract manufacturing in its business strategy.

         While the Company anticipates continued overall growth in sales of the
products it markets, there are no assurances that the annual percentage rate of
sales growth will continue at past levels.

         Costs and Expenses. Manufacturing costs as a percentage of revenue
declined from 53.5% to 43.5% due to the effects of favorable pricing and product
mix. The improvement in product mix reflected an increase in the relative
contribution of higher margin brand sales and a decrease in lower margin generic
pain management sales. Of the 10 percentage-point net decrease, changes in
product mix and volume accounted for 7.3% and pricing accounted for 3.3%, which
were offset by a 1.1% increase in costs.

         Research and development expense increased $1.2 million, or 17%,
compared to the prior year period. The increase was due primarily to an increase
in the number of clinical testing programs conducted. The Company expects to
continue a high level of expenditures for research, clinical and regulatory
efforts.

         Selling and administrative expenses increased $15.8 million, or 71%,
compared to the corresponding period of the prior year. The increase was due
primarily to the Company's investment in building the sales force for Ther-Rx
and related marketing expenses. Selling and marketing expenses associated with
this effort were $10.9 million. Selling and marketing expenses of ETHEX
increased $1.5 million.

         Amortization expense increased $2.1 million due to the amortization of
product rights acquired in March 1999 and August 1999.

         Other income, net, decreased $8.6 million to $4.9 million during fiscal
2000 primarily due to a non-recurring gain related to an arbitration award in
fiscal 1999, being $6.7 million higher than the current year's award (See Note
17 of Notes to Consolidated Financial Statements) and net interest expense
increasing $1.4 million.

         Net Income. As a result of the factors described above, net income
improved $1 million, or 4%, to $24.3 million compared to the prior year period.

         (b) Regarding Commodity Prices

         The Company utilizes various raw materials in its manufacturing
processes. Although the Company historically has not encountered material
fluctuations in pricing of such commodities, there is no assurance that pricing
of such commodities will remain relatively constant, and the Company's
manufacturing costs could increase significantly if raw material commodity
prices increase by amounts substantially above current prices.

         (c) Variable Rate Risks

         Advances to the Company under the Company's credit facility bear
interest at a rate which varies consistent with increases or decreases in the
publicly-announced prime rate [and/or the LIBOR rate with respect to
LIBOR-related loans, if any]. A material increase in such rates, however, could
significantly increase future borrowing expenses. The Company currently has no
borrowings on its variable rate credit facility. Other long-term debt consists
primarily of fixed rate mortgage obligations.

         (d) Liquidity and Capital Resources

         The following table lists selected cashflow and balance sheet data for
fiscal years 2001, 2000 and 1999:

<TABLE>
<CAPTION>


               ($ in 000's)                          2001            2000            1999

                                               --------------- --------------- ---------------
     <S>                                    <C>               <C>             <C>

          Cashflow from Operations              $ 17,071           $24,938*        $ 9,499
          Working Capital                         50,918            37,566          43,112
          Long-Term Liabilities                    8,347            19,139          33,974
          Shareholders' Equity                   125,942            97,799          67,548


<FN>

         * See Note (a) on page 15 for non-recurring gains and Note 17 of Notes
           to Consolidated Financial Statements.

</FN>

</TABLE>


         Cash flow from operations of $17.1 million was $7.9 million, or 31.5%,
lower than the prior year due primarily to the collection of a $13.3 million
arbitration award in the first quarter of last year. Excluding the effect of the
non-recurring award, cash from operations increased $5.4 million, or 46.1%, due
primarily to a $4.7 million reduction in cash used for working capital.

         Cash flow from operations for the fiscal year was due primarily to net
income plus depreciation and amortization. This was partially offset by
increases in accounts receivable, inventories and prepaid expenses and a
decrease in accounts payable and accrued liabilities. The increase in accounts
receivable was due to higher year-end net receivables in the specialty generics
division, primarily due to the timing of wholesaler purchases in the fourth
quarter. Inventories increased primarily in raw materials to support increased
production of specialty generic products. The increase in prepaid expenses
reflects user fees paid to the FDA and product liability insurance prepayments.
The decrease in accounts payable and accrued liabilities was due to lower trade
payables reflecting the timing of various material purchases.

         Long term liabilities decreased $10.8 million in fiscal 2001 primarily
as a result of a $11 million payoff of borrowing incurred to finance the
acquisition of the Micro-K(R)product line.

         Investing activities for fiscal 2001 were for capital expenditures of
$8.1 million. Capital expenditures were primarily for machinery and equipment
for the upgrade and expansion of the Company's pharmaceutical manufacturing and
distribution facilities. Construction-in-progress at March 31, 2001 was
estimated to cost $4.3 million to complete. The Company plans to continue to
invest in capital improvements in fiscal 2002 to include further upgrades and
expansion of its manufacturing, laboratory and distribution facilities and
expansion of its administrative offices to support expected growth.

         The Company believes that existing cash, cash generated from operating
activities and funds available under its credit facility will be adequate to
fund operating activities in the short and long term for the presently
foreseeable future, including near and long term debt obligations, capital
improvements, product development activities and expansion of marketing
capabilities for the branded pharmaceutical business. As of March 31, 2001, the
Company has a loan agreement expiring October 2002 with LaSalle National Bank.
The agreement provides for a revolving line of credit for borrowing up to $40
million. The Company had no cash borrowing and $2.7 million in open letters of
credit issued under this facility.

         Ratios. The following table lists selected financial ratios for the
fiscal years 2001, 2000 and 1999:

<TABLE>
<CAPTION>


                                                     2001            2000            1999
                                               --------------- --------------- ---------------

<S>                                         <C>            <C>             <C>


         Working Capital Ratio                   4.0 to 1        2.6 to 1        2.6 to 1
          Debt to Equity                          .05 to 1        .19 to 1        .48 to 1
          Total Liabilities to Equity             .20 to 1        .44 to 1        .89 to 1


</TABLE>


         The Company's working capital ratio improved in fiscal 2001 due to an
increase in current assets and a decrease in current liabilities. The debt to
equity and total liabilities to equity ratios improved due to the $11 million
decrease in long term debt associated with the pay off of borrowings from the
credit facility incurred to finance the Micro-K(R) acquisition.

         Inflation. Although at reduced levels in recent years, inflation
continues to apply upward pressure on the cost of goods and services used by the
Company. However, the Company believes that the net effect of inflation on its
operations has been minimal during the past three years. In addition, changes in
the mix of products sold and the effect of competition has made a comparison of
changes in selling prices less meaningful relative to changes in the overall
rate of inflation over the past three years.

         (e) New Accounting Standards

         In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivatives
and Hedging Activities", which establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. SFAS No. 133 is effective for years beginning after June 15, 2000
and requires comparative information for all fiscal quarters of fiscal years
beginning after June 15, 2000. The Company does not expect the adoption of this
statement to have a significant impact on its results of operations, financial
position or cash flows.

         In December 1999, the SEC released Staff Accounting Bulletin ("SAB")
No. 101, "Revenue Recognition in Financial Statements," providing the staff's
views in applying accounting principles generally accepted in the United States
to certain revenue recognition issues. The Company adopted SAB No. 101, as
amended, in fiscal 2001 and there was no material effect on the Company's
consolidated financial position or results of operations.

Item 7a.      Quantitive and Qualitive Disclosures About Market Risk
              ------------------------------------------------------

              Not applicable.

Item 8.       Financial Statements and Supplementary Data.
              -------------------------------------------


<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors
of K-V Pharmaceutical Company:


We have audited the consolidated balance sheets of KV Pharmaceutical
Company and Subsidiaries as of March 31, 2001 and 2000, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended March 31, 2001. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of K-V Pharmaceutical
Company and Subsidiaries at March 31, 2001 and 2000, and the results of their
operations and their cash flows for each of the three years in the period ended
March 31, 2001, in conformity with accounting principles generally accepted in
the United States of America.

BDO Seidman, LLP
St. Louis, Missouri

May 18, 2001


<PAGE>


                   KV PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             March 31, 2001 and 2000
                        (In thousands, except share data)

<TABLE>
<CAPTION>

ASSETS                                                                             2001           2000
------                                                                          ---------      ----------
<S>                                                                           <C>           <C>
Current Assets:
Cash and cash equivalents                                                       $  4,128       $  3,443
Receivables, less allowance for doubtful accounts of
   $448 and $438 in 2001 and 2000, respectively                                   26,259         23,681
Inventories                                                                       32,211         30,114
Prepaid and other assets                                                           3,804            637
Deferred income tax                                                                1,644          3,138
                                                                                ----------      --------
  Total Current Assets                                                            68,046         61,013

Property and equipment, less accumulated depreciation                             36,847         32,173

Intangibles and other assets, net of amortization                                 46,524         47,132
Deferred income taxes                                                               -                67
                                                                                ---------      ---------
TOTAL ASSETS                                                                    $151,417       $140,385
                                                                                =========      =========

LIABILITIES
Current Liabilities:
Accounts payable                                                                $  6,349       $ 10,843
Accrued liabilities                                                               10,067         10,945
Current maturities of long-term debt                                                 712          1,659
                                                                                ---------      ---------
  Total Current Liabilities                                                       17,128         23,447

Long-term debt                                                                     5,080         16,779
Other long-term liabilities                                                        2,534          2,360
Deferred income taxes                                                                733           -
                                                                                ---------      ---------
TOTAL LIABILITIES                                                                 25,475         42,586
                                                                                ---------      ---------

SHAREHOLDERS' EQUITY
7% Cumulative Convertible Preferred Stock, $.01 par value; $25.00 stated and
   liquidation value; 840,000 shares authorized;
   issued and outstanding -240,000 and 240,000 shares in 2001 and 2000,
   respectively (convertible into Class A shares at a ratio of 5.625 to one)           2              2

Class A and Class B Common Stock, $.01 par value; 150,000,000 and 75,000,000
shares authorized, respectively;
   Class A-issued 18,896,945 and 18,392,999 in 2001 and 2000                         189            123
   Class B-issued 10,663,574 and 9,910,668 in 2001 and 2000 -                        107             66
   (convertible into Class A shares on a one-for-one basis)

Additional paid-in capital                                                        45,792         40,864
Retained earnings                                                                 79,907         56,799
Less:  Treasury Stock, 53,318 shares of Class A
  and 53,428 shares of Class B Common Stock in 2001 and
  53,428 shares each of Class A and Class B Common Stock in 2000, at cost            (55)           (55)
                                                                                ---------      ---------

TOTAL SHAREHOLDERS' EQUITY                                                       125,942         97,799
                                                                                ---------      ---------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                      $151,417       $ 140,385
                                                                                =========      =========

</TABLE>

See Accompanying Notes to Consolidated Financial Statements.


