UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K


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

      For the fiscal year ended May 29, 1999 Commission file number 1-11479
                                ------------                        -------

                                  E-Z-EM, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                               11-1999504
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

  717 Main Street, Westbury, New York                               11590
----------------------------------------                     -------------------
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code  (516) 333-8230
                                                    --------------

Securities registered pursuant to Section 12(b) of the Act:  Class A Common
   Stock, par value $.10 and Class B Common Stock, par value $.10

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes _X_   No ___

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

The aggregate market value of the registrant's  voting Class A Common Stock held
by non-affiliates on August 2, 1999 was $15,492,000.

On August 2,  1999,  there were  4,035,346  shares of the  registrant's  Class A
Common Stock outstanding and 6,036,578 shares of the registrant's Class B Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions  of  the  Proxy  Statement  for  registrants  1999  Annual  Meeting  of
Stockholders  to be held October 19, 1999 are  incorporated by reference in Part
III of this Form 10-K Report.

                                  Page 1 of 71
                            Exhibit Index on Page 33


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

                                      INDEX
                                      -----

                                                                            Page
                                                                            ----
Part I:
-------
           Item l.  Business                                                   3

           Item 2.  Properties                                                13

           Item 3.  Legal Proceedings                                         13

           Item 4.  Submission of Matters to a Vote of Security Holders       14


Part II:
--------
           Item 5.  Market for Registrant's Common Equity and Related
                    Stockholder Matters                                       15

           Item 6.  Selected Financial Data                                   16

           Item 7.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                       17

           Item 7A. Quantitative and Qualitative Disclosures About
                    Market Risk                                               22

           Item 8.  Financial Statements and Supplementary Data               23

           Item 9.  Changes in and Disagreements with Accountants on
                    Accounting and Financial Disclosure                       23


Part III:
---------
           Item 10. Directors and Executive Officers of the Registrant        24

           Item 11. Executive Compensation                                    26

           Item 12. Security Ownership of Certain Beneficial Owners
                    and Management                                            29

           Item 13. Certain Relationships and Related Transactions            31


Part IV:
--------
           Item 14. Exhibits, Financial Statement Schedules and
                    Reports on Form 8-K                                       33




                                       -2-


<PAGE>



                                     Part I
                                     ------

Item 1.  Business
         --------

(a)  General Development of Business
     -------------------------------

     E-Z-EM,  Inc. (the  "Company" or "E-Z-EM"),  organized in Delaware in 1983,
has been in business for over 37 years, and has its corporate offices located at
717 Main  Street,  Westbury  N.Y.  11590.  The Company is  primarily  engaged in
developing, manufacturing and marketing diagnostic products used by radiologists
and  other  physicians  during  image-assisted  procedures  to  detect  anatomic
abnormalities and diseases. The Company also designs, develops, manufactures and
markets,    through   its   wholly-owned   subsidiary,    AngioDynamics,    Inc.
("AngioDynamics"),  a variety of therapeutic  and diagnostic  products,  for use
principally in the diagnosis and treatment of peripheral vascular disease. These
products are  primarily  used by  interventional  medical  practitioners  during
minimally invasive diagnostic and surgical procedures. Thirty-four percent (34%)
of the Company's sales were to customers outside the U.S. during 1999.

     E-Z-EM contrast systems consist of specially  developed powdered and liquid
barium sulfate  formulations  and  consumable  medical  devices,  which function
together  as  a  system,   for   examination   of  the  various   parts  of  the
gastrointestinal ("G.I.") tract. Contrast systems are used in X-ray, CT-scanning
and other imaging  examinations.  The G.I. tract is commonly  referred to as the
digestive  system  and  consists  of  the  pharynx,  esophagus,  stomach,  small
intestine (or small bowel) and colon.  E-Z-EM  manufactures  a broad spectrum of
barium  sulfate  products for different uses in G.I.  tract  examinations.  Each
E-Z-EM barium sulfate  formulation is tailored to that portion of the G.I. tract
to be  examined,  and  to  the  procedures  employed  by  radiologists  in  each
examination.  Based upon  sales,  the  Company  believes  that it is the leading
worldwide  producer of barium  sulfate  contrast  systems for use in G.I.  tract
examinations.

     The Company also competes in areas related and  complementary  to its basic
contrast systems  business,  categorized as non-contrast  systems.  Non-contrast
systems include:  diagnostic radiology devices, custom contract pharmaceuticals,
gastrointestinal   cleansing   laxatives,   X-ray  protection   equipment,   and
immunoassay tests. See "Narrative Description of Business".

     The Company's sales of contrast and non-contrast systems,  collectively the
diagnostic   ("Diagnostic")  products  industry  segment,  net  of  intersegment
eliminations, increased 4% during 1999 as compared to 1998.

     The  Company  manufactures  and  markets,   through  AngioDynamics,   three
differentiated   product  groups  for  use  during  interventional   procedures:
angiography products, therapeutic products and coronary products.  AngioDynamics
also  manufactures  and sells  angiographic  and coronary  products on an O.E.M.
basis.  Collectively these products are classified as the AngioDynamics products
industry segment. See "Narrative Description of Business".

     During 1999, AngioDynamics product sales, net of intersegment eliminations,
increased  4%.  Domestic  sales  increased  by  11%  due  to  continued   market
penetration of angiography products,  while international sales decreased by 17%
as a result of temporarily suspending product shipments to distributors affected
by the recent Brazilian economic crisis, and a continued decline in sales of the
coronary AngioStent(TM).

     Unless  the  context  requires  otherwise,   all  references  herein  to  a
particular year are references to the Company's fiscal year.


                                       -3-


<PAGE>



(b)  Financial Information About Industry Segments
     ---------------------------------------------

     The  Company is  engaged  in the  manufacture  and  distribution  of a wide
variety of products that are classified into two industry  segments:  Diagnostic
products and AngioDynamics products. Diagnostic products encompass both contrast
systems,  consisting of barium sulfate  formulations and related medical devices
used in X-ray,  CT-scanning,  ultrasound and Magnetic  Resonance Imaging ("MRI")
imaging examinations,  and non-contrast systems,  including diagnostic radiology
devices, custom contract pharmaceuticals,  gastrointestinal cleansing laxatives,
X-ray  protection  equipment,  and  immunoassay  tests.  AngioDynamics  products
include  angiography,  therapeutic  and  coronary  medical  devices  used in the
interventional medical marketplace.

     Certain  financial  information,  including  net  sales,  depreciation  and
amortization,  net earnings (loss), assets and capital expenditures attributable
to each operating segment are set forth in Note O to the Consolidated  Financial
Statements included herein.

(c)  Narrative Description of Business
     ---------------------------------

     Diagnostic Products
     -------------------

     Diagnostic  products  include both contrast  systems,  consisting of barium
sulfate formulations and related medical devices used in X-ray,  CT-scanning and
other imaging  examinations,  and  non-contrast  systems,  including  diagnostic
radiology devices, custom contract pharmaceuticals,  gastrointestinal  cleansing
laxatives, X-ray protection equipment, and immunoassay tests.

     Contrast Systems

     Contrast  systems,  using barium  sulfate  formulations  as contrast  media
together with consumable medical devices,  have been E-Z-EM's principal business
since the Company's  organization  over 37 years ago. For over 80 years,  barium
sulfate has been the  contrast  medium of choice for  virtually  all G.I.  tract
X-ray examinations.  It has the longest history of use among all contrast media.
Barium  sulfate is preferred  among G.I.  tract  contrast media because it has a
high absorption  coefficient for X-rays. In addition,  it is biologically inert,
insoluble in water and  chemically  stable.  Barium  sulfate for  suspension  is
listed in the U.S.  Pharmacopeia.  The use of properly formulated barium sulfate
suspensions permits the visualization of the entire G.I. tract.

     The  Company's  contrast  systems are designed for a variety of  radiologic
procedures. In single contrast procedures, a portion of the G.I. tract is filled
with barium sulfate to produce a diagnostic  image of the tract's  contours.  In
double contrast  procedures,  gas or air is used to distend the G.I. tract after
coating  with  a  high  density  barium  sulfate  suspension.  This  produces  a
significantly  clearer  diagnostic  image  of  the  tract's  surface  than  that
obtainable through the use of single contrast procedures. In computed tomography
procedures,  known as "CT-scanning",  a specially  formulated low density barium
sulfate  product  is used to  visualize  the G.I.  tract and thus  significantly
enhance the radiographic image.

     Contrast  systems  provide  radiologists  with a  range  of  effective  and
convenient powdered and liquid product formulations tailored to single contrast,
double contrast or CT-scanning  procedures.  Many of the Company's  products are
functionally packaged in consumable dispensing containers.  The Company believes
that it currently has the broadest  barium sulfate product line of any worldwide
manufacturer  and is continuing to develop  additional  formulations  for modern
X-ray  techniques.  E-Z-EM  also  sells  accessory  medical  devices  for use in
contrast system procedures, including empty enema administration kits and

                                       -4-


<PAGE>



components.  Sales of contrast  systems  increased 3% during 1999 as compared to
1998.

     Non-Contrast Systems

     The Company also competes in areas related and  complementary  to its basic
contrast systems  business,  categorized as non-contrast  systems.  Non-contrast
systems include:  diagnostic radiology devices, custom contract pharmaceuticals,
gastrointestinal   cleansing   laxatives,   X-ray  protection   equipment,   and
immunoassay  tests.  Sales of non-contrast  systems  increased 6% during 1999 as
compared to 1998.

     The   Company's   line   of   diagnostic    radiology    devices    include
electromechanical  injectors and syringes,  needles, trays and ancillary devices
used during a variety of diagnostic radiologic and ultrasound  procedures.  This
product  grouping  includes the PercuPump  TouchscreenTM  with EDA injector ("PP
with EDA"),  which is designed to inject contrast media into the vascular system
for visualization purposes during CT procedures.  The PP with EDA, introduced in
1998,   is  the  first  CT  injector   designed  to  aid  in  the  detection  of
extravasation,  an accidental  infiltration  of contrast media into  surrounding
tissue.  The PP  with  EDA is  comprised  of an  electromechanical  injector,  a
consumable  syringe,  and an EDA  detector  patch.  Other  diagnostic  radiology
devices include entry needles, biopsy needles, trays and ancillary products used
during mammography, amniocentesis and other specialty procedures.

     Custom contract  pharmaceutical and cosmetic products are manufactured on a
contract basis by E-Z-EM Canada Inc. ("E-Z-EM  Canada"),  the Company's Canadian
subsidiary.  Pharmaceutical  products  include  liquid  vitamins  and  antacids,
decongestants,  cough  medicines and  vaporizing  ointments.  Cosmetic  products
include tanning and sun screen lotions and bath powders.

     During 1999,  E-Z-EM Canada entered into a long-term  agreement with O'Dell
Engineering   Ltd.  of  Cambridge,   Ontario,   Canada,   to   commercialize   a
decontamination  lotion for chemical warfare agents.  The product line, known as
Reactive Skin Decontaminant  Lotion ("RSDL"),  is initially aimed at the defense
sector market. Under the terms of the agreement,  E-Z-EM Canada is the exclusive
manufacturer  of the  product  and is  responsible  for all  phases  of  product
development, including future generation decontaminants.

     RSDL is a unique  decontamination  lotion  which  neutralizes  and destroys
chemical warfare agents on personnel.  It has been shown to be effective against
the G and V families of nerve  agents,  which  include  Sarin (used in the Tokyo
subway terrorist attack) and VX, and the H and L families of vesicants  (blister
agents),  which include Mustard and Lewisite.  Developed by the Defense Research
Establishment of the Canadian Department of National Defense, the product patent
is held by the Canadian government which has entered into an exclusive licensing
agreement with O'Dell until the year 2010. To date, patents have been issued for
RSDL in the U.S., Canada and over a dozen European countries.

     The Company offers laxative  products  specially  formulated to cleanse the
G.I. tract prior to X-ray and colonoscopic examinations. These products are sold
through the same distribution network as the Company's contrast systems.

     The  Company  markets  a  line  of  X-ray  protection  equipment  featuring
Adjust-A-Weight(TM), a patented design concept which allows the wearer to adjust
the weight distribution of the protective apron to relieve fatigue. This product
line is sold through the same  distribution  network as the  Company's  contrast
systems.

     The Company,  through its wholly-owned  subsidiary,  Enteric Products, Inc.
("EPI"), markets immunoassay tests for use in the detection of Helicobacter

                                       -5-


<PAGE>



pylori ("H. pylori").  The tests analyze a patient's serum or whole blood sample
using a patented antigen  licensed from Baylor College of Medicine.  These tests
are available for both laboratory use and for use in a physician's office.

     H. pylori  infection  has been  identified as the leading cause of duodenal
and gastric ulcers and has also been linked to gastritis and gastric cancer. The
World Health  Organization has categorized H. pylori as a Class 1 carcinogen,  a
definite  cancer  causing agent in humans.  Gastric cancer is a leading cause of
death in Asia, Africa and Eastern Europe.

     The Company's  agreement  with Abbott  Laboratories  for the  international
marketing of its physician's office test to detect H. pylori expired in December
1998. The Primary Care Division of Beckman Coulter, Inc. ("Beckman"),  with whom
EPI co-developed  the serum and whole blood tests,  also markets its own version
of the  product  under the name  FlexSureTM  HP in the U.S.  and other  selected
territories.  EPI is  currently  working  with  Beckman  to  find  an  exclusive
international  marketing  partner for its physician's  office test. EPI receives
revenue from royalties on the sale of product by Beckman to its distributors and
end-users,  and from the sale of EPI's  patented  antigen to Beckman  for use in
both tests. In addition,  EPI derives  revenue from the sale of HM-CAP(TM),  the
laboratory  version of the blood serum test. The Company markets the HM-CAP test
direct and through distributors in the U.S. and abroad.

     EPI,  through  its  EndoDynamics  division,  also  sells  products  to  the
gastroenterology  and cardiology  markets.  These products  include the patented
Suction  Polyp  Trap(TM)  that  is used  during  colonoscopy  and  the  patented
E-Z-Guard(TM)  Mouthpiece  that  is  used  during  esophageal   echocardiography
procedures.  EndoDynamics  markets its products through a network of independent
sales representatives in the U.S. and specialty distributors outside the U.S.

     Sales  to  Picker  International,  Inc.,  which  is a  distributor  of  the
Company's Diagnostic products, were 17% of total net sales during 1999.

     AngioDynamics Products
     ----------------------

     The Company, through its wholly-owned subsidiary, AngioDynamics,  develops,
manufactures  and markets a variety of  differentiated  products and systems for
the  worldwide  interventional  medical  marketplace,  which is the  practice of
medicine using both  traditional  and new diagnostic  procedures for therapeutic
purposes.

     The Company  believes  that the  interventional  medical  market is growing
dramatically.  This is due,  in large  part,  to the less  invasive  aspects  of
interventional procedures, as compared to open surgical procedures, which result
in a reduction  in the overall cost of medical  care while  providing  important
patient   benefits.   Interventional   procedures  are  often  performed  on  an
out-patient  basis,  thereby  requiring fewer hospital support  services.  These
procedures,  even when  performed on an in-patient  basis,  generally  require a
shorter  hospital stay than do surgical  procedures.  Interventional  procedures
also  typically have reduced risk and trauma,  are less complex,  have fewer and
less serious  complications,  can often be  performed  earlier in the stage of a
disease,  and frequently result in less costly and more definitive  therapy than
do  surgical  procedures.  The  Company  expects  the  number of  interventional
procedures  performed to increase as these procedures gain wider acceptance,  as
more  physicians  become trained in less invasive  medical  specialties,  and as
these procedures become more widely performed in community  hospitals as well as
in major medical centers.  Improvements in technology  should further expand the
application of interventional procedures.


                                       -6-


<PAGE>



     Angiography Products

     Angiography  products  include  diagnostic   catheters,   fluid  management
products and  CO2Ject(TM),  a proprietary  angiographic  system that uses carbon
dioxide ("CO2") instead of standard iodinated contrast media. These products are
used  during  procedures  known  as  "angiograms",   "venograms",  and  "cardiac
catheterizations", which provide images of the human vasculature and blood flow.

     The   Company   manufactures   three   lines   of   diagnostic   catheters,
Memory-Vu(TM),  ANGIOPTIC(TM),  and  Soft-Vu(TM),  suitable for  diagnosing  the
complete  human  vascular  system.  These  catheters  are made in 3, 4, 5, and 6
French sizes, with wire braided and non-braided nylon shafts,  and are available
in over 500 tip configurations  and lengths,  either as standard catalogue items
or made to order  through the  Company's  customization  program.  The Company's
lines  of  angiographic   catheters  are  cleared  for  sale  in  the  U.S.  and
internationally.

     The proprietary  Soft-Vu/Memory-Vu catheter technology incorporates a soft,
atraumatic  tip that is  attached  to a more rigid  shaft.  In addition to being
soft,  the  catheter  tips are also easily  visualized  under  fluoroscopy.  The
Company  believes this soft tipped  catheter  technology  offers the physician a
safe diagnostic catheter with less propensity to perforate or lacerate an artery
or vein.

     The Company has  developed a unique  catheter  line called  ANGIOPTIC.  The
distinguishing  characteristic  of this  product is that the entire  catheter is
highly visible under  fluoroscopy.  The catheter is constructed of a proprietary
triple-layer extrusion technology.

     The  Company  manufactures  several  lines of products  used to  administer
fluids and  contain the blood and other  biological  wastes  produced  during an
interventional  procedure.  These  products are  designed to meet the  increased
concern  about  HIV and  hepatitis.  The  AngioFill(TM)  product  line  controls
airborne blood borne  pathogens by aspirating a catheter and injecting the blood
into an appropriate receptacle. The AngioFill systems also have fluid lines that
connect to saline and  contrast  media  bottles.  In use,  the  physicians  will
aspirate the catheter  with a syringe and release the contents in the  AngioFill
bag. While the syringe is still  connected to the AngioFill,  the physician will
draw fresh saline or contrast media to flush the catheter. The patented Pulse-Vu
Needle(TM)  and Sos Bloodless  Entry  Needle(TM)  control  airborne  blood borne
pathogens and the spurting blood flow normally encountered in a femoral arterial
puncture. Both needles have a thin diaphragm to divert the pressurized column of
blood  into a clear,  flexible  side arm tube thus  preventing  the  blood  from
entering the clinical environment.  The special diaphragm has a slit that allows
easy passage of a guidewire through the needle hub and needle lumen and into the
lumen  of  the  artery.  The  Company  believes  its  diaphragm   technology  is
proprietary. All of the Company's fluid management products are cleared for sale
in the U.S. and internationally.

     The CO2Ject is comprised of CO2  contrast,  an  automated  injector,  a CO2
connection set, a diagnostic catheter and an angioplasty balloon catheter. Since
a normal function of the human vasculature and blood flow system is the transfer
and expulsion of CO2 through the respiratory  system,  the Company believes that
CO2 provides a higher degree of safety than iodinated  contrast media, which can
cause severe allergic  reactions in certain patients.  The Company also believes
that CO2 is more cost  effective  and  provides  better  images  than  iodinated
contrast media.  Currently,  the CO2Ject is being sold in Europe, South America,
Australia and Asia. To date,  there is no automated CO2 system that has received
U.S.  Food and Drug  Administration  ("FDA")  clearance for sale in the U.S. The
Company does not anticipate  receiving FDA clearance for the CO2Ject in the near
future,  and there can be no assurance  that such  clearance will be obtained at
all.

                                       -7-


<PAGE>



     Therapeutic Products

     The  Company's   therapeutic  line  principally  consists  of  thrombolytic
products, vascular access products for dialysis, stents for non coronary use and
liver access products.

     The Company's  proprietary  thrombolytic product line is marketed under the
names  Pulse*Spray(R) and UNI*FUSE(TM) which are used to dissolve blood clots in
hemodialysis  access grafts,  arteries and veins.  Pulse*Spray and UNI*FUSE Sets
include PRO(TM) Infusion Catheters, occluding wires, check valves, and syringes.
The Pulse*Spray and UNI*FUSE Sets optimize the delivery of lytic agent (the drug
that actually dissolves the clot) by providing a controlled,  forceful,  uniform
dispersion.  This  improvement has been clinically shown to reduce the amount of
lytic agent and the time necessary for the procedure by a factor of three.  This
represents  significant  cost savings for the  hospital,  the  patient,  and the
healthcare system,  while reducing the complications  associated with the use of
larger volumes of lytic agent. The Pulse*Spray and UNI*FUSE Sets are cleared for
sale in the U.S. and internationally.

