<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (MARK ONE)

[ X ]    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

For the quarterly period ended March 31, 2001

                                       or

[  ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

For the transition period from to

Commission File Number: 1-16057

                         SYBRON DENTAL SPECIALTIES, INC.

             (Exact name of registrant as specified in its charter)

                DELAWARE                             33-0920985
                --------                             ----------
     (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)              Identification No.)

1717 WEST COLLINS AVENUE, ORANGE, CALIFORNIA           92867
  (Address of principal executive offices)           (Zip Code)

                                 (714) 516-7400
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last
report.)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ]   No

         At May 3, 2001, there were 35,182,375 shares of the Registrant's Common
Stock, par value $.01 per share, outstanding.


<PAGE>   2






                SYBRON DENTAL SPECIALTIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
         INDEX                                                                                                     PAGE
------------------------------                                                                                     -----
<S>                                                                                                                  <C>
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Consolidated Balance Sheets, March 31, 2001 and September 30, 2000................................................     2

Consolidated Statements of Income for the three and six months ended March 31, 2001 and 2000......................     3

Consolidated Statement of Stockholders' Equity for the six months ended March 31, 2001............................     4

Consolidated Statements of Cash Flows for the six months ended March 31, 2001 and 2000............................     5

Notes to Unaudited Consolidated Financial Statements..............................................................     6

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..................    10

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.............................................    24

PART II - OTHER INFORMATION

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....................................................    25

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.......................................................................    25

SIGNATURES .....................................................................................................      26
</TABLE>





<PAGE>   3


                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                SYBRON DENTAL SPECIALTIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                   (UNAUDITED)

                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                                         March 31,     September 30,
                                                                                           2001            2000
                                                                                         ---------     -------------
<S>                                                                                     <C>              <C>
                                     ASSETS
Current assets:
  Cash and equivalents.............................................................      $  2,873        $  5,783
  Accounts receivable (less allowance for doubtful receivables of $2,140 and
       $2,056 at March 31, 2001 and September 30, 2000, respectively)..............        83,108          85,767
  Inventories (note 2).............................................................        79,080          74,383
  Deferred income taxes............................................................         7,535           8,977
  Prepaid expenses and other current assets........................................        12,103           6,497
                                                                                         --------        --------
    Total current assets...........................................................       184,699         181,407
Advances and loans to Apogent......................................................            --          77,762
Property, plant and equipment, net of accumulated depreciation of $71,611 and
     $66,800 at March 31, 2001 and September 30, 2000, respectively................        54,600          55,326
Intangible assets, net.............................................................       217,415         220,705
Deferred income taxes..............................................................         4,662           3,410
Other assets.......................................................................        11,468           6,967
                                                                                         --------        --------
    Total assets...................................................................      $472,844        $545,577
                                                                                         ========        ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable.................................................................     $ 12,614         $ 11,351
  Current portion of long-term debt................................................       23,444           21,761
  Income taxes payable.............................................................        7,133            1,698
  Income taxes payable to Apogent..................................................           --            3,982
  Accrued payroll and employee benefits............................................       13,458           13,780
  Restructuring reserve (note 4)...................................................        1,883            2,403
  Deferred income taxes............................................................        3,770            3,225
  Accrued rebate...................................................................        1,854            5,137
  Other current liabilities........................................................        8,076            6,539
                                                                                        --------         --------
    Total current liabilities......................................................       72,232           69,876
Long-term debt (note 1)............................................................      344,309          298,482
Deferred income taxes..............................................................       15,161           15,414
Other liabilities..................................................................       12,231            8,835
Commitments and contingent liabilities:
Stockholders' equity:
  Preferred stock, $.01 par value; authorized 20,000,000 shares, none outstanding..           --               --
  Common stock, $.01 par value; authorized 250,000,000 shares, 35,174,181
    issued and outstanding at March 31, 2001.......................................          352               --
Additional paid-in capital (note 1)................................................       24,037          164,648
Retained earnings..................................................................       17,706               --
Accumulated other comprehensive loss...............................................      (13,184)         (11,678)
                                                                                        --------         --------
    Total stockholders' equity.....................................................       28,911          152,970
                                                                                        --------         --------
    Total liabilities and stockholders' equity.....................................     $472,844         $545,577
                                                                                        ========         ========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.


                                       2
<PAGE>   4


                SYBRON DENTAL SPECIALTIES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                                   (UNAUDITED)

                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                   Three Months Ended              Six Months Ended
                                                                         March 31,                     March 31,
                                                                   2001          2000             2001           2000
                                                                ----------    ----------        ---------      ---------
    <S>                                                         <C>           <C>              <C>            <C>
    Net sales.................................................  $  111,721    $  108,315       $  209,222     $  201,679
     Cost of sales:
         Cost of product sold.................................      48,785        44,578           91,286         83,816
         Amortization of purchase accounting adjustments......          33            27               54             54
                                                                ----------    ----------        ---------      ---------
              Total cost of sales.............................      48,818        44,605           91,340         83,870
                                                                ----------    ----------        ---------      ---------
    Gross profit..............................................      62,903        63,710          117,882        117,809
    Selling, general and administrative expenses..............      32,782        32,767           64,896         62,235
    Amortization of purchase accounting adjustments...........       2,079         2,130            4,285          4,168
                                                                ----------    ----------        ---------      ---------
              Total selling, general and administrative
                 expenses.....................................      34,861        34,897           69,181         66,403
                                                                ----------    ----------        ---------      ---------
    Operating income..........................................      28,042        28,813           48,701         51,406
    Other income (expense):
         Interest expense.....................................      (9,080)       (6,276)         (16,703)       (12,287)
         Amortization of deferred financing fees..............        (196)         (70)             (303)          (138)
         Other, net...........................................          (2)          409              (27)           609
                                                                ----------    ----------        ---------      ---------
    Income before income taxes and extraordinary item.........      18,764        22,876           31,668         39,590
    Income taxes..............................................       7,599         9,241           12,826         15,993
                                                                ----------    ----------        ---------      ---------
    Income before extraordinary item..........................      11,165        13,635           18,842         23,597
    Extraordinary item, net of tax (note 7)...................           -             -             (498)             -
                                                                ----------    ----------        ---------      ---------
    Net income................................................  $   11,165    $   13,635        $  18,344      $  23,597
                                                                ==========    ==========        =========      =========
    Basic earnings per share: (note 6)
         Basic earnings per share before extraordinary item...  $     0.32                      $    0.54
         Extraordinary item...................................           -                          (0.02)
                                                                ----------                      ---------
         Basic earnings per share.............................  $     0.32                      $    0.52
                                                                ==========                      =========
    Diluted earnings per share: (note 6)
         Diluted earnings per share before extraordinary item.  $     0.31                      $    0.53
         Extraordinary item...................................           -                          (0.02)
                                                                ----------                      ---------
         Diluted earnings per share...........................  $     0.31                      $    0.51
                                                                ==========                      =========
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.


                                       3
<PAGE>   5
                SYBRON DENTAL SPECIALTIES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                     FOR THE SIX MONTHS ENDED MARCH 31, 2001
                                  (UNAUDITED)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>

                                                                           ACCUMULATED OTHER         TOTAL
                                             CAPITAL        RETAINED         COMPREHENSIVE       STOCKHOLDER'S
                                            ACCOUNTS        EARNINGS         INCOME (LOSS)           EQUITY
                                            --------        --------         -------------           ------
                                                                   (IN THOUSANDS)

<S>                                         <C>             <C>              <C>                    <C>
Balance at September 30, 2000.............  $164,648        $     --         $    (11,678)          $152,970
Comprehensive income:
  Net income..............................       638          17,706                   --             18,344
  Translation adjustment..................                                            366                366
                                            --------        --------          -----------           --------
  Unrealized loss on derivative
   instruments............................        --              --               (1,872)            (1,872)
                                            --------        --------          -----------           --------
        Total comprehensive income........       638          17,706               (1,506)            16,838
Issuance of common stock..................       585                                                     585
Capital contributions from Apogent........     4,612              --                   --              4,612
Dividends paid to Apogent.................   (67,927)                                                (67,927)
Non cash dividend to Apogent..............   (78,167)             --                   --            (78,167)
                                            --------        --------          -----------           --------
Balance at March 31, 2001.................  $ 24,389        $ 17,706          $   (13,184)          $ 28,911
                                            ========        ========          ===========           ========

</TABLE>


     See accompanying notes to unaudited consolidated financial statements.
<PAGE>   6
                SYBRON DENTAL SPECIALTIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

                                 (IN THOUSANDS)

                                SIX MONTHS ENDED
<TABLE>
<CAPTION>
                                                                                                      MARCH 31,

                                                                                               2001             2000
                                                                                        -------------    --------------
<S>                                                                                     <C>              <C>
Cash flows from operating activities:
   Net income........................................................................   $      18,344    $       23,597
   Adjustments to reconcile net income to net cash provided by
      operating activities:
   Depreciation......................................................................           5,744             5,127
   Amortization......................................................................           4,285             4,293
   Loss on sales of property, plant and equipment....................................             (50)              (68)
   Provision for losses on doubtful accounts.........................................             551               350
   Inventory provisions..............................................................           1,157             1,684
   Deferred income taxes.............................................................             482               179
       Changes in assets and liabilities, net of effects of businesses acquired:

   Decrease in accounts receivable...................................................           2,575             9,438
   Increase in inventories...........................................................          (4,118)           (5,168)
   Increase in prepaid expenses and other current assets.............................          (5,606)           (2,856)
   Increase (decrease) in accounts payable...........................................           1,263            (4,447)
   Increase in income taxes payable..................................................           1,453             4,834
   Decrease in accrued payroll and employee benefits.................................            (322)           (1,321)
   Decrease in restructuring reserve.................................................            (520)             (400)
   Decrease in other current liabilities.............................................          (1,746)           (8,028)
   Net change in other assets and liabilities........................................           1,071              (859)
                                                                                        -------------    --------------
       Net cash provided by operating activities.....................................          24,563            26,355
                                                                                        =============    ==============
Cash flows from investing activities:
   Capital expenditures..............................................................          (5,206)           (4,227)
   Proceeds from sales of property, plant, and equipment.............................              81               455
   Payments for businesses acquired, net of cash acquired............................          (1,596)          (17,907)
                                                                                        -------------    --------------
       Net cash used in investing activities.........................................          (6,721)          (21,679)
                                                                                        =============    ==============
Cash flows from financing activities:
   Proceeds - credit facility........................................................         426,160           128,000
   Principal payments - credit facility..............................................        (378,807)          (89,000)
   Proceeds - other long-term debt...................................................             250                 -
   Payments - other long-term debt...................................................             (93)           (3,227)
   Payment of deferred financing fees................................................          (5,494)                -
   Payment of Apogent dividend.......................................................         (67,927)                -
   Capital contributions from Apogent................................................           4,612            20,398
   Cash received from exercise of stock options......................................             585                 -
   Net change in advances and loans to Apogent.......................................            (404)          (61,275)
                                                                                        -------------    --------------
       Net cash used from financing activities.......................................         (21,118)           (5,104)
                                                                                        =============    ==============
Effect of exchange rate changes on cash and cash equivalents.........................             366            (2,287)
Net decrease in cash and cash equivalents............................................          (2,910)           (2,715)
Cash and cash equivalents at beginning of period.....................................           5,783             6,090
                                                                                        -------------    --------------
Cash and cash equivalents at end of period...........................................   $       2,873    $        3,375
                                                                                        =============    ==============

Supplemental disclosures of cash flow information:

   Cash paid during the period for interest..........................................   $      13,292     $      11,505
                                                                                        =============    ==============
   Cash paid during the period for income taxes......................................   $       6,050     $      12,990
                                                                                        =============    ==============
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.