<PAGE>


                   KV PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

                For the Years Ended March 31, 2001, 2000 and 1999
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                           2001                  2000              1999
                                                -------------------   ------------------    --------------------

<S>                                                   <C>                   <C>                   <C>


Net Revenues                                              $182,909              $145,970              $114,860
                                                 -------------------   ------------------    --------------------

Costs and Expenses:
     Manufacturing costs                                    70,663                63,446                61,415
     Research and development                                9,282                 8,043                 6,884
     Selling and administrative                             62,622                37,982                22,201
     Amortization of intangible assets                       2,370                 2,307                   244
                                                 -------------------   ------------------    --------------------
Total costs and expenses                                   144,937               111,778                90,744
                                                 -------------------   ------------------    --------------------

Operating income                                            37,972                34,192                24,116
                                                 -------------------   ------------------    --------------------

 Other income (expense):
     Arbitration award, net of expenses                          -                 6,059                12,723
     Interest and other income                                 164                   780                 1,291
     Interest expense                                       (1,072)               (1,932)                 (498)
                                                 -------------------   ------------------    --------------------
Total other income (expense), net                             (908)                4,907                13,516
                                                 -------------------   ------------------    --------------------

Income before income taxes                                  37,064                39,099                37,632
Provision for income taxes                                  13,439                14,791                14,292
                                                 -------------------   ------------------    --------------------

Net Income                                                $ 23,625              $ 24,308              $ 23,340
                                                 ===================   ==================    ====================

Net Income per Common Share-Basic                            $0.80                 $0.85                 $0.84
                                                 ===================   ==================    ====================

Net Income per Common Share-Diluted                          $0.74                 $0.80                 $0.78
                                                 ===================   ==================    ====================

</TABLE>

See Accompanying Notes to Consolidated Financial Statements



<PAGE>



                   KV PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                For the Years Ended March 31, 2001, 2000 and 1999
                        (In thousands, except share data)

<TABLE>
<CAPTION>

                                                                  Class A       Class B       Additional
                                                    Preferred      Common        Common        Paid In         Treasury
                                                      Stock        Stock         Stock         Capital           Stock
                                                   --------------------------------------------------------------------------
<S>                                              <C>              <C>            <C>        <C>              <C>
Balance at March 31, 1998                                  $2           $118          $64          $34,042            $(55)
Comprehensive income
Net income                                                  -              -            -                -               -
Other comprehensive loss, net of tax:
   Net unrealized loss on available-for-sale                -              -            -                -               -
   securities
Total comprehensive income                                  -              -            -                -               -
Dividends paid on preferred stock                           -              -            -                -               -
Conversion of 123,000 shares of Class B shares to
   Class A shares                                           -              1           (1)               -               -
Stock Options exercised,
   46,478 shares of Class A less 88 shares                  -              -            -              261               -
      repurchased
   74,129 shares of Class B                                 -              -            1              229               -
Class A shares canceled - 6,146 shares                      -              -            -                -               -
Stock Split - payment of partial shares from 1998           -              -            -                -               -
                                                   --------------------------------------------------------------------------
Balance at March 31, 1999                                   2            119           64           34,532             (55)
Comprehensive income
Net income                                                  -              -            -                -               -
Other comprehensive income, net of tax:
Reclassification adjustment for gains on
   available-for-sale securities included in                -              -            -                -               -
   income
Total comprehensive income
Dividends paid on preferred stock                           -              -            -                -               -
Product acquisition                                         -              3            -            4,497               -

Conversion of 33,997 shares of Class B shares to
    Class A shares                                          -              -            -                -               -
Conversion of 1,000 shares of Preferred                     -              -            -                -               -
Stock Options exercised,
   42,422 shares of Class A less 599 shares                 -              1            -              232               -
     repurchased
   247,242 shares of Class B                                -              -            2            1,603               -
                                                   --------------------------------------------------------------------------
Balance at March 31, 2000                                   2            123           66           40,864             (55)
Net income                                                  -              -            -                -               -
Dividends paid on preferred stock                           -              -            -                -               -
Product development                                         -              -            -              200               -
Conversion of 422,088 shares of Class B shares to
    Class A shares                                          -              4           (4)               -               -
Stock Options exercised,
   46,004 shares of Class A                                 -              -            -              366               -
   994,081 shares of Class B                                -              -           10            4,362               -
   Three-for-two stock split                                -             62           35                -               -
                                                   --------------------------------------------------------------------------
Balance at March 31, 2001                                  $2           $189         $107          $45,792            $(55)
                                                   ==========================================================================

</TABLE>

<TABLE>
<CAPTION>

                                                                     Accumulated          Total
                                                     Retained       Comprehensive     Shareholders'
                                                     Earnings            Loss             Equity
                                                     -----------------------------------------------

<S>                                               <C>            <C>            <C>

Balance at March 31, 1998                             $ 9,993           $  -             $ 44,164
Comprehensive income
Net income                                             23,340              -              23,340
Other comprehensive loss, net of tax:
   Net unrealized loss on available-for-sale                -            (25)                (25)
   securities
Total comprehensive income                                  -            (25)             23,315
Dividends paid on preferred stock                        (422)             -                (422)
Conversion of 123,000 shares of Class B shares to
   Class A shares                                           -              -                   -
Stock Options exercised,
   46,478 shares of Class A less 88 shares                  -              -                 261
      repurchased
   74,129 shares of Class B                                 -              -                 230
Class A shares canceled - 6,146 shares                      -              -                   -
Stock Split - payment of partial shares from 1998           -              -                   -
                                                     ----------------------------------------------
Balance at March 31, 1999                              32,911            (25)             67,548
Comprehensive income
Net income                                             24,308              -              24,308
Other comprehensive income, net of tax:
Reclassification adjustment for gains on
   available-for-sale securities included in                -             25                  25
   income
                                                      ---------------------------------------------

Total comprehensive income                                                                24,333
Dividends paid on preferred stock                        (420)             -                (420)
Product acquisition                                         -              -               4,500
Conversion of 33,997 shares of Class B shares to
    Class A shares                                          -              -                   -
Conversion of 1,000 shares of Preferred                     -              -                   -
Stock Options exercised,
   42,422 shares of Class A less 599 shares                 -              -                 233
     repurchased
   247,242 shares of Class B                                -              -               1,605
                                                   ------------------------------------------------
Balance at March 31, 2000                              56,799              -              97,799
Net income                                             23,625              -              23,625
Dividends paid on preferred stock                        (420)             -                (420)
Product development                                                        -                 200
Conversion of 422,088 shares of Class B shares to
    Class A shares                                          -              -                   -
Stock Options exercised,
   46,004 shares of Class A                                 -              -                 366
   994,081 shares of Class B                                -              -               4,372
Stock split 3-for-2 from 2000                             (97)             -                   -
                                                   ------------------------------------------------
Balance at March 31, 2001                              $79,907          $  -            $125,942
                                                   ================================================
</TABLE>

See Accompanying Notes to Consolidated Financial Statements


<PAGE>


                   KV PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                For the Years Ended March 31, 2001, 2000 and 1999
                                 (In thousands)

<TABLE>
<CAPTION>


                                                                   2001             2000             1999
                                                                   ----             ----             ----
<S>                                                        <C>                <C>              <C>

OPERATING ACTIVITIES
Net Income                                                        $23,625          $24,308          $23,340
Adjustments to reconcile net income
   To net cash provided by operating activities:
   Depreciation, amortization and other non-cash charges            5,953            4,480            1,875
   Change in deferred taxes                                         2,294             (205)            (586)
   Change in deferred compensation                                    174              257              501
Changes in operating assets and liabilities:
   Increase in receivables, net                                    (2,578)          (4,693)          (3,684)
   Decrease (increase) in receivable arbitration award               -              13,253          (13,253)
   Increase in inventories                                         (2,097)          (6,461)          (8,047)
   (Increase) decrease in prepaid and other assets                 (4,929)          (2,032)             193
   (Decrease) increase in accounts payable and
      accrued liabilities                                          (5,371)          (3,969)           9,160
                                                                  ---------       ----------        ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES                          17,071           24,938            9,499
                                                                  ---------       ----------        ---------

INVESTING ACTIVITIES
   Purchase of property and equipment, net                         (8,058)         (15,380)          (5,846)
   Sale (purchase) of marketable securities                          -               7,548           (7,564)
   Product acquisition                                               -              (3,000)         (36,140)
                                                                  ---------       ----------        ---------
NET CASH USED IN INVESTING ACTIVITIES                              (8,058)         (10,832)         (49,550)
                                                                  ---------       ----------        ---------

FINANCING ACTIVITIES
   Principal payments on  long-term debt                          (17,646)         (16,698)            (558)
   Proceeds from credit facility                                    5,000            2,000           25,000
   Dividends paid on Preferred Stock                                 (420)            (420)            (422)
   Exercise of Common Stock options                                 4,738            1,838              490
                                                                  ---------       ----------        ---------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                (8,328)         (13,280)          24,510
                                                                  ---------       ----------        ---------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      685              826          (15,541)
CASH AND CASH EQUIVALENTS AT:
BEGINNING OF YEAR                                                   3,443            2,617           18,158
                                                                  ---------       ----------        ---------
END OF YEAR                                                       $ 4,128          $ 3,443          $ 2,617
                                                                  =========       ==========        =========

Non-cash investing and financing activities:

        Portion of product acquisition financed through issuance of:

        Short-term debt                                                            $   933
        Common Stock                                                               $ 4,500

        Portion of building acquired through proceeds
        from a term loan                                                                            $  2,300


</TABLE>

See Accompanying Notes to Consolidated Financial Statements


<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (In thousands, except share and per share data)

1.       Summary of Significant Accounting Policies
         ------------------------------------------

         Principles of Consolidation

         The consolidated financial statements include the accounts of KV
Pharmaceutical Company and its wholly-owned subsidiaries ("KV" or the
"Company"). All material intercompany accounts and transactions have been
eliminated in consolidation.