     The  Pulse*Spray  Injector  is  designed  to be  used in  conjunction  with
AngioDynamics' other therapeutic products. This automated injector replaces hand
pressure as an injection  mechanism and improves the  consistency and efficiency
of the delivery of lytic agents through  various  Pulse*Spray and UNI*FUSE Sets,
as well as PRO Infusion Catheters. The Pulse*Spray Injector will only accept the
Company's  manufactured  single use components.  It allows the user to deliver a
wide range of infusion volumes and times and utilizes  state-of-the-art computer
technology  with a touch  screen  program  to store up to 20  customer-specified
programs.

     The   Pulse*Spray   Injector   is  cleared   for  sale  in  the  U.S.   and
internationally.  The Company believes that the Pulse*Spray Injector may provide
the first viable  treatment for dissolving  deep vein clots  ("DVT's") in a wide
patient  population.  Early clinical  experience with the  Pulse*Spray  Injector
indicates a significant  reduction in the amount of thrombolytic  drugs and time
required to resolve thrombosed deep veins in the legs. Further clinical evidence
is needed to confirm these initial results.

     The Company's  vascular  access  products,  marketed  under the Schon trade
name, are primarily used by patients  requiring blood  dialysis.  These vascular
access  catheters are classified as long-term or acute. A long-term  catheter is
used in the event the patient is waiting for a permanent  dialysis graft to heal
after a surgical  placement or repair.  Acute  catheters  are placed in patients
with a temporary interruption of renal function due to serious injury or trauma.
The Company  believes  that vascular  access  procedures in general and dialysis
access procedures specifically, are growing rapidly.

     Stents are used to hold open  passageways  in the body that may have closed
or become  obstructed  as a result of aging,  disease,  or  trauma.  Stents  are
increasingly  being  used  as an  alternative  to or  adjunct  to  surgical  and
minimally invasive  procedures and drug therapies,  which reduce procedure time,
patient trauma, hospitalization and recovery time.

     The Company's patent pending stent for non coronary use, the VISTAFLEX(TM),
incorporates a platinum linked-looped design. The VISTAFLEX stent is constructed
from a single  strand of  platinum  alloy  wire that is  precision  formed.  The
Company  believes that this design provides more  consistent  vessel support and
radial force than other stent designs, as well as more visibility,  flexibility,
and easier delivery than competitive  stents.  The Company believes that its use
of platinum imparts better hemocompatibility and long-term biocompatibility than
stainless steel stent designs.


                                       -8-


<PAGE>



     During 1999, the FDA granted AngioDynamics a 510(k) clearance to market the
VISTAFLEX stent for biliary stricture in the U.S. Biliary stricture, a condition
common among hepatic and pancreatic cancer patients,  is a narrowing of the bile
duct as a result  of tumor  ingrowth.  The  VISTAFLEX  for  peripheral  vascular
applications  has not yet been cleared for sale in the U.S. The Company  intends
to submit a premarket approval ("PMA") application to obtain marketing clearance
from the FDA for  peripheral  vascular  applications.  The VISTAFLEX is marketed
internationally for peripheral vascular and biliary stricture applications.

     The  Company  markets  a  transjugular  intrahepatic   portosystemic  shunt
("TIPS") for liver access.  The  Company's  TIPS access set is designed to probe
the liver with a small 21 gauge needle and utilizes carbon dioxide as a contrast
agent to visualize  important  liver  structures  such as the hepatic artery and
bile ducts.  Cirrhosis  of the liver  often  causes  bleeding of the  esophageal
varices.  As an alternative to traditional  surgical methods,  a TIPS (shunt) is
placed between the portal vein and hepatic vein in the liver to reduce  pressure
and thus relieve the bleeding.

     Coronary Products

     The Company  believes that the coronary  AngioStent  provides a competitive
advantage  over  competing  stent  products  and  alternative   therapies.   The
AngioStent  incorporates a number of unique and proprietary design features. The
AngioStent is  constructed  from a single strand of platinum  alloy wire that is
precision formed into a spiraling sinusoidal  configuration.  This configuration
has the wire turn back on  itself  and  attach  back at its  beginning,  thereby
forming a  longitudinal  wire that imparts  added  strength and  stability.  The
Company believes that its patented stent design provides more consistent  vessel
support and radial force than other stent designs,  as well as more  visibility,
flexibility,  and easier delivery than competitive  stents. The Company believes
that  its  use  of  platinum  imparts  better  hemocompatibility  and  long-term
biocompatibility than stainless steel stent designs. The AngioStent is available
in a variety of diameters  and lengths and is provided  pre-mounted  on both the
over-the-wire  and  rapid  exchange  delivery  systems.  Both of these  delivery
systems  offer  advanced   features,   such  as  a  high  pressure  balloon  and
one-step-placement  with no necessity for pre-dilation of the target lesion. The
AngioStent  has been utilized in a variety of coronary  applications,  including
vessels in which other stent procedures have failed, as well as in the treatment
of difficult  lesions in curved or tortuous  vessels.  The Company  believes the
technical  features of its  proprietary  AngioStent  systems provide the Company
with a number of competitive advantages.

     The  AngioStent   currently  is  marketed   internationally   for  coronary
applications.  The AngioStent for coronary applications has not been cleared for
sale in the U.S. and the Company does not intend to submit for such approval.

     The Company  also  develops  and  manufacturers  percutaneous  transluminal
coronary angioplasty ("PTCA") balloon catheters. A PTCA balloon catheter is used
to inflate a narrowing in the arteries of the heart, either by expanding a stent
or on a  stand-alone  basis  during  balloon  angioplasty  procedures.  The PTCA
products  include  the Racer  Pico,  Racer  Select,  Pico  Runner and Pico ST II
balloon catheters,  each of which is approved for sale internationally (with the
Pico Runner and Pico ST II cleared for sale in the U.S.). The Company intends to
use the base of balloon catheter technology to develop PTA balloon catheters for
the peripheral vascular market.

     O.E.M. Manufacturing

     The  Company  has  two  ISO  9001  certified   facilities   with  available
manufacturing  capacity and is seeking  partnerships,  joint ventures and O.E.M.
arrangements to manufacture PTCA balloon catheters, stent delivery systems and

                                       -9-


<PAGE>



similar  products.  The Company also sells  certain  angiographic  products on a
bulk,  non-sterile  basis. The Company is focusing its marketing  efforts in the
interventional  radiology  market and is seeking a  strategic  partner,  with an
existing cardiovascular sales and marketing franchise, to leverage its stent and
angioplasty technology in the cardiology market.

     Marketing
     ---------

     The Company  believes  that the success of its barium  sulfate  products is
primarily  due  to  its  ability  to  create  contrast  systems  with  specific,
sophisticated barium formulations for varying radiologic needs. E-Z-EM continues
to develop new barium sulfate products,  including  products for CT-scanning and
MRI procedures.

     E-Z-EM's  contrast  systems,  laxatives,  X-ray  protection  equipment  and
diagnostic  radiology devices,  such as syringes,  biopsy needles and trays, are
marketed  to  radiologists   and  hospitals  in  the  U.S.   through  about  200
distributors,  supported  by 31  E-Z-EM  sales  people,  many of whom  have  had
technical training as X-ray technicians.  The Company also advertises in medical
journals and displays at most national and international radiology conventions.

     Outside the U.S., the Company's  contrast systems are also marketed through
113  distributors,  including  wholly-owned  subsidiaries in Canada,  the United
Kingdom,  Japan and Holland.  Significant  sales are made in Canada,  the United
Kingdom,  Japan,  Holland,  Italy, Brazil,  Germany,  Austria,  South Africa and
Belgium.  Foreign  distributors  are generally  granted  exclusive  distribution
rights and hold governmental product  registrations in their names, although new
registrations are currently being filed in the Company's name.

     The  Company's   AngioDynamics  products  are  marketed  to  interventional
radiologists, cardiologists, vascular surgeons and nephrologists. Domestic sales
are supported by 19 direct sales employees,  while the  international  marketing
effort  is  conducted   through  49   distributors,   including  3  wholly-owned
subsidiaries.  Foreign distributors are generally granted exclusive distribution
rights on a country-by-country basis.

     Competition
     -----------

     Based  upon  sales,  E-Z-EM  contrast  systems  are the  most  widely  used
diagnostic  imaging  products  of their  kind in the U.S.,  Canada  and  certain
European  countries.  The Company faces competition  domestically from Lafayette
Pharmaceuticals,  Incorporated,  as well as from small U.S. competitors,  and it
also faces competition outside of the U.S. The Company competes primarily on the
basis of product quality,  customer service,  the availability of a full line of
barium sulfate formulations tailored to user needs, and price.

     Radiologic  procedures for which the Company supplies products  complement,
as  well  as  compete  with,  endoscopic  procedures  such  as  colonoscopy  and
endoscopy. Such examinations involve visual inspection of the G.I. tract through
the use of a flexible  fiber  optic  instrument  inserted  into the patient by a
gastroenterologist.  The use of gastroenterology  procedures has been growing in
both  upper and lower  G.I.  examinations  as  patients  have been  increasingly
referred to gastroenterologists rather than radiologists. Also, the availability
of drugs which  successfully treat ulcers and other  gastrointestinal  disorders
has  tended to reduce  the need for upper G.I.  tract  examinations.  In January
1998,  Medicare began reimbursing for colorectal cancer screening utilizing G.I.
examinations, as well as other procedures.

     The major  non-contrast  systems market that the Company competes in is the
medical device radiology market, which is highly competitive. No single company,
domestic or foreign, competes with the Company across all of its non-contrast

                                      -10-


<PAGE>



system product lines. In electromechanical injectors and syringes, the Company's
main  competitors are Schering AG and  Mallinckrodt,  Inc. In needles and trays,
the Company  competes  with C.R.  Bard,  Inc.,  Baxter  Healthcare  Corporation,
Sherwood Medical Co. and various other competitors.  The Company also encounters
competition in the marketing of its other non-contrast systems products.

     The Company competes in the AngioDynamics  products segment on the basis of
product quality, product innovation, sales, marketing and service effectiveness,
and price. There are many large companies, with significantly greater financial,
manufacturing, marketing, distribution and technical resources than the Company,
focusing  on  these  markets.  Those  Company  products  that  already  have FDA
clearance  and those Company  products that in the future  receive FDA clearance
will have to compete vigorously for market acceptance and market share.

     Cook, Inc., Boston Scientific Corporation, Johnson & Johnson Interventional
System, Co., C.R. Bard, Inc.,  Medtronic,  Inc., Guidant Corporation,  Biotronik
GmbH,  Progressive  Angioplasty  Systems,   American  Biomed,  Inc.  and  Global
Therapeutics,  among  others,  currently  compete  against  the  Company  in the
development, production and marketing of stents and stent technology.

     The medical  indications  that can be treated by stents can also be treated
by surgery,  drugs, or other medical devices,  many of which are widely accepted
in the medical  community.  The  ability to use  patents  and other  proprietary
rights to prevent  sales by  competitors  is an  important  tool in the  medical
devices industry.

     Within the contrast media market,  the Company's  CO2Ject  system  competes
with a product  offered by Daum GmbH.  The Company also competes with  companies
marketing  iodinated  contrast  agents.  These  companies  include Nycomed Inc.,
Bracco s.p.a., Schering AG and Mallinckrodt, Inc.

     In the market for diagnostic  angiography  catheters,  the Company's  major
competitors are Cook, Inc., Boston Scientific  Corporation and Johnson & Johnson
Interventional System, Co.

     The  competitive  situation  in the  market  for  thrombolytic  therapeutic
products is complex.  The first level of competition is the medical  profession,
where each physician can decide if an artery or graft will be cleared surgically
or by thrombolysis.  If thrombolysis is used, the second level of competition is
for the  specific  type of  catheter  or wire  that  will be used.  The  primary
competitors   in  this   market  are  Boston   Scientific   Corporation,   Micro
Therapeutics, Inc., Cook, Inc. and Arrow International.

     The Company  believes that it is perceived as a market leader in the market
for blood containment  products,  where its primary competition comes from Arrow
International and  Becton-Dickinson.  The market for fluid management systems is
extremely  competitive,  with the Company's  products  being similar to products
from Boston Scientific  Corporation,  Merit, Burron Medical,  DeRoyal,  Biocore,
Advanced Medical Design, and Furon, Inc. These products are non-patient  contact
and, therefore,  the barriers to entry, such as regulatory clearance,  potential
liability, and the need for technical sophistication, are not significant.

     Research and Development
     ------------------------

     In addition  to its  technical  staff,  consisting  of a  Medical/Technical
Director and 45 employees,  the Company has consulting arrangements with various
physicians   who  assist   through  their   independent   research  and  product
development.  Research and development expenditures totaled $4,847,000, or 5% of
net sales,  in 1999, as compared to $5,662,000,  or 6% of net sales, in 1998 and
$6,881,000,  or 7% of net sales, in 1997, reflecting the Company's commitment to
expansion of its product lines through research and development.

                                      -11-


<PAGE>



     Raw Materials and Supplies
     --------------------------

     Most of the barium sulfate for contrast  systems is supplied by a number of
European and U.S.  manufacturers,  with a minor portion being supplied by E-Z-EM
Canada,  which operates a barium  sulfate mine and  processing  facility in Nova
Scotia and whose  reserves  are  anticipated  to last a minimum of five years at
current usage rates.  The Company believes that these sources should be adequate
for its foreseeable needs.

     The  Company has  generally  been able to obtain  adequate  supplies of all
components  for its  AngioDynamics  business in a timely  manner  from  existing
sources.  However, the inability to develop alternative sources, if required, or
a reduction or interruption in supply, or a significant increase in the price of
components, could adversely affect operations.

     Patents and Trademarks
     ----------------------

     Although  several  products  and  processes  are  patented  and the Company
considers its trademarks to be a valuable  marketing  tool, the Company does not
consider any single  patent,  group of patents,  or  trademarks to be materially
important to its  Diagnostic  business  segment.  E-Z-EM and  AngioDynamics  are
examples of the Company's registered trademarks in the U.S.

     The Company believes that success in the AngioDynamics  products segment is
dependent, to a large extent, on patent protection and the proprietary nature of
its technology.  The Company intends to file and prosecute  patent  applications
for  technology  for  which it  believes  patent  protection  is  effective  and
advisable.  The Company  believes that issued patents  covering  Pulse*Spray and
AngioStent are significant to its AngioDynamics business.

     Because patent applications are secret until patents are issued in the U.S.
or corresponding  applications are published in foreign  countries,  and because
publication of discoveries  in the  scientific or patent  literature  often lags
behind actual  discoveries,  the Company cannot be certain that it was the first
to make the inventions  covered by each of its pending patent  applications,  or
that it was the  first to file  patent  applications  for such  inventions.  The
Company also relies on trade secret  protection and  confidentiality  agreements
for certain unpatented aspects of its proprietary technology.

     Regulation
     ----------

     The  Company's  products  are  registered  with  the FDA and  with  similar
regulatory  agencies  in  foreign  countries  where they are sold.  The  Company
believes  it is  in  compliance,  in  all  material  respects,  with  applicable
regulations of these agencies.

     Certain of the Company's  products are subject to FDA regulation as medical
devices and certain other products,  such as various  contrast  systems products
and  CO2Ject,  are  regulated  as  pharmaceuticals.  Outside  of the  U.S.,  the
regulatory process and  categorization of products vary on a  country-by-country
basis.

     The  Company's  products  are  covered by  Medicare,  Medicaid  and private
healthcare   insurers,   subject   to  patient   eligibility.   Changes  in  the
reimbursement  policies and procedures of such insurers may affect the frequency
with which such procedures are performed.

     The Company  operates  several  facilities  within a broad  industrial area
located in Nassau County,  New York, which has been designated by New York State
as a  Superfund  site.  This  industrial  area has been  listed  as an  inactive
hazardous  waste site,  due to ground  water  investigations  conducted  on Long
Island  during the 1980's.  Due to the broad area of the  designated  site,  the
potential

                                      -12-


<PAGE>



number of responsible parties, and the lack of information concerning the degree
of  contamination  and potential  clean-up costs, it is not possible to estimate
what, if any, liability exists with respect to the Company.  Further, it has not
been alleged that the Company  contributed to the  contamination,  and it is the
Company's belief that it has not done so.

     Employees
     ---------

     The  Company  employs  931  persons,  196 of whom are  covered  by  various
collective bargaining agreements.  Collective bargaining agreements covering 100
and 92 employees  expire in December 1999 and December 2004,  respectively.  The
Company considers employee relations to be satisfactory.

(d)  Financial  Information Regarding Foreign and Domestic Operations and Export
     ---------------------------------------------------------------------------
     Sales
     -----

     The Company derived about 34% of its sales from customers  outside the U.S.
during 1999.  Operating  profit  margins on export sales are somewhat lower than
domestic  sales  margins.  The Company's  domestic  operations  bill third party
export  sales in U.S.  dollars and,  therefore,  do not incur  foreign  currency
transaction gains or losses. Third party sales to Canadian customers,  which are
made by E-Z-EM  Canada,  are  billed in local  currency.  Third  party  sales to
Japanese  customers,  which are made by the Company's Japanese  subsidiary,  are
also billed in local currency.

     The Company employs 334 persons  involved in the developing,  manufacturing
and  marketing of products  internationally.  The  Company's  product  lines are
marketed through  approximately 138 foreign distributors to 84 countries outside
of the U.S.

     The  net  sales  of  each  geographic   area  and  the  long-lived   assets
attributable to each geographic area are set forth in Note O to the Consolidated
Financial Statements included herein.


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

     The Company's principal manufacturing  facilities and executive offices are
located in Westbury, New York. They consist of three buildings,  one of which is
owned by the Company,  containing  an aggregate of 183,800  square feet used for
manufacturing, warehousing and administration. One of the Westbury facilities is
leased to the Company by various lessors, including certain related parties. See
"Certain  Relationships  and  Related   Transactions".   AngioDynamics  occupies
manufacturing  and  warehousing  facilities  located  in  Queensbury,  New  York
consisting of two buildings, one of which is owned by the Company, containing an
aggregate of 29,312 square feet.  AngioDynamics  Ltd. owns a 20,000  square-foot
manufacturing and warehousing facility located in Enniscorthy,  Ireland.  E-Z-EM
Caribe  owns a  38,600  square-foot  plant in San  Lorenzo,  Puerto  Rico  which
fabricates  enema tips and heat-sealed  products.  E-Z-EM Canada leases a 29,120
square-foot  building  in Debert,  Nova  Scotia  and both owns and  leases  land
encompassing  its barium  sulfate  mining  operation.  E-Z-EM Canada also owns a
64,050 square-foot  manufacturing and warehousing  facility located in Montreal,
Canada.


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

     The Company is  presently  involved in various  claims,  legal  actions and
complaints arising in the ordinary course of business. The Company believes such
matters are without merit, or involve such amounts that unfavorable disposition

                                      -13-


<PAGE>



would not have a material adverse effect on the Company's financial position.


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

     None.




















































                                      -14-


<PAGE>





                                     Part II
                                     -------


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters
         ---------------------------------------------------------------------

     E-Z-EM,  Inc.  Class A and Class B Common  Stock is traded on the  American
Stock Exchange ("AMEX") under the symbols "EZM.A" and "EZM.B", respectively. The
following  table sets forth,  for the periods  indicated,  the high and low sale
prices for the Class A and Class B Common Stock as reported by the AMEX.