                                       4
<PAGE>   7


                SYBRON DENTAL SPECIALTIES, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

               (IN THOUSANDS, EXCEPT FOR SHARE OR PER SHARE DATA)

OVERVIEW AND BASIS OF PRESENTATION

1.   Sybron Dental Specialties, Inc. ("SDS" or the "Company") was incorporated
     in Delaware on July 17, 2000. Its principal subsidiary, Sybron Dental
     Management, Inc. ("SDM") (formerly known as Sybron Dental Specialties,
     Inc.), a Delaware corporation, located in Orange, California, was organized
     in 1993 when Apogent Technologies Inc. (formerly known as Sybron
     International Corporation), a Wisconsin corporation ("Apogent"), grouped
     the professional dental and orthodontics companies, Kerr Corporation and
     Ormco Corporation, under the SDM umbrella. Infection control products were
     added in 1995 with the acquisition of Metrex Research Corporation
     ("Metrex"). The subsidiaries of SDS market their products under brand names
     such as KERR(R), Belle(TM), Metrex(R), ORMCO(R) and "A" Company(R)
     Orthodontics, PINNACLE(R), DEMETRON(R) and AOA(TM), which are well
     recognized in the dental, orthodontics and infection control industries.
     SDS has three business segments: a) Professional Dental, b) Orthodontics
     and c) Infection Control Products.

     On December 11, 2000, Apogent spun-off its dental business by way of a pro
     rata distribution to its shareholders of all of the outstanding common
     stock and related preferred stock purchase rights of SDS (the "Spin-Off").
     Apogent shareholders of record as of November 30, 2000 received one share
     of SDS common stock for every three shares of Apogent common stock they
     owned as of the record date. Prior to the Spin-Off, SDM was a direct
     wholly-owned subsidiary of Apogent. Immediately prior to the Spin-off,
     Apogent contributed all of the stock of SDM to SDS making SDS the owner of
     all of the outstanding stock of SDM. As used in these Notes to Unaudited
     Consolidated Financial Statements, the term "SDS" or the "Company" means
     Sybron Dental Management, Inc. for the periods prior to the Spin-Off and
     Sybron Dental Specialties, Inc. (formerly known as SDS Holding Co.) for
     periods after the Spin-Off.

     The unaudited consolidated financial statements reflect the operations of
     SDS and its wholly owned subsidiaries and affiliates. The term "Apogent" as
     used herein refers to Apogent Technologies Inc. and its subsidiaries. The
     Company's fiscal year ends on September 30. All significant intercompany
     balances and transactions have been eliminated. The fiscal quarters and six
     month periods ended March 31, 2000 and March 31, 2001 are hereinafter
     referred to as "2000" and "2001", respectively.

     In the opinion of management, all adjustments, which are necessary for a
     fair presentation of the results for the interim periods presented, have
     been included. Except as described in notes 4 and 7 below, all such
     adjustments were of a normal recurring nature. The results for the quarter
     and year to date period ended March 31, 2001 are not necessarily indicative
     of the results to be expected for the full year. Because certain
     disclosures have been omitted from these statements, this information
     should only be read in conjunction with the Company's Annual Report (Form
     10-K) for the fiscal year ended September 30, 2000. The results of the
     quarter and year to date period ended March 31, 2000 and the period from
     October 1 through December 11, 2000 are not reflective of SDS as a
     stand-alone entity, but as a subsidiary of Apogent. As a result of the
     Spin-Off, we incurred a significant amount of floating bank debt resulting
     in a net increase in long-term debt over the prior fiscal year quarter of
     approximately $48.0 million. The new debt was used to reduce part of the
     indebtedness to Apogent as of the date of the Spin-Off.

     The reduction in paid-in capital primarily reflects the payment of $67.9
     million in dividends to Apogent as a result of the Spin-Off, and the
     reduction of capital of approximately $78.2 million representing a dividend
     in the form of a settlement of the intercompany balance with Apogent as a
     result of the Spin-Off.

     On October 1, 2000 the Company adopted Statement of Financial Accounting
     Standards No. 133, "Accounting for Derivative Instruments and Hedging
     Activities" as modified by Statement of Financial Accounting Standards No.
     137, and Statement of Financial Accounting Standards No. 138. These
     statements establish accounting and reporting standards for derivative
     instruments, including certain derivative instruments embedded in other
     contracts and hedging activities. The adoption of these statements had no
     material impact on the Company's financial position or results of its


                                       5
<PAGE>   8
     operations at October 1, 2000. As of March 31, 2001, SDS has recorded a
     $3.1 million unrealized loss in other current liabilities and $1.9 million
     (net of income taxes) in accumulated other comprehensive loss in the equity
     section related to certain interest rate swap transactions entered into to
     hedge the cash flow payments on certain long-term debt.


     The Company is required by the terms of its Credit Facility (defined below
     in Item 2. "Liquidity and Capital Resources") to protect against increases
     in interest rates by entering into and maintaining four-year hedging
     arrangements on at least 50% of the aggregate outstanding principal amount
     of the Term Loans. As of March 31, 2001, a total notional amount of $210
     million is hedged through interest rate swaps.

     For the six month period ended March 31, 2001 the Company has not
     recognized any gain or loss on the hedges as the net settlement has not
     yet occurred. In addition, for the six month period ended March 31, 2001,
     none of the cash flow hedges have been discontinued.

INVENTORIES

2.   Inventories at March 31, 2001 and September 30, 2000 consist of the
     following:

<TABLE>
<CAPTION>
                                                                                       MARCH 31,         SEPTEMBER 30,
                                                                                         2001                2000
                                                                                     -------------       -------------
<S>                                                                                  <C>                 <C>
Raw materials..................................................................      $      24,307       $      24,300
Work-in-process................................................................             13,825               8,410
Finished goods.................................................................             43,963              44,749
Excess and obsolescence reserves...............................................             (3,462)             (4,347)
LIFO reserve...................................................................                447               1,271
                                                                                     -------------       -------------
                                                                                     $      79,080       $      74,383
                                                                                     =============       =============
</TABLE>

ACQUISITIONS

3.   During the first six months of fiscal 2001, the Company completed two
     acquisitions for cash. The aggregate purchase price of the acquisitions,
     net of cash acquired (none of which individually, or aggregated, was
     significant), was approximately $1.6 million. Both of these acquisitions
     have been accounted for as purchases. The results of these acquisitions are
     included as of the date they were acquired. The total goodwill and
     intangibles for the acquired companies was approximately $0.8 million and
     will be amortized over 10 to 20 years. Descriptions of the acquired
     companies are as follows:

(a)  On December 4, 2000 Ormco B.V., a subsidiary of SDS, completed the
     acquisition of certain assets of Optident, Ltd., located in West Yorkshire,
     England, the former exclusive authorized distributor of Ormco/"A" Company
     products in the United Kingdom. The orthodontic division of Optident
     recorded sales of approximately $1.9 million during its fiscal year ended
     March 31, 2000.

(b)  On December 8, 2000, Kerr Corporation, a subsidiary of SDS, acquired
     certain assets of the dental division of Special Metals Corporation. The
     Special Metals dental division was a contract manufacturer and supplier of
     alloys used in producing the alloy powders used in Kerr's Tytin(R) and
     Tytin(R) FC dental amalgams. Kerr purchased the patents, machinery and
     inventory related to the manufacturing of these alloys in order to assure
     continued access to this technology. The Special Metals dental division
     recorded sales of approximately $5.4 million during its fiscal year ended
     December 31, 1999, of which approximately 52% was sold to the Company.

RESTRUCTURING CHARGES

4.   In June 1998, the Company recorded a restructuring charge of approximately
     $14.6 million (approximately $10.7 million after tax) for the
     rationalization of certain acquired companies, combination of certain
     duplicate production facilities, movement of certain customer service and
     marketing functions, and the exiting of several product lines.

     In September 2000, the Company recorded a restructuring charge of
     approximately $9.3 million ($5.8 million after tax) consisting primarily of
     exited product lines (approximately $5.3 million, $1.7 million and $0.6
     million in the Orthodontics, Professional Dental and Infection Control
     Products business segments, respectively), and severance and termination
     for approximately sixty-five employees (fifty-six located at the Metrex
     Research Corporation facility in Parker, Colorado, eight located at the
     Ormco facility in San Diego, California, and one located at the Ormco
     factiliy in Amersfort, The Netherlands), as a result of the 2000
     restructuring plan. Of the $9.3 million restructuring charges,
     approximately $7.8 million represents non-cash charges related to the
     exited products and capital, while the balance of approximately $1.5
     million are cash related charges for severance and contractual obligations.
     These combined charges are collectively referred to herein as the "2000
     Special Charges". The closing and re-location of the Metrex facility to


                                       6
<PAGE>   9
     the Kerr facility in Romulus, Michigan, the reduced working capital related
     to the exited products, and the headcount reductions at the Ormco
     facilities will save the Company approximately $1.7 million pre-tax on an
     annual basis, once completed. The reductions in headcount at the Ormco San
     Diego and Amersfort facilities and the product line exits were all
     completed in the first quarter of 2001. The Metrex facility move and
     closing is anticipated to occur in the third quarter of 2001, along with
     the majority of the cash charges.