         Cash Equivalents

         Cash equivalents consist of highly liquid instruments that have an
original maturity of three months or less. Cash equivalents consist primarily of
government backed securities aggregating $3,682 at March 31, 2001 and $2,352 at
March 31, 2000.

         Inventories

         Inventories are stated at the lower of cost or market, with the cost
determined on the first-in, first-out (FIFO) basis.

         Property and Equipment

         Property and equipment are stated at cost. Depreciation is computed
over the estimated useful life using the straight line method.

         Intangibles and Other Assets

         The excess of cost over the fair value of the net assets of the
Company's Particle Dynamics, Inc. ("PDI") subsidiary, at the time of acquisition
is being amortized on a straight line basis over 40 years. The Micro-K(R) and
PreCare(R) product acquisitions are being amortized on a straight line basis
over 20 years. All other intangible assets and deferred charges are being
amortized over periods varying from 5 to 17 years on a straight line basis. The
Company reviews intangible assets for possible impairment if there is a
significant event that detrimentally affects operations. Impairment is assessed
using estimates of the non-discounted future earnings potential of the entity or
assets acquired. The Company has estimated that no impairment losses have
occurred through March 31, 2001.

         Revenue Recognition

         The Company recognizes revenue from product sales upon shipment to its
customers. Provisions for estimated sales allowances, returns and losses are
accrued at the time revenues are recognized. The Company also enters into
long-term agreements under which it assigns marketing rights for the products it
has developed to pharmaceutical marketers. Royalties are earned based on the
sale of products. Other non-refundable payments specified in the agreements, for
which there are no future obligations, such as milestone payments and research
and development reimbursements, are recognized as income when due.

         Shipping and Handling Costs

         The Company classifies shipping and handling costs in manufacturing
costs.  The Company does not derive revenue from shipping.

         Research and Development

         Research and development costs, including costs funded by third
parties, are expensed in the period incurred. Payments received from third
parties for research and development are offset against expenses when the
parties are billed.

         Earnings Per Share

         Basic earnings per share is calculated by dividing net income available
to Common Shareholders for the period by the weighted average number of shares
of Common Stock outstanding during the period. The assumed exercise of stock
options and the assumed conversion of Preferred Stock are included in the
calculation of diluted earnings per share.

         Income Taxes

         Income taxes are accounted for under the liability method, in which
deferred income taxes are recognized as a result of temporary differences
between the financial reporting basis and tax basis of assets and liabilities.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized.

         Use of Estimates

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

         Stock-Based Compensation

         The Company grants stock options for a fixed number of shares to
employees with an exercise price greater than or equal to the fair value of the
shares at the date of grant. The Company accounts for stock option grants to
employees in accordance with Accounting Principles Board Opinion No. 25, ("APB
Opinion No. 25") "Accounting for Stock Issued to Employees". That Opinion
requires that compensation cost related to fixed stock option plans be
recognized only to the extent that the fair value of the shares at the grant
date exceeds the exercise price. Accordingly, the Company recognizes no
compensation expense for stock option grants.

         In October 1995, the Financial Accounting Standards Board, ("FASB")
issued SFAS No. 123, "Accounting for Stock-Based Compensation". SFAS No. 123
allows companies to continue to account for their employee stock option plans in
accordance with APB Opinion No. 25, but encourages the adoption of a new
accounting method based on the estimated fair value of employee stock options.
Pro forma net income and income per share, determined as if the Company has
applied the new method, are disclosed in Note 12.

         Fair Value of Financial Instruments

         The carrying amounts of all short-term asset and liability financial
instruments are reasonable estimates of their fair value because of the short
maturity of these items. The carrying amount of all long term financial
instruments approximates their fair value because their terms are similar to
those which can be obtained for similar financial instruments in the current
marketplace.

         New Accounting Pronouncements

         In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivatives
and Hedging Activities," which establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. SFAS No. 133 is effective for years beginning after June 15, 2000
and requires comparative information for all fiscal quarters of fiscal years
beginning after June 15, 2000. The Company does not expect the adoption of this
statement to have significant impact on its results of operations, financial
position or cash flows.

         In December 1999, the SEC released Staff Accounting Bulletin ("SAB")
No. 101, "Revenue Recognition in Financial Statements," providing the staff's
views in applying accounting principles generally accepted in the United States
to certain revenue recognition issues. The Company adopted SAB No. 101, as
amended, in fiscal 2001 and there was no material effect on the Company's
consolidated financial position or results of operations.


2.       Business Operations
         -------------------

         The Company and its subsidiaries develop, manufacture and market
technologically distinguished pharmaceuticals and pharmaceutical compounds.
Prescription pharmaceuticals are sold primarily to domestic wholesalers,
drugstore chains, distributors and independent pharmacies nationwide. Contract
manufactured products and pharmaceutical compounds are sold to major domestic
drug, nutritional and food companies.

         For the year ended March 31, 2001, three companies accounted for 23%,
20% and 14%, respectively, of the Company's gross sales. For the years ended
March 31, 2000 and 1999, two companies accounted for 18% and 12%, and 20% and
11%, respectively, of the Company's gross sales.

3.       Acquisition
         -----------

         (a) On August 2, 1999, the Company acquired the world-wide rights and
trademark for the prescription prenatal product, PreCare(R) from UCB Pharma for
$8.4 million. The purchase price was funded by a $3 million cash payment, a $0.9
million note and $4.5 million in Class A Common Stock. The intangible asset
(product rights) related to the acquisition is being amortized on a
straight-line basis over 20 years. The pro forma results related to the
PreCare(R) product are not material to the financial statements for comparative
purposes.

         (b) In the fourth quarter of fiscal 1999, the Company acquired the
world-wide rights and trademark to Micro-K(R) Extencaps from Wyeth-Ayerst
Laboratories, the pharmaceutical division of American Home Products Corporation
for a cash payment of $36 million, consisting of an $11 million payment from
available cash and $25 million drawn on its revolving line of credit. The
intangible asset (product rights) related to the acquisition is being amortized
on a straight-line basis over 20 years.


4.       Inventories
         -----------

         Inventories as of March 31, consist of:

<TABLE>
<CAPTION>

                                         2001        2000
                                         ----        ----

     <S>                          <C>                  <C>

     Finished goods                    $15,119      $15,990
     Work-in-process                     3,604        2,544
     Raw materials                      14,076       12,642
                                       --------     --------
                                        32,799       31,176
                                       ========     ========

     Reserves for obsolescence            (588)      (1,062)
                                       --------     --------
                                       $32,211      $30,114
                                       =======      =======

</TABLE>


5.       Property and Equipment
         ----------------------

         Property and equipment as of March 31, consist of:

<TABLE>
<CAPTION>
                                                                        2001          2000
                                                                        ----          ----
     <S>                                                            <C>         <C>

         Land and improvements                                         $ 2,083      $ 2,083
         Building and building improvements                             16,009       10,504
         Machinery and equipment                                        26,768       18,320
         Office furniture and equipment                                  7,766        4,450
         Leasehold improvements                                          3,189        3,145
         Construction-in-progress (estimated costs to complete
         at March 31, 2001 was $4,328)                                   3,264       13,093
                                                                       -------       ------
                                                                        59,079       51,595
         Less accumulated depreciation and amortization                (22,232)     (19,422)
                                                                      --------      -------
         Net property and equipment                                    $36,847      $32,173
                                                                       =======      =======

</TABLE>


         Estimated useful lives:

         Land improvements                       10 years
         Building                                25 to 40 years
         Building improvements                   10 years
         Machinery and equipment                 3 to 15 years
         Leasehold improvements                  Lease life plus renewal period,
                                                 or 10 years
         Office furniture and equipment          3 to 10 years


         Purchases of property and equipment were $8,058 and $15,380 for fiscal
years 2001 and 2000, respectively. Depreciation and amortization of property and
equipment was $3,383, $2,173 and $1,616 for 2001, 2000 and 1999, respectively.

6.       Comprehensive Income
         --------------------

         Effective April 1, 1998 the Company adopted SFAS No. 130, "Reporting
Comprehensive Income". This Statement establishes standards for the reporting of
all changes in equity from non-shareholder sources. There was no effect on prior
year financial statements.