<TABLE>
<CAPTION>
                                                        Class A                             Class B
                                                ------------------------           -------------------------
                                                 High              Low               High              Low
                                                -------          -------           --------          -------
<S>                                              <C>              <C>                <C>              <C>
     Fifty-two weeks ended May 29, 1999
     ----------------------------------

     First Quarter.....................          $7.63            $5.88              $7.50            $5.38
     Second Quarter....................           7.13             5.88               6.13             5.50
     Third Quarter.....................           7.00             5.88               6.50             4.38
     Fourth Quarter....................           7.00             4.88               6.00             4.38

     Fifty-two weeks ended May 30, 1998
     ----------------------------------

     First Quarter.....................          $9.13            $7.50              $7.88            $6.63
     Second Quarter....................           8.63             7.13               7.50             5.88
     Third Quarter.....................           7.88             6.88               7.38             6.25
     Fourth Quarter....................           9.75             6.75               9.00             5.88
</TABLE>

     As of August 2, 1999 there were approximately 226 and 356 record holders of
the Company's Class A and Class B Common Stock, respectively.

     During fiscal 1997 and 1998, the Company issued 3% stock dividends.  During
fiscal 1999, such stock dividends were not issued.  The Company will continue to
evaluate its  dividend  policy on an ongoing  basis.  Any future  dividends  are
subject to the Board of Directors'  review of operations and financial and other
conditions then prevailing.








                                      -15-


<PAGE>



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

<TABLE>
<CAPTION>
                                                Fifty-two weeks ended                    Fifty-three
                                -----------------------------------------------------    weeks ended
                                 May 29,        May 30,       May 31,        June 1,       June 3,
                                  1999          1998#          1997           1996          1995
                                ---------     ---------      ---------      ---------     ---------
                                               (in thousands, except per share data)
<S>                             <C>           <C>            <C>            <C>           <C>
Income statement data:
  Net sales ...............     $107,179      $102,884       $97,324        $91,932       $88,526
  Gross profit ............       45,157        37,433        36,570         36,414        36,681
  Operating profit (loss) .        7,242        (5,351)       (4,911)           957         2,837
  Earnings (loss) from
    continuing operations
    before income taxes ...        6,671        (5,534)       (4,530)         1,940         3,559
  Earnings (loss) from
    continuing operations .        4,797        (5,967)       (3,208)         1,697         2,473
  Net earnings (loss) .....        4,797        (5,967)       (3,208)        21,008         1,630
  Earnings (loss) from
    continuing operations
    per common share
      Basic (1) ...........          .48          (.60)         (.33)           .17           .26
      Diluted (1) .........          .47          (.60)         (.33)           .17           .26
  Earnings (loss) per
    common share
      Basic (1) ...........          .48          (.60)         (.33)          2.16           .17
      Diluted (1) .........          .47          (.60)         (.33)          2.04           .17
  Weighted average common
    shares
      Basic (1) ...........       10,077         9,952         9,871          9,712         9,634
      Diluted (1) .........       10,314         9,952         9,871         10,315         9,640

                                 May 29,        May 30,       May 31,        June 1,       June 3,
                                  1999          1998#          1997           1996          1995
                                ---------     ---------      ---------      ---------     ---------
                                                           (in thousands)
<S>                             <C>           <C>            <C>            <C>           <C>
Balance sheet data:
  Working capital .........     $48,430       $41,597        $ 43,115       $53,508       $33,254
  Cash, certificates of
    deposit and short-
    term debt and equity
    securities ............      13,289         8,129          15,475        23,610         4,447
  Total assets ............      96,059        90,706         100,720        96,037        76,095
  Long-term debt, less
    current maturities ....         477           606             842           680         1,114
  Stockholders' equity ....      75,291        71,223          77,244        80,603        57,890
</TABLE>


#    Includes the  impairment  charge of  $4,121,000  described in Note C to the
     Consolidated Financial Statements included herein.

(1)  Retroactively  restated to reflect  the total  shares  issued  after the 3%
     stock  dividends  described  in  Note  M  to  the  Consolidated   Financial
     Statements included herein.








                                      -16-


<PAGE>



Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         -----------------------------------------------------------------------
         of Operations
         -------------

     The  Company's  fiscal years ended May 29,  1999,  May 30, 1998 and May 31,
1997 represent fifty-two weeks.

Results of Operations
---------------------

     Segment Overview
     ----------------

     The Company  operates in two  industry  segments:  Diagnostic  products and
AngioDynamics  products.  The Diagnostic  products operating segment encompasses
both contrast  systems,  consisting of barium sulfate  formulations  and related
medical  devices  used  in  X-ray,  CT-scanning,   ultrasound  and  MRI  imaging
examinations,  and non-contrast systems, including diagnostic radiology devices,
custom contract  pharmaceuticals,  gastrointestinal  cleansing laxatives,  X-ray
protection equipment,  and immunoassay tests. Contrast systems, which constitute
the Company's core business and the majority of the Diagnostic products segment,
accounted  for 56% of net sales in 1999,  as  compared to 57% in 1998 and 61% in
1997.  Non-contrast  system  sales  accounted  for 25% of net sales in 1999,  as
compared to 24% in 1998 and 21% in 1997. The  AngioDynamics  products  operating
segment, which includes angiography products,  therapeutic products and coronary
products used in the interventional  medical  marketplace,  accounted for 19% of
net sales in 1999, as compared to 19% in 1998 and 18% in 1997.

<TABLE>
<CAPTION>
                                             Diagnostic         AngioDynamics          Eliminations             Total
                                             ----------         -------------          ------------             -----
                                                                            (in thousands)
<S>                                            <C>                 <C>                    <C>                 <C>
Fifty-two weeks ended May 29, 1999
----------------------------------

 Unaffiliated customer sales                   $86,920             $20,259                    -               $107,179
 Intersegment sales                                 36                 503                 ($539)                  -
 Gross profit (loss)                            36,154               9,028                   (25)               45,157
 Operating profit (loss)                         8,237                (990)                   (5)                7,242

Fifty-two weeks ended May 30, 1998
----------------------------------

 Unaffiliated customer sales                   $83,475             $19,409                    -               $102,884
 Intersegment sales                                 91                 483                 ($574)                  -
 Gross profit (loss)                            30,220               7,263                   (50)               37,433
 Operating profit (loss)                         1,988              (7,317)                  (22)               (5,351)

Fifty-two weeks ended May 31, 1997
----------------------------------

 Unaffiliated customer sales                   $79,588             $17,736                    -                $97,324
 Intersegment sales                              1,250                 926               ($2,176)                  -
 Gross profit (loss)                            28,794               7,783                    (7)               36,570
 Operating profit (loss)                        (1,088)             (3,816)                   (7)               (4,911)
</TABLE>

     Diagnostic Products
     -------------------

     Diagnostic segment operating results for 1999 improved by $6,249,000 due to
increased sales, improved gross profit and reduced operating expenses. Net sales
increased 4%, or $3,445,000,  due to increased demand for sales of both contrast
systems and non-contrast systems. Price increases had little effect on net sales
in 1999.  Gross profit  expressed as a percentage  of net sales  improved to 42%
during 1999, versus 36% during 1998 due primarily to reduced unabsorbed overhead
costs.  Decreased  operating expenses of $315,000 can be attributed to a decline
in research and development ("R&D")  expenditures of $651,000,  partially offset
by an increase in selling and administrative  expenses of $336,000.  The decline
in R&D expenses  resulted  primarily  from  decreases  in corporate  projects of
$341,000 and expenses associated with product validations and clinical trials of
$273,000, partially offset by increased selling and administrative expenses

                                      -17-


<PAGE>



of $336,000.

     Diagnostic segment operating results for 1998 improved by $3,076,000 due to
a 5% sales increase, as well as reduced operating expenses of $1,650,000.  Price
increases  had little effect on net sales in 1998.  Gross profit  expressed as a
percentage  of net sales was 36% during  both 1998 and 1997,  as the  effects of
increased  sales  discounts  to group  purchasing  organizations  were offset by
reduced  unabsorbed  overhead  costs  associated  with  the  manufacturing  site
relocation.

     AngioDynamics Products
     ----------------------

     AngioDynamics segment operating results for 1999 improved by $6,327,000, of
which  $4,121,000  resulted from the  recording of an impairment  charge in 1998
(described below). Excluding the effect of the impairment charge,  AngioDynamics
operating results improved by $2,206,000 due to increased sales,  improved gross
profit and reduced  operating  expenses of $441,000.  Net sales increased 4%, or
$850,000,  due to continued domestic market penetration of angiography products.
International  sales declined 17% as a result of temporarily  suspending product
shipments to distributors  affected by the recent Brazilian economic crisis, and
a  continued  decline  in sales of the  coronary  AngioStent(TM).  Gross  profit
expressed as a percentage of net sales  improved to 43% during 1999, as compared
to 37% during 1998, due primarily to increased manufacturing efficiencies at the
Queensbury,  New York  facility,  increased  production  throughput  at both the
Queensbury and Irish facilities, and the consolidation of operations,  resulting
from the closing of its Leocor facility in 1998.

     AngioDynamics  segment  operating  results  for  1998,  which  declined  by
$3,501,000,   were  adversely  affected  by  a  non-cash  accounting  charge  of
$4,121,000,  relating to an impairment of certain  long-lived assets used in the
cardiovascular market. The Company determined that the revenue potential of this
technology,  as it relates to the  cardiovascular  market,  was  impaired due to
increased  competition  and price  erosion for coronary  stents and  angioplasty
products  and the  Company's  strategic  decision to  commercially  exploit this
technology  in the  interventional  radiology  market.  The Company is seeking a
strategic business partner with an existing  cardiovascular  sales and marketing
franchise in order to be successful in the cardiovascular market, although there
can be no assurances that such a partner can be found.  The charge had no impact
on the  Company's  cash flow or its ability to generate cash flow in the future.
As a result of the  impairment  charge,  amortization  expense  related to these
assets decreased by approximately $250,000 per year.

     Excluding  the effect of the  impairment  charge,  AngioDynamics  operating
results  improved  by  $620,000  in  1998  due to  reduced  operating  expenses,
partially  offset by lower gross profit.  Domestic sales improved by $3,154,000,
or 27%, due to continued market penetration, while international sales decreased
$1,480,000,  or 24%, due to a decline in sales of the  coronary  AngioStent(TM).
Overall,  AngioDynamics  sales increased 9% in 1998. Gross profit expressed as a
percentage  of net sales  declined to 37% during 1998 versus 42% during 1997 due
primarily to price  erosion in the  coronary  stent  marketplace,  underutilized
capacity at the Irish manufacturing  facility,  and increased inventory reserves
of  $344,000.   Operating   expenses  before  the  impairment  charge  decreased
$1,140,000  due, in part, to the write-off of expenses  relating to the proposed
initial public offering of AngioDynamics in 1997.

     Certain  financial  information,  including  net  sales,  depreciation  and
amortization,  net earnings (loss), assets and capital expenditures attributable
to each operating segment are set forth in Note O to the Consolidated  Financial
Statements included herein.



                                      -18-


<PAGE>



     Consolidated Results of Operations
     ----------------------------------

     The  Company  reported  net  earnings of  $4,797,000,  or $.48 and $.47 per
common share on a basic and diluted basis,  respectively,  for 1999, as compared
to a net loss of  $5,967,000,  or ($.60) per common share on a basic and diluted
basis,  for 1998, and a net loss of $3,208,000,  or ($.33) per common share on a
basic and diluted basis, for 1997.  Results for 1998 included the  AngioDynamics
impairment charge,  with no associated tax benefit,  of $4,121,000,  or $.41 per
common  share.  The fact  that the  Company  did not  record a tax  benefit  for
financial  reporting  purposes,  associated with the impairment charge, does not
affect its ability to record the deduction for tax purposes at some future date.

     Results for 1999 were favorably affected by increased sales, improved gross
profit and decreased  operating  expenses,  before  impairment  charge,  in both
operating segments.

     Results for 1998 were adversely  affected by the  AngioDynamics  impairment
charge of $4,121,000,  or $.41 per share, and lower  AngioDynamics gross profit.
Results  were  positively  affected by  increased  sales  coupled  with  reduced
operating expenses, before impairment charge, in both operating segments.

     Net sales  increased  4%,  or  $4,295,000,  to  $107,179,000  in 1999,  and
increased 6%, or  $5,560,000,  to  $102,884,000  in 1998. Net sales in 1999 were
favorably  affected by increased sales of contrast  systems of $1,892,000,  non-
contrast  systems of $1,553,000 and  AngioDynamics  products of $850,000.  Price
increases  had  little  effect  on net  sales in 1999.  Net  sales in 1998  were
favorably  affected by increased  sales of  non-contrast  systems of $4,192,000,
including $2,648,000 relating to custom contracts, and AngioDynamics products of
$1,673,000. Price increases had little effect on net sales in 1998.

     Net sales in international markets, including direct exports from the U.S.,
decreased less than 1%, or $114,000, to $36,625,000 in 1999 and decreased 3%, or
$975,000,  to $36,739,000 in 1998. The 1999 decline was due to foreign  currency
exchange rate fluctuations, which adversely affected the translation of Canadian
and Japanese sales to U.S. dollars for financial reporting  purposes,  partially
offset by the effects of volume and price increases. The 1998 decline was due to
decreased sales of contrast systems of $1,691,000 and AngioDynamics  products of
$1,480,000,  partially  offset by  increased  sales of  non-contrast  systems of
$2,196,000.  The  decline in sales of  AngioDynamics  products  was due to lower
stent sales.  The increase in sales of non-contrast  systems was attributable to
increased sales of custom contracts.

     Gross profit  expressed as a  percentage  of net sales was 42% in 1999,  as
compared  to 36% in 1998  and 38% in 1997.  The  improvement  in  gross  profit,
expressed  as a  percentage  of net sales,  in 1999 was due to  increased  gross
profit in both operating  segments.  The improved Diagnostic gross profit is due
primarily to reduced unabsorbed overhead costs. The improved AngioDynamics gross
profit  is  due  primarily  to  increased  manufacturing   efficiencies  at  the
Queensbury facility,  increased production throughput at both the Queensbury and
Irish  facilities,  and the  consolidation  of  operations,  resulting  from the
closing of its Leocor  facility in 1998. The decline in gross profit,  expressed
as a percentage of net sales, in 1998 was due primarily to reduced AngioDynamics
gross profit,  resulting from price erosion in the coronary  stent  marketplace,
underutilized  capacity  at the  Irish  manufacturing  facility,  and  increased
inventory  reserves  of  $344,000.  In the  Diagnostic  segment,  the effects of
increased  discounts to group purchasing  organizations,  were offset by reduced
unabsorbed overhead costs associated with the manufacturing site relocation.

     Selling and  administrative  ("S&A")  expenses  were  $33,068,000  in 1999,
$33,001,000  in  1998  and  $34,600,000  in  1997.   There  were  no  materially
significant  factors  affecting  the  comparison  of S&A expenses in 1999 versus
1998.

                                      -19-


<PAGE>



The decrease in 1998 versus 1997 of $1,599,000, or 5%, was due to decreased
Diagnostic S&A expenses of $1,053,000 and decreased AngioDynamics S&A expenses
of $546,000, which resulted, in part, from the write-off of expenses relating to
the proposed initial public offering of AngioDynamics in 1997.

     R&D  expenditures  in 1999  totalled  $4,847,000,  or 5% of net  sales,  as
compared to $5,662,000, or 6% of net sales, in 1998 and $6,881,000, or 7% of net
sales, in 1997. The decline in 1999 versus 1998 of $815,000 was due primarily to
decreases in corporate projects of $341,000, expenses associated with Diagnostic
product validations and clinical trials of $273,000,  and AngioDynamics projects
of $164,000.  The decline in 1998 versus 1997 of $1,219,000 was due primarily to
decreases in regulatory expenses associated with product validations of $826,000
and  AngioDynamics  project spending of $593,000,  partially offset by increased
contrast  system  spending  of  $415,000.  Of  the  R&D  expenditures  in  1999,
approximately 47% relate to contrast systems, 34% to AngioDynamics projects, 11%
to general  regulatory  costs,  3% to  immunological  projects,  and 5% to other
projects.  R&D expenditures  are expected to continue at  approximately  current
levels.  In addition to its in-house  technical  staff, the Company is presently
sponsoring  various  independent  R&D  projects  and is  committed  to continued
expansion of its product lines through R&D.

     Other income, net of other expenses,  totalled $571,000 of expense in 1999,
$183,000  of expense in 1998 and  $381,000  of income in 1997.  The  increase in
other  expense in 1999  versus 1998 was  primarily  due to the  recording  of an
impairment  charge of  $896,000  relating  to the  Company's  investment  in ITI
Medical  Technologies,  Inc.  ("ITI"),  partially  offset  by  improved  foreign
currency  exchange gains and losses of $259,000 and decreased  interest expense,
resulting  from the repayment of  AngioDynamics  debt. The change in 1998 versus
1997 was primarily due to increased  interest  expense of $177,000 and decreased
interest income of $138,000, resulting from bank financing for the AngioDynamics
operations, coupled with the recording of the Company's approximate 23% share in
the losses of ITI of $219,000.

     Note H to the Consolidated Financial Statements included herein details the
major  elements  affecting  income taxes for 1999,  1998 and 1997. In 1999,  the
Company's effective tax rate of 28% differed from the Federal statutory tax rate
of 34% due  primarily  to the fact that the  Company  reversed  a portion of its
valuation  allowance  against certain domestic tax benefits since it is now more
likely  than not  that  such  benefits  will be  realized.  The  utilization  of
previously  unrecorded  carryforward  benefits  and earnings of the Puerto Rican
subsidiary,  which are subject to favorable U.S. tax  treatment,  also favorably
affected the Company's  effective tax rate in 1999,  but were offset by the fact
that the  Company  did not  provide  for the tax  benefit on losses  incurred in
certain  foreign  jurisdictions,  since it is more  likely  than  not that  such
benefits  will not be  realized.  In 1998,  the  Company  reported an income tax
provision of $433,000  against  losses  before  income taxes of  $5,534,000  due
primarily  to the fact that the  Company  did not provide for the tax benefit on
losses  incurred  in certain  jurisdictions,  since,  at that time,  it was more
likely than not that such benefits would not be realized. In 1997, the Company's
effective tax benefit rate of 29% differed  from the Federal  statutory tax rate
of 34% due  primarily to losses  incurred in a foreign  jurisdiction  subject to
lower tax rates and to the fact that the  Company  did not  provide  for the tax
benefit on losses  incurred in certain  foreign  jurisdictions,  since,  at that
time,  it was more likely  than not that such  benefits  would not be  realized,
partially offset by earnings of the Puerto Rican  subsidiary,  which are subject
to favorable U.S. tax treatment.

Liquidity and Capital Resources
-------------------------------

     During 1999,  capital  expenditures and debt repayments were funded by cash
provided by operations. During 1998, debt repayments, capital expenditures and

                                      -20-


<PAGE>



investment in affiliate were funded primarily by cash reserves. During 1997, the
purchase of Leocor,  capital  expenditures  and increased  inventory levels were
funded  primarily by cash  reserves and proceeds from the issuance of bank debt.
The Company's  policy has been to fund capital  requirements  without  incurring
significant  debt. At May 29, 1999, debt (notes payable,  current  maturities of
long-term  debt and long-term  debt) was $2,503,000 as compared to $3,934,000 at
May 30,  1998.  The Company  has  available  $3,357,000  under two bank lines of
credit of which $718,000 was outstanding at May 29, 1999.

     Presently, the Company is continuing to look for both new and complementary
lines of business for expansion in order to ensure its continued growth.

     At May 29,  1999,  approximately  65% of the  Company's  assets  consist of
inventories, accounts receivable, cash and cash equivalents, and short-term debt
and equity securities.  The current ratio is 3.71 to 1, with net working capital
of  $48,430,000  at May 29, 1999, as compared to the current ratio of 3.43 to 1,
with net working capital of $41,597,000 at May 30, 1998.

     Net capital  expenditures,  primarily  for machinery  and  equipment,  were
$2,207,000 in 1999, as compared to $1,897,000 in 1998 and $4,370,000 in 1997. Of
the 1997 expenditures,  approximately $1,900,000 relates to the acquisition, and
related  improvements,  of a  manufacturing  facility  by  AngioDynamics'  Irish
subsidiary.  No material increase in the aggregate level of capital expenditures
is currently contemplated for 2000.