         The 1998 restructuring charge activity since June 30, 1998 and its
components are as follows:

<TABLE>
<CAPTION>
                                          LEASE   SHUT-DOWN  INVENTORY    FIXED              CONTRACTUAL
                             SEVERANCE  PAYMENTS    COSTS    WRITE-OFF   ASSETS      TAX     OBLIGATIONS   OTHER    TOTAL
                                (a)        (b)       (b)        (c)        (c)       (d)         (e)
                            ----------  --------  ---------  ---------   -------    ------   -----------   -----   -------
<S>                           <C>        <C>       <C>       <C>         <C>        <C>        <C>        <C>      <C>
1998 Restructuring charge..   $ 4,300    $   300   $   400   $   4,600   $ 1,300    $  700     $  900     $2,100   $14,600
1998 cash payments.........     1,800          -       100           -         -         -        300      1,400     3,600
1998 non-cash charges......         -          -         -       4,600     1,300         -          -          -     5,900
                              -------    -------   -------   ---------   -------    ------     ------     ------   -------
September 30, 1998 balance.   $ 2,500    $   300   $   300   $       -   $     -    $  700     $  600     $  700   $ 5,100
1999 cash payments.........     1,300        300       300           -         -         -        300        400     2,600
Adjustments (a)............     1,200          -         -           -         -         -          -          -     1,200
                              -------    -------   -------   ---------   -------    ------     ------     ------   -------
September 30, 1999 balance.   $     -    $     -   $     -   $       -   $     -    $  700     $  300     $  300   $ 1,300
2000 cash payments.........         -          -         -           -         -         -        300        100       400
                              -------    -------   -------   ---------   -------    ------     ------     ------   -------
September 30, 2000 and
   March 31, 2001 balances.   $     -    $     -   $     -   $       -   $     -    $  700     $    -     $  200   $   900
                              -------    -------   -------   ---------   -------    ------     ------     ------   -------
</TABLE>

         The 2000 restructuring charge activity since September 30, 2000
and its components are as follows:

<TABLE>
<CAPTION>
                                          LEASE   SHUT-DOWN   INVENTORY    FIXED             CONTRACTUAL
                             SEVERANCE  PAYMENTS    COSTS     WRITE-OFF   ASSETS     TAX     OBLIGATIONS   OTHER    TOTAL
                                (a)        (b)       (b)          (c)       (c)      (d)         (e)
                             ---------  --------  ---------   ---------   ------    ------   -----------  ------   -------
<S>                           <C>        <C>       <C>        <C>         <C>       <C>        <C>        <C>      <C>
2000 Restructuring charge..   $ 1,300    $     -   $     -    $   7,600   $  200    $    -     $  100     $  100   $ 9,300
2000 non-cash charges......         -          -         -        7,600      200         -          -          -     7,800
                              -------    -------   -------    ---------   ------    ------     ------     ------   -------
September 30, 2000 balance.     1,300          -         -            -        -         -        100        100     1,500
Fiscal 2001 cash payments..       350          -         -            -        -         -         50        100       500
                              -------    -------   -------    ---------   ------    ------     ------     ------   -------
March 31, 2001 balance.....   $   950    $     -   $     -    $       -   $    -    $    -     $   50     $    -   $ 1,000
                              =======    =======   =======    =========   ======    ======     ======     ======   =======
</TABLE>

     (a) Amount represents the 1998 restructuring charge for severance and
     termination costs for approximately 165 employees (primarily sales and
     marketing personnel). As of March 31, 2001, 154 employees have been
     terminated as a result of the 1998 restructuring plan. An adjustment of
     approximately $1.2 million was made in fiscal 1999 to adjust the accrual
     primarily representing over accruals for anticipated costs associated with
     outplacement services, accrued fringe benefits, and severance associated
     with employees who were previously notified of termination and subsequently
     filled other Company positions. No additional employees will be terminated
     under this restructuring plan. The 2000 restructuring charge represents
     severance and termination costs for approximately 65 employees who will be
     terminated (primarily at the Metrex facility in, Parker, Colorado) as a
     result of the 2000 restructuring plan. During the quarter ended December
     31, 2000, the Ormco San Diego and Amersfort terminations and severance
     payments associated with those terminations were completed under the 2000
     restructuring plan. (b) Amount represents lease payments and shutdown costs
     on exited facilities. (c) Amount represents write-offs of inventory and
     fixed assets associated with discontinued product lines. (d) Amount
     represents a statutory tax relating to assets transferred from an exited
     sales facility in Switzerland. (e) Amount represents certain terminated
     contractual obligations.


                                       7
<PAGE>   10


SEGMENT INFORMATION

5.   The Company's operating subsidiaries are engaged in the manufacture and
     sale of dental, orthodontics and infection control products in the United
     States and other countries. The Company's products are categorized in the
     following business segments: a) Professional Dental, b) Orthodontics and c)
     Infection Control Products.

         Information on these business segments is summarized as follows:

<TABLE>
<CAPTION>
                                                                                        INFECTION
                                                            PROFESSIONAL                 CONTROL
                                                               DENTAL    ORTHODONTICS   PRODUCTS   ELIMINATIONS  TOTAL SDS
                                                            ------------ ------------   ---------  ------------  ---------
<S>                                                          <C>        <C>           <C>          <C>           <C>
THREE MONTHS ENDED MARCH 31, 2000
Revenues:
   External customer......................................   $ 55,217   $    46,699   $   6,399    $       -      $108,315
   Intersegment (a).......................................        293         2,074           4       (2,371)            -
     Total revenues.......................................     55,510        48,773       6,403       (2,371)      108,315
Gross profit..............................................     32,331        28,685       2,694            -        63,710
Selling, general and admin................................     16,415        15,694       2,788            -        34,897
Operating income..........................................     15,916        12,991        (94)            -        28,813
THREE MONTHS ENDED MARCH 31, 2001
Revenues:
   External customer......................................     58,704        46,592       6,425            -       111,721
   Intersegment(a)........................................        554         1,766           -       (2,320)            -
     Total revenues.......................................     59,258        48,358       6,425       (2,320)      111,721
Gross profit..............................................     32,663        26,926       3,314            -        62,903
Selling, general and admin................................     16,339        15,495       3,027            -        34,861
Operating income..........................................     16,324        11,431         287            -        28,042
</TABLE>

(a)  Includes the elimination of intergroup activity in the three months ended
     March 31, 2000 and 2001.

<TABLE>
<CAPTION>
                                                                                       INFECTION
                                                            PROFESSIONAL                CONTROL
                                                               DENTAL    ORTHODONTICS  PRODUCTS    ELIMINATIONS  TOTAL SDS
                                                            ------------ ------------  ---------   ------------  ---------
<S>                                                          <C>        <C>            <C>         <C>            <C>
SIX MONTHS ENDED MARCH 31, 2000
Revenues:
   External customer......................................   $102,822   $    86,760    $ 12,097    $       -      $201,679
   Intersegment (a).......................................        439         2,672           4       (3,115)            -
     Total revenues.......................................    103,261        89,432      12,101       (3,115)      201,679
Gross profit..............................................     58,586        53,600       5,623            -       117,809
Selling, general and admin................................     30,231        30,966       5,206            -        66,403
Operating income..........................................     28,355        22,634         417            -        51,406
SIX MONTHS ENDED MARCH 31, 2001
Revenues:
   External customer......................................    107,654        88,742      12,826            -       209,222
   Intersegment(a)........................................        916         3,335           -       (4,251)            -
     Total revenues.......................................    108,570        92,077      12,826       (4,251)      209,222
Gross profit..............................................     59,386        52,140       6,356            -       117,882
Selling, general and admin................................     31,323        31,896       5,962            -        69,181
Operating income..........................................     28,063        20,244         394            -        48,701

Segment assets (at end of period).........................    262,662       170,180      40,002            -       472,844
</TABLE>


(a)  Includes the elimination of intergroup activity in the six months ended
     March 31, 2000 and 2001.

EARNINGS PER SHARE

6.   The earnings per share ("EPS") calculations include certain assumptions due
     to the Spin-Off from Apogent taking place on December 11, 2000. The shares
     that were distributed due to the pro rata distribution were assumed to have
     been


                                       8
<PAGE>   11

     outstanding at the beginning of the year through the Spin-Off. The basic
     weighted average number of shares for the quarter and six month period
     ended March 31, 2001, were 35,136,095 and 35,122,241, respectively. Fully
     diluted shares are calculated using the treasury stock method. The average
     price assumed before November 28, 2000, the day SDS stock began trading on
     a when issued basis, was the opening trading price, or $13. For the period
     of November 28, 2000 through December 11, 2000, the SDS when issued trading
     price was used. For the quarter and six month period ended March 31,2001,
     the incremental fully diluted shares were calculated to be 1,332,741 and
     688,534, respectively, and represent the dilutive effect of options
     outstanding as of March 31, 2001. We made no assumptions and have not
     disclosed EPS calculations for prior periods.


EXTRAORDINARY CHARGES

7.   The extraordinary item represents the SDS allocation of the write-off of
     Apogent's deferred financing fees associated with the termination of
     Apogent's credit agreement due to the Spin-Off.


                                       9
<PAGE>   12


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

GENERAL

     Sybron Dental Specialties, Inc. ("SDS" or the "Company") was spun off by
way of a pro rata distribution on December 11, 2000 from Apogent. Our
subsidiaries are leading manufacturers of value-added products for the
Professional Dental, Orthodontics and Infection Control Products markets in the
United States and abroad. The primary subsidiaries in each of our business
segments are as follows:

<TABLE>
<CAPTION>

PROFESSIONAL DENTAL                                                            ORTHODONTICS
-------------------                                                            ------------
<S>                                                                            <C>
Kerr Corporation, including its Demetron Division                              Ormco Corporation, including its Analytic
                                                                               Endodontics Division

Kerr Italia S.p.A.                                                             Ormco B.V.
Sybron Canada Limited's Beavers Dental Division                                Ormodent Group
Pinnacle Products, Inc.                                                        Allesee Orthodontic Appliances, Inc.

INFECTION CONTROL PRODUCTS
--------------------------

Metrex Research Corporation, including its Alden
  Scientific Division
</TABLE>

     Our goals are to consistently grow sales and earnings. Key elements of our
strategy to achieve these goals are: a focus on product innovation, ongoing cost
reduction, and selective acquisitions while continuing to pursue a strategy of
debt reduction.

     When we use the terms "we" or "our" in this report, we are referring to SDS
and its subsidiaries. Our fiscal year ends on September 30 and, accordingly, all
references to quarters refer to our fiscal quarters. The quarters ended March
31, 2000 and 2001, refer to the second quarters of fiscal 2000 and 2001,
respectively.