         There was no comprehensive income recorded for the year ended March 31,
2001.

         Changes in accumulated comprehensive income, net for the year ended
March 31, 2000 are as follows:

<TABLE>
<CAPTION>

                                                                         Tax
                                                       Before-Tax      Benefit       Net-of-Tax
                                                         Amount       (Expense)        Amount
                                                       ----------     ---------      ----------
     <S>                                          <C>             <C>            <C>
          Unrealized losses on securities:

          Unrealized losses arising during period        $(61)           $23            $(38)
          Less: reclassification adjustments for
            losses realized and net income                102            (39)             63
                                                     ----------     ---------      ----------
          Net unrealized gains                           $ 41           ($16)           $ 25
                                                     ==========     =========      ==========

</TABLE>


         Changes in accumulated comprehensive loss, net for the year ended
March 31, 1999 are as follows:

<TABLE>
<CAPTION>

                                                                         Tax
                                                       Before-Tax      Benefit       Net-of-Tax
                                                         Amount       (Expense)        Amount
                                                       ----------     ---------      ----------
     <S>                                          <C>             <C>            <C>

          Unrealized losses on securities
          arising during period                          $(41)           $16            $(25)
            Less: reclassification adjustments for
            losses on the sale of securities
            included in net income                          -              -               -
                                                       ----------     ---------      ----------
          Net unrealized gains                           $(41)           $16            $(25)
                                                       ==========     =========      ==========
</TABLE>


7.       Intangibles and Other Assets
         ----------------------------

         Intangibles and other assets as of March 31, consist of:

<TABLE>
<CAPTION>

                                                          2001             2000
                                                          ----             ----
<S>                                                    <C>             <C>
          Product rights                                  $44,573         $44,573
          Trademarks and patents                            2,223           1,721
          Goodwill                                          2,139           2,139
          Cash surrender value of life insurance
          and split-dollar life insurance                   2,138           1,592
          Deposits                                          1,248             534
          Other                                               291             291
          Financing charges                                    63             369
                                                          --------        --------
                                                           52,675          51,219
          Less accumulated amortization                    (6,151)         (4,087)
                                                          --------        --------
            Net intangibles and other assets              $46,524         $47,132
                                                          ========        ========

</TABLE>


         Amortization of goodwill is being charged to operations at $55 per
year. Amortization of product rights and all other deferred charges was $2,315,
$2,252 and $188 for 2001, 2000 and 1999, respectively.

8.       Accrued Liabilities
         -------------------

         Accrued liabilities as of March 31, consist of:

                                                        2001            2000
                                                        ----            ----
          Salaires, wages, incentives
            and benefits                             $ 4,581         $ 4,451
          Income Taxes                                 2,240           3,045
          Promotions                                   1,110           1,486
          Professional fees                              973             416
          Revenue sharing                                754           1,142
          Other                                          369             318
          Interest                                        40              87
                                                     --------        --------
                                                     $10,067         $10,945
                                                     ========        ========


9.        Long Term Debt
         ---------------

          Long-term debt as of March 31, consists of:

                                                     2001            2000
                                                     ----            ----

          Revolving credit line                     $     -         $11,000
          Industrial revenue bonds                    1,180           1,505
          Building mortgages                          4,612           4,985
          PreCare-UCB                                     -             948
                                                    --------        -------
                                                      5,792          18,438
          Less current portion                         (712)         (1,659)
                                                    --------        --------
          Long-term debt                            $ 5,080         $16,779
                                                    ========        =======


         As of March 31, 2001, the Company has a loan agreement expiring October
15, 2002 with LaSalle National Bank. The agreement provides for a revolving line
of credit for borrowing up to $40,000. The credit facility is unsecured and
interest is currently charged at the LIBOR rate of 5.08% plus 200 basis points
or 7.08% at March 31, 2001. At March 31, 2001, the Company had $2,705 in open
letters of credit issued under this facility. The agreement includes covenants
that impose minimum levels of earnings before interest, taxes, depreciation and
amortization, a maximum funded debt ratio, and limit capital expenditures and
dividend payments. As of March 31, 2001, the Company was in compliance with all
of its covenants.

         The industrial revenue bonds, which bear interest at 7.35% per annum,
mature serially through 2005 and are collateralized by certain property and
equipment, as well as through a letter of credit, which may only be accessed in
case of default on the bonds. The bonds do not allow the holder to require the
Company to redeem the bonds.

         The building mortgages bear interest at 8.53% and 7.95% with monthly
principal payments of $19 and $13 plus interest through June 18, 2002 and March
11, 2004 with final payments of the remaining principal balances outstanding
plus accrued and unpaid interest due on June 18, 2002 and March 11, 2004,
respectively.

         The aggregate maturities of long-term debt as of March 31, 2001 are as
follows:

                     2002                $  712
                     2003                 2,851
                     2004                 2,024
                     2005                   205
                     2006                     -
                     Later Years              -

         The Company paid interest of $1,329, $1,954, and $446 during the years
ended March 31, 2001, 2000 and 1999, respectively.

10.      Commitments and Contingencies
         -----------------------------

         Leases

         The Company leases manufacturing, office and warehouse facilities,
equipment and automobiles under operating leases expiring through 2012. Total
rent expense for the years ended March 31, 2001, 2000 and 1999 was $4,433,
$2,185 and $1,457, respectively.

Future minimum lease commitments under non-cancelable operating leases are as
follows:

                     2002              $ 2,373
                     2003                2,127
                     2004                2,355
                     2005                2,254
                     2006                1,926
                     Later Years        11,648


         Contingencies

         The Company currently carries product liability coverage of ten million
dollars per occurrence and ten million dollars in the aggregate on a "claims
made" basis. There is no assurance that its present insurance will cover any
potential claims that may be asserted in the future.

         The Company is subject to legal proceedings and claims which arise in
the ordinary course of business. While the Company is not presently able to
determine the potential liability, if any, related to such matters, the Company
believes none of the matters, individually or in the aggregate, will have a
material adverse effect on its financial position or operations.

         Employment Agreements

         The Company has employment agreements with certain officers and key
employees which extend for one to five years. These agreements provide for base
levels of compensation and, in certain instances, also provide for incentive
bonuses and separation benefits. Also, the agreement with one officer contains
provisions for partial salary continuation under certain conditions, contingent
upon noncompete restrictions and providing consulting services to the Company as
specified in the agreement. The Company expensed $174, $257 and $501 under this
agreement in 2001, 2000 and 1999, respectively.

11.      Income Taxes
         ------------

         The fiscal 2001, 2000, and 1999 provisions were based on the estimated
Federal and State taxable income using the statutory rates. The current and
deferred Federal and State income tax provisions for fiscal years 2001, 2000 and
1999 are as follows:

<TABLE>
<CAPTION>

                                                Years Ended March 31,
                                                ---------------------
                                     2001                2000                1999
                                     ----                ----                ----

     <S>                       <C>                <C>                 <C>

         Provision
            Current
              Federal               $10,072             $13,471             $13,372
              State                   1,073               1,525               1,506
                                    -------             -------             -------
                                     11,145              14,996              14,878
                                    -------             -------             -------

            Deferred
              Federal                 2,061                (184)               (528)
              State                     233                 (21)                (58)
                                    -------             -------             -------
                                      2,294                (205)               (586)
                                    -------             -------             -------
                                    $13,439             $14,791             $14,292
                                    =======             =======             =======

</TABLE>


         The reasons for the differences between the provision for income taxes
and the expected Federal income taxes at the statutory rate are as follows:

<TABLE>
<CAPTION>


                                                       2001             2000                1999
                                                       ----             ----                ----

     <S>                                        <C>              <C>               <C>

         Computed income tax expense
            at statutory rate                        $12,972          $13,684            $13,170
         State income taxes, less
            Federal income tax benefit                   849            1,090              1,070
         Business credits                               (142)               -                  -
         Other                                          (240)              17                 52
                                                     -------          -------            -------
         Provision for income taxes                  $13,439          $14,791            $14,292
                                                     =======          =======            =======


         As of March 31, 2001, and 2000, the tax effect of temporary differences
between the tax basis of assets and liabilities and their financial reporting
amount are as follows:

</TABLE>


<TABLE>

<CAPTION>



                                                        2001                                     2000

                                            Current            Non-Current              Current          Non-Current
                                          --------------------------------          --------------------------------

<S>                                     <C>                  <C>                   <C>                  <C>

Fixed asset basis differences             $         -              $(1,131)           $       -               $(818)
Reserve for inventory and receivables           1,175                    -                1,970                   -
Vacation pay reserve                              338                    -                  383                   -
Deferred compensation                               -                  949                    -                 885
Amortization                                        -                 (551)                   -                   -
Other                                             131                    -                  785                   -
                                            ---------          -----------             --------            --------
Net deferred tax asset (liability)             $1,644             $   (733)              $3,138              $   67
                                               ======             ========               ======              ======

</TABLE>


         The Company paid income taxes of $11,971, $19,754 and $9,213 during the
years ended March 31, 2001, 2000 and 1999, respectively.


12.      Employee Benefits
         -----------------

         Stock Option Plan and Agreements

         Under the Company's stock option plan, options to acquire shares of
Common Stock have been made available for grant to certain employees. Each
option granted has an exercise price of not less than 100% of the market value
of the Common Stock on the date of grant. The contractual life of each option is
generally ten years. The exerciseability of the grants varies according to the
individual options granted. In addition to the Stock Option Plan, the Company
issues stock options periodically related to employment agreements with its
executives and non-employee directors.