     In January 1999,  the Board of Directors  authorized  the repurchase of the
Company's Class B Common Stock up to an aggregate  purchase price of $2,000,000.
As of May 29, 1999, the Company had repurchased  12,100 shares of Class B Common
Stock for approximately $68,000.

     Year 2000 Compliance
     --------------------

     Management  has  developed  a plan  to  modify  the  Company's  information
technology  to  recognize  the Year  2000.  The Year 2000 issue is the result of
computer  programs being written using two digits rather than four to define the
applicable year. The plan has three distinct areas of focus; namely, traditional
information  systems,  technology  used in support areas,  and  preparedness  of
suppliers and customers.

     The first area of focus has been an assessment of  traditional  information
technology, namely internal software business applications, hardware and desktop
support.  All of the Company's  domestic and most of its international  software
systems,  applications  and desktop  support  have been  assessed,  modified and
tested  to  be  Year  2000   compliant.   The  remaining   system   upgrades  or
modifications, at two of the Company's international subsidiaries, are scheduled
for completion during the second quarter of fiscal 2000.

     The  second  area of focus has been an  assessment  of  technology  used in
support  areas,  which  includes the  electronics  in  manufacturing  equipment,
telephone  systems,  security  systems and payroll time  clocks.  At the present
time, substantially all such equipment,  except the Company's Westbury telephone
system,  has  either  been  tested to assure  Year 2000  compliance  or has been
certified  by vendors to be Year 2000  compliant.  The vendor  that  handles the
Company's  telephone system at its Westbury offices has assured the Company that
the system will be made Year 2000 compliant  during the second quarter of fiscal
2000, at no cost to the Company.

     The third area of focus is  communications  with suppliers and customers to
understand  their level of readiness  and assure a constant flow of materials to
support business plans. The Company has sought  compliance  statements from each
of its significant suppliers. Communication has shown a high level of awareness

                                      -21-


<PAGE>



and planning by these parties,  most of which have provided positive  assurances
to  maintain a constant  flow of  materials.  At the present  time,  no material
problems or concerns are indicated by these responses. However, if a significant
vendor or customer is non-compliant, the Company can give no assurance that such
occurrence will not have an adverse affect on the Company's results. The Company
believes  its action  plans will  minimize  these  risks and  prevent  any major
interruptions in the flow of materials and products.

     Formal  contingency  plans will not be  formulated  unless the  Company has
identified  specific  areas  where  there  is a  substantial  risk of year  2000
problems  occurring.  No such areas have been  identified to date. If during our
remaining  testing the Company  finds  results  that  warrant  concern,  we will
dedicate appropriate staff to procure readiness and to do re-testing.

     The plan is being  administered  by internal  staff and  management.  Costs
incurred in the  Company's  readiness  effort are being  expensed  as  incurred,
except  for those  costs  capitalized  as fixed  assets.  Anticipated  costs are
expected  to  approximate  $130,000  and to date an  estimated  $50,000 has been
spent.  Management  has no reason to believe  that the Company will not meet its
compliance  goals and does not anticipate that this project will have a material
impact on the  Company's  operations,  though no assurance  can be given in this
regard.

     Forward-Looking Statements
     --------------------------

     This Form 10-K  contains  certain  forward-looking  statements  within  the
meaning  of  Section  27A of  the  Securities  Act  of  1933,  as  amended  (the
"Securities  Act"),  and Section 21E of the Securities  Exchange Act of 1934, as
amended  (the  "Exchange  Act"),  which are  intended  to be covered by the safe
harbors  created  thereby.  Investors  are  cautioned  that all  forward-looking
statements  involve risks and uncertainty,  including  without  limitation,  the
ability of the  Company  to  develop  its  products,  as well as general  market
conditions,  competition  and pricing.  Although the Company  believes  that the
assumptions  underlying  the  forward-looking  statements  contained  herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the  forward-looking  statements included in this Form 10-K
will prove to be accurate. In light of the significant uncertainties inherent in
the   forward-looking   statements   included  herein,  the  inclusion  of  such
information  should not be  regarded as a  representation  by the Company or any
other person that the objectives and plans of the Company will be achieved.


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
          ----------------------------------------------------------

     The  Company  is exposed to market  risk from  changes in foreign  currency
exchange rates and, to a much lesser extent,  interest rates on investments  and
financing,  which could impact results of operations and financial position. The
Company does not  currently  engage in hedging or other  market risk  management
tools.

     Foreign Currency Exchange Rate Risk
     -----------------------------------

     The Company's  international  subsidiaries  are  denominated  in currencies
other  than the U.S.  dollar.  However,  since the  functional  currency  of the
Company's  international  subsidiaries is the local currency,  foreign  currency
translation  adjustments  are  accumulated as a component of  accumulated  other
comprehensive  income (loss) in  stockholders'  equity.  Assuming a hypothetical
change in the foreign  currency  versus the U.S. dollar exchange rates of 10% at
May 29, 1999, the Company's assets and liabilities would increase or decrease by
$2,283,000  and  $764,000,  respectively,  and the  Company's  net sales and net
earnings would increase or decrease by $2,376,000 and $38,000,  respectively, on
an annual basis.

                                      -22-


<PAGE>



     The Company also maintains  intercompany balances and loans receivable with
subsidiaries  with  different  local  currencies.  These  amounts are at risk of
foreign  exchange  losses if exchange rates  fluctuate.  Assuming a hypothetical
change in the foreign  currency  versus the U.S. dollar exchange rates of 10% at
May 29, 1999,  results of operations would be favorably or unfavorably  impacted
by approximately $458,000 on an annual basis.

     Interest Rate Risk
     ------------------

     The Company is exposed to interest  rate change market risk with respect to
its  investments in tax-free  municipal  bonds in the amount of $5,155,000.  The
bonds bear  interest at a floating rate  established  weekly.  During 1999,  the
interest  rate on the  bonds  approximated  3.4%.  Each  100  basis  point  (1%)
fluctuation in interest rates will increase or decrease  interest  income on the
bonds by approximately $52,000 on an annual basis.

     As the  Company's  principal  amount of fixed and  variable  interest  rate
financing approximates $1,785,000 and $718,000, respectively, at May 29, 1999, a
change in interest  rates would not  materially  impact results of operations or
financial position.


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

     Financial statements and supplementary data required by Part II, Item 8 are
included in Part IV of this form as indexed at Item 14 (a) 1.


Item 9.  Changes in and Disagreements with Accountants on Accounting and
         ---------------------------------------------------------------
         Financial Disclosure
         --------------------

     None.


                                      -23-


<PAGE>



                                    Part III
                                    --------


     Certain information required by Part III is omitted from this Annual Report
on Form 10-K because the Company will file a definitive  proxy statement  within
120 days after the end of its fiscal year pursuant to Regulation 14A (the "Proxy
Statement")  for its Annual  Meeting of  Stockholders,  currently  scheduled for
October  19,  1999,  and the  information  included  in the Proxy  Statement  is
incorporated herein by reference.


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

     The  following  table sets forth  certain  information  with respect to the
Company's officers and directors.

           Name               Age                    Positions
           ----               ---                    ---------

Howard S. Stern (1)......      68       Chairman of the Board, President, Chief
                                          Executive Officer, Director
Arthur L. Zimmet.........      63       Senior Vice President - Special Projects
Sandra D. Baron..........      47       Vice President - Human Resources
Craig A. Burk............      46       Vice President - Manufacturing
Joseph A. Cacchioli......      43       Vice President - Controller
Dennis J. Curtin.........      52       Vice President - Chief Financial Officer
Agustin V. Gago..........      40       Vice President - International
Eamonn P. Hobbs..........      46       Vice President - AngioDynamics Division
Joseph J. Palma..........      57       Vice President - Sales and Marketing
Archie B. Williams.......      48       Vice President - Imaging Products
                                          Management
Terry S. Zisowitz........      52       Vice President - Legal and Regulatory
                                          Affairs
Michael A. Davis, M.D....      58       Medical Director/Technical Director,
                                          Director
Paul S. Echenberg (1)....      55       Chairman of the Board of E-Z-EM Canada,
                                          Director
James L. Katz CPA, JD....      63       Director
  (1)(2)(4)(5)
Donald A. Meyer (3)(4)...      65       Director
David P. Meyers..........      35       Director
Robert M. Topol (1)(2)...      74       Director
  (3)(5)


(1) Member of Executive Committee
(2) Member of Audit Committee
(3) Member of Nominating Committee
(4) Member of Compensation Committee
(5) Member of Finance Committee

     Directors are elected for a three year term and each holds office until his
successor is elected and qualified.  Officers are elected  annually and serve at
the pleasure of the Board of Directors.

     Mr. Stern is a co-founder  of the Company and has served as Chairman of the
Board and Director of the Company  since its  formation  in 1962.  Mr. Stern has
also served as President and Chief Executive  Officer of the Company since 1997.
From 1990 to 1994,  Mr. Stern served as Chief  Executive  Officer,  and from the
formation of the Company until 1990, he served as President and Chief  Executive
Officer.  Mr.  Stern is also a director of ITI Medical  Technologies,  Inc.  The
Company has an investment in ITI Medical Technologies, Inc.

                                      -24-


<PAGE>



     Mr.  Zimmet has served as Senior Vice  President - Special  Projects  since
1988, and has been an employee of the Company since 1982.

     Ms. Baron has served as Vice  President - Human  Resources  since 1995, and
has been an employee of the Company since 1985.

     Mr. Burk has served as Vice President - Manufacturing since 1987.

     Mr. Cacchioli has served as Vice President - Controller since 1988, and has
been an employee of the Company since 1984.

     Mr.  Curtin has served as Vice  President - Chief  Financial  Officer since
1995, and  previously  served as Vice President - Finance from 1985 to 1995. Mr.
Curtin has been an employee of the Company since 1983.

     Mr. Gago has served as Vice President -  International  since 1997, and has
been an employee of the Company since 1979.

     Mr. Hobbs has served as Vice President - AngioDynamics Division since 1991,
and has been an employee of the Company since 1988.

     Mr. Palma has served as Vice  President - Sales and  Marketing  since 1996,
and previously served as Vice President - Sales from 1995 to 1996. Mr. Palma has
been an employee of the Company since 1994.

     Mr.  Williams has served as Vice  President - Imaging  Products  Management
since 1993, and has been an employee of the Company since 1980.

     Ms.  Zisowitz has served as Vice President - Legal and  Regulatory  Affairs
since 1995, and previously served as Vice President - Legal Affairs from 1990 to
1995. Ms. Zisowitz has been an employee of the Company since 1989.

     Dr. Davis has served as Medical Director/Technical Director and Director of
the Company since 1997, and previously  served as Medical  Director and Director
of the Company from 1995 to 1996, and as Medical  Director from 1994 to 1995. He
has been  Professor  of  Radiology  and  Nuclear  Medicine  and  Director of the
Division of Radiologic  Research,  University of  Massachusetts  Medical  Center
since 1980. He is also the President,  Chief  Executive  Officer and Director of
Amerimmune  Pharmaceuticals,  Inc. and its wholly-owned subsidiary,  Amerimmune,
Inc., since February 1999. He is also a director of MacroChem Corp.

     Mr.  Echenberg has been a director of the Company since 1987 and has served
as Chairman of the Board of E-Z-EM Canada since 1994. He is the President, Chief
Executive Officer and Director of Schroders & Associates Canada Inc. (investment
buy-out advisory  services) and Director of Schroders  Ventures Ltd. since 1997.
He is also a founder  and has been a general  partner  and  director  of Eckvest
Equity Inc. (personal investment and consulting services) since 1989. He is also
a director of Lallemand  Inc., ISG  Technologies,  Inc.,  Benvest  Capital Inc.,
Colliers  MacAuley   Nicholl,   Huntington  Mills  (Canada)  Ltd.,  ITI  Medical
Technologies,  Inc.,  Flexia  Corporation,  Fib-Pak  Industries Inc. and Shirmax
Fashions  Ltd. The Company has  investments  in ISG  Technologies,  Inc. and ITI
Medical Technologies, Inc.

     Mr. Katz has been a director of the Company since 1983. He is a founder and
managing  director  since  its  organization  in 1995 of  Chapman  Partners  LLC
(investment banking). Previously, he had been the co-owner and President of Ever
Ready Thermometer Co., Inc. from its acquisition in 1985 until its sale in 1994.
From 1971  until  1980 and from  1983  until  1985,  he held  various  executive
positions with Baxter  International  and subsidiaries of Baxter  International,
including that of Chief Financial Officer of Baxter International.  He is also a
director of Intec, Inc., Lakeshore Medical Fitness, LLC and ELPAS North

                                      -25-


<PAGE>



America, Inc.

     Mr. Meyer has been a director of the Company since 1968. He is currently an
independent  consultant  in legal  matters to arts and  business  organizations,
specializing in technical assistance.  He had been the Executive Director of the
Western  States  Arts  Federation,  Santa Fe, New  Mexico,  which  provides  and
develops  regional arts programs,  from 1990 to 1995. From 1958 through 1990, he
was an attorney practicing in New Orleans, Louisiana.

     Mr. Meyers has been a director of the Company since 1996. He is the founder
of MedTest Express, Inc., an Atlanta,  Georgia provider of contracted laboratory
services  for home  health  agencies,  and has  served as its  President,  Chief
Executive Officer and Director since 1994.

     Mr.  Topol has been a director  of the  Company  since  1982.  Prior to his
retirement  in 1994, he served as an Executive  Vice  President of Smith Barney,
Inc.  (financial  services).  He is also a  director  of First  American  Health
Concepts,  Fund for the Aging, City Meals on Wheels, American Health Foundation,
State University of New York - Purchase and Redstone Resources Inc.


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

Summary Compensation Table

     The following table sets forth information  concerning the compensation for
services,  in all capacities for 1999, 1998 and 1997, of those persons who were,
at the end of 1999,  Chief Executive  Officer ("CEO") (Howard S. Stern) and each
of the four most highly compensated executive officers of the Company other than
the CEO (collectively, the "Named Executive Officers"):

<TABLE>
<CAPTION>
                                      Annual Compensation             Long Term Compensation
                                    -------------------------- -------------------------------------
                                                                           Awards            Payouts
                                                      Other    ----------------------------  -------
                                                      Annual   Restricted                             All Other
    Name and                                        Compensa-    Stock          Options       LTIP    Compensa-
    Principal              Fiscal  Salary    Bonus   tion (1)    Awards    ----------------  Payouts   tion (4)
    Position                Year    ($)       ($)      ($)        ($)       # (2)    # (3)     ($)       ($)
    ---------              ------  ------    -----  ---------  ----------  -------   ------  -------  ---------
<S>                         <C>   <C>       <C>        <C>        <C>         <C>    <C>        <C>     <C>
Howard S. Stern,........    1999  $250,000  $83,250    None       None        None     .2273    None    $15,404
Chairman of the Board,      1998   250,000   61,874    None       None        None     .2273    None     19,609
President and Chief         1997   250,000   11,538    None       None        None    8.5227    None      7,090
Executive Officer

Arthur L. Zimmet,.......    1999  $165,000  $54,945    None       None        None     None     None    $ 9,264
Senior Vice President       1998   155,000   40,283    None       None        None     None     None      8,069
                            1997   153,000    7,062    None       None        None     None     None      7,380

Eamonn P. Hobbs,........    1999  $200,000  $17,481    None       None        None     .2273    None    $ 8,083
Vice President              1998   195,000   21,923    None       None        None     .2273    None      7,630
                            1997   176,250    6,058    None       None        None   45.4545    None      7,902

Dennis J. Curtin,.......    1999  $160,000  $39,996    None       None        None     None     None    $ 8,956
Vice President              1998   146,667   38,861    None       None        None     None     None      7,637
                            1997   144,000    6,646    None       None        None    3.4091    None      7,534

Joseph J. Palma,........    1999  $150,000  $49,950    None       None        None     None     None    $ 9,150
Vice President              1998   135,000   33,247    None       None        None     None     None      6,052
                            1997   132,000    3,046    None       None        None     None     None      6,428
</TABLE>

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

(1)  The Company has concluded  that the  aggregate  amount of  perquisites  and
     other personal  benefits paid to each of the Named  Executive  Officers for
     1999,  1998 and 1997 did not  exceed  the  lesser of 10% of such  officer's
     total  annual  salary  and bonus for 1999,  1998 or 1997 or  $50,000;  such
     amounts are, therefore, not reflected in the table.

(2)  Options are exercisable in Class B Common Stock of the Company.

(3)  Options are exercisable in Class B Common Stock of AngioDynamics, Inc., a

                                      -26-


<PAGE>



     wholly-owned subsidiary of the Company.

(4)  For 1999, 1998 and 1997,  includes for each of the Named Executive Officers
     the amounts  contributed by the Company under the Profit-Sharing  Plan and,
     as matching  contributions,  under the companion  401(k) Plan. For 1999 and
     1998,  also  includes  for  Howard S.  Stern  fees of $6,000  and  $12,000,
     respectively, relating to attendance at AngioDynamics directors' meetings.

Option/SAR Grants Table

     The following table sets forth certain information  concerning stock option
grants made during 1999 to the Named Executive  Officers.  These grants are also
reflected in the Summary  Compensation  Table. All of the options granted during
1999 have an exercise  price not less than the fair market  value of the Class B
Common Stock of AngioDynamics,  Inc., a wholly-owned  subsidiary of the Company,
on the date of grant, and expire in ten years. In accordance with SEC disclosure
rules,  the  hypothetical  gains or "option  spreads"  for each option grant are
shown based on compound  annual rates of stock price  appreciation of 5% and 10%
from the grant date to the  expiration  date.  The  assumed  rates of growth are
prescribed  by the SEC and are for  illustrative  purposes  only;  they  are not
intended  to  predict  future  stock  prices,  which  will  depend  upon  market
conditions and the Company's future  performance.  The Company did not grant any
stock appreciation rights during 1999.

<TABLE>
<CAPTION>
                                                                               Potential Realizable Value at
                                                                               Assumed Annual Rates of Stock
                              Individual Grants                              Price Appreciation for Option Term
------------------------------------------------------------------------   --------------------------------------
                         Number of   % of Total
                         Securities   Options                                       5%                  10%
                         Underlying  Granted to    Exercise                ------------------   -----------------
                          Options   Employees in   or Base                 Stock    Potential   Stock   Potential
                          Granted    Fiscal Year    Price     Expiration   Price      Value     Price     Value
      Name                  (#)         1999        ($/Sh)       Date      ($/Sh)       $       ($/Sh)      $
      ----               ----------  -----------   --------   ----------   ------   ---------   ------  ---------
<S>                        <C>          <C>       <C>          <C>        <C>        <C>       <C>       <C>
Howard S. Stern.......     .2273 (1)    29% (2)   $40,000 (3)  5/28/09    $65,156    $5,717    $103,750  $14,489

Arthur L. Zimmet......      None

Eamonn P. Hobbs.......     .2273 (1)    29% (2)   $40,000 (3)  5/28/09    $65,156    $5,717    $103,750  $14,489

Dennis J. Curtin......      None

Joseph J. Palma.......      None
</TABLE>

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

(1)  Options are exercisable in Class B Common Stock of  AngioDynamics,  Inc., a
     wholly-owned  subsidiary of the Company.  Options are  exercisable  20% per
     year over five years from the date of grant,  provided  a  threshold  event
     occurs or 100% on the ninth anniversary of the grant, if no threshold event
     occurs.  A threshold  event is the  earlier of (i)  fourteen  months  after
     either  an  initial  public  offering  ("IPO")  or  the  spin  off  of  all
     AngioDynamics stock to the Company's shareholders, or (ii) two months after
     the occurrence of both an IPO and the spin off of all  AngioDynamics  stock
     to the Company's shareholders.

(2)  Represents the percentage of total options granted to employees during 1999
     and exercisable in Class B Common Stock of AngioDynamics, Inc.

(3)  The options  granted  during 1999 have an exercise  price not less than the
     fair market value of the Class B Common Stock of AngioDynamics, Inc. on the
     date of grant.  A total of 136.36 shares of  AngioDynamics'  Class B Common
     Stock may be issued under this plan.