     Sales for the quarter and year to date ended March 31, 2001 grew from the
corresponding prior year period. Net sales for the second quarter of fiscal 2001
increased by 3.1% from the corresponding fiscal 2000 period, while year to date
sales increased by 3.7% from the comparable prior year period. Operating income
for the second quarter of fiscal 2001 decreased by 2.7% from the corresponding
fiscal 2000 period, while year to date operating income decreased 5.3% from the
comparable prior year period, primarily due to an unfavorable currency impact
and general and administrative costs associated with being a stand-alone entity.

     Sales growth in the quarter and year to date ended March 31, 2001 were
strong domestically. Domestic sales increased by 4.5% and 6.1% for the quarter
and year to date periods, respectively, from the corresponding fiscal 2000
periods. International sales growth increased by 1.3% and 0.5% for the quarter
and year to date periods, respectively, from the corresponding fiscal 2000
periods, despite the negative impact of the strengthening U.S. dollar. Without
the negative currency effects, international sales growth would have been 6.0%
and 9.4% for the quarter and year to date periods, respectively, from the
corresponding fiscal 2000 periods.

     We continue to maintain an active program of developing and marketing new
products and product line extensions, as well as pursuing growth through
acquisitions. We completed two acquisitions in the first half of fiscal 2001.
(See note 3 of notes to the unaudited consolidated financial statements.)

     Substantial portions of our sales, income and cash flows are derived
internationally. The financial position and the results of operations from
substantially all of our international operations, other than most U.S. export
sales, are measured using the local currency of the countries in which such
operations are conducted and are then translated into U.S. dollars. While the
reported income of foreign subsidiaries will be impacted by a weakening or
strengthening of the U.S. dollar in relation to a particular local currency, the
effects of foreign currency fluctuations are partially mitigated by the fact
that manufacturing costs and other expenses of foreign subsidiaries are
generally incurred in the same currencies in which sales are generated. Such
effects of foreign currency fluctuations are also mitigated by the fact that
such subsidiaries' operations are conducted in


                                       10
<PAGE>   13

numerous foreign countries and, therefore, in numerous foreign currencies. In
addition, our U.S. export sales may be impacted by foreign currency fluctuations
relative to the value of the U.S. dollar as foreign customers may adjust their
level of purchases upward or downward according to the weakness or strength of
their respective currencies versus the U.S. dollar.

     From time to time we may employ currency hedges to mitigate the impact of
foreign currency fluctuations. If currency hedges are not employed, we may be
exposed to earnings volatility as a result of foreign currency fluctuations. As
of March 31, 2001 we have not entered into any such currency hedges.

RESULTS OF OPERATIONS

QUARTER ENDED MARCH 31, 2001 COMPARED TO THE QUARTER ENDED MARCH 31, 2000

         NET SALES
<TABLE>
<CAPTION>
                                                         FISCAL            FISCAL           DOLLAR          PERCENT
NET SALES: (IN THOUSANDS)                                 2000              2001            CHANGE          CHANGE
-------------------------                            -------------       -----------     ------------      ----------
<S>                                                  <C>                 <C>             <C>                      <C>
Professional Dental................................  $      55,217       $    58,704     $      3,487             6.3%
Orthodontics.......................................         46,699            46,592             (107)            (.2)%
Infection Control Products.........................          6,399             6,425               26              .4%
                                                     -------------       -----------     ------------      ----------
Total Net Sales....................................  $     108,315       $   111,721     $      3,406             3.1%
                                                     =============       ===========     ============      ==========
</TABLE>

     Overall Company. Net sales for the second quarter of fiscal 2001 increased
by $3.4 million or 3.1% from the corresponding fiscal 2000 quarter.

     Professional Dental. Increased net sales in the Professional Dental segment
resulted primarily from: (a) increased net sales of new products (approximately
$2.9 million), (b) net sales of products from acquired companies (approximately
$1.7 million), (c) increased volume of existing products (approximately $0.6
million), and (d) reduced rebate expense (approximately $0.1 million). Increased
net sales were partially offset by: (a) unfavorable foreign currency
fluctuations (approximately $1.0 million), and (b) decreased net sales related
to prior year exited product lines (approximately $0.8 million).

     Orthodontics. Decreased net sales in the Orthodontics segment resulted
primarily from: (a) decreased net sales of existing products (approximately $2.2
million), (b) decreased net sales related to prior year exited product lines
(approximately $1.2 million), and (c) unfavorable foreign currency fluctuations
(approximately $1.2 million). The decrease in sales was partially offset by: (a)
increased volume of new products (approximately $4.3 million), (b) net sales of
products from acquired companies (approximately $0.1 million), and (c) and
decreased rebate expense (approximately $0.1 million).

     Infection Control Products. Increased net sales in the Infection Control
Products segment remained relatively flat over the corresponding fiscal 2000
quarter.

         GROSS PROFIT

<TABLE>
<CAPTION>
                               FISCAL      PERCENT OF       FISCAL        PERCENT OF        DOLLAR           PERCENT
GROSS PROFIT: (IN THOUSANDS)    2000          SALES          2001            SALES          CHANGE           CHANGE
----------------------------  ---------    ----------       -------       ----------       --------         --------
<S>                           <C>               <C>         <C>               <C>         <C>                    <C>
Professional Dental......     $  32,331         58.6%       $32,663           55.6%       $     332              1.0%
Orthodontics.............        28,685         61.4%        26,926           57.8%          (1,759)            (6.1)%
Infection Control Products        2,694         42.1%         3,314           51.6%             620             23.0%
                              ---------      -------        -------           ----         --------         --------
Total Gross Profit.......     $  63,710         58.8%       $62,903           56.3%       $    (807)            (1.3)%
                              =========      =======        =======       ========        =========         ========
</TABLE>

         Overall Company. Gross profit for the quarter ended March 31, 2001
decreased by $0.8 million or (1.3)% from the corresponding fiscal 2000 period.

         Professional Dental. Increased gross profit in the Professional Dental
segment resulted primarily from: (a) increased unit volume relating to new
products (approximately $1.7 million), (b) the effects of acquired companies
(approximately $1.0 million), (c) increased volume of existing products
(approximately $0.4 million), (d) a decrease in inventory reserve adjustments
(approximately $0.3 million, of which approximately $0.3 is a favorable standard
cost adjustment, a decrease in royalty expense


                                       11
<PAGE>   14

of approximately $0.2 million, and an approximate $0.1 million reduction in the
obsolescence provision, partially offset by an increase related to physical
inventory adjustments of approximately $0.3 million), and (e) decreased rebate
expense (approximately $0.1 million). Higher gross profit was partially offset
by (a) an unfavorable product mix (approximately $2.0 million), (b) an
unfavorable exchange rate effect (approximately $0.4 million), (c) unfavorable
manufacturing variances (approximately $0.4 million), and (d) decreased profits
related to prior year exited products lines (approximately $0.4 million).

     Orthodontics. Decreased gross profit in the Orthodontics segment resulted
primarily from: (a) unfavorable manufacturing variances (approximately $1.7
million), (b) unfavorable foreign exchange rate (approximately $1.2 million),
(c) decreased sales of existing products (approximately $1.1 million), (d)
product line exits from prior year (approximately $0.6 million), and (e)
inventory reserve adjustments (approximately $0.6 million, of which
approximately $0.3 million is related to reduced royalty income, an approximate
$0.2 million increase in the LIFO provision, and an increase of approximately
$0.2 million related to the obsolescence reserves, partially offset by a
favorable physical inventory adjustment of approximately $0.1 million). These
unfavorable decreases were partially offset by; (a) increased sales of new
products (approximately $2.6 million), (b) product mix cost reductions
(approximately $0.7 million), and (c) decreased rebate expense (approximately
$0.1 million).

     Infection Control Products. Gross profit in the Infection Control Products
segment increased due to: (a) a favorable manufacturing variance (approximately
$0.4 million), (b) favorable inventory adjustments (approximately $0.4 million,
of which approximately $0.5 million is related to physical inventory
adjustments, partially offset by an approximate $0.1 million obsolescence
adjustment), and (c) increased sales volume (approximately $0.1 million). The
increase in gross profit was partially offset by: (a) an unfavorable variance
from standard cost (approximately $0.2 million), and (c) increased labor costs
(approximately $0.1 million).

                                       12
<PAGE>   15


         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

<TABLE>
<CAPTION>

SELLING GENERAL AND ADMINISTRATIVE      FISCAL      PERCENT OF     FISCAL       PERCENT OF      DOLLAR        PERCENT
EXPENSES: (IN THOUSANDS)                 2000         SALES         2001          SALES         CHANGE        CHANGE
----------------------------------    ---------     ----------    --------      ----------     --------       -------
<S>                                   <C>               <C>       <C>              <C>         <C>               <C>
Professional Dental.................  $  16,415         29.7%     $ 16,339         27.8%       $    (76)          (.5)%
Orthodontics........................     15,694         33.6%       15,495         33.3%           (199)         (1.3)%
Infection Control Products..........      2,788         43.6%        3,027         47.1%            239           8.6%
                                      ---------     --------      --------      -------        --------       -------
Total Selling General and
    Administrative Expenses.........  $  34,897         32.2%     $ 34,861         31.2%       $    (36)          (.1)%
                                      =========     ========      ========      =======        ========       =======
</TABLE>

     Overall Company. Selling, general and administrative expenses for the
quarter ended March 31, 2001 decreased by $0.04 million or (0.1)% from the
corresponding fiscal 2000 quarter.

     Professional Dental. Decreased selling, general and administrative expenses
in the Professional Dental segment resulted primarily from: (a) a favorable
currency exchange rate effect (approximately $0.8 million), and (b) decreased
research and development expenses (approximately ($0.4 million). These decreases
were partially offset by: (a) increased selling and marketing expenses
(approximately $0.5 million), (b) increased general and administrative expenses
(approximately $0.5 million), and (c) additional expenses related to
acquisitions (approximately 0.1 million).

     Orthodontics. Decreased selling, general and administrative expenses in the
Orthodontics segment resulted primarily from: (a) a favorable foreign currency
fluctuations (approximately $0.4 million), (b) decreased selling and marketing
expenses (approximately $0.2 million) and (c) decreased amortization expense
(approximately $0.1 million). Decreased selling, general and administrative
expenses in the Orthodontics segment were partially offset by an increase in
general and administrative expenses (approximately $0.5 million).