         The following summary shows the transactions for the fiscal years 2001,
2000 and 1999 under option arrangements:


<TABLE>
<CAPTION>
                                                  Options Outstanding                Options Exercisable
                                              ------------------------------     -----------------------------
                                                                    Average                           Average
                                               No. of              Price Per      No. of             Price Per
                                               Shares                Share        Shares              Share
                                               ------              ---------      ------             ---------

<S>                                       <C>                <C>              <C>                <C>

Balance, March 31, 1998                       2,483,361           $  5.26       1,390,239              $5.43
Options granted                                 635,097             10.51               -                  -
Options becoming exercisable                          -                 -         351,204               5.74
Options exercised                              (180,910)             3.48        (180,910)              3.48
Options canceled                               (154,785)             7.54         (29,919)              6.38
                                             ----------            ------      ----------              -----
Balance, March 31, 1999                       2,782,763              6.45       1,530,614               5.72
Options granted                                 869,587             11.11               -                  -
Options becoming exercisable                          -              -            706,159               8.37
Options exercised                              (433,597)             4.25        (433,597)              8.37
Options canceled                               (131,108)             9.74         (23,912)              9.50
                                             ----------            ------      ----------              -----
Balance, March 31, 2000                       3,087,645              7.90       1,779,264               7.10
Options granted                                 592,125             15.62               -                  -
Options becoming exercisable                          -              -            433,351              11.13
Options exercised                            (1,344,348)             7.15      (1,344,348)              7.15
Options canceled                               (182,223)            10.47         (54,643)              9.01
                                             ----------            ------      ----------              -----
Balance, March 31, 2001                       2,153,199            $10.27         813,623              $9.04
                                             ==========            ======      ==========              =====

</TABLE>

         As discussed in the Summary of Accounting Policies, the Company applies
APB Opinion No. 25 and related interpretations in accounting for this plan.
Accordingly, no compensation cost has been recognized for its incentive stock
option plan.

     The weighted-average fair value of options granted at market price was
$1,850 in 2001, $1,890 in 2000 and $1,525 in 1999.  The weighted-average fair
value of options granted with an exercise price exceeding market price on the
date of grant was $274 in 2001, $193 in 2000 and $216 in 1999.

         The following table summarizes information about stock options
outstanding at March 31, 2001:


<TABLE>

<CAPTION>


                                        Options Outstanding                         Options Exercisable
                        --------------------------------------------------        --------------------------
        Range of          Number        Weighted Average      Weighted           Number          Weighted
        Exercise        Outstanding           Life             Average         Exercisable        Average
         Prices         At 3/31/01         Remaining       Exercise Price       at 3/31/01    Exercise Price
         ------         ----------         ---------       --------------      -----------    --------------

<S>                   <C>               <C>                 <C>               <C>              <C>

$ 1.23  -  $ 4.50         252,494           4 Years            $ 3.18            148,802          $ 3.12
$ 4.51  -  $ 7.50         355,296           5 Years            $ 5.40            180,131          $ 5.44
$ 7.51  -  $11.00         742,539           7 Years            $10.02            247,787          $10.17
$11.01  - $ 17.00         575,685           8 Years            $13.35            213,546          $13.83
$17.01  - $ 27.50         227,185           9 Years            $18.81             23,357          $18.78

</TABLE>

         At March 31, 2001, 4,500,000 shares have been reserved for issuance
under the plan, of which 1,583,106 shares were available for future option
grants.  At March 31, 2001, options to purchase 233,350 shares of stock were
outstanding pursuant to employment agreements and grants to non-employee
directors.

         The pro-forma effect on earnings for the year ended March 31, 2001,
2000 and 1999 of the method consistent with SFAS No. 123 would be to reduce
reported net income by approximately $0.9 million, $0.7 million and $0.4
million, respectively, to approximately $22.7 million, $23.6 million and $22.9
million.

         The pro-forma effect on basic earnings per share for the years ended
March 31, 2001, 2000 and 1999 of this method would be to reduce net income per
share by $.03 per share, $.02 per share and $.03 per share, respectively, to
$.77 per share, $.82 per share and $.82 per share.

         The pro-forma effect on diluted earnings per share for the years ended
March 31, 2001, 2000 and 1999 of this method would be to reduce net income per
share by $.03 per share, $.02 per share and $.01 per share, respectively, to
$.71 per share, $.78 per share and $.77 per share.

         Profit Sharing Plan

         The Company has a qualified trustee profit sharing plan (the "Plan")
covering substantially all non-union employees. The Company's annual
contribution to the Plan, as determined by the Board of Directors, is
discretionary and was $300 for fiscal 2001 and $175 for fiscal 2000 and 1999.
The Plan includes features as described under Section 401(k) of the Internal
Revenue Code.

         The Company's contributions to the 401(k) investment funds are fifty
percent (50%) of the first 7% of the salary contributed by each participant.
Contributions to the 401(k) investment funds of approximately $907, $586 and
$421 were made in fiscal 2001, 2000 and 1999, respectively.

         Contributions are also made to multi-employer defined benefit plans
administered by labor unions for certain union employees. Amounts charged to
pension expense and contributed to these plans were $161, $119 and $86 in fiscal
2001, 2000 and 1999, respectively.

         Health and Medical Insurance Plan

         The Company contributes to health and medical insurance programs for
its non-union and union employees. For non-union employees, the Company self
insures the first fifty thousand dollars of each employee's covered medical
claims. The Company has recorded $300 and $225 of accrued health insurance
expense reserves as of March 31, 2001 and 2000, respectively for claims incurred
but not reported. For union employees, the Company participates in a fully
funded insurance plan sponsored by the union. Expenses related to both plans
charged to operations were approximately $4,084, $2,647 and $1,390 in fiscal
2001, 2000 and 1999, respectively.

13.      Related Party Transactions
         --------------------------

         The Company currently leases certain real property from an affiliated
partnership of an officer and director of the Company. Lease payments made for
this property during the years ended March 31, 2001, 2000 and 1999 totaled $246,
$246 and $241, respectively.

14.      Equity Transactions
         -------------------

         As of March 31, 2001, the Company had 240,000 shares of 7% Cumulative
Convertible Preferred Stock (par value $.01 per share) outstanding at a stated
value of $25 per share. The Preferred Stock is non-voting with dividends payable
quarterly. The Preferred Stock is redeemable at its stated value. Each share of
Preferred Stock is convertible into Class A Common Stock at a conversion price
of $4.45 per share. The Preferred Stock has a liquidation preference of $25 per
share plus all accrued but unpaid dividends prior to any liquidation
distributions to holders of Class A or Class B Common Stock. No dividends may be
paid on Class A or Class B Common Stock unless all dividends on the Cumulative
Convertible Preferred Stock have been declared and paid. Undeclared and
unaccrued cumulative preferred dividends at both March 31, 2001 and 2000 were
$2,194 or $9.14 per share. Also, under the terms of its credit agreement, the
Company may not pay cash dividends in excess of 25% of the prior fiscal year's
consolidated net income.

         Holders of Class A Common Stock are entitled to receive dividends per
share equal to 120% of the dividends per share paid on the Class B Common Stock
and have one-twentieth vote per share in the election of directors and on other
matters.

         Under the terms of the Company's current loan agreement (see Note 9),
the Company has limitations on paying dividends, except in stock, on its Class A
and B Common Stock. Payment of dividends may also be restricted under Delaware
Corporation law.

         On August 18, 2000, the Company's Board of Directors declared a
three-for-two stock split in the form of a 50% stock dividend of its Common
Stock to shareholders of record on August 28, 2000, payable on September 7,
2000. Common Stock was credited and retained earnings was charged for the
aggregate par value of the shares issued. The stated par value of each share was
not changed from $.01.

         All per share data in this report has been restated to reflect the
aforementioned three-for-two stock split in the form of a 50% stock dividend.


<PAGE>

15.      Earnings Per Share
         ------------------

         The computation of basic and diluted earnings per share is as follows:

<TABLE>
<CAPTION>

                                            2001              2000              1999
                                            ----              ----              ----

<S>                                      <C>               <C>             <C>

Numerator:

Net income                                 $23,625           $24,308           $23,340

Preferred Stock dividends                     (420)             (420)             (422)
                                           --------          --------          --------

Numerator for basic earnings per
   share-income available to common
   shareholders                             23,205            23,888            22,918

Effect of dilutive securities:
   Preferred Stock dividends                   420               420               422
                                           --------          --------          --------

Numerator for diluted earnings per
   share-income available to common
   shareholders after assumed
   conversions                             $23,625           $24,308           $23,340
                                           ========          ========          ========
Denominator:

Denominator for basic earnings per
   share-weighted-average shares            28,981           27,975             27,302
                                           --------          --------          --------

Effect of dilutive securities:
   Employee stock options                    1,662            1,203              1,299
   Convertible Preferred Stock               1,350            1,350              1,356
                                           --------          --------          --------

Dilutive potential Common Shares             3,012            2,553              2,655
                                           --------          --------          --------

Denominator for diluted earnings
      per share-adjusted weighted-
      average
      shares and assumed conversions        31,993           30,528             29,957
                                           ========          ========          ========

Basic Earnings per Share (1):              $  0.80       $     0.85         $     0.84
                                           ========          ========          ========
Diluted Earnings per Share (1,2):          $  0.74       $     0.80         $     0.78
                                           ========          ========          ========

<FN>

(1)  The two-class method for Class A and Class B Common Stock is not presented
     because the earnings per share are equivalent to the if converted method
     since dividends were not declared or paid and each class of common stock
     has equal ownership of the Company.

(2)  Employee stock options to purchase 5,750 and 107,250 shares of Class A
     Common Stock at March 31, 2001 and 2000, respectively, are not presented
     because these options are anti-dilutive. The exercise prices of these
     options exceeded the average market prices of the shares under option in
     each respective period. There were no anti-dilutive employee stock options
     as of March 31, 1999.