                                      -27-


<PAGE>



Aggregated Option Exercises and Fiscal Year-End Option Value Table

     The following table sets forth certain information concerning all exercises
of stock  options  during 1999 by the Named  Executive  Officers  and the fiscal
year-end value of unexercised stock options on an aggregated basis:

<TABLE>
<CAPTION>
                                                                     Number of
                                                                     Securities       Value of
                                                                     Underlying      Unexercised
                                                                    Unexercised     In-the-Money
                                                                     Options at      Options at
                                                                    May 29, 1999    May 29, 1999
                                                                        (#)            ($) (1)
                                                                   -------------   -------------
                                   Shares        Value              Exercisable/    Exercisable/
                                Acquired on    Realized            Unexercisable   Unexercisable
            Name                Exercise (#)     ($)                    (2)             (2)
            ----                ------------   ---------           -------------   -------------
<S>                                 <C>           <C>                   <C>             <C>
Howard S. Stern...                  None          None                  78,786/         $61,428/
                                                                         None             None

Arthur L. Zimmet..                  None          None                  50,884/         $33,347/
                                                                         None             None

Eamonn P. Hobbs...                  None          None                  39,595/         $25,449/
                                                                         None             None

Dennis J. Curtin..                  None          None                  50,556/         $39,207/
                                                                         None             None

Joseph J. Palma...                  None          None                  27,974/         $17,551/
                                                                         None             None
</TABLE>

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

(1)  Options are  "in-the-money"  if on May 29,  1999,  the market  price of the
     stock  exceeded the exercise  price of such options.  At May 29, 1999,  the
     closing price of the  Company's  Class A and Class B Common Stock was $5.06
     and  $5.00,  respectively.  The  value of such  options  is  calculated  by
     determining the difference  between the aggregate market price of the stock
     covered by the options on May 29, 1999 and the aggregate  exercise price of
     such options.

(2)  Options granted prior to the Company's recapitalization on October 26, 1992
     are  exercisable  one-half in Class A Common  Stock and one-half in Class B
     Common Stock. Options granted after the recapitalization are exercisable in
     Class B Common Stock.

Compensation of Directors

     On an annual basis,  directors,  who are not employees of the Company,  are
entitled to directors  fees of $15,000,  1,000 shares of the  Company's  Class B
Common Stock, and stock options for 1,000 shares of Class B Common Stock,  which
vest one year  from  date of  grant.  Directors,  who are not  employees  of the
Company,  are also  entitled to a fee of $1,000 for each regular  board  meeting
attended and $250 for each telephonic  board meeting  attended.  Directors,  who
serve on committees of the Company and who are not employees or  consultants  of
the Company,  are entitled to a fee of $500 for each committee meeting attended,
except that the  chairman of a committee is entitled to a fee of $1,000 for each
committee meeting attended.


                                      -28-


<PAGE>



Employment Contract

     During 1994, the Company entered into an employment contract with Howard S.
Stern.  This  employment  contract  is for a term of eight  years  at an  annual
compensation of $250,000.

Severance Arrangements

     The  information  required by this caption is  incorporated by reference to
the Company's Proxy Statement under the heading "Severance Arrangements."

Compensation and Stock Option Committee Report on Executive Compensation

     The  information  required by this caption is  incorporated by reference to
the Company's Proxy Statement under the heading  "Compensation  and Stock Option
Committee Report on Executive Compensation."

Common Stock Performance

     The  information  required by this caption is  incorporated by reference to
the Company's Proxy Statement under the heading "Common Stock Performance."


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

     The following table sets forth information, as of August 2, 1999, as to the
beneficial ownership of the Company's voting Class A Common Stock by each person
known by the Company to own  beneficially  more than 5% of the Company's  voting
Class A Common Stock:

  Name and Address of                         Shares                Percent of
   Beneficial Owner                       Beneficially Owned          Class
   ----------------                       ------------------          -----

Howard S. Stern,..................            956,412                  23.7
Chairman of the Board,
President, Chief Executive
Officer, Director
717 Main Street
Westbury, NY  11590

Betty S. Meyers,..................            820,806                  20.3
401 Emerald Street
New Orleans, LA  70124

David P. Meyers,..................            311,551 (1)               7.7
Director
1220 Pasadena Avenue
Atlanta, GA  30306

Jonas I. Meyers,..................            311,551 (2)               7.7
904 Oakland Avenue
Ann Arbor, MI  48104

Stuart J. Meyers,.................            311,551 (3)               7.7
434 Bellaire Drive
New Orleans, LA  70124

Dimensional Fund Advisors, Inc.,..            222,475                   5.5
1299 Ocean Avenue
Santa Monica, CA  90401

                                      -29-


<PAGE>



  Name and Address of                         Shares                Percent of
   Beneficial Owner                       Beneficially Owned          Class
   ----------------                       ------------------          -----

Wellington Management Company,....            219,258                   5.4
75 State Street
Boston, MA  02109

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

(1)  Includes  154,801  shares in which  David P.  Meyers  has only a  remainder
     interest. Betty S. Meyers holds a life estate in such shares.

(2)  Includes  154,801  shares in which  Jonas I.  Meyers  has only a  remainder
     interest. Betty S. Meyers holds a life estate in such shares.

(3)  Includes  154,801  shares in which  Stuart J.  Meyers has only a  remainder
     interest. Betty S. Meyers holds a life estate in such shares.

     The following table sets forth information, as of August 2, 1999, as to the
beneficial  ownership  of the  Company's  voting Class A and  nonvoting  Class B
Common Stock, by (i) each of the Company's directors, (ii) each of the Company's
Named Executive Officers,  and (iii) all directors and executive officers of the
Company as a group:

<TABLE>
<CAPTION>
                                                     Class A                                 Class B
                                       ------------------------------         --------------------------------
                                          Shares              Percent            Shares                Percent
      Name of                          Beneficially             of            Beneficially               of
  Beneficial Owner                       Owned (1)             Class            Owned (2)               Class
  ----------------                     ------------           -------         ------------             -------
<S>                                       <C>                   <C>             <C>                      <C>
Howard S. Stern,...........               956,412               23.7            1,256,164                20.5
Chairman of the Board,
President, Chief Executive
Officer, Director

David P. Meyers,...........               311,551 (3)            7.7              614,439 (4)            10.2
Director

Arthur L. Zimmet,..........                28,750                 *                90,784                 1.5
Senior Vice President

Robert M. Topol,...........                25,291                 *                66,933                 1.1
Director

Paul S. Echenberg,.........                 2,291                 *                76,497                 1.3
Chairman of the Board of
E-Z-EM Canada, Director

Donald A. Meyer,...........                19,470                 *                44,462                  *
Director

James L. Katz,.............                 2,316                 *                55,763                  *
Director

Dennis J. Curtin,..........                 2,052                 *                53,382                  *
Vice President

Eamonn P. Hobbs,...........                    50                 *                39,604                  *
Vice President

Michael A. Davis, M.D.,....                  None                 *                39,836                  *
Medical Director/Technical
Director, Director
</TABLE>

                                      -30-


<PAGE>

<TABLE>
<CAPTION>
                                                     Class A                                 Class B
                                       ------------------------------         --------------------------------
                                          Shares              Percent            Shares                Percent
      Name of                          Beneficially             of            Beneficially               of
  Beneficial Owner                       Owned (1)             Class            Owned (2)               Class
  ----------------                     ------------           -------         ------------             -------
<S>                                       <C>                   <C>             <C>                      <C>
Joseph J. Palma,...........                    None                *               27,974                  *
Vice President

All directors and executive
 officers as a group (17
 persons)..................               1,348,183  (3)        33.4            2,490,988 (4)            37.5
</TABLE>

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

*    Does not exceed 1%.

(1)  Includes  Class A Common Stock  shares  issuable  upon  exercise of options
     currently  exercisable or exercisable within 60 days from August 2, 1999 as
     follows:  Robert M. Topol  (1,791),  Paul S. Echenberg  (1,791),  Donald A.
     Meyer  (1,791),  James L. Katz  (1,791)  and all  directors  and  executive
     officers as a group (7,164).

(2)  Includes  Class B Common Stock  shares  issuable  upon  exercise of options
     currently  exercisable or exercisable within 60 days from August 2, 1999 as
     follows:  Howard S. Stern (78,786),  Arthur L. Zimmet  (50,884),  Robert M.
     Topol (41,041), Paul S. Echenberg (74,807), Donald A. Meyer (18,869), James
     L. Katz  (52,952),  Dennis J. Curtin  (50,556),  Eamonn P. Hobbs  (39,595),
     Michael A. Davis, M.D. (39,836), Jospeh J. Palma (27,974) and all directors
     and executive officers as a group (601,450).

(3)  Includes 154,801 shares in which Mr. Meyers has only a remainder  interest.
     Betty S.  Meyers,  a  principal  shareholder,  holds a life  estate in such
     shares.

(4)  Includes 201,014 shares in which Mr. Meyers has only a remainder  interest.
     Betty S.  Meyers,  a  principal  shareholder,  holds a life  estate in such
     shares.  Also  includes  190,035  shares owned by a  partnership  which Mr.
     Meyers has an interest in.


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

     A facility of the  Company  located in  Westbury,  New York is owned 27% by
Howard S. Stern,  25% by Betty S. Meyers, a principal  shareholder,  2% by other
employees  of the Company and 46% by  unrelated  parties,  which  includes a 25%
owner who manages the property.  Aggregate  rentals,  including  real estate tax
payments, were $154,000 during 1999. The lease term expires in 2004.

     During  1998,  the  Company   entered  into  split  dollar  life  insurance
arrangements  with  Howard S. Stern  (including  his spouse) and Betty S. Meyers
(the  "insureds").  On an annual  basis,  the  Company  makes  interest  bearing
advances of  approximately  $100,000  per  insured  toward the cost of such life
insurance  policies.  Interest  on the  advances  is to be paid  to the  Company
annually by the insureds.  Under collateral assignment agreements,  the proceeds
from the  policies  will first be paid to the  Company to repay the  advances it
made.  If the policies  are  terminated  prior to the death of the insured,  the
Company  will be entitled to the cash  surrender  value of the  policies at that
time, and any shortfall  between that amount and the amount of the advances made
by the Company will be repaid to the Company by the insureds.

     The Company has an unsecured,  two-year  interest  bearing note  receivable
from Eamonn P. Hobbs, an executive officer of the Company, in the principal

                                      -31-


<PAGE>



amount of $320,000.  The outstanding principal and interest matures on September
30, 1999.

     The Company has engaged Michael A. Davis,  M.D., a director of the Company,
for  consulting  services.  Fees for such services were  approximately  $147,000
during 1999.
























































                                      -32-


<PAGE>



                                     Part IV
                                     -------


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

                                                                            Page
                                                                            ----

(a)  l.   Financial Statements
          --------------------

     The following consolidated financial statements and supplementary
data of Registrant and its subsidiaries required by Part II, Item 8,
are included in Part IV of this report:

     Report of Independent Certified Public Accountants                       36

     Consolidated balance sheets - May 29, 1999 and May 30, 1998              37

     Consolidated statements of operations - fifty-two weeks ended
          May 29, 1999, May 30, 1998 and May 31, 1997                         39

     Consolidated statement of stockholders' equity and
          comprehensive income (loss) - fifty-two weeks ended
          May 29, 1999, May 30, 1998 and May 31, 1997                         40

     Consolidated statements of cash flows - fifty-two weeks ended
          May 29, 1999, May 30, 1998 and May 31, 1997                         41

     Notes to consolidated financial statements                               43

(a)  2.   Financial Statement Schedules
          -----------------------------

     The following consolidated financial statement schedule is
included in Part IV of this report:

     Schedule II - Valuation and qualifying accounts                          67

     All other schedules are omitted because they are not applicable,
or not required, or because the required information is included in
the consolidated financial statements or notes thereto.

(a)  3.   Exhibits
          --------

      3(i)  Certificate of Incorporation                                     (a)

      3(ii) Amended Bylaws                                                   (b)

     10(a)  Agreement and Plan of Merger dated November 7, 1995 among
            United States Surgical Corporation, USSC Acquisition
            Corporation, Surgical Dynamics Inc., and E-Z-EM, Inc. and
            Calmed Laboratories, Inc. and E-Z-SUB, Inc.                      (c)

     10(b)  1983 Stock Option Plan                                           (d)

     10(c)  1984 Directors and Consultants Stock Option Plan                 (e)

     10(d)  Income Deferral Program                                          (f)

     13     Annual report to security holders                                (g)

     21     Subsidiaries of the Registrant                                    68


                                      -33-


<PAGE>



                                                                            Page
                                                                            ----

(a)  3.   Exhibits (continued)
          --------------------

     22     Proxy statement to security holders                              (h)

     23     Consent of Independent Certified Public Accountants               69

     27     Financial Data Schedule                                           70

     99     Report of Independent Certified Public Accountants
                 Other than Principal Accountants                             71

     ---------------
                 (a)   Incorporated by reference to Exhibit 3(i) of the
                       Company's annual report filed on Form 10-K for the
                       fiscal year ended May 31, 1997

                 (b)   Incorporated by reference to Exhibit 3(ii) of the
                       Company's annual report filed on Form 10-K for the
                       fiscal year ended May 28, 1994

                 (c)   Incorporated by reference to Exhibit 10 of the
                       Company's current report filed on Form 8-K/A dated
                       November 22, 1995

                 (d)   Incorporated by reference to Exhibit 10(a) of the
                       Company's quarterly report filed on Form 10-Q for
                       the quarterly period ended December 2, 1995

                 (e)   Incorporated by reference to Exhibit 10(b) of the
                       Company's quarterly report filed on Form 10-Q for
                       the quarterly period ended December 2, 1995

                 (f)   Incorporated by reference to Exhibit 10(c) of the
                       Company's annual report filed on Form 10-K for the
                       fiscal year ended May 29, 1993

                 (g)   The Company intends to mail a copy of its annual
                       report on Form 10-K to its security holders. The
                       Company's shareholders letter will be filed on a
                       subsequent date together with its proxy statement to
                       security holders.

                 (h)   To be filed on a subsequent date

(b)  1.  Reports on Form 8-K
         -------------------

     No reports on Form 8-K were filed for the quarter ended May 29, 1999.

     Schedules  other than those  shown above are not  submitted  as the subject
matter thereof is either not required or is not present in amounts sufficient to
require  submission in accordance with the instructions in Regulation S-X or the
information  required  is  included  in  the  Notes  to  Consolidated  Financial
Statements.








                                      -34-


<PAGE>



                                   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.

                                            E-Z-EM, Inc.
                                           ------------------------------------
                                            (Registrant)


Date  August 27, 1999                       /s/ Howard S. Stern
    ------------------                     ------------------------------------
                                            Howard S. Stern, Chairman of the
                                            Board, President, Chief Executive
                                            Officer, Director

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.


Date  August 27, 1999                       /s/ Howard S. Stern
    ------------------                     ------------------------------------
                                            Howard S. Stern, Chairman of the
                                            Board, President, Chief Executive
                                            Officer, Director



Date  August 27, 1999                       /s/ Dennis J. Curtin
    ------------------                     ------------------------------------
                                            Dennis J. Curtin, Vice President -
                                            Chief Financial Officer



Date  August 27, 1999                       /s/ Michael A. Davis
    ------------------                     ------------------------------------
                                            Michael A. Davis, Director



Date  August 27, 1999                       /s/ Paul S. Echenberg
    ------------------                     ------------------------------------
                                            Paul S. Echenberg, Director



Date  August 27, 1999                       /s/ James L. Katz
    ------------------                     ------------------------------------
                                            James L. Katz, Director



Date  August 27, 1999                       /s/ Donald A. Meyer
    ------------------                     ------------------------------------
                                            Donald A. Meyer, Director



Date  August 27, 1999                       /s/ David P. Meyers
    ------------------                     ------------------------------------
                                            David P. Meyers, Director



Date  August 27, 1999                       /s/ Robert M. Topol
    ------------------                     ------------------------------------
                                            Robert M. Topol, Director


                                      -35-


<PAGE>




                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
  E-Z-EM, Inc.

We have audited the accompanying consolidated balance sheets of E-Z-EM, Inc. and
Subsidiaries  as of May 29, 1999 and May 30, 1998, and the related  consolidated
statements of operations,  stockholders' equity and comprehensive income (loss),
and cash flows for the fifty-two  weeks ended May 29, 1999, May 30, 1998 and May
31, 1997.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.  We did not audit the financial  statements of a
certain   subsidiary,   which  statements  reflect  total  assets   constituting
approximately  17%  in  1999  and  18%  in  1998  and  net  sales   constituting
approximately  12%  in  1999,  12%  in  1998  and  10% in  1997  of the  related
consolidated  totals.  Those  statements were audited by other  auditors,  whose
report thereon has been furnished to us, and our opinion,  insofar as it relates
to the amounts included for this subsidiary,  is based solely upon the report of
the other auditors.

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

In our opinion,  based on our audits and the report of the other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the consolidated  financial position of E-Z-EM,  Inc. and Subsidiaries as of May
29, 1999 and May 30, 1998, and the consolidated  results of their operations and
their  consolidated  cash flows for the fifty-two  weeks ended May 29, 1999, May
30, 1998 and May 31, 1997,  in conformity  with  generally  accepted  accounting
principles.

We have also audited the  financial  statement  schedule  listed in the Index at
Item 14(a)(2).  In our opinion,  this schedule  presents fairly, in all material
respects, the information required to be set forth therein.



GRANT THORNTON LLP
Certified Public Accountants


Melville, New York
July 27, 1999





                                      -36-


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)


                                                            May 29,      May 30,
              ASSETS                                         1999         1998
                                                            ------       -------

CURRENT ASSETS
     Cash and cash equivalents                              $8,073        $4,654
     Debt and equity securities                              5,216         3,475
     Accounts receivable, principally
         trade, net of allowance for
         doubtful accounts of $1,028 in
         1999 and $1,148 in 1998                            21,904        21,348
     Inventories                                            26,974        26,764
     Other current assets                                    4,151         2,499
                                                            ------        ------

              Total current assets                          66,318        58,740

INVESTMENT IN AFFILIATE                                                    1,121

PROPERTY, PLANT AND EQUIPMENT - AT COST,
     less accumulated depreciation and
     amortization                                           21,325        21,917

COST IN EXCESS OF FAIR VALUE OF NET ASSETS
     ACQUIRED, less accumulated amortization
     of $464 in 1999 and $441 in 1998                          424           446

INTANGIBLE ASSETS, less accumulated
     amortization of $870 in 1999 and
     $652 in 1998                                            2,328         2,546

DEBT AND EQUITY SECURITIES                                   3,015         2,057

OTHER ASSETS                                                 2,649         3,879
                                                            ------        ------

                                                           $96,059       $90,706
                                                            ======        ======






The accompanying notes are an integral part of these statements.

                                      -37-


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)


                                                           May 29,       May 30,
    LIABILITIES AND STOCKHOLDERS' EQUITY                    1999          1998
                                                           ------        ------

CURRENT LIABILITIES
     Notes payable                                         $1,829        $3,041
     Current maturities of long-term debt                     197           287
     Accounts payable                                       7,320         6,265
     Accrued liabilities                                    7,736         6,958
     Accrued income taxes                                     806           592
                                                           ------        ------

              Total current liabilities                    17,888        17,143

LONG-TERM DEBT, less current maturities                       477           606

OTHER NONCURRENT LIABILITIES                                2,403         1,734

COMMITMENTS AND CONTINGENCIES
                                                           ------        ------

              Total liabilities                            20,768        19,483
                                                           ------        ------

STOCKHOLDERS' EQUITY
     Preferred stock, par value $.10 per share -
         authorized, 1,000,000 shares; issued, none
     Common stock
         Class A (voting), par value $.10 per
              share - authorized, 6,000,000 shares;
              issued and outstanding 4,035,346 shares
              in 1999 and 1998                                403           403
         Class B (nonvoting), par value $.10 per
              share - authorized, 10,000,000 shares;
              issued and outstanding 6,058,277 shares
              in 1999 (excluding 12,100 shares held in
              treasury) and 5,999,073 shares in 1998          606           600
     Additional paid-in capital                            21,917        21,643
     Retained earnings                                     53,887        49,090
     Accumulated other comprehensive income (loss)         (1,522)         (513)
                                                           ------        ------

              Total stockholders' equity                   75,291        71,223
                                                           ------        ------

                                                          $96,059       $90,706
                                                           ======        ======














The accompanying notes are an integral part of these statements.