     Infection Control Products. Increased selling, general and administrative
expenses in the Infection Control Products segment resulted primarily from
increased marketing expenses (approximately $0.2 million).


                                       13
<PAGE>   16


          OPERATING INCOME
<TABLE>
<CAPTION>
                                          FISCAL     PERCENT OF     FISCAL     PERCENT OF      DOLLAR      PERCENT
OPERATING INCOME (LOSS): (IN THOUSANDS)    2000         SALES        2001         SALES        CHANGE      CHANGE
---------------------------------------  --------    ----------    -------     ----------     -------     --------
<S>                                     <C>             <C>       <C>             <C>        <C>              <C>
Professional Dental.................    $  15,916       28.8%     $ 16,324        27.8%      $    408         2.6%
Orthodontics........................       12,991       27.8%       11,431        24.5%        (1,560)      (12.0)%
Infection Control Products..........          (94)      (1.5)%         287         4.5%           381       405.3%
                                        ---------   --------      --------     -------       --------     -------
Total Operating Income..............    $  28,813       26.6%     $ 28,042        25.1%      $   (771)       (2.7)%
                                        =========   ========      ========     =======       ========     =======
</TABLE>

     As a result of the foregoing, operating income in the second quarter of
fiscal 2001 decreased by 2.7% or $0.8 million below operating income in the
corresponding quarter of fiscal 2000.

          INTEREST EXPENSE

     Interest expense was $9.1 million in the second quarter of fiscal 2001, an
increase of $2.8 million from the corresponding fiscal 2000 quarter. The
increase resulted from a higher average debt balance in 2001 and a higher
average interest rate due to the SDS Credit Facility (as defined in the
"Liquidity and Capital Resources" section below).

          INCOME TAXES

     Taxes on income in the second quarter of fiscal 2001 were $7.6 million, a
decrease of $1.6 million from the corresponding 2000 quarter. The decrease
resulted primarily from lower taxable earnings.

          NET INCOME

     As a result of the foregoing, we had net income of $11.2 million in the
second quarter of fiscal 2001, as compared to net income of $13.6 million in the
corresponding 2000 period.

          DEPRECIATION AND AMORTIZATION

     Depreciation and amortization expense is allocated among cost of sales,
selling, general and administrative expenses and other expense. Depreciation
expense increased $0.7 million in the second quarter of fiscal 2001 compared to
the same period prior year due to routine depreciation expense on capital
expenditures, while amortization expense decreased slightly.

SIX MONTHS ENDED MARCH 31, 2001 COMPARED TO THE SIX MONTHS ENDED MARCH 31, 2000

     NET SALES

<TABLE>
<CAPTION>
                                                        FISCAL             FISCAL           DOLLAR          PERCENT
NET SALES: (IN THOUSANDS)                                2000               2001            CHANGE          CHANGE
-------------------------                            -------------       -----------     ------------      ----------
<S>                                                  <C>                 <C>             <C>                      <C>
Professional Dental................................  $     102,822       $   107,654     $      4,832             4.7%
Orthodontics.......................................         86,760            88,742            1,982             2.3%
Infection Control Products.........................         12,097            12,826              729             6.0%
                                                     -------------       -----------     ------------      ----------
Total Net Sales....................................  $     201,679       $   209,222     $      7,543             3.7%
                                                     =============       ===========     ============      ==========
</TABLE>

     Overall Company. Net sales for the first six months of fiscal 2001
increased by $7.5 million or 3.7% from the corresponding fiscal 2000 period.

     Professional Dental. Increased net sales in the Professional Dental segment
resulted primarily from: (a) increased net sales of new products (approximately
$4.3 million), (b) net sales of products from acquired companies (approximately
$3.1 million), (c) increased sales from existing products (approximately $0.9
million), and (d) reduced rebate expense (approximately $0.4 million). Partially
offsetting higher sales were: (a) an unfavorable exchange rate (approximately
$3.1 million) and (b) decrease in sales from prior year of exited product lines
(approximately $0.8 million).

     Orthodontics. Increased net sales in the Orthodontics segment resulted
primarily from (a) increased net sales of new products (approximately $7.6
million), and (b) net sales of products from acquired companies (approximately
$0.9 million).


                                       14
<PAGE>   17

Partially offsetting higher sales were: (a) unfavorable exchange rate effect
(approximately $3.7 million), (b) decreased sales of existing products
(approximately $1.6 million), and (c) decreased sales related to prior year
exited products (approximately $1.2 million).

     Infection Control Products. Increased net sales in the Infection Control
Products segment resulted primarily from net sales of existing products
(approximately $0.7 million).

         GROSS PROFIT

<TABLE>
<CAPTION>
                               FISCAL      PERCENT OF       FISCAL        PERCENT OF       DOLLAR       PERCENT
GROSS PROFIT: (IN THOUSANDS)    2000          SALES          2001            SALES         CHANGE       CHANGE
----------------------------  ---------     ---------      --------       ----------      ---------     --------
<S>                           <C>               <C>        <C>               <C>         <C>                <C>
Professional Dental.......... $  58,586         57.0%      $ 59,386           55.2%       $     800          1.4%
Orthodontics.................    53,600         61.8%        52,140           58.8%          (1,460)        (2.7)%
Infection Control Products...     5,623         46.5%         6,356           49.6%             733         13.0%
                              ---------      -------       --------       --------        ---------     --------
Total Gross Profit........... $ 117,809         58.4%      $117,882           56.3%       $      73           .1%
                              =========      =======       ========       ========        =========     ========
</TABLE>

     Overall Company. Gross profit for the six months ended March 31, 2001
increased by $0.1 million or 0.1% from the corresponding fiscal 2000 period.

     Professional Dental. Increased gross profit in the Professional Dental
segment resulted primarily from: (a) increased unit volume relating to new
products (approximately $2.5 million), (b) acquisition company sales
(approximately $1.9 million), (c) inventory adjustments (approximately $1.0
million, of which approximately $0.5 million is related to standard cost
revisions, approximately $0.4 million is related to physical inventory
adjustments, and approximately $0.1 million is a decrease in the obsolescence
provision), (d) increased volume of existing products (approximately $0.7
million), and (e) decreased rebate expense (approximately $0.4 million). The
following offset increased gross profit margins: (a) unfavorable product mix
(approximately $2.7 million), (b) an unfavorable exchange rate effect
(approximately $1.8 million), (c) unfavorable manufacturing variances
(approximately $0.8 million) and (d) margins lost from prior year exited
products (approximately $0.4 million).

     Orthodontics. Decreased gross profit in the Orthodontics segment resulted
primarily from: (a) an unfavorable exchange rate effect (approximately $3.7
million), (b) inventory adjustments (approximately $1.4 million, of which
approximately $0.5 is due to decreased royalty income, an approximate $0.4
increase in obsolescence provisions, an increase of approximately $0.4 million
due to LIFO provisions, and approximately $0.2 million in increased royalty
expense, partially offset by a favorable physical inventory reduction of
approximately $0.1 million), (c) increased manufacturing variances
(approximately $1.1 million), (d) decreased margins on sales of existing
products (approximately $0.7 million), and (e) decreased margins due to exited
prior year product lines (approximately $0.6 million). These decreases were
partially offset by: (a) increased unit volume of new product lines
(approximately $4.6 million), (b) favorable product mix (approximately $1.0
million), and (c) acquisition company product sales (approximately $0.4
million).

     Infection Control Products. Gross profit in the Infection Control Products
segment increased due to: (a) inventory adjustments (approximately $0.4 million,
of which approximately $0.5 million is due to a favorable physical inventory
adjustment, partially offset by and $0.1 million obsolescence adjustment), (b)
increased sales volume (approximately $0.4 million), and (c) reduced
manufacturing variance costs (approximately $0.3 million). Increased gross
profit was partially offset by an unfavorable variance from standard costs
(approximately $0.4 million).


                                       15
<PAGE>   18



SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

<TABLE>
<CAPTION>

SELLING GENERAL AND ADMINISTRATIVE     FISCAL      PERCENT OF      FISCAL       PERCENT OF      DOLLAR         PERCENT
EXPENSES: (IN THOUSANDS)                2000          SALES         2001           SALES        CHANGE         CHANGE
----------------------------------    ---------     ---------     --------      ----------     --------       --------
<S>                                   <C>               <C>       <C>              <C>         <C>                <C>
Professional Dental.................  $  30,231         29.4%     $ 31,323         29.1%       $  1,092           3.6%
Orthodontics........................     30,966         35.7%       31,896         35.9%            930           3.0%
Infection Control Products..........      5,206         43.0%        5,962         46.5%            756          14.5%
                                      ---------     --------      --------        -----        --------       -------
Total Selling General and
    Administrative Expenses.........  $  66,403         32.9%     $ 69,181         33.1%       $ 2, 778           4.2%
                                      =========     ========      ========        =====        ========       =======
</TABLE>

     Overall Company. Selling, general and administrative expenses for the six
months ended March 31, 2001 increased by $2.8 million or 4.2% from the
corresponding fiscal 2000 period. This was primarily due to $0.7 million of
Apogent charges for certain corporate functions now handled by SDS as a result
of the Spin-Off along with the assumption of additional costs of being a
stand-alone entity instead of a subsidiary of Apogent.

     Charges allocated to SDS by Apogent for general and administrative expenses
for the quarter ended December 31, 2000 were approximately $0.7 million. These
charges were allocated by Apogent and represented tax, legal and other corporate
overhead expenses incurred by Apogent (prior to the Spin-Off). Without these tax
effected charges, the basic and fully diluted EPS for the six month period ended
March 31, 2001 would have been approximately $ .01 higher.

     Professional Dental. Increased selling, general and administrative expenses
in the Professional Dental segment resulted primarily from: (a) higher general
and administrative charges (approximately $1.4 million), (b) increased selling
and marketing expenses (approximately $0.8 million), (c) additional expenses
related to acquisitions (approximately $0.2 million), and (d) increased
amortization expense (approximately $0.1 million). These increases were
partially offset by: (a) a decrease in expenses related to foreign currency
fluctuations (approximately $1.2 million), and (b) decreased research and
development expenses (approximately $0.2 million).

     Orthodontics. Increased selling, general and administrative expenses in the
Orthodontics segment resulted primarily from: (a) increased general and
administrative expenses (approximately $1.4 million) (b) increased selling and
marketing expenses (approximately $0.5 million), and (c) higher selling, general
and administrative expenses related to acquisitions (approximately $0.1
million). Increased selling, general and administrative expenses in the
Orthodontics segment were partially offset by a decrease in expenses related to
foreign currency fluctuations (approximately $1.0 million) and reduced
amortization expenses ($0.1 million).