     An option to purchase 500,000 shares of Class A Common Stock in the year
     ended March 31, 1999, sold in connection with an agreement entered into in
     January 1996, is not presented because the minimum exercise price of
     the option exceeded the average market price of the shares under option
     during the period. As of March 31, 1999, all options sold under this
     agreement had expired.

</FN>
</TABLE>

16.      Agreements
         ----------

         In January 1997, the Company concluded an agreement with Roche
Holdings, Ltd. of Basel, Switzerland ("Roche"), which gave KV the right to
market a one dose vaginal anti-fungal product in North America and the exclusive
right to market or license the product in the rest of the world.

         The agreement included a cash payment of $3,000 to be made in January
1999. This non-refundable payment was received and recorded as licensing revenue
in the fourth quarter of the fiscal year ended March 31, 1999.

17.      Nonrecurring Gain
         -----------------

         Under a contract that the Company has with a supplier, issues arose
with respect to the timing of supply of a product and the supplier's failure to
pursue another product. The terms of the contract provided for binding private
arbitration between the parties which resulted in the Company receiving notice
of an award in December, 1998 of $13,253. The Arbitration Panel subsequently
directed the parties to have further discussions including possible replacement
products. Payment of the award was deferred pending the outcome of these
discussions. Subsequent attempts to obtain replacement products were
unsuccessful and the Company was paid the arbitration in June 1999. In January
2000, the Company received an additional award of $6,973 covering all open
monetary issues related to the contract. The awards, net of applicable income
taxes and expenses, represent $.13 and $.27 per common share on a diluted basis
for the years ended March 31, 2000 and 1999, respectively, and are reflected in
Other Income.

18.      Quarterly Financial Results (Unaudited)
         ---------------------------------------

<TABLE>
<CAPTION>

                                   1st Quarter      2nd Quarter       3rd Quarter      4th Quarter         Year
<S>                               <C>               <C>               <C>             <C>               <C>
FISCAL  2001

Net Sales                            $ 38,810         $ 45,300          $ 43,777         $ 55,022         $ 182,909

Gross Profit                           22,615           27,398            26,762           35,471           112,246

Pretax Income                           6,964            8,473             8,379           13,248            37,064

Net Income                              4,352            5,423             5,371            8,479            23,625

Earnings Per Share-Basic (b)             0.15             0.18              0.18             0.29              0.80

Earnings Per Share-Diluted (b)           0.14             0.17              0.17             0.26              0.74


FISCAL 2000

Net Sales                            $ 32,794         $ 36,011          $ 38,792         $ 38,373         $ 145,970

Gross Profit                           16,262           20,318            22,558           23,386            82,524

Pretax Income (a)                       5,452            6,848             9,212           17,587            39,099

Net Income (a)                          3,379            4,247             5,714           10,968            24,308

Earnings Per Share-Basic (b)             0.12             0.15              0.20             0.38              0.85

Earnings Per Share-Diluted (b)           0.11             0.14              0.19             0.36              0.80

<FN>

Note:


(a)    The fourth quarter of fiscal 2000 includes a non-recurring gain
       associated with a $3.9 million arbitration award net of expenses and
       taxes (see Note 17).


(b)    All earnings per share amounts have been restated to reflect a three-for-
       two stock split in the form of a 50% stock dividend, declared by the
       Board of Directors on August 18, 2000 and distributed September 7, 2000
       to shareholders of record as of August 28, 2000.

</FN>
</TABLE>
<PAGE>


19.      Segment Reporting
         -----------------

         In fiscal 1999, the Company adopted SFAS No. 131, "Disclosure about
Segments of an Enterprise and Related Information", which revises reporting and
disclosure requirements for operating segments. The following information is
provided in accordance with the requirements of this statement.

         The reportable segments of the Company as of March 31, 2001, are
branded products, specialty generics, specialty materials and contract services.
Segment profits are measured based on income before taxes and are determined
based on each segment's direct revenues and expenses. The majority of research
and development, corporate general and administrative expenses, amortization and
interest expense, as well as interest and other income, are not allocated to
segments.

         Revenues and profits for these segments are as follows:

<TABLE>
<CAPTION>

                           Fiscal Year
                              Ended      Branded   Specialty   Specialty   Contract    All
                             March 31    Products  Generics    Materials   Services    Other   Eliminations   Consolidated

<S>                    <C>          <C>        <C>         <C>          <C>        <C>       <C>           <C>

(Thousands of Dollars)
Total Revenues               2001        $25,206   $137,296     $17,088     $ 3,018   $   301    $      -        $182,909
                             2000         23,469    101,342      17,182       3,720       257           -         145,970
                             1999          1,795     91,833      13,405       4,382     3,445           -         114,860

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

Income before taxes          2001       $ (6,490)  $ 71,779     $ 4,333     $ 1,131   $(33,689)  $      -        $ 37,064
                             2000          5,307     48,862       3,823         917    (19,810)         -          39,099
                             1999            (58)    36,351       2,149       1,390     (2,200)         -          37,632
--------------------------------------------------------------------------------------------------------------------------

Identifiable Assets          2001       $  9,497   $ 31,241    $ 8,278      $39,200   $ 64,359   $  (1,158)      $151,417
                             2000          9,237     27,927      6,939       32,605     64,835      (1,158)       140,385
                             1999          3,933     23,314      7,403       25,713     68,785      (1,158)       127,990
--------------------------------------------------------------------------------------------------------------------------

Property and
equipment additions          2001       $    226   $    805    $    91     $  6,676   $    260   $       -       $  8,058
                             2000            119        338        208       13,172      1,542           -         15,379
                             1999          1,561      1,654        498        1,355      3,078           -          8,146
--------------------------------------------------------------------------------------------------------------------------

Depreciation and
Amortization                 2001      $      82 $      180    $   152    $   2,816   $  2,523   $       -       $  5,753
                             2000             50        148        140        1,683      2,459           -          4,480
                             1999              -         74         86        1,457        243           -          1,860


<FN>

        Consolidated revenues are principally derived from customers in North America.

        Property and equipment is all located in St. Louis, Missouri.

</FN>
</TABLE>
<PAGE>


Item  9.  Changes In and Disagreements With Accountants on Accounting and
          Financial Disclosure
          ---------------------------------------------------------------


          Not Applicable.


                                    PART III

Item 10.  Directors and Executive Officers of the Registrant
          --------------------------------------------------

          The information contained under the caption "INFORMATION CONCERNING
NOMINEES AND DIRECTORS CONTINUING IN OFFICE" in the Company's definitive proxy
statement to be filed pursuant to Regulation 14(a) for its 2001 Annual Meeting
of Shareholders, which involves the election of directors, is incorporated
herein by this reference. Also see Item 4(a) of Part I hereof.

Item 11.  Executive Compensation
          -----------------------

          The information contained under the captions "EXECUTIVE COMPENSATION"
and "INFORMATION AS TO STOCK OPTIONS" in the Company's definitive proxy
statement to be filed pursuant to Regulation 14(a) for its 2001 Annual Meeting
of Shareholders is incorporated herein by this reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
          --------------------------------------------------------------

          The information contained under the caption "SECURITY OWNERSHIP OF
PRINCIPAL HOLDERS AND MANAGEMENT" in the Company's definitive proxy statement to
be filed pursuant to Regulation 14(a) for its 2001 Annual Meeting of
Shareholders is incorporated herein by this reference.

Item 13.  Certain Relationships and Related Transactions
          ----------------------------------------------

          The information contained under the caption "TRANSACTIONS WITH ISSUER"
in its definitive proxy statement to be filed pursuant to Regulation 14(a) for
its 2001 Annual Meeting of Shareholders is incorporated herein by this
reference.


<PAGE>


                                    PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K
          ---------------------------------------------------------------






  (a)  1.   Financial Statements:                                       Page
            --------------------                                        ----

            The following consolidated financial
            statements of the Company are included
            in Part II, Item 8:

            Report of Independent Certified Public Accountants           21

            Consolidated Balance Sheets as of
            March 31, 2001 and 2000                                      22

            Consolidated Statements of Income
            for the Years Ended March 31, 2001, 2000 and 1999            23

            Consolidated Statements of Shareholders'
            Equity 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 Financial Statements                             26-41


       2.   Financial Statement Schedule:
            ----------------------------

            Report of Independent Certified Public Accountants
            regarding Financial Statement Schedule

            Schedule II - Valuation of Qualifying Accounts



  (b)       No reports on Form 8-K were filed by the Company
            in the 4th quarter of Fiscal 2001.


<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Shareholders and Board of Directors
of K-V Pharmaceutical Company:


The audits referred to in our report dated May 18, 2001 relating to the
consolidated financial statements of K-V Pharmaceutical Company which is
contained in Item 8 of this Form 10-K included the audit of the financial
statement schedule listed in the accompanying index. This financial statement
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion on this financial statement schedule based upon our
audits.

In our opinion such financial statement schedule presents fairly, in all
material respects, the information set forth therein.