                                      -38-


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)


                                                     Fifty-two weeks ended
                                             ----------------------------------
                                             May 29,       May 30,       May 31,
                                              1999          1998          1997
                                             -------       -------       ------
Net sales                                   $107,179      $102,884      $97,324

Cost of goods sold                            62,022        65,451       60,754
                                             -------       -------       ------

      Gross profit                            45,157        37,433       36,570
                                             -------       -------       ------

Operating expenses
  Selling and administrative                  33,068        33,001       34,600
  Research and development                     4,847         5,662        6,881
  Impairment of long-lived assets                            4,121
                                              ------        ------       ------

    Total operating expenses                  37,915        42,784       41,481
                                              ------        ------       ------

      Operating profit (loss)                  7,242        (5,351)      (4,911)

Other income (expense)
  Interest income                                505           692          830
  Interest expense                              (263)         (694)        (517)
  Write-down of investment in affiliate       (1,121)         (219)
  Other, net                                     308            38           68
                                               -----         -----        -----

      Earnings (loss) before income
        taxes                                  6,671        (5,534)      (4,530)

Income tax provision (benefit)                 1,874           433       (1,322)
                                               -----         -----        -----

      NET EARNINGS (LOSS)                   $  4,797      $ (5,967)     $(3,208)
                                               =====         =====        =====

Earnings (loss) per common share
  Basic                                     $    .48      $   (.60)     $  (.33)
                                               =====         =====        =====

  Diluted                                   $    .47      $   (.60)     $  (.33)
                                               =====         =====        =====







The accompanying notes are an integral part of these statements.

                                      -39-


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS)

        Fifty-two weeks ended May 29, 1999, May 30, 1998 and May 31, 1997
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                     Class A            Class B                              Accumulated              Compre-
                                   common stock       common stock    Additional                other                 hensive
                                  ---------------    ---------------   paid-in    Retained  comprehensive             income
                                  Shares   Amount    Shares   Amount   capital    earnings  income (loss)   Total     (loss)
                                  ------   ------    ------   ------   -------    --------  -------------   -----     ------
<S>                             <C>         <C>    <C>         <C>     <C>        <C>          <C>         <C>       <C>
Balance at June 1, 1996         4,035,346   $403   5,199,615   $520    $15,165    $63,347      $1,168      $80,603
Exercise of stock options                            117,919     12        600                                 612
Income tax benefits on
  stock options exercised                                                  261                                 261
Compensation related to
  stock options plans                                                        2                                   2
Issuance of stock                                      3,022                24                                  24
3% common stock dividend                             280,327     28      3,021     (3,052)                      (3)
Net loss                                                                           (3,208)                  (3,208)  $(3,208)
Unrealized holding loss on
  debt and equity securities                                                                   (1,028)      (1,028)   (1,028)
Foreign currency translation
  adjustments                                                                                     (19)         (19)      (19)
                                ---------    ---   ---------    ---     ------     ------       -----        -----     -----

Comprehensive loss                                                                                                   $(4,255)
                                                                                                                       =====
Balance at May 31, 1997         4,035,346    403   5,600,883    560     19,073     57,087         121       77,244
Exercise of stock options                            107,417     11        470                                 481
Income tax benefits on
  stock options exercised                                                   88                                  88
Compensation related to
  stock option plans                                                         7                                   7
Issuance of stock                                      1,025                 6                                   6
3% common stock dividend                             289,748     29      1,999     (2,030)                      (2)
Net loss                                                                           (5,967)                  (5,967)  $(5,967)
Unrealized holding gain on
  debt and equity securities                                                                       12           12        12
Foreign currency translation
  adjustments                                                                                    (646)        (646)     (646)
                                ---------    ---   ---------    ---     ------     ------       -----       ------     -----

Comprehensive loss                                                                                                   $(6,601)
                                                                                                                       =====
Balance at May 30, 1998         4,035,346    403   5,999,073    600     21,643     49,090        (513)      71,223
Exercise of stock options                             64,704      6        267                                 273
Income tax benefits on
  stock options exercised                                                   38                                  38
Compensation related to
  stock option plans                                                         5                                   5
Issuance of stock                                      6,600      1         31                                  32
Purchase of treasury stock                           (12,100)    (1)       (67)                                (68)
Net earnings                                                                        4,797                    4,797    $4,797
Unrealized holding loss on
  debt and equity securities                                                                     (151)        (151)     (151)
Foreign currency translation
  adjustments                                                                                    (858)        (858)     (858)
                                ---------    ---   ---------    ---     ------     ------       -----        -----     -----

Comprehensive income                                                                                                  $3,788
                                                                                                                       =====
Balance at May 29, 1999         4,035,346   $403   6,058,277   $606    $21,917    $53,887     $(1,522)     $75,291
                                =========    ===   =========    ===     ======     ======       =====       ======
</TABLE>






The accompanying notes are an integral part of these statements.

                                      -40-


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                      Fifty-two weeks ended
                                              -----------------------------------
                                              May 29,        May 30,       May 31,
                                               1999           1998          1997
                                              -------        ------        ------
<S>                                          <C>           <C>           <C>
Cash flows from operating activities:
  Net earnings (loss)                        $  4,797      $ (5,967)     $ (3,208)
  Adjustments to reconcile net earnings
    (loss) to net cash provided by (used
    in) operating activities
      Depreciation and amortization             2,829         3,315         3,037
      Impairment of long-lived assets                         4,121
      Provision for doubtful accounts             250           286           451
      Write-down of investment in
        affiliate                               1,121           219
      Loss (gain) on sale of assets                39           (11)            2
      Deferred tax (benefit) provision           (735)          (64)         (147)
      Other non-cash items                         30             7            20
      Changes in operating assets and
        liabilities, net of acquisition
          Accounts receivable                    (806)       (4,663)       (1,270)
          Inventories                            (210)          587        (3,421)
          Other current assets                   (251)        1,565        (1,111)
          Other assets                            (35)         (588)         (137)
          Accounts payable                      1,055            97         1,073
          Accrued liabilities                     778           127           608
          Accrued income taxes                    183           310           (54)
          Other noncurrent liabilities            146           (21)          (25)
                                               ------        ------        ------

            Net cash provided by (used
              in) operating activities          9,191          (680)       (4,182)
                                               ------        ------        ------

Cash flows from investing activities:
  Additions to property, plant and
    equipment                                  (2,207)       (1,897)       (4,370)
  Acquisition of business                                                  (7,096)
  Investment in affiliate                                    (1,340)
  Proceeds from disposal of business                            510
  Proceeds from sale of assets                      8            50           114
  Available-for-sale securities
    Purchases                                 (34,061)      (12,290)      (22,735)
    Proceeds from sale                         32,320        19,806        31,998
                                               ------        ------        ------

      Net cash (used in) provided by
        investing activities                   (3,940)        4,839        (2,089)
                                               ------        ------        ------
</TABLE>




The accompanying notes are an integral part of these statements.

                                      -41-


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                 (in thousands)


                                                     Fifty-two weeks ended
                                               ---------------------------------
                                               May 29,      May 30,      May 31,
                                                1999         1998         1997
                                               -------      -------      -------
Cash flows from financing activities:
  Repayments of debt                          $(2,670)     $(7,704)     $(1,023)
  Proceeds from issuance of debt                1,072        3,619        7,592
  Proceeds from exercise of stock
    options, including related income
    tax benefits                                  311          569          873
  Purchase of treasury stock                      (68)
  Proceeds from issuance of stock in
    connection with the stock purchase
    plan                                            7            6           24
                                                -----        -----        -----

      Net cash (used in) provided by
        financing activities                   (1,348)      (3,510)       7,466
                                                -----        -----        -----

Effect of exchange rate changes on
  cash and cash equivalents                      (484)        (479)         (74)
                                                -----        -----        -----

      INCREASE IN CASH AND CASH
        EQUIVALENTS                             3,419          170        1,121

Cash and cash equivalents
  Beginning of year                             4,654        4,484        3,363
                                                -----        -----        -----

  End of year                                 $ 8,073      $ 4,654      $ 4,484
                                                =====        =====        =====

Supplemental disclosures of cash flow
  information:
    Cash paid during the year for:
      Interest                                $   154      $   650      $   398
                                                =====        =====        =====

      Income taxes (net of $218,
        $1,337 and $686 in refunds
        in 1999, 1998 and 1997,
        respectively)                         $ 2,153      $  (762)     $     6
                                                =====        =====        =====





The accompanying notes are an integral part of these statements.

                                      -42-


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The summary of significant accounting policies is presented to assist the
          reader in  understanding  and  evaluating the  consolidated  financial
          statements.  These policies are in conformity with generally  accepted
          accounting  principles  and  have  been  applied  consistently  in all
          material respects.

     Nature of Business
     ------------------

     The Company is primarily engaged in developing, manufacturing and marketing
          diagnostic  products used by radiologists and other physicians  during
          image-assisted   procedures  to  detect  anatomic   abnormalities  and
          diseases.  The  Company  also  designs,  develops,   manufactures  and
          markets,  through its  wholly-owned  subsidiary,  AngioDynamics,  Inc.
          ("AngioDynamics"),  a variety of therapeutic and diagnostic  products,
          for use  principally  in the  diagnosis  and  treatment of  peripheral
          vascular disease (see Note O).

     Basis of Consolidation
     ----------------------

     The consolidated  financial statements include the accounts of E-Z-EM, Inc.
          and all  100%-owned  subsidiaries  (the  "Company").  All  significant
          intercompany  balances  and  transactions  have been  eliminated.  The
          Company's  approximate  23% interest in an affiliate was accounted for
          by the equity  method.  Pursuant to this method,  such  investment was
          recorded at cost and adjusted by the Company's share of  undistributed
          earnings (or losses) (see Note D).

     Operations outside the U.S. are included in the consolidated financial
          statements  and  consist  of: a  subsidiary  operating  a  mining  and
          chemical   processing   operation  in  Nova   Scotia,   Canada  and  a
          manufacturing and marketing facility in Montreal, Canada; a subsidiary
          manufacturing   products   located  in  Puerto   Rico;   a  subsidiary
          manufacturing  and marketing  products  located in Japan; a subsidiary
          promoting and distributing  products located in Holland;  a subsidiary
          promoting and distributing products located in the United Kingdom; and
          a subsidiary manufacturing products located in Ireland.

     Fiscal Year
     -----------

     The Company reports on  a  fiscal  year  which  concludes  on the  Saturday
          nearest to May 31.  Fiscal years 1999,  1998 and 1997 ended on May 29,
          1999,  May 30,  1998 and May 31,  1997,  respectively,  for  reporting
          periods of fifty-two weeks.

     Cash and Cash Equivalents
     -------------------------

     The Company considers all unrestricted highly liquid  investments purchased
          with a  maturity  of less than  three  months to be cash  equivalents.
          Included  in  cash   equivalents  are   certificates  of  deposit  and
          Eurodollar  investments  of $5,089,000  and $1,220,000 at May 29, 1999
          and May 30, 1998, respectively. The carrying amount of these financial
          instruments reasonably  approximates fair value because of their short
          maturity.  Foreign-denominated  cash and cash  equivalents  aggregated
          $1,116,000   and  $2,359,000  at  May  29,  1999  and  May  30,  1998,
          respectively.


                                      -43-


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     Debt and Equity Securities
     --------------------------

     Debt  and  equity   securities   are   classified  as   "available-for-sale
          securities"  and  reported at fair value,  with  unrealized  gains and
          losses  excluded  from  operations  and  reported  as a  component  of
          accumulated other comprehensive  income (loss), net of the related tax
          effects,  in  stockholders'  equity.  Cost  is  determined  using  the
          specific identification method.

     Inventories
     -----------

     Inventories are  stated  at  the  lower of cost (on the first-in, first-out
          method)   or   market.   Appropriate   consideration   is   given   to
          deterioration,  obsolescence  and  other  factors  in  evaluating  net
          realizable value.

     Property, Plant and Equipment
     -----------------------------

     Property,  plant  and  equipment  are  stated  at  cost,  less  accumulated
          depreciation.   Depreciation   is  computed   principally   using  the
          straight-line  method over the  estimated  useful lives of the assets.
          Leasehold  improvements  are  amortized  over the terms of the related
          leases or the useful life of the  improvements,  whichever is shorter.
          Expenditures  for  repairs and  maintenance  are charged to expense as
          incurred.  Renewals  and  betterments  are  capitalized.  Depreciation
          expense was  $2,595,000,  $2,827,000 and $2,721,000 in 1999,  1998 and
          1997, respectively.

     Cost in Excess of Fair Value of Net Assets Acquired
     ---------------------------------------------------

     The cost  in excess of fair  value  of net  assets acquired ("goodwill") is
          being amortized on a straight-line  basis over 40 years.  Amortization
          of goodwill was $16,000,  $17,000 and $64,000 in 1999,  1998 and 1997,
          respectively.

     Intangible Assets
     -----------------

     Intangible assets are being amortized on a  straight-line  basis  over  the
          estimated useful lives of the respective  assets ranging from three to
          fifteen and one-half  years.  Amortization  of  intangible  assets was
          $218,000, $471,000 and $252,000 in 1999, 1998 and 1997, respectively.

     On an ongoing basis, management reviews the valuation and  amortization  of
          goodwill and  intangible  assets to determine  possible  impairment by
          considering  current  operating  results and  comparing  the  carrying
          values  to the  anticipated  undiscounted  future  cash  flows  of the
          related assets (see Note C).

     Advertising
     -----------

     All  costs   associated  with   advertising  are  expensed  when  incurred.
          Advertising expense,  included in selling and administrative expenses,
          was  $1,074,000,  $900,000  and  $1,156,000  in 1999,  1998 and  1997,
          respectively.


                                      -44-


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     Income Taxes
     ------------

     Deferred  income  taxes  are  recognized  for temporary differences between
          financial statement and income tax bases of assets and liabilities and
          loss  carryforwards and tax credit  carryforwards for which income tax
          benefits  are  expected to be realized  in future  years.  A valuation
          allowance has been  established to reduce deferred tax assets as it is
          more likely than not that all, or some  portion,  of such deferred tax
          assets will not be realized.  The effect on deferred taxes of a change
          in tax rates is  recognized  in income in the period that includes the
          enactment date.

     Foreign Currency Translation
     ----------------------------

     In accordance with Statement of Financial Accounting Standards ("SFAS") No.
          52, "Foreign  Currency  Translation,"  the Company has determined that
          the  functional  currency  for its foreign  subsidiaries  is the local
          currency. This assessment considers that the day-to-day operations are
          not dependent upon the economic environment of the parent's functional
          currency,  financing is effected through their own operations, and the
          foreign  operations  primarily  generate and expend foreign  currency.
          Foreign  currency   translation   adjustments  are  accumulated  as  a
          component  of  accumulated  other   comprehensive   income  (loss)  in
          stockholders' equity.

     Earnings (Loss) Per Common Share
     --------------------------------

     In  1998,  the  Company  adopted  SFAS No. 128, "Earnings Per Share," which
          requires public  companies to present basic earnings per share and, if
          applicable,  diluted  earnings per share.  In accordance with SFAS No.
          128, all  comparative  periods were  restated,  if  applicable.  Basic
          earnings per share are based on the weighted  average number of common
          shares  outstanding  without  consideration of potential common stock.
          Diluted earnings per share are based on the weighted average number of
          common and potential common shares outstanding.  The calculation takes
          into  account  the shares  that may be issued  upon  exercise of stock
          options,  reduced by the shares that may be repurchased with the funds
          received  from the  exercise,  based on the average  price  during the
          period.  Potential  common  shares  were  excluded  from  the  diluted
          calculation for 1998 and 1997, as their effects were anti-dilutive.

     The  following  table sets forth the reconciliation of the weighted average
          number of common shares:

                                            1999          1998           1997
                                           ------        ------         ------

       Basic                             10,077,445     9,952,482      9,870,732
       Effect of dilutive securities
           (stock options)                  236,644
                                         ----------     ---------      ---------
       Diluted                           10,314,089     9,952,482      9,870,732
                                         ==========     =========      =========

     The weighted  average number of common shares and the per share amounts for
          all periods presented have been retroactively  restated to reflect the
          total shares issued after the 3% stock dividends described in Note M.

                                      -45-


<PAGE>



                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     Use of Estimates
     ----------------

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


NOTE B - COMPREHENSIVE INCOME (LOSS)

     During 1999, the Company adopted  SFAS  No. 130,  "Reporting  Comprehensive
          Income."  SFAS No. 130  establishes  new rules for the  reporting  and
          display of  comprehensive  income  and its  components;  however,  the
          adoption of SFAS No. 130 had no impact on the  Company's  net earnings
          (loss) or  stockholders'  equity.  SFAS No.  130  requires  unrealized
          holding   gains   or   losses   on   debt   and   equity    securities
          available-for-sale and cumulative translation adjustments, which prior
          to adoption were reported  separately in stockholders'  equity,  to be
          included in accumulated other comprehensive  income (loss). Prior year
          financial   statements  have  been  reclassified  to  conform  to  the
          requirements of SFAS No. 130.

     The  components  of comprehensive income (loss), net of related tax, are as
         follows:

<TABLE>
<CAPTION>
                                                        1999             1998             1997
                                                       ------           ------           ------
                                                                    (in thousands)

<S>                                                    <C>              <C>             <C>
          Net earnings (loss)                          $4,797           $(5,967)        $(3,208)
          Unrealized holding (loss) gain on
            debt and equity securities, net of
            income tax provision (benefit) of
            $1,118, $6 and $(508) in 1999,
            1998 and 1997, respectively                  (151)               12          (1,028)
          Foreign currency translation
            adjustments                                  (858)             (646)            (19)
                                                        -----             -----           -----

              Comprehensive income (loss)              $3,788           $(6,601)        $(4,255)
                                                        =====             =====           =====
</TABLE>

     The  components  of  accumulated  other comprehensive income (loss), net of
         related tax, are as follows:
                                                          May 29,       May 30,
                                                           1999          1998
                                                           ----          ----
                                                              (in thousands)

          Unrealized holding gain on debt and equity
            securities, net of income tax (liability)
            asset of $(204) and $914 at May 29, 1999
            and May 30, 1998, respectively               $ 1,193        $ 1,344
          Cumulative translation adjustments              (2,715)        (1,857)
                                                           -----          -----

              Accumulated other comprehensive income
                (loss)                                   $(1,522)       $  (513)
                                                           =====          =====


                                      -46-
<PAGE>

                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE C - ASSET PURCHASE AND IMPAIRMENT CHARGE

     On  January  8, 1997, the Company purchased  certain assets of Leocor, Inc.
          ("Leocor")  and  certain  other  assets   directly  from  a  principal
          shareholder  of  Leocor  for   approximately   $7,096,000,   including
          acquisition  costs.  Leocor  developed  and  manufactured  angioplasty
          catheters.  No  liabilities  were  assumed  in  connection  with  this
          acquisition.  The  acquisition  was  accounted  for under the purchase
          method with the results of operations  being included in the Company's
          consolidated  statement of  operations  from the date of  acquisition.
          Prior to the impairment charge described below, the fair values of the
          intangible  assets  acquired  ($6,543,000),  representing  technology,
          trademarks,  licenses and know-how, were amortized on a straight- line
          basis over fifteen years.

     In  connection  with  this  acquisition,  the  Company  also entered into a
          consulting  agreement  with the  principal  shareholder  of Leocor for
          consideration of $200,000.  The term of this consulting  agreement was
          for a period of two years  from the  acquisition  date of  January  8,
          1997. As a result of the intangible asset impairment,  the unamortized
          consideration was written off in 1998.