     Infection Control Products. Increased selling, general and administrative
expenses in the Infection Control Products segment resulted primarily from: (a)
increased marketing expenses (approximately $0.6 million), and (b) increased
general and administrative expenses (approximately $0.2 million).


                                       16
<PAGE>   19


          OPERATING INCOME

<TABLE>
<CAPTION>

                                        FISCAL       PERCENT OF    FISCAL       PERCENT OF      DOLLAR         PERCENT
OPERATING INCOME: (IN THOUSANDS)         2000           SALES       2001           SALES        CHANGE         CHANGE
--------------------------------      ---------     -----------   --------      ----------     -------         -------
<S>                                   <C>               <C>       <C>              <C>         <C>              <C>
Professional Dental.................  $  28,355         27.6%     $ 28,063         26.1%       $  (292)         (1.0)%
Orthodontics........................     22,634         26.1%       20,244         22.8%        (2,390)        (10.6)%
Infection Control Products..........        417          3.4%          394          3.1%           (23)         (5.5)%
                                      ---------     --------      --------      -------        -------         -----
Total Operating Income..............  $  51,406         25.5%     $ 48,701         23.3%       $(2,705)         (5.3)%
                                      =========     ========      ========      =======        =======         =====
</TABLE>

     As a result of the foregoing, operating income in the first six months of
fiscal 2001 decreased by 5.3% or $2.7 million below operating income in the
corresponding period of fiscal 2000.

          INTEREST EXPENSE

     Interest expense was $16.7 million in the first six months of fiscal 2001,
an increase of $4.4 million from the corresponding fiscal 2000 period. The
increase resulted from a higher average debt balance in 2001 and a higher
average interest rate due to the SDS Credit Facility (as defined in the
"Liquidity and Capital Resources" section below).

          INCOME TAXES

     Taxes on income before the extraordinary item in the first six months of
fiscal 2001 were $12.8 million, a decrease of $3.2 million from the
corresponding 2000 period. The decrease resulted primarily from lower taxable
earnings.

          INCOME BEFORE EXTRAORDINARY ITEM

     As a result of the foregoing, we had income before extraordinary item
of $18.8 million in the first six months of fiscal 2001, as compared to
$23.6 million in the corresponding 2000 period.

          EXTRAORDINARY ITEM

     Due to the Spin-Off of SDS, Apogent terminated its credit agreement and
wrote off the associated deferred financing fees. This resulted in an after tax
write-off of $0.5 million that was allocated to SDS. The incremental EPS effect
of this allocation for the six month period ended March 31, 2001 was $0.02 per
share on both a basic and fully diluted basis.

          NET INCOME

     As a result of the foregoing, we had net income of $18.3 million in the
first six months of fiscal 2001, as compared to net income of $23.6 million in
the corresponding 2000 period.

          DEPRECIATION AND AMORTIZATION

     Depreciation and amortization expense is allocated among cost of sales,
selling, general and administrative expenses and other expense. Depreciation
and amortization expense increased $0.6 million in the first six months of
fiscal 2001, as compared to the corresponding 2000 period, due to acquisition
activity, as well as additional depreciation on routine operating expenditures.

          LIQUIDITY AND CAPITAL RESOURCES

     As a result of the acquisition of Apogent's predecessor in 1987 and the
acquisitions we have completed since 1987, the carrying value of certain
tangible and intangible assets were increased consistent with generally accepted
accounting principles. Accordingly, our results of operations include a
significant level of non-cash expenses related to the depreciation of fixed
assets and the amortization of intangible assets, including goodwill.

     Prior to the Spin-Off, our capital requirements arose principally from our
allocation of the indebtedness incurred in connection with the permanent
financing for the 1987 acquisition of the predecessor to Apogent and subsequent
refinancings, obligations to pay rent under the Sale/Leaseback facility (as
defined herein), working capital needs (primarily related to


                                       18

<PAGE>   20
inventory and accounts receivable), capital expenditures (primarily related to
purchases of machinery, the purchase of various businesses and product lines in
execution of our acquisition strategy), payments to be made in connection with
our restructuring activities in 1998 and 2000, and the periodic expansion of
physical facilities. Other than the capital requirements related to the
permanent financing for the 1987 acquisition of Apogent's predecessor, we expect
our future capital requirements to be similar to those prior to the Spin-Off. In
addition, we required capital to service bank debt and related interest
allocated to us in the Spin-Off in the amount of $307.1 million. It is currently
our intent to de-leverage and continue to pursue our acquisition strategy when
those acquisitions appear to be in the best interest of the stockholders and
considering the level of debt and interest. If acquisitions continue at our
historical pace, of which there can be no assurance, we may require financing
beyond the capacity of the SDS Credit Facility (as defined below). Also, the SDS
Credit Facility limits our ability to consummate acquisitions without the
consent of our lenders. In addition, certain acquisitions previously completed
contain "earnout provisions" requiring further payments in the future if certain
financial results are achieved by the acquired companies.

     The statement contained in the immediately preceding paragraph concerning
our intent to continue to pursue our acquisition and de-levering strategies are
forward-looking statements. Our ability to continue our acquisition strategy is
subject to a number of uncertainties, including, but not limited to, our ability
to raise capital beyond the capacity of the SDS Credit Facility and the
availability of suitable acquisition candidates at reasonable prices. See
"Cautionary Factors" below.

     Approximately $24.6 million of cash was generated from operating activities
in the first six months of fiscal 2001, as compared to approximately $26.4 from
the same period of the prior year. The approximate $1.8 million decrease in cash
flows from operations was primarily due to: (a) a decrease in the net change in
accounts receivable from the prior year period of approximately $6.9 million,
(b) decreased earnings compared to the prior year period of approximately $5.3
million, (c) lower increase in income taxes payable from the prior year period
of approximately $3.4 million), and (d) an increase in the net change of prepaid
expenses for the current year period as compared to the prior year of
approximately $2.8 million. The decreases in cash flows from operations were
offset by the following: (a) an increase in the net change in other current
liabilities from the same period prior year of approximately $6.3 million, (b)
an increase in the net change in accounts payable from the same period prior
year of approximately $5.7 million, (c) an increase in the net change in other
assets and liabilities from the same period prior year of approximately $1.9
million, a lower increase in inventories from the prior year period increase of
approximately $1.1 million, (e) an increase in the net change of accrued
employee benefits from the prior year period net change of approximately $1.0
million, and (f) an increase in depreciation expense of approximately $0.6
million. Approximately $6.7 million of cash was used in investing activities in
the first half of 2001, a decrease of approximately $15.0 million, or 69%, from
the same period of fiscal 2000 (primarily due to lower payments for acquisitions
from the prior year period of approximately $16.3, partially offset by higher
capital expenditures of approximately $1.0 million and lower proceeds from sales
of property, plant and equipment of approximately $0.3 million). Approximately
$21.1 million of cash was used in financing activities in the first half of
fiscal 2001 as compared to approximately $5.1 million from the corresponding
prior fiscal year period. The approximate $16.0 million increase in cash used in
financing activities from the prior year was primarily attributed to: (a) a cash
dividend payment to Apogent in the first quarter of fiscal 2001 of approximately
$67.9 million, (b) lower capital contributions from Apogent in fiscal year 2001
as compared to fiscal 2000 of approximately $15.8 million, and (c) the payment
of deferred financing fees related to the SDS Credit Facility of approximately
$5.5 million. These uses of cash in financing activities were partially offset
by: (a) the net change in advances and loans to Apogent from the prior year six
month fiscal period of approximately $60.9 million, (b) a net increase in loan
proceeds from the same period prior year of approximately $11.7 million, and (c)
cash received from the exercise of stock options of approximately $0.6 million
from the prior year fiscal period.

     CREDIT FACILITIES: Historically, the operations of SDS have been funded
through the credit facilities managed by Apogent (the "Apogent Credit
Facilities"). Certain affiliates of SDS have been obligors under Apogent Credit
Facilities and as such, Apogent has historically recorded a portion of the debt
outstanding and related interest under these facilities at SDS or its
affiliates. At September 30, 2000, approximately $311.8 million of the
borrowings under the Apogent Credit Facilities, consisting of term loan
facilities (the "Old Tranche A Term Loan" and "Old Tranche B Term Loan") and a
revolving credit facility (the "Old Revolving Credit Facility") were recorded at
SDS and its affiliates. Under the Old Tranche A Term Loan, SDS and its
affiliates had $69.5 million outstanding at September 30, 2000. Under the Old
Tranche B Term Loan, SDS and its affiliates had $119.7 million outstanding at
September 30, 2000. Under the Old Revolving Credit Facility, SDS and its
affiliates had $122.6 million outstanding at September 30, 2000. The cash flows
of SDS have been substantially affected by the historical debt (and related
interest expense) and by charges related to an allocation of corporate operating
expenses by Apogent to SDS. Interest expense at SDS was, $6.3 million, and $9.1
million during the quarters ended March 31, 2000 and 2001, respectively, and
$12.3 million and $16.7 million for the six-month periods ending March 31, 2000
and 2001, respectively. Apogent corporate


                                       18
<PAGE>   21

operating expenses charged to SDS were $1.3 million during the quarter ended
March 31, 2000, and $2.4 million and $0.7 million during the six months ended
March 31, 2000 and 2001, respectively. The interest expense and corporate
operating expense charges are not necessarily indicative of the interest charges
and corporate operating expenses that would have been incurred by SDS if SDS had
been an independent company during the periods presented. During the first
quarter of 2001, SDS assumed stand-alone corporate expenses, as well as
incurring corporate charges from Apogent prior to the Spin-Off. Borrowed funds
after the Spin-Off have higher interest rates than those historically recorded
at SDS by Apogent. Since the Spin-Off, SDS has been responsible for the expenses
of being a public company.

     Under the new SDS credit facility (the "SDS Credit Facility") put in place
for the Spin-Off, SDS together with certain of its subsidiaries obtained a
credit facility, which allows for borrowings up to $450 million from ABN AMRO
Bank N.V. and certain other lenders. The SDS Credit Facility is comprised of a
$150 million five year tranche A term loan (the "Tranche A Term Loan"), a $150
million seven year tranche B term loan (the "Tranche B Term Loan"), under which
Kerr and Ormco are borrowers (the "Term Loan Borrowers"), and a five year
revolving credit facility up to $150 million (the "Revolving Credit Facility),
under which SDM is the borrower.