BDO SEIDMAN, LLP

St. Louis, Missouri
May 18, 2001


<PAGE>

<TABLE>
<CAPTION>

2.   Financial Statement Schedules:
     -----------------------------

                                                    Schedule II

                                          Valuation of Qualifying Accounts

                                                        Additions
                                       Balance at        charged          Amounts          Balance
                                       beginning        to costs          charged          at end
                                        of year        and expenses      to reserves       of year
                                       ---------       ------------     ------------       -------

<S>                                   <C>           <C>               <C>            <C>
Year Ended March 31, 1999:
Allowance for doubtful accounts          $179,935      $   103,239        $  90,771     $   192,403
Inventory obsolescence                    361,751          686,373          499,836         548,288
                                        ---------      -----------       ----------    ------------
                                         $541,686       $  789,612        $ 590,607      $  740,691
                                         ========       ==========        =========      ==========

Year Ended March 31, 2000:
Allowance for doubtful accounts          $192,403      $   241,772        $  (3,759)    $   437,934
Inventory obsolescence                    548,288        1,502,323          988,538       1,062,073
                                        ---------      -----------        ---------     -----------
                                         $740,691       $1,744,095         $984,779      $1,500,007
                                         ========       ==========         ========      ==========

Year Ended March 31, 2001:
Allowance for doubtful accounts       $   437,934        $  12,652       $    2,627     $   447,959
Inventory obsolescence                  1,062,073          418,284          892,760         587,597
                                      -----------        ---------        ---------    ------------
                                       $1,500,007         $430,936         $895,387      $1,035,556
                                       ==========         ========         ========      ==========

</TABLE>

Financial Statements of KV Pharmaceutical Company (separately) are omitted
because KV is primarily an operating company and its subsidiaries included in
the Financial Statements are wholly-owned and are not materially indebted to any
person other than through the ordinary course of business.


3. Exhibits:
   --------

     See Exhibit Index on pages 45 through 51 of this Report. Management
     contracts and compensatory plans are designated on the Exhibit Index.


<PAGE>


                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                 KV PHARMACEUTICAL COMPANY


Date:    June 28, 2001           By       /s/  Marc S. Hermelin
                                          --------------------------------------
                                          Vice Chairman of the Board
                                          (Principal Executive Officer)


Date:    June 28, 2001            By       /s/  Gerald R. Mitchell
                                          --------------------------------------
                                          Vice President, Treasurer and
                                          Chief Financial Officer
                                          (Principal Financial and
                                          Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on the dates indicated by the following persons on behalf
of the Company and in their capacities as members of the Board of Directors of
the Company:


Date:    June 28, 2001            By    /s/  Marc S. Hermelin
                                       -----------------------------------------
                                        Marc S. Hermelin



Date:    June 28, 2001            By    /s/  Victor M. Hermelin
                                       -----------------------------------------
                                        Victor M. Hermelin



Date:    June 28, 2001            By    /s/ Garnet E. Peck
                                       -----------------------------------------
                                        Garnet E. Peck, Ph.D.



Date:    June 28, 2001            By    /s/  Norman D. Schellenger
                                       -----------------------------------------
                                        Norman D. Schellenger



Date:    June 28, 2001            By    /s/  Alan G. Johnson
                                       -----------------------------------------
                                        Alan G. Johnson



Date:   June 28, 2001             By    /s/  Kevin S. Carlie
                                       -----------------------------------------
                                        Kevin S. Carlie

<PAGE>

                                  EXHIBIT INDEX


   Exhibit No.                         Description

      3(a)         The Company's Certificate of Incorporation, which was filed
                   as Exhibit 3(a) to the Company's Annual Report on Form 10-K
                   for the year ended March 31, 1981, is incorporated herein by
                   this reference.

      3(b)         Certificate of Amendment to Certificate of Incorporation of
                   the Company, effective March 7, 1983, which was filed as
                   Exhibit 3(c) to the Company's Annual Report on Form 10-K for
                   the year ended March 31, 1983, is incorporated herein by this
                   reference.

      3(c)         Certificate of Amendment to Certificate of Incorporation of
                   the Company, effective June 9, 1987, which was filed as
                   Exhibit 3(d) to the Company's Annual Report on Form 10-K for
                   the year ended March 31, 1987, is incorporated herein by this
                   reference.

      3(d)         Certificate of Amendment to Certificate of Incorporation of
                   the Company, effective September 24, 1987, which was filed as
                   Exhibit 3(f) to the Company's Annual Report on Form 10-K for
                   the year ended March 31, 1988, is incorporated herein by this
                   reference.

      3(e)         Certificate of Amendment to Certificate of Incorporation of
                   the Company, which was filed as Exhibit 3(e) to the Company's
                   Annual Report on Form 10-K for the year ended March 31, 1996,
                   is incorporated herein by this reference.

      3(f)         Certificate of Amendment to Certificate of Incorporation of
                   the Company, which was filed as Exhibit 3(f) to the Company's
                   Annual Report on Form 10-K for the year ended March 31, 1996,
                   is incorporated herein by this reference.

      3(g)         Bylaws of the Company, as amended through November 18, 1982,
                   which was filed as Exhibit 3(e) to the Company's Annual
                   Report on Form 10-K for the year ended March 31, 1993, is
                   incorporated herein by this reference.

      3(h)         Amendment to Bylaws of the Company, which was filed as
                   Exhibit 3(h) to the Company's Annual Report on Form 10-K for
                   the year ended March 31, 1996, is incorporated herein by this
                   reference.

      4(a)         Certificate of Designation of Rights and Preferences of 7%
                   Cumulative Convertible preferred stock of the Company,
                   effective June 9, 1987, and related Certificate of
                   Correction, dated June 17, 1987, which was filed as Exhibit
                   4(f) to the Company's Annual Report on Form 10-K for the year
                   ended March 31, 1987, is incorporated herein by this
                   reference.

      4(b)         Loan Agreement dated as of November 1, 1989, with the
                   Industrial Development Authority of the County of St. Louis,
                   Missouri, regarding private activity refunding and revenue
                   bonds issued by such Authority, including form of Promissory
                   Note executed in connection therewith, which was filed as
                   Exhibit 4(b) to the Company's Quarterly Report on Form 10-Q
                   for the quarter ended December 31, 1989, is incorporated
                   herein by this reference.

      4(c)         Loan Agreement dated June 18, 1997 between the Company and
                   its subsidiaries and LaSalle National Bank ("LaSalle"), which
                   was filed as Exhibit 4(i) to the Company's Annual Report on
                   Form 10-K for the year ended March 31, 1997, is incorporated
                   herein by this reference.

      4(d)         Revolving Note, dated June 18, 1997, by the Company and its
                   subsidiaries in favor of LaSalle, which was filed as Exhibit
                   4(j) to the Company's Annual Report on Form 10-K for the year
                   ended March 31, 1997, is incorporated herein by this
                   reference.

      4(e)         Term Note, dated June 24, 1997, by the Company and its
                   subsidiaries in favor of LaSalle, which was filed as Exhibit
                   4(k) to the Company's Annual Report on Form 10-K for the year
                   ended March 31, 1997, is incorporated herein by this
                   reference.

      4(f)         Reimbursement Agreement dated as of October 16, 1997, between
                   the Company and LaSalle, which was filed as Exhibit 4(f) to
                   the Company's Annual Report on Form 10-K for the year ended
                   March 31, 1998, is incorporated herein by this reference.

      4(g)         Deed of Trust and Security Agreement dated as of October 16,
                   1997, between the Company and LaSalle, which was filed as
                   Exhibit 4(g) to the Company's Annual Report on Form 10-K for
                   the year ended March 31, 1998, is incorporated herein by this
                   reference.

      4(h)         First Amendment, dated as of October 28, 1998, to Loan
                   Agreement between the Company and its subsidiaries and
                   LaSalle, which was filed as Exhibit 4(h) to the Company's
                   Annual Report on Form 10-K for the year ended March 31, 1999,
                   is incorporated herein by this reference.

      4(i)         Second Amendment, dated as of March 11, 1999, to Loan
                   Agreement between the Company and its subsidiaries and
                   LaSalle, which was filed as Exhibit 4(i) to the Company's
                   Annual Report on Form 10-K for the year ended March 31, 1999,
                   is incorporated herein by this reference.

      4(j)         Third Amendment, dated June 22, 1999, to Loan Agreement
                   between the Company and its subsidiaries and LaSalle, which
                   was filed as Exhibit 4(j) to the Company's Annual Report on
                   Form 10-K for the year ended March 31, 2000, is incorporated
                   by this reference.

      4(k)         Fourth Amendment, dated December 17, 1999, to Loan Agreement
                   between the Company and its subsidiaries and LaSalle, which
                   was filed as Exhibit 4(k) to the Company's Annual Report on
                   Form 10-K for the year ended March 31, 2000, is incorporated
                   by this reference.

     10(a)*        Stock Option Agreement between the Company and Marc S.
                   Hermelin, Vice Chairman and Chief Executive Officer, dated
                   February 18, 1986, is incorporated herein by this reference.

     10(b)*        First Amendment to and Restatement of the KV Pharmaceutical
                   1981 Employee Incentive Stock Option Plan, dated March 9,
                   1987 (the "Restated 1981 Option Plan"), which as filed as
                   Exhibit 10(t) to the Company's Annual Report on Form 10-K for
                   the year ended March 31, 1988, is incorporated herein by this
                   reference.

     10(c)*        Second Amendment to the Restated 1981 Option Plan, dated June
                   12, 1987, which was filed as Exhibit 10(u) to the Company's
                   Annual Report on Form 10-K for the year ended March 31, 1988,
                   is incorporated herein by this reference.

     10(d)*        Revised Form of Stock Option Agreement, effective June 12,
                   1987, for the Restated 1981 Option Plan, which was filed as
                   Exhibit 10(v) to the Company's Annual Report on Form 10-K for
                   the year ended March 31, 1988, is incorporated herein by this
                   reference.