     The following  unaudited  pro forma information  has been prepared assuming
          Leocor had been acquired as of the beginning of the period  presented,
          after giving effect to certain adjustments,  including amortization of
          intangible  assets,  interest  expense  on the  acquisition  debt  and
          related income tax effects. The pro forma information is presented for
          informational  purposes only and is not necessarily indicative of what
          would  have  occurred  if the  acquisition  had  been  made  as of the
          beginning of fiscal 1997.

     Pro Forma Information (Unaudited)

                                                                 1997
                                                                ------
                                                             (in thousands,
                                                         except per share data)

         Net sales                                             $97,882
         Net loss                                               (3,651)
         Loss per common share:
           Basic                                                  (.37)
           Diluted                                                (.37)

     In  accordance  with  SFAS  No.  121,  "Accounting  for the  Impairment  of
          Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of," the
          Company recorded an impairment  charge in 1998, with no associated tax
          benefit,  of  $4,121,000,  or $.41  per  share,  relating  to  certain
          long-lived assets pertaining to the Leocor acquisition and used in the
          cardiovascular   market.  The  Company  determined  that  the  revenue
          potential  of this  technology,  as it relates  to the  cardiovascular
          market,  was impaired due to increased  competition  and price erosion
          for  coronary  stents  and  angioplasty  products  and  the  Company's
          strategic  decision to  commercially  exploit this  technology  in the
          interventional  radiology  market.  The Company is seeking a strategic
          business partner with an existing  cardiovascular  sales and marketing
          franchise  in order to be  successful  in the  cardiovascular  market,
          although there can be no assurances  that such a partner can be found.
          The impairment


                                      -47-
<PAGE>


                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE C - ASSET PURCHASE AND IMPAIRMENT CHARGE (continued)

          charge  represents  the  difference  between  the  carrying  value  of
          intangible  assets and the fair market  value of these assets based on
          estimated future cash flows discounted at a rate commensurate with the
          risk involved.  The charge had no impact on the Company's cash flow or
          its  ability to generate  cash flow in the future.  As a result of the
          impairment charge,  amortization  related to these assets decreased by
          approximately  $250,000 per year, with the remaining intangible assets
          being amortized on a straight-line  basis over the remaining estimated
          useful lives of approximately eight years.


NOTE D - INVESTMENT IN AFFILIATE AND IMPAIRMENT CHARGE

     In  August  1997,  the  Company  acquired  approximately 23% of ITI Medical
          Technologies,  Inc.  ("ITI")  for  $1,340,000,  including  acquisition
          related expenses of $40,000. ITI is a California corporation, based in
          Livermore,  California, which develops and manufactures MRI diagnostic
          and therapeutic medical devices.  The Company's  investment in ITI was
          accounted for by the equity method.  In accordance  with SFAS No. 121,
          the Company  recorded an  impairment  charge in the fourth  quarter of
          1999,  with  no  associated  tax  benefit,  of  $896,000,  as  it  was
          determined  that the fair value of such  investment was zero,  with no
          future  cash flows  anticipated  due to ITI's  inability  to  generate
          income  from  operations  or raise  additional  capital.  Prior to the
          impairment charge, the Company's investment in ITI had been reduced by
          its  proportionate  share of losses in 1999 and 1998 of  approximately
          $225,000 and $219,000, respectively. For 1999 and 1998, the impairment
          charge and the Company's proportionate share of losses are included in
          the   consolidated   statements  of   operations   under  the  caption
          "Write-down of investment in affiliate".










                                      -48-
<PAGE>

                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE E - DEBT AND EQUITY SECURITIES

     Debt and equity securities at May 29, 1999 consist of the following:

                                                                      Unrealized
                                             Amortized       Fair      holding
                                               cost          value       gain
                                             ---------       -----    ----------
                                                       (in thousands)

    Current
    -------
    Available-for-sale securities
      (carried on the balance sheet
      at fair value)
        Debt securities                         $5,155      $5,155
        Other                                       61          61
                                                 -----       -----

                                                $5,216      $5,216
                                                 =====       =====

    Noncurrent
    ----------
    Available-for-sale securities
      (carried on the balance sheet
      at fair value)
        Equity securities                       $1,617      $3,014      $1,397
        Other                                        1           1
                                                 -----       -----       -----

                                                $1,618      $3,015      $1,397
                                                 =====       =====       =====

     Debt and equity securities at May 30, 1998 consist of the following:

                                                                      Unrealized
                                             Amortized       Fair      holding
                                               cost          value       gain
                                             ---------       -----    ----------
                                                       (in thousands)
    Current
    -------
    Available-for-sale securities
      (carried on the balance sheet
      at fair value)
        Debt securities                         $3,470      $3,470
        Other                                        5           5
                                                 -----       -----

                                                $3,475      $3,475
                                                 =====       =====

    Noncurrent
    ----------
    Available-for-sale securities
      (carried on the balance sheet
      at fair value)
        Equity securities                       $1,626      $2,056        $430
        Other                                        1           1
                                                 -----       -----         ---

                                                $1,627      $2,057        $430
                                                 =====       =====         ===




                                      -49-
<PAGE>

                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE F - INVENTORIES

     Inventories consist of the following:

                                           May 29,                 May 30,
                                            1999                    1998
                                           -------                 -------
                                                    (in thousands)

    Finished goods                        $14,000                   $13,846
    Work in process                         1,926                     1,474
    Raw materials                          11,048                    11,444
                                           ------                    ------

                                          $26,974                   $26,764
                                           ======                    ======


NOTE G - PROPERTY, PLANT AND EQUIPMENT, AT COST

     Property, plant and equipment are summarized as follows:

                                        Estimated
                                         useful          May 30,       May 29,
                                          lives           1999          1998
                                        ---------        ------        ------
                                                     (in thousands)

    Building and building
      improvements                  10 to 39 years      $13,411        $13,337
    Machinery and equipment          2 to 10 years       28,675         26,964
    Leasehold improvements           Term of lease        1,740          1,645
                                                         ------         ------

                                                         43,826         41,946
    Less accumulated depreciation
      and amortization                                   25,984         23,506
                                                         ------         ------

                                                         17,842         18,440
    Land                                                  3,483          3,477
                                                         ------         ------

                                                        $21,325        $21,917
                                                         ======         ======





                                      -50-
<PAGE>





                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE H - INCOME TAXES

     Income tax expense  (benefit)  analyzed by category and by income statement
          classification is summarized as follows:

                                       1999           1998            1997
                                      ------         ------          ------
                                                 (in thousands)

    Current
      Federal                         $1,592         $(159)          $  (724)
      State and local                    204           131                54
      Foreign                            813           525              (505)
                                       -----           ---             -----

        Subtotal                       2,609           497            (1,175)

    Deferred                            (735)          (64)             (147)
                                       -----           ---             -----

        Total                         $1,874         $ 433           $(1,322)
                                       =====           ===             =====

     Temporary   differences   which  give  rise  to  deferred  tax  assets  and
          liabilities are summarized as follows:

                                                       May 29,         May 30,
                                                        1999            1998
                                                       -------         -------
                                                           (in thousands)

    Deferred tax assets
      Difference between book and tax basis in
        investment sold to Canadian subsidiary         $1,137           $1,137
      Tax operating loss carryforwards                    982              677
      Tax credit carryforwards                            356              642
      Alternative minimum tax ("AMT") credit
        carryforward                                        4              125
      Impairment of long-lived assets                   1,356            1,507
      Expenses incurred not currently deductible        1,171            1,435
      Unrealized investment losses                                         951
      Inventories                                         721              591
      Deferred compensation costs                         603              548
      Write-down of investment in affiliate               496               81
      Other                                                88               87
                                                        -----            -----

          Gross deferred tax asset                      6,914            7,781
                                                        -----            -----

    Deferred tax liabilities
      Excess tax over book depreciation                 1,026            1,054
      Unrealized investment gains                         204               37
      Tax on unremitted profits of Puerto
        Rican subsidiary                                  112               86
      Other                                                16               20
                                                        -----            -----

          Gross deferred tax liability                  1,358            1,197

    Valuation allowance                                (4,754)          (5,405)
                                                        -----            -----

          Net deferred tax asset                       $  802           $1,179
                                                        =====            =====

                                      -51-
<PAGE>

                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE H - INCOME TAXES (continued)

     In 1994, the Company sold  to its Canadian subsidiary  warrants to purchase
          396,396  shares of stock in ISG  Technologies,  Inc. This  transaction
          generated a capital gain for tax purposes of approximately $3,344,000,
          utilizing a portion of the  Company's  capital loss  carryforward  and
          giving rise to a temporary  difference  pertaining  to the  difference
          between the financial statement and tax basis in this asset.

     During  1999,  the Company  reduced its  valuation  allowance  primarily to
          recognize deferred tax assets of approximately $832,000, in the fourth
          quarter,  that  management  believes  is more  likely  than  not to be
          realized through future taxable earnings from U.S. operations.

     If not  utilized,  the tax  operating  loss  carryforwards  will  expire in
          various  amounts  over the years  2001  through  2004.  The tax credit
          carryforwards  will  expire in  various  amounts  over the years  2000
          through 2012.

     Deferred  income taxes are  provided  for the expected  Tollgate tax on the
          undistributed earnings of the Company's Puerto Rican subsidiary, which
          are expected to be distributed at some time in the future.

     At May 29, 1999,  undistributed  earnings of certain  foreign  subsidiaries
          aggregated  $14,778,000  which will not be  subject to U.S.  tax until
          distributed  as dividends.  Any taxes paid to foreign  governments  on
          these  earnings may be used, in whole or in part,  as credits  against
          the U.S. tax on any dividends  distributed  from such earnings.  It is
          not  practical to estimate the amount of U.S.  tax, if any, that might
          be payable on the eventual remittance of such earnings. On remittance,
          certain  foreign  countries  impose  withholding  taxes  that are then
          available  for use as credits  against a U.S. tax  liability,  if any,
          subject to certain  limitations.  The amount of  withholding  tax that
          would be payable on remittance  of the entire amount of  undistributed
          earnings would approximate $739,000.

     Deferred  tax assets  and  liabilities  are  included  in the  consolidated
          balance sheets as follows:

                                                        May 29,       May 30,
                                                         1999          1998
                                                        -------       -------
                                                           (in thousands)

    Current - Other current assets                     $1,401
    Current - Accrued income taxes                       (112)         $  (86)
    Noncurrent - Other assets                                           1,265
    Noncurrent - Other noncurrent liabilities            (487)
                                                        -----           -----

      Net deferred tax asset                           $  802          $1,179
                                                        =====           =====




                                      -52-
<PAGE>

                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE H - INCOME TAXES (continued)

     Earnings (loss) before income taxes for U.S. and  international  operations
          consist of the following:

                               1999             1998              1997
                              ------           ------            ------
                                          (in thousands)

    U.S.                      $5,371          $(5,225)          $(1,977)
    International              1,300             (309)           (2,553)
                               -----            -----             -----

                              $6,671          $(5,534)          $(4,530)
                               =====            =====             =====

     The Company's consolidated income tax provision (benefit) has differed from
          the amount  which  would be  provided  by  applying  the U.S.  Federal
          statutory  income tax rate to the  Company's  earnings  (loss)  before
          income taxes for the following reasons:

                                                1999         1998         1997
                                               ------       ------       ------
                                                        (in thousands)

    Income tax provision (benefit)             $1,874        $  433     $(1,322)
    Effect of:
      State income taxes, net of Federal
        tax benefit                              (108)          (40)        (34)
      Research and development credit              27            41          75
      Earnings of the Puerto Rican
        subsidiary, net of Puerto Rico
        Corporate tax and Tollgate tax            242           188         214
      Earnings of the Foreign Sales
        Corporation                                22             7           7
      Tax-exempt portion of investment
        income                                     27            96         202
      Change in valuation allowance               770        (1,807)       (100)
      Losses of foreign entities
        generating no current tax
        benefit                                  (553)         (526)       (380)
      Nondeductible expenses                     (148)         (324)       (269)
      Other                                       115            50          67
                                                -----         -----       -----

    Income tax provision (benefit)
      at statutory tax rate of 34%             $2,268       $(1,882)    $(1,540)
                                                =====         =====       =====

     The Company has an agreement with the  Commonwealth of Puerto Rico pursuant
          to which its  operations  in Puerto  Rico are subject to a partial tax
          exemption  which  expires  January 23,  2007.  Commonwealth  taxes are
          currently being provided on earnings of the subsidiary.

     The U.S.  Federal  income tax returns of the Company  through  June 3, 1995
          have been closed by the Internal Revenue Service.







                                      -53-
<PAGE>

                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE I - DEBT

     Notes payable consist of the following:

                                                     May 29,          May 30,
                                                      1999             1998
                                                     -------          -------
                                                          (in thousands)
    Bank, lines of credit
      6.25% (1)                                     $  718
      6.50% (1)                                                        $1,961
    Japanese bank
      2.43% note (2)                                 1,111
      2.13% note (2)                                                    1,080
                                                     -----              -----

                                                    $1,829             $3,041
                                                     =====              =====

  Long-term debt consists of the following:

                                                     May 29,          May 30,
                                                      1999             1998
                                                     -------          -------
                                                          (in thousands)
    Japanese bank loan, due November 2007,
      2.38% (2)                                       $301              $298
    Japanese bank loan, due November 2004,
      1.80% (2)                                        260               252
    Canadian bank loan, due November 1999,
      6.75% (3)                                        113               343
                                                       ---               ---

                                                       674               893
    Less current maturities                            197               287
                                                       ---               ---

                                                      $477              $606
                                                       ===               ===

     (1)  The Company's Canadian subsidiary has available  $1,357,000  (Canadian
          $2,000,000)   under  this  line  of  credit  with  a  bank,  which  is
          collateralized  by accounts  receivable  and  inventory and expires on
          September 30, 1999.

     (2)  Guaranteed by the Company and  collateralized  by property,  plant and
          equipment having a net carrying value of $1,886,000 at May 29, 1999.

     (3)  Collateralized   by  accounts   receivable   and  $678,000   (Canadian
          $1,000,000) in machinery and equipment.

     The Company also has available $2,000,000 under an unsecured line of credit
          with a bank,  which  expires on November 30, 1999. At May 29, 1999, no
          amounts were outstanding under this line of credit.

     The Company believes that the carrying  amount of its debt approximates the
          fair  value  as  the  variable  interest  rates  approximate   current
          prevailing interest rates.

     During  1999,  1998  and  1997,  the  weighted  average  interest  rates on
          short-term debt were 3.54%, 6.38% and 6.19%, respectively.


                                      -54-
<PAGE>

                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE J - ACCRUED LIABILITIES AND OTHER NONCURRENT LIABILITIES

     Accrued liabilities consist of the following:

                                              May 29,               May 30,
                                               1999                  1998
                                              ------                ------
                                                     (in thousands)

    Payroll and related expenses              $3,808                 $3,792
    Accrued sales rebates                      2,604                  1,421
    Other                                      1,324                  1,745
                                               -----                  -----

                                              $7,736                 $6,958
                                               =====                  =====

     Other noncurrent liabilities consist of the following:

                                              May 29,               May 30,
                                               1999                  1998
                                              ------                ------
                                                     (in thousands)

    Deferred compensation                     $1,628                $1,481
    Deferred taxes                               487
    Other                                        288                   253
                                               -----                 -----

                                              $2,403                $1,734
                                               =====                 =====


NOTE K - RETIREMENT PLANS

     E-Z-EM,  Inc.  and its domestic  subsidiaries  ("E-Z-EM")  provide  pension
          benefits through three Profit-Sharing  Plans, under which E-Z-EM makes
          discretionary contributions to eligible employees, and three companion
          401(k) Plans,  under which  eligible  employees can defer a portion of
          their annual  compensation,  part of which is matched by E-Z-EM. These
          plans cover all E-Z-EM  employees not otherwise  covered by collective
          bargaining  agreements.   In  1999,  1998  and  1997,   profit-sharing
          contributions were $581,000, $534,000 and $507,000,  respectively, and
          401(k) matching  contributions  were $359,000,  $341,000 and $328,000,
          respectively.

     E-Z-EM also  contributed  $36,000,  $42,000  and $52,000 in 1999,  1998 and
          1997,  respectively,  to a  multiemployer  pension plan for  employees
          covered  by a  collective  bargaining  agreement.  This  plan  is  not
          administered by E-Z-EM and  contributions are determined in accordance
          with provisions of negotiated labor contracts.

     E-Z-EM Canada Inc., a wholly-owned subsidiary of the Company, also provides
          pension   benefits   to   eligible   employees   through  two  Defined
          Contribution  Plans.  In  1999,  1998  and  1997,  contributions  were
          $71,000, $70,000 and $55,000, respectively.








                                      -55-
<PAGE>


                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE L - COMMITMENTS AND CONTINGENCIES

     The Company is  committed  under  non-cancellable  operating   leases   for
          facilities,  automobiles  and equipment,  including  certain  facility
          leases with related  parties.  During 1999,  1998 and 1997,  aggregate
          rental costs under all operating leases were approximately $1,743,000,
          $1,325,000  and  $1,216,000,   respectively,  of  which  approximately
          $196,000,  $196,000 and $197,000,  respectively,  were paid to related
          parties.  Future annual  operating  lease  payments in the  aggregate,
          which include  escalation  clauses and real estate taxes, with initial
          remaining  terms of more than one year at May 29, 1999, are summarized
          as follows:

                                                                 Related
                                             Total                party
                                            leases                leases
                                            ------               -------
                                                    (in thousands)

                   2000                    $  990                  $184
                   2001                       796                   128
                   2002                       681                   107
                   2003                       509                   109
                   2004                       486                   101
                   Thereafter               1,335
                                            -----                   ---

                                           $4,797                  $629
                                            =====                   ===

     The Company has an employment  contract with a key executive  that provides
          for a term of eight years.  Future annual  commitments with respect to
          this contract at May 29, 1999, are summarized as follows:

                                                         (in thousands)

                   2000                                            $250
                   2001                                             250
                   2002                                             125
                                                                    ---

                                                                   $625
                                                                    ===





                                      -56-
<PAGE>


                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE M - COMMON STOCK

     In 1983,  the Company  adopted a Stock Option Plan (the "1983  Plan").  The
          1983 Plan provides for the grant to key employees of both nonqualified
          stock options and incentive stock options. A total of 1,817,974 shares
          of the  Company's  Common  Stock  may be  issued  under  the 1983 Plan
          pursuant to the  exercise of options.  All stock  options must have an
          exercise  price of not less than the market value of the shares on the
          date of grant. Options will be exercisable over a period of time to be
          designated by the  administrators  of the 1983 Plan (but not more than
          10 years  from the date of grant)  and will be  subject  to such other
          terms and conditions as the  administrators  may  determine.  The 1983
          Plan terminates in December 2005.

     In 1984, the Company  adopted a second Stock Option Plan (the "1984 Plan").
          The 1984  Plan  provides  for the  grant to  members  of the  Board of
          Directors and  consultants of nonqualified  stock options.  A total of
          459,490  shares of the Company's  Common Stock may be issued under the
          1984 Plan pursuant to the exercise of options.  All stock options must
          have an exercise price of not less than the market value of the shares
          on the date of grant.  Options  will be  exercisable  over a period of
          time to be designated by the  administrators of the 1984 Plan (but not
          more than 10 years from the date of grant) and will be subject to such
          other terms and conditions as the  administrators  may determine.  The
          1984 Plan terminates in December 2005.

     In 1997, the Company's AngioDynamics subsidiary adopted a Stock Option Plan
          (the  "1997  Plan").  The  1997  Plan  provides  for the  grant to key
          employees  of both  nonqualified  stock  options and  incentive  stock
          options and to members of the Board of Directors  and  consultants  of
          nonqualified stock options. A total of 136.36 shares of AngioDynamics'
          Class B Common Stock may be issued under the 1997 Plan pursuant to the
          exercise of options.  All stock options must have an exercise price of
          not less  than the  market  value of the  shares on the date of grant.
          Options will be exercisable  over a period of time to be designated by
          the  administrators  of the 1997 Plan (but not more than 10 years from
          the date of  grant)  and  will be  subject  to such  other  terms  and
          conditions  as  the  administrators  may  determine.   The  1997  Plan
          terminates in March 2007. As a result of the 1997 Plan,  the Company's
          equity interest in AngioDynamics may become diluted by as much as 12%.