     The Tranche A Term Loan bears interest, at the option of the Term Loan
Borrowers, equal to: (a) the higher of (i) the rate from time to time publicly
announced by ABN AMRO Bank N.V. as its prime rate plus 1% to 1.75% or (ii) the
federal funds rate plus an additional 1.5% to 2.25% depending upon certain
financial ratios or (b) the adjusted interbank offered rate for Eurodollar
deposits with an additional 2% to 2.75% depending upon certain financial ratios.
The highest percentage on the grid is applicable through June 30, 2001.
Repayments under the Tranche A Term Loan are due in quarterly installments
beginning on March 31, 2001. Amounts due in fiscal 2001, 2002, 2003, 2004 and
2005 are $15 million, $23.75 million, $28.75 million, $33.75 million and $38.75
million, respectively, with the final payment of $10 million due in November
2005. The average interest rate at March 31, 2001 on the Tranche A Term Loan was
8.8%.

     The Tranche B Term Loan bears interest, at the option of the Term Loan
Borrowers, equal to: (a) the higher of (i) the rate from time to time publicly
announced by ABN AMRO Bank N.V. as its prime rate plus 2.75% or (ii) the federal
funds rate plus 3.25% depending upon certain financial ratios or (b) the
adjusted interbank offered rate for Eurodollar deposits plus 3.75%. Repayments
under the Tranche B Term Loan are due in quarterly installments beginning on
March 31, 2001. Amounts due in fiscal 2001, 2002, 2003, 2004, 2005, 2006, and
2007 are $1.125 million, $1.5 million, $1.5 million, $1.5 million, $1.5 million,
$53.812 million and $71.25 million, respectively, with the final payment of
$17.813 million due in November 2007. The average interest rate at March 31,
2001 on the Tranche B Term Loan was 9.88%.

     Borrowings under the Revolving Credit Facility generally bear interest on
the same terms as those under Tranche A Term Loan. In addition, SDM pays a
commitment fee on the average unused portion of the Revolving Credit Facility
ranging between .375% to .5% depending on certain financial ratios. Until June
30, 2001, the Company pays the highest end of the range. The Revolving Credit
Facility also provides for the issuance of standby letters of credit and swing
line loans of credit as required in the ordinary course of business, subject to
certain sublimits. The average interest rate at March 31, 2001 on the Revolving
Credit Facility was 8.87%.

     The SDS Credit Facility contains numerous financial and operating
covenants, including, among other things: restrictions on acquisitions and
investments; requirements that we maintain certain financial ratios;
restrictions on our ability to incur indebtedness or to create or permit liens,
or to pay cash dividends; and limitations on incurrence of additional
indebtedness. Our ability to meet our debt service requirements and to comply
with such covenants is dependent upon our future performance, which is subject
to financial, economic, competitive and other factors affecting us, many of
which are beyond our control. We were in compliance with all such covenants.

     All interest on the historical books of SDS under the Apogent Credit
Facilities was at floating rates, primarily based on the Eurodollar rates and,
as such, SDS was exposed to fluctuation in Eurodollar rates. SDS has not
historically mitigated that risk through derivative instruments. The SDS Credit
Facility is anticipated to use primarily the Eurodollar rates provided the rates
are more favorable to the Company. Under the SDS Credit Facility, SDS is
required to have interest rate protection for a minimum of 50% of the of the
aggregate outstanding principal amount of the Tranche A Term Loan and Tranche B
Term Loan for not fewer than four years. SDS is meeting this obligation.


                                       19
<PAGE>   22

     The SDS Credit Facility is secured by domestic real and personal property
assets, and a pledge of capital stock of SDM, Kerr, and Ormco, and certain
material domestic and foreign SDS subsidiaries.

     As a result of the terms of the SDS Credit Facility, we are sensitive to a
rise in interest rates. A rise in interest rates would result in increased
interest expense on our outstanding debt. In order to reduce our sensitivity to
interest rate increases, from time to time we enter into interest rate swap
agreements. As of March 31, 2001, the Company had six interest rate swaps
outstanding aggregating a notional amount of $210 million. Under the terms of
the swap agreements, the Company is required to pay fixed rate amounts equal to
the swap agreement rates listed below. In exchange for the payment of the fixed
rate amounts, the Company receives floating rate amounts equal to the
three-month LIBOR rate in effect on the date of the swap agreements and the
subsequent reset dates. For the swap agreements, the rate resets on the
quarterly anniversary of the swap agreement dates until the swap expiration
dates. The net interest rate paid by the Company is approximately equal to the
sum of the swap agreement rates plus the applicable Eurodollar Rate Margin. The
swap agreement rates and durations are as follows:

<TABLE>
<CAPTION>

EXPIRATION DATE          NOTIONAL AMOUNT      SWAP AGREEMENT DATE          SWAP AGREEMENT RATE      SWAP EFFECTIVE DATE
---------------          ---------------      -------------------          -------------------      -------------------
<S>                        <C>                   <C>                           <C>                    <C>
September 15,2002          $25 million           February 23,2001              4.999%                 March 15, 2001
September 15, 2002         $35 million           February 23, 2001             4.997%                 June 15, 2001
January 18, 2005           $70 million           December 22, 2000             5.7825%                January 16, 2001
February 16, 2005          $10 million           January 24, 2001              5.6940%                February 16, 2001
March 31, 2005             $35 million           January 2, 2001               5.6500%                March 30, 2001
March 31, 2005             $35 million           January 2, 2001               5.5800%                March 30, 2001
</TABLE>


     We intend to fund our acquisitions, working capital requirements, capital
expenditure requirements, principal and interest payments, obligations under the
Sale/Leaseback (defined below), restructuring expenditures, other liabilities
and periodic expansion of facilities, to the extent available, with funds
provided by operations and short-term borrowings under the Revolving Credit
Facility. To the extent that funds are not available from those sources,
particularly with respect to our acquisition strategy, we would have to raise
additional capital.

     The Revolving Credit Facility provides up to $150 million in available
credit. At March 31, 2001, there was approximately $87.0 million of available
credit under the Revolving Credit Facility. The Tranche A Term Loan had an
outstanding balance of $145.0 million at March 31, 2001,and the Tranche B Term
Loan had an outstanding balance of $149.6 million at March 31, 2001.

     We believe that the cash flows from operations, unused amounts available
under the SDS Credit Facility, and access to capital markets will be sufficient
to satisfy our future working capital, capital investment, acquisition and other
financing requirements for the foreseeable future. However, there can be no
assurance that will be the case.

     SALE/LEASEBACK: In 1988 SDM completed the sale and leaseback (the
"Sale/Leaseback") of its then principal domestic manufacturing and office
facilities with an unaffiliated third party. The transaction has been accounted
for as a financing for financial statement purposes, thus the facilities remain
in property, plant and equipment. The transaction was a sale for income tax
purposes. The financing obligation is being amortized over the initial 25-year
lease term.

     The initial term of each lease is 25 years with five five-year renewal
options. On the fifth anniversary of the leases and every five years thereafter
(including renewal terms), the rent is increased by the percentage equal to 75%
of the percentage increase in the Consumer Price Index over the preceding five
years. The percentage increase to the rent in any five-year period will be
capped at 15%. Beginning January 1, 1999 annual payments increased from $1.3
million to $1.5 million. The next adjustment will occur January 1, 2004. As a
result of the Spin-Off, the Sale/Leaseback has been amended to extend the leases
an additional 5 years, increase the basic rent by $.15 million per year, and
provides SDS the option to purchase the leased premises at fair market value
from June 1, 2008 to May 31, 2009.

     The Company pays all costs of maintenance and repair, insurance, taxes and
all other expenses associated with the properties. In addition, SDS
unconditionally guarantees each of the leases.


                                       20
<PAGE>   23

     The Company has the option to purchase the facilities according to the
terms of any bona fide offer received by the lessor from a third party at any
time during the term of the leases. The Company may be obligated to repurchase
the property upon the event of a breach of certain covenants or occurrence of
certain other events.

CAUTIONARY FACTORS

     This report contains various forward-looking statements concerning our
prospects that are based on the current expectations and beliefs of management.
We may also make forward-looking statements, from time to time in other reports
and documents as well as oral presentations. When used in written documents or
oral statements, the words "anticipate", "believe", "continue", "estimate",
"expect", "goal", "objective", "outlook" and similar expressions are intended to
identify forward-looking statements. The statements contained herein and such
future statements involve or may involve certain assumptions, risks and
uncertainties, many of which are beyond our control, that could cause our actual
results and performance to differ materially from what is expected. In addition
to the assumptions and other factors referenced specifically in connection with
such statements, the following factors could impact our business and financial
prospects:

     -    We have incurred a significant amount of floating rate bank debt as a
          result of the Spin-Off, which we may be unable to service or as to
          which we may be adversely affected by increases in interest rates. At
          the time of the Spin-Off, we had $375 million in bank debt, including
          $68 million of new debt used to reduce the indebtedness of Apogent.
          This level of indebtedness could have significant consequences,
          including; limiting the cash flow available for working capital,
          capital expenditures, acquisitions and other corporate purposes
          because a significant portion of our cash flow from operations must be
          dedicated to servicing our debt; limiting our ability to obtain
          additional financing in the future for working capital or other
          purposes; and limiting our flexibility to react to competitive or
          other changes in our industry, and to economic conditions generally.
          Our ability to pay or refinance our indebtedness will depend upon our
          future operating performance, which will be affected by general
          economic, financial, competitive, legislative, regulatory and other
          factors beyond our control.

     -    A large portion of our revenue is generated outside the United States
          and we have significant operations outside the United States. We are
          therefore subject to factors affecting our international operations,
          including relevant foreign currency exchange rates, which can affect
          the cost to produce our products or the ability to sell our products
          in foreign markets, and the value in U.S. dollars of sales made in
          foreign currencies. Other factors include our ability to obtain
          effective hedges against fluctuations in currency exchange rates;
          foreign trade, monetary and fiscal policies; laws, regulations and
          other activities of foreign governments, agencies and similar
          organizations; risks associated with having major manufacturing
          facilities located in countries, such as Mexico and Italy, which have
          historically been less stable than the United States in several
          respects, including fiscal and political stability; and risks
          associated with any economic downturn in other countries.