     10(e)*        Consulting Agreement between the Company and Victor M.
                   Hermelin, Chairman of the Board, dated October 30, 1978, as
                   amended October 30, 1982, and Employment Agreement dated
                   February 20, 1974, referred to therein (which was filed as
                   Exhibit 10(m) to the Company's Annual Report on Form 10-K for
                   the year ended March 31, 1983) and subsequent Amendments
                   dated as of August 12, 1986, which was filed as Exhibit 10(f)
                   to the Company's Annual Report on Form 10-K for the year
                   ended March 31, 1987, and dated as of September 15, 1987
                   (which was filed as Exhibit 10(s) to the Company's Annual
                   Report on Form 10-K for the year ended March 31, 1988), and
                   dated October 25, 1988 (which was filed as Exhibit 10(n) to
                   the Company's Annual Report on Form 10-K for the year ended
                   March 31, 1989), and dated October 30, 1989 (which was filed
                   as Exhibit 10(n) to the Company's Annual Report on Form 10-K
                   for the year ended March 31, 1990), and dated October 30,
                   1990 (which was filed as Exhibit 10(n) to the Company's
                   Annual Report on Form 10-K for the year ended March 31,
                   1991), and dated as of October 30, 1991 (which was filed as
                   Exhibit 10(i) to the Company's Annual Report on Form 10-K for
                   the year ended March 31, 1992), are incorporated herein by
                   this reference.

     10(f)*        Restated and Amended Employment Agreement between the Company
                   and Gerald R. Mitchell, Vice President, Finance, dated as of
                   March 31, 1994, is incorporated herein by this reference.

     10(g)*        Employment Agreement between the Company and Raymond F.
                   Chiostri, Corporate Vice-President and President-
                   Pharmaceutical Division, which was filed as Exhibit10(l) to
                   the Company's Annual Report on Form 10-K for the year
                   ended March 31, 1992, is incorporated herein by this
                   reference.

      10(h)        Lease of the Company's facility at 2503 South Hanley Road,
                   St. Louis, Missouri, and amendment thereto, between the
                   Company as Lessee and Marc S. Hermelin as Lessor, which was
                   filed as Exhibit 10(n) to the Company's Annual Report on Form
                   10-K for the year ended March 31, 1983, is incorporated
                   herein by this reference.

      10(i)        Amendment to the Lease for the facility located at 2503 South
                   Hanley Road, St. Louis, Missouri, between the Company as
                   Lessee and Marc S. Hermelin as Lessor, which was filed as
                   Exhibit 10(p) to the Company's Annual Report on Form 10-K for
                   the year ended March 31, 1992, is incorporated herein by this
                   reference.

      10(j)        Amendment to Lease Agreement, dated as of September 30, 1985,
                   between the Industrial Development Authority of the County of
                   St. Louis, Missouri, as Lessor and KV Pharmaceutical Company
                   as Lessee, regarding lease of facility located at 2303
                   Schuetz Road, St. Louis County, Missouri, which was filed as
                   Exhibit 10(q) to the Company's Report on Form 10-Q for the
                   quarter ended December 31, 1985, is incorporated herein by
                   this reference.

     10(k)*        KV Pharmaceutical Company Fourth Restated Profit Sharing
                   Plan and Trust Agreement dated September 18, 1990, which was
                   filed as Exhibit 4.1 to the Company's Registration Statement
                   on Form S-8 No. 33-36400, is incorporated herein by this
                   reference.

     10(l)*        First Amendment to the KV Pharmaceutical Company Fourth
                   Restated Profit Sharing Plan and Trust dated September 18,
                   1990, is incorporated herein by this reference.

     10(m)*        Employment Agreement between the Company and Marc S.
                   Hermelin, Vice-Chairman, dated November 15, 1993, which was
                   filed as Exhibit 10(u) to the Company's Annual Report on Form
                   10-K for the year ended March 31, 1994, is incorporated
                   herein by this reference.

     10(n)*        Stock Option Agreement dated June 1, 1995, granting stock
                   option to Marc S. Hermelin, which was filed as Exhibit 10(w)
                   to the Company's Quarterly Report on Form 10-Q for the
                   quarter ended June 30, 1996, is incorporated herein by this
                   reference.

     10(o)*        Second Amendment dated as of June 1, 1995, to Employment
                   Agreement between the Company and Marc S. Hermelin, which was
                   filed as Exhibit 10(x) to the Company's Quarterly Report on
                   Form 10-Q for the quarter ended June 30, 1996, is
                   incorporated herein by this reference.

     10(p)*        Stock Option Agreement dated as of January 22, 1996, granting
                   stock options to MAC & Co., which was filed as Exhibit 10(z)
                   to the Company's Annual Report on Form 10-K for the year
                   ended March 31, 1996, is incorporated herein by this
                   reference.

     10(q)*        Third Amendment dated as of November 22, 1995, to Employment
                   Agreement between the Company and Marc S. Hermelin, which was
                   filed as Exhibit 10(aa) to the Company's Annual Report on
                   Form 10-K for the year ended March 31, 1996, is incorporated
                   herein by this reference.

     10(r)*        Stock Option Agreement dated as of November 22, 1995,
                   granting a stock option to Victor M. Hermelin, which was
                   filed as Exhibit 10(bb) to the Company's Annual Report on
                   Form 10-K for the year ended March 31, 1996, is incorporated
                   herein by this reference.

     10(s)*        Fourth Amendment to and Restatement, dated as of January 2,
                   1997, of the KV Pharmaceutical Company 1991 Incentive Stock
                   Option Plan, which was filed as Exhibit 10(y) to the
                   Company's Annual Report on Form 10-K for the year ended March
                   31, 1997, is incorporated herein by this reference.

     10(t)*        Agreement between the Company and Marc S. Hermelin, Vice
                   Chairman, dated December 16, 1996, with supplemental letter
                   attached, which was filed as Exhibit 10(z) to the Company's
                   Annual Report on Form 10-K for the year ended March 31, 1997,
                   is incorporated herein by this reference.

     10(u)         Amendment to Lease dated February 17, 1997, for the facility
                   located at 2503 South Hanley Road, St. Louis, Missouri,
                   between the Company as Lessee and Marc S. Hermelin as Lessor,
                   which was filed as Exhibit 10(aa) to the Company's Annual
                   Report on Form 10-K for the year ended March 31, 1997, is
                   incorporated herein by this reference.

     10(v)*        Stock Option Agreement dated as of January 3, 1997, granting
                   a stock option to Marc S. Hermelin, which was filed as
                   Exhibit 10(bb) to the Company's Annual Report on Form 10-K
                   for the year ended March 31, 1999, is incorporated herein by
                   this reference.

     10(w)*        Stock Option Agreement dated as of May 15, 1997, granting a
                   stock option to Marc S. Hermelin, which was filed as Exhibit
                   10(cc) to the Company's Annual Report on Form 10-K for the
                   year ended March 31, 1999, is incorporated herein by this
                   reference.

     10(x)         Asset Purchase Agreement by and between K-V Pharmaceutical
                   Company and American Home Products Corporation, acting
                   through its Wyeth-Ayerst Laboratories division, dated as of
                   February 11, 1999, which was filed as Exhibit 2.1 to the
                   Company's Report on Form 8-K filed April 5, 1999, is
                   incorporated herein by this reference.

     10(y)*        Amendment, dated as of October 30, 1998, to Employment
                   Agreement between the Company and Marc S. Hermelin, which was
                   filed as Exhibit 10(ee) to the Company's Annual Report on
                   Form 10-K for the year ended March 31, 1999, is incorporated
                   herein by this reference.

     10(z)         Exclusive License Agreement, dated as of April 1, 1999
                   between Victor M. Hermelin as licenser and the Company as
                   licensee, which was filed as Exhibit 10(ff) to the Company's
                   Annual Report on Form 10-K for the year ended March 31, 1999
                   is incorporated herein by this reference.

     10(aa)*       Stock Option Agreement dated as of March 31, 1999, granting
                   a stock option to Victor M. Hermelin, filed herewith.

     10(bb)*       Stock Option Agreement dated as of April 1, 1999, granting a
                   stock option to Marc S. Hermelin, which was filed as Exhibit
                   10(gg) to the Company's Annual Report on Form 10-K for the
                   year ended March 31, 2000, is incorporated by this reference.

     10(cc)*       Stock Option Agreement dated as of August 16, 1999, granting
                   a stock option to Marc S. Hermelin, which was filed as
                   Exhibit 10 (hh) to the Company's Annual Report on Form 10-K
                   for the year ended March 31, 2000, is incorporated by this
                   reference.

     10(dd)*       Amendment, dated December 2, 1999, to Employment Agreement
                   between the Company and Marc S. Hermelin, Vice-Chairman,
                   which was filed as Exhibit 10(ii) to the Company's Annual
                   Report on Form 10-K for the year ended March 31, 2000, is
                   incorporated by this reference.

     10(ee)*       Employment Agreement between the Company and Alan G. Johnson,
                   Senior Vice-President, Strategic Planning and Corporate
                   Growth, dated September 27, 1999, which was filed as Exhibit
                   10(jj) to the Company's Annual Report on Form 10-K for the
                   year ended March 31, 2000, is incorporated by this reference.

     10(ff)*       Consulting Agreement, dated as of May 1, 1999, between the
                   Company and Victor M. Hermelin, Chairman, which was filed as
                   Exhibit 10(kk) to the Company's Annual Report on Form 10-K
                   for the year ended March 31, 2000, is incorporated by this
                   reference.

     10(gg)*       Stock Option Agreement dated as of June 1, 2000, granting a
                   stock option to Marc S. Hermelin filed herewith.

     10(hh)*       Stock Option Agreement dated as of June 1, 2000, granting a
                   stock option to Marc S. Hermelin filed herewith.

       21          List of Subsidiaries, filed herewith.

       23          Consent of BDO Seidman, LLP, filed herewith.


        *     Management contract or compensation plan.