     -    Some of our growth over the past several years has been achieved
          through our acquisition program, which has generated 24 acquisitions
          from 1993 through March 31, 2001. Our rate of continued growth is
          therefore subject to factors affecting our ability to continue
          pursuing our acquisition strategy, and to be successful with that
          strategy. These factors include our ability to obtain the required
          consent from our lenders, to raise capital beyond the capacity of our
          credit facilities, or to use our stock for acquisitions, the cost of
          the capital required to effect our acquisition strategy, the
          availability of suitable acquisition candidates at reasonable prices,
          competition for appropriate acquisition candidates and the relatively
          small size of such candidates, our ability to realize the synergies
          expected to result from acquisitions, and the ability of our existing
          personnel to efficiently handle increased transitional
          responsibilities resulting from acquisitions.

     -    Our reliance on major independent distributors for a substantial
          portion of our sales subjects our sales performance to volatility in
          demand if distributor inventories get out of balance with end user
          demand. This can happen when distributors merge or consolidate, or
          when inventories are not managed to end-user demand.

     -    Our ability to increase revenues, and to profitably distribute and
          sell our products, is subject to a number of risks, including any
          changes in our business relationships with our principal distributors,
          competitive risks


                                       21
<PAGE>   24

          such as the entrance of additional competitors into our markets,
          pricing and technological competition, risks associated with the
          development and marketing of new products in order to remain
          competitive with dental, orthodontic and infection control
          innovations; and risks associated with changes in demand for dental
          services which can be affected by economic conditions, health care
          reform, government regulation, and more stringent limits on
          expenditures by dental insurance providers or governmental programs.

     -    Our business is subject to quarterly variations in operating results
          caused by a number of factors, including business and industry
          conditions, the timing of acquisitions, distribution chain issues, and
          other factors listed here. All these factors make it difficult to
          predict operating results for any particular period.

     -    We strive to increase our margins by controlling our costs and by
          improving our manufacturing efficiencies. There can be no assurance,
          however, that our efforts will continue to be successful. Margins can
          be affected by many factors, including competition, product mix, and
          the effect of acquisitions.

     -    Our ability to hire and retain competent employees is subject to a
          number of risks, including unionization of our non-union employees and
          changes in relationships with our unionized employees.

     -    There is a risk of strikes or other labor disputes at our locations,
          which are unionized or are subject to national contracts, which could
          affect our operations.

     -    Our ability to continue manufacturing and selling those of our
          products that are subject to regulation by the United States Food and
          Drug Administration or other domestic or foreign governments or
          agencies is subject to a number of risks, including the promulgation
          of stricter laws or regulations, reclassification of our products into
          categories subject to more stringent requirements, or the withdrawal
          of the approval needed to sell one or more of our products.

     -    The impact of changing public and private health care budgets can
          affect the demand for or pricing of our products.

     -    Our business is subject to the risks of claims involving our products
          and other legal and administrative proceedings, including the expense
          of investigating, litigating and settling any claims.

     -    We may be subject to risks arising from other business and investment
          considerations that may be disclosed from time to time in our
          Securities and Exchange Commission filings or in other publicly
          written documents.

RISK FACTORS RELATING TO SEPARATING SDS FROM APOGENT



                                       22
<PAGE>   25

     -    The separation of SDS from Apogent poses new financial and operational
          risks. As a result of the Spin-Off, SDS owns and operates the dental
          business and as such, lacks a recent operating history as a
          stand-alone entity. SDS is also smaller and less diversified than was
          Apogent prior to the Spin-Off. The future performance and cash flows
          of each company will be subject to prevailing economic conditions in
          its own markets and to financial, business and other factors affecting
          its own business operations, including factors beyond its control.

     -    SDS may be required to satisfy certain indemnification obligations to
          Apogent, or may not be able to collect on indemnification rights from
          Apogent. Under the terms of the Spin-Off, SDS and Apogent and their
          respective U.S. subsidiaries have each agreed to indemnify the other
          (and related parties) from and after the Spin-Off with respect to
          certain indebtedness, liabilities and obligations. These
          indemnification obligations could be significant. The availability of
          these indemnities will depend upon the future financial strength of
          each of the companies. We cannot determine whether SDS will have
          substantial indemnification obligations to Apogent and its affiliates
          after the Spin-Off. We also cannot be assured in the event that
          Apogent has substantial indemnification obligations to SDS and our
          affiliates, Apogent will have the ability to satisfy those
          obligations.

     -    If SDS does not comply with the conditions to the IRS ruling, the
          distribution of SDS stock could be taxable. Apogent has received
          rulings from the IRS that, for federal income tax purposes, certain
          internal restructurings necessary to effect the Spin-Off will be
          tax-free to the SDS stockholders. These rulings are subject to the
          continuing validity of factual representations made to the IRS and
          assumptions and conditions set out in the ruling request. In order to
          assure that the distribution of SDS stock will continue to be
          tax-free, Apogent and SDS have also agreed to certain restrictions on
          their future actions for a period of time following the Spin-Off.

     Except as may be required by applicable securities laws or regulations, we
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.



                                       23
<PAGE>   26


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

RISK MANAGEMENT

     We are exposed to market risk from changes in foreign currency exchange
rates and interest rates. To reduce our risk from these foreign currency rate
and interest rate fluctuations, we occasionally enter into various hedging
transactions. We do not anticipate material changes to our primary market risks
other than fluctuations in magnitude from increased or decreased foreign
currency denominated business activity or floating rate debt levels. We do not
use financial instruments for trading purposes and are not a party to any
leveraged derivatives. As of March 31, 2001 we did not enter into any foreign
currency hedging transactions.

FOREIGN EXCHANGE

     Prior to the Spin-Off we have, from time to time, used foreign currency
options to hedge our exposure from adverse changes in foreign currency rates.
Our foreign currency exposure exists primarily in the Euro, Australian dollar
and the Japanese Yen values versus the U.S. dollar. Hedging may be accomplished
by the use of foreign currency options, and the gain or loss on these options
would be used to offset gains or losses in the foreign currencies to which they
pertain. Hedges of anticipated transactions may be accomplished with options
that expire on or near the maturity date of the anticipated transactions. As of
March 31, 2001 we had no foreign currency hedges in place.

     For the remainder of the fiscal year 2001, we expect our exposure from our
primary foreign currencies to approximate the following:
<TABLE>
<CAPTION>

                                                                                  ESTIMATED
                                                                             EXPOSURE DENOMINATED             ESTIMATED
                                                                               IN THE RESPECTIVE              EXPOSURE
                 CURRENCY                                                      FOREIGN CURRENCY            IN U.S. DOLLARS
                ---------                                                    --------------------          ---------------
                                                                                            (IN THOUSANDS)
<S>                                                                                 <C>                   <C>
Euro (EUR)................................................................          25,500 EUR            $     22,400
Japanese Yen (JPY)........................................................         455,500 JPY            $      3,600
Australian Dollar (AUD)...................................................           6,500 AUD            $      3,200
</TABLE>

     As a result of these anticipated exposures, SDS plans to review the cost
and benefit of protecting itself from possible detrimental effects of foreign
currency fluctuations.

INTEREST RATES

     We use interest rate swaps to reduce our exposure to interest rate
movements. Our net exposure to interest rate risk consists of floating rate
instruments whose interest rates are determined by the Eurodollar rate. Interest
rate risk management is accomplished by the use of swaps to create fixed
interest rate debt by resetting Eurodollar rate loans concurrently with the
rates applying to the swap agreements. At March 31, 2001 we had floating rate
debt of approximately $359.1 million of which a total of $210 million was
covered under our interest rate swap agreement. Under our new SDS Credit
Facility the net interest rate paid by the Company is approximately equal to the
sum of the swap agreement rate plus the applicable Eurodollar rate margin. In
the second quarter of fiscal 2001, the Tranche A and Revolver Eurodollar rate
margins were 2.75%. The Tranche B Eurodollar rate margin was 3.75%. The model
below quantifies the Company's sensitivity to interest rate movements as
determined by the Eurodollar rate and the effect of the interest rate swap which
reduce that risk. The model assumes a) a base Eurodollar rate of 4.88% (the
"Eurodollar Base Rate") which approximates the March 31, 2001 three month
Eurodollar rate, b) the Company's floating rate debt is equal to its March 31,
2001 floating rate debt balance of $359.1 million, c) the Company pays interest
on floating rate debt equal to the Eurodollar Base Rate + 317 basis points, d)
the Company has interest rate swaps with total notional amounts of $210 million,
all in place as of March 31, 2001 (please see schedule in "Liquidity and Capital
Resources" above for actual effective dates), and e) the Eurodollar Base Rate
varies by 10% of the Base Rate.


                                       24
<PAGE>   27

<TABLE>
<CAPTION>

                                       INTEREST EXPENSE INCREASE FROM A 10%             INTEREST EXPENSE DECREASE FROM A 10%
INTEREST RATE EXPOSURE                 INCREASE IN THE EURODOLLAR BASE RATE             DECREASE IN THE EURODOLLAR BASE RATE
----------------------                 ------------------------------------             ------------------------------------
<S>                                                    <C>                                            <C>
Without interest rate swaps:                           $2.9 million                                   ($2.9 million)
With interest rate swaps:                              $1.2 million                                   ($1.2 million)
</TABLE>


PART II - OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        Information regarding our annual meeting of shareholders held on January
        31, 2001 was previously reported in our Form 10-Q for the quarter ended
        December 31, 2000.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS:

     See the Exhibit Index following the Signature page in this report, which is
     incorporated herein by reference.

(b)  REPORTS ON FORM 8-K:

     No reports on Form 8-K were filed during the quarter for which this report
     is filed.



                                       25
<PAGE>   28


                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                   SYBRON DENTAL SPECIALTIES, INC
                                   ------------------------------
                                   (Registrant)



Date:  May 11, 2001                /S/ GREGORY D. WALLER
-----------------------            --------------------------------------------
                                   Gregory D. Waller
                                   Vice President - Finance, Chief
                                   Financial Officer & Treasurer*

                                   *   executing as both the principal financial
                                       officer and the duly authorized officer
                                       of the Company.


                                       26
<PAGE>   29






                         SYBRON DENTAL SPECIALTIES, INC.

                               (THE "REGISTRANT")

                          (COMMISSION FILE NO. 1-16057)

                                  EXHIBIT INDEX

                                       TO

       QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2001

<TABLE>
<CAPTION>
                                                                                       INCORPORATED
EXHIBIT                                                                                 HEREIN BY              FILED
NUMBER                          DESCRIPTION                                            REFERENCE TO           HEREWITH
------           ---------------------------------------------                         ------------           --------
<S>               <C>                                                                  <C>                    <C>
12               Computation of Ratio of Earnings to Fixed Charges                                                X
</TABLE>







                                      E-1