     Effective  in 1997,  the  Company  adopted  SFAS No. 123,  "Accounting  for
          Stock-Based Compensation".  SFAS 123 allows for a choice of the method
          of accounting  used for stock-based  compensation.  Entities may elect
          the "intrinsic value" method based on APB Opinion No. 25,  "Accounting
          for  Stock  Issued  to  Employees"  or the  new  "fair  value"  method
          contained in SFAS 123. The Company  elected to continue to account for
          stock-based  compensation  under the guidelines of APB Opinion No. 25.
          Accordingly,  no compensation  expense has been recognized under these
          plans  concerning  options  granted to key employees and to members of
          the Board of Directors,  as such options were granted to Board members
          in their capacity as Directors. Compensation expense of $5,000, $7,000
          and $2,000 in 1999, 1998 and 1997, respectively,  was recognized under
          these  plans for  options  granted to  consultants.  The  Company  has
          adopted the disclosure provisions of SFAS 123.



                                      -57-
<PAGE>


                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE M - COMMON STOCK (continued)

     If the Company had elected to recognize compensation expense based upon the
          fair value at the grant date for options  granted under these plans to
          key  employees  and to members of the Board of  Directors,  consistent
          with the  methodology  prescribed by SFAS 123, the Company's pro forma
          net earnings  (loss) and earnings  (loss) per common share would be as
          follows:

                                        1999            1998              1997
                                       ------          ------            ------
                                       (in thousands, except per share data)

    Net earnings (loss)
      As reported                     $4,797          $(5,967)          $(3,208)
      Pro forma                        4,345           (6,549)           (3,672)

    Basic earnings (loss) per
      common share
        As reported                     $.48            $(.60)            $(.33)
        Pro forma                        .43             (.66)             (.37)

    Diluted earnings (loss) per
      common share
        As reported                     $.47            $(.60)            $(.33)
        Pro forma                        .42             (.66)             (.37)

     These pro forma  amounts may not be  representative  of future  disclosures
          because  they do not take into effect pro forma  compensation  expense
          related to grants  made  before  1996.  The fair value of options  was
          estimated at the date of grant using the Black-Scholes  option-pricing
          model with the following  weighted-average  assumptions for 1999, 1998
          and  1997,  respectively:  dividend  yields  of zero  for  all  years;
          expected volatility ranging from 41.32% to 48.90% in 1999, from 43.89%
          to  47.30%  in 1998 and  from  46.90%  to  47.61%  in 1997;  risk-free
          interest  rates  ranging  from  4.78% to 5.98% in 1999,  from 5.61% to
          6.35% in 1998 and from  5.90%  to 7.09% in 1997;  and  expected  terms
          ranging from 5 to 9 1/2 years for all years.





                                      -58-
<PAGE>


                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE M - COMMON STOCK (continued)

     A summary of the status of the  Company's  stock option plans as of May 29,
          1999,  May 30, 1998 and May 31, 1997,  and changes for the three years
          then ended, is presented below:

<TABLE>
<CAPTION>
                                           1999                                1998                                1997
                                 -------------------------           -------------------------           -------------------------
                                                  Weighted                            Weighted                            Weighted
                                                  -Average                            -Average                            -Average
                                 Shares           Exercise           Shares           Exercise           Shares           Exercise
                                 (000)             Price             (000)             Price             (000)             Price
                                 ------           --------           ------           --------           ------           --------
<S>                               <C>              <C>               <C>                 <C>              <C>               <C>
    1983 Plan
    ---------
    Outstanding at
      beginning of year           1,002            $ 4.94            1,115               $4.90            1,225             $ 4.90
    Granted                          33            $ 5.83                                                    11             $10.13
    Exercised                       (56)           $ 4.22             (107)              $4.48             (118)            $ 5.19
    Forfeited                        (3)           $ 6.23               (5)              $7.01               (3)            $ 8.77
    Expired                          (3)           $10.68               (1)              $8.74
                                  -----                              -----                                -----
    Outstanding at
      end of year                   973            $ 4.99            1,002               $4.94            1,115             $ 4.90
                                  =====                              =====                                =====

    Options exercisable
      at year-end                   940            $ 4.96              995               $4.91            1,100             $ 4.86

    Weighted-average
      fair value of
      options granted
      during the year                              $ 2.59                                                                   $ 5.13

    1984 Plan
    ---------
    Outstanding at
      beginning of year             304            $ 5.51              305               $5.60              306             $ 5.65
    Granted                           6            $ 5.00                6               $5.88               16             $ 9.32
    Exercised                        (9)           $ 4.22
    Expired                                                             (7)              $9.53              (17)            $10.00
                                    ---                                ---                                  ---
    Outstanding at
      end of year                   301            $ 5.54              304               $5.51              305             $ 5.60
                                    ===                                ===                                  ===

    Options exercisable
      at year-end                   289            $ 5.55              293               $5.47              283             $ 5.24

    Weighted-average
      fair value of
      options granted
      during the year                              $ 2.36                                $2.72                              $ 4.76
</TABLE>



                                      -59-
<PAGE>

                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE M - COMMON STOCK (continued)

<TABLE>
<CAPTION>
                                            1999                                1998                                 1997
                                  -------------------------            -------------------------            -----------------------
                                                   Weighted                             Weighted                           Weighted
                                                   -Average                             -Average                           -Average
                                  Shares           Exercise            Shares           Exercise            Shares         Exercise
                                  (000)             Price              (000)             Price              (000)           Price
                                  ------           --------            ------           --------            ------         --------
<S>                              <C>              <C>                  <C>              <C>                 <C>             <C>
    1997 Plan
    ---------
    Outstanding at
      beginning of year          130.00           $40,000              122.39           $80,000
    Granted                        1.93           $40,000              140.63           $43,022             122.39          $80,000
    Forfeited                     (2.78)          $40,000             (133.01)          $80,000
                                 ------                                ------                               ------
    Outstanding at
      end of year                129.15           $40,000              130.00           $40,000             122.39          $80,000
                                 ======                                ======                               ======

    Options exercisable
      at year-end                  None                                  None                                 None

    Weighted-average
      fair value of
      options granted
      during the year                             $26,480                               $24,877                             $36,463
</TABLE>

     The following information applies to options outstanding and exercisable at
          May 29, 1999:

<TABLE>
<CAPTION>
                                                      Outstanding                                              Exercisable
                                  -----------------------------------------------------              ------------------------------
                                                       Weighted-
                                   Number               Average               Weighted-              Number               Weighted-
                                    Out-               Remaining               Average                Exer-                Average
          Range of                standing              Life in                Exercise              cisable              Exercise
       Exercise Prices             (000)                 Years                  Price                 (000)                 Price
       ---------------            --------             ---------              ---------              -------              ---------
<S>                                 <C>                  <C>                    <C>                     <C>                  <C>
       1983 Plan
       ---------
     $3.66 to $5.39                 821                  4.91                    $4.46                  821                   $4.46
     $5.63 to $6.00                  33                  9.21                    $5.83
    $7.54 to $10.13                 119                  5.01                    $8.40                  119                   $8.40
                                    ---                                                                 ---

                                    973                                                                 940
                                    ===                                                                 ===

       1984 Plan
       ---------
     $3.66 to $5.49                 211                  5.59                    $4.17                  205                   $4.15
     $5.88 to $8.58                  66                  5.65                    $7.93                   60                   $8.14
    $9.58 to $12.49                  24                  5.37                   $10.93                   24                  $10.93
                                    ---                                                                 ---

                                    301                                                                 289
                                    ===                                                                 ===
</TABLE>

     On May 29, 1999, there remained 191,366,  107,259 and 7.22 shares available
          for  granting  of  options  under  the  1983,  1984  and  1997  Plans,
          respectively.

     Options granted prior to the Company's recapitalization on October 26, 1992
          are exercisable one-half in Class A Common Stock and one-half in Class
          B  Common  Stock.  Options  granted  after  the  recapitalization  are
          exercisable in Class B Common Stock.






                                      -60-
<PAGE>

                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE M - COMMON STOCK (continued)

     On May 5, 1998, the Company's Board of Directors  approved the repricing of
          all outstanding stock options  previously granted under the 1997 Plan.
          The repricing  provided for the exercise price of 128.41 options to be
          reduced  from  $80,000  per share to  $40,000  per  share,  to reflect
          current fair value.  The  repricing did not affect the term or vesting
          period of the options.

     In 1985, the Company adopted an Employee Stock Purchase Plan (the "Employee
          Plan").  The Employee  Plan  provides for the purchase by employees of
          the Company's Class B Common Stock at a discounted price of 85% of the
          market value of the shares on the date of purchase. A total of 150,000
          shares  of the  Company's  Class B Stock  may be  purchased  under the
          Employee Plan which  terminates  on September  30, 2002.  During 1999,
          employees  purchased  1,600  shares,  at prices  ranging from $4.36 to
          $5.10 per share.  Total proceeds received by the Company  approximated
          $7,000.

     On March 4, 1997,  the Board of Directors  declared a 3% stock  dividend on
          shares of Class A and Class B Common Stock.  The dividend,  payable in
          nonvoting  Class  B  Stock,  was  distributed  on  April  21,  1997 to
          shareholders  of record on March 31, 1997.  On January 23,  1998,  the
          Board of Directors  declared a 3% stock  dividend on shares of Class A
          and Class B Common Stock.  The dividend,  payable in nonvoting Class B
          Stock,  was distributed on March 16, 1998 to shareholders of record on
          February  26,  1998.  Earnings  (loss)  per  common  share  have  been
          retroactively adjusted to reflect the stock dividends.

     In January 1999,  the Board of Directors  authorized  the repurchase of the
          Company's  Class B Common Stock up to an aggregate  purchase  price of
          $2,000,000.  As of May 29, 1999,  the Company had  repurchased  12,100
          shares of Class B Common Stock for approximately $68,000.


NOTE N - RELATED PARTIES

     During  1998,  the  Company   entered  into  split  dollar  life  insurance
          arrangements  with  a  key  executive  (including  his  spouse)  and a
          principal  shareholder  (the  "insureds").  On an  annual  basis,  the
          Company makes interest bearing advances of approximately  $100,000 per
          insured toward the cost of such life insurance  policies.  Interest on
          the  advances is to be paid to the Company  annually by the  insureds.
          Under collateral assignment agreements, the proceeds from the policies
          will first be paid to the Company to repay the  advances  it made.  If
          the policies  are  terminated  prior to the death of the insured,  the
          Company will be entitled to the cash  surrender  value of the policies
          at that time, and any shortfall  between that amount and the amount of
          the advances  made by the Company will be repaid to the Company by the
          insureds.  At May 29, 1999 and May  30,1998,  advances of $400,000 and
          $200,000,  respectively,  are  recorded  in the  consolidated  balance
          sheets under the caption "Other Assets".

     The Company has an unsecured,  two-year  interest  bearing note  receivable
          from an executive  officer in the  principal  amount of $320,000.  The
          outstanding principal and interest matures on September 30, 1999.



                                      -61-
<PAGE>

                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE N - RELATED PARTIES (continued)

     Several directors provided  consulting services to the Company during 1999,
          1998 and 1997.  Fees for such  services,  including  fees  relating to
          attendance  at  directors'  meetings,   were  approximately  $258,000,
          $298,000 and $525,000 during 1999, 1998 and 1997, respectively.


NOTE O -   OPERATING SEGMENT, GEOGRAPHIC AREA OPERATIONS AND CONCENTRATION OF
           CREDIT RISK

     In 1999, the Company adopted SFAS No. 131,  "Disclosures  about Segments of
          an Enterprise and Related  Information".  The statement  redefines how
          operating  segments are determined and requires  disclosure of certain
          financial  and  descriptive  information  about a company's  operating
          segments. The Company has adopted the new requirements retroactively.

     The  Company is  engaged  in the  manufacture  and  distribution  of a wide
          variety of products which are classified into two operating  segments:
          Diagnostic  products and AngioDynamics  products.  Diagnostic products
          encompass  both  contrast   systems,   consisting  of  barium  sulfate
          formulations  and related medical devices used in X-ray,  CT-scanning,
          ultrasound and MRI imaging  examinations,  and  non-contrast  systems,
          including    diagnostic    radiology    devices,    custom    contract
          pharmaceuticals,    gastrointestinal    cleansing   laxatives,   X-ray
          protection equipment,  and immunoassay tests.  AngioDynamics  products
          include angiography,  therapeutic and coronary medical devices used in
          the interventional medical marketplace. The Company's primary business
          activity  is  conducted  with  radiologists  and  hospitals,   located
          throughout the U.S. and abroad,  through  numerous  distributors.  The
          Company's  exposure to credit risk is dependent,  to a certain extent,
          on the  healthcare  industry.  The  Company  performs  ongoing  credit
          evaluations   of  its  customers   and  does  not  generally   require
          collateral; however, in certain circumstances, the Company may require
          letters of credit from its customers.

     In 1999, 1998 and 1997,  there was one customer to whom sales of Diagnostic
          products  represented  17%, 15% and 15% of total sales,  respectively.
          Approximately  20% and 19% of accounts  receivable  pertained  to this
          customer at May 29, 1999 and May 30, 1998, respectively.

     The Company's chief operating decision maker utilizes operating segment net
          earnings  (loss)  information  in  assessing  performance  and  making
          overall operating decisions and resource  allocations.  The accounting
          policies of the operating  segments are the same as those described in
          the summary of significant accounting policies.  Information about the
          Company's segments is as follows:





                                      -62-
<PAGE>


                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


     NOTE O - OPERATING SEGMENT, GEOGRAPHIC AREA OPERATIONS AND CONCENTRATION OF
              CREDIT RISK (continued)

<TABLE>
<CAPTION>
     Operating Segments                               1999               1998                  1997
     ------------------                              ------             ------                ------
                                                                   (in thousands)
<S>                                                <C>                 <C>                   <C>
    Net sales from external customers
      Diagnostic products
        Contrast systems                           $ 60,366            $ 58,474              $58,779
        Non-contrast systems                         26,554              25,001               20,809
                                                    -------             -------               ------

        Total Diagnostic products                    86,920              83,475               79,588
        AngioDynamics products                       20,259              19,409               17,736
                                                    -------             -------               ------

    Total net sales from external
      customers                                    $107,179            $102,884              $97,324
                                                    =======             =======               ======

    Intersegment net sales
      Diagnostic products                          $     36            $     91              $ 1,250
      AngioDynamics products                            503                 483                  926
                                                    -------             -------               ------

    Total intersegment net sales                   $    539            $    574              $ 2,176
                                                    =======             =======               ======

    Interest income
      Diagnostic products                          $  1,475            $  1,269              $   918
      AngioDynamics products                             16                  20                   87
      Eliminations                                     (986)               (597)                (175)
                                                    -------             -------               ------

    Total interest income                          $    505            $    692              $   830
                                                    =======             =======               ======

    Interest expense
      Diagnostic products                          $    263            $    340              $   287
      AngioDynamics products                            986                 951                  405
      Eliminations                                     (986)               (597)                (175)
                                                    -------             -------               ------

    Total interest expense                         $    263            $    694              $   517
                                                    =======             =======               ======

    Depreciation and amortization
      Diagnostic products                          $  2,125            $  2,361              $ 2,437
      AngioDynamics products                            704                 954                  600
                                                    -------             -------               ------

    Total depreciation and amortization            $  2,829            $  3,315              $ 3,037
                                                    =======             =======               ======

    Equity in losses of affiliate
      Diagnostic products                          $    225            $    219              $   -
                                                    -------             -------               ------

    Total equity in losses of affiliate            $    225            $    219              $   -
                                                    =======             =======               ======

    Income tax expense (benefit)
      Diagnostic products                          $  2,419            $  1,198              $  (295)
      AngioDynamics products                           (545)               (765)              (1,027)
                                                    -------             -------               ------

    Total income tax expense (benefit)             $  1,874            $    433              $(1,322)
                                                    =======             =======               ======
</TABLE>


                                      -63-
<PAGE>


                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE O -  OPERATING SEGMENT, GEOGRAPHIC AREA OPERATIONS AND CONCENTRATION OF
          CREDIT RISK (continued)
<TABLE>
<CAPTION>
     Operating Segments (continued)                   1999               1998                  1997
     ------------------------------                  ------             ------                ------
                                                                   (in thousands)
<S>                                                <C>                 <C>                   <C>
    Net earnings (loss)
      Diagnostic products                          $  5,960            $  1,623              $    138
      AngioDynamics products                         (1,158)             (7,568)*              (3,339)
      Eliminations                                       (5)                (22)                   (7)
                                                    -------             -------               -------

    Total net earnings (loss)                      $  4,797            $ (5,967)             $ (3,208)
                                                    =======             =======               =======

    Other significant noncash items
      Diagnostic products
        Impairment of investment in
          affiliate                                $    896            $    -                $    -
      AngioDynamics products
        Impairment of long-lived assets                 -                 4,121                   -
                                                    -------             -------               -------

    Total other significant noncash
      items                                        $    896            $  4,121              $    -
                                                    =======             =======               =======

    Assets
      Diagnostic products                          $107,027            $ 99,846              $ 95,537
      AngioDynamics products                         17,922              19,631 *              25,515
      Eliminations                                  (28,890)            (28,771)              (20,332)
                                                    -------             -------               -------

    Total assets                                   $ 96,059            $ 90,706              $100,720
                                                    =======             =======               =======

    Capital expenditures
      Diagnostic products                          $  1,831            $  1,745              $  1,484
      AngioDynamics products                            376                 152                 2,886
                                                    -------             -------               -------

    Total capital expenditures                     $  2,207            $  1,897              $  4,370
                                                    =======             =======               =======

    Investment in affiliate
      Diagnostic products                          $    -              $  1,121              $    -
                                                    -------             -------               -------

    Total investment in affiliate                  $    -              $  1,121              $    -
                                                    =======             =======               =======
</TABLE>

* Includes an impairment charge of $4,121,000 (see Note C).


                                      -64-
<PAGE>


                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE O -  OPERATING SEGMENT, GEOGRAPHIC AREA OPERATIONS AND CONCENTRATION OF
          CREDIT RISK (continued)

     Geographic Areas
     ----------------

     The following  geographic  area  data  includes net sales  generated by and
          long-lived assets employed in operations located in each area:


                                       1999             1998              1997
                                      ------           ------            ------
                                                   (in thousands)

      Net sales
        U.S. operations             $ 89,200          $ 85,014          $79,873
        International operations:
          Canada                      22,735            20,321           14,369
          Other                       12,226            13,932           12,871
        Eliminations                 (16,982)          (16,383)          (9,789)
                                     -------           -------           ------

      Total net sales               $107,179          $102,884          $97,324
                                     =======           =======           ======

      Long-lived assets
        U.S. operations              $11,826           $12,229          $12,750
        International operations:
          Canada                       5,248             5,276            5,987
          Other                        4,251             4,412            4,681
                                      ------            ------           ------

      Total long-lived assets        $21,325           $21,917          $23,418
                                      ======            ======           ======


NOTE P - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

     Quarterly results of operations during 1999 and 1998 were as follows:

<TABLE>
<CAPTION>
                                                        1999
                                ------------------------------------------------------
                                 First        Second            Third          Fourth
                                quarter       quarter          quarter         quarter
                                -------       -------          -------         -------
                                        (in thousands, except per share data)

<S>                              <C>           <C>             <C>             <C>
    Net sales                    $25,665       $26,508         $26,618         $28,388
    Gross profit                  10,669        11,538          11,192          11,758
    Net earnings                   1,470         1,528             959             840
    Earnings per common share
      Basic                          .15           .15             .10             .08
      Diluted (1)                    .14           .15             .09             .08
</TABLE>




                                      -65-
<PAGE>


                          E-Z-EM, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                   May 29, 1999, May 30, 1998 and May 31, 1997


NOTE P - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (continued)

<TABLE>
<CAPTION>
                                                        1998
                                ------------------------------------------------------
                                 First        Second            Third          Fourth
                                quarter       quarter          quarter         quarter
                                -------       -------          -------         -------
                                        (in thousands, except per share data)

<S>                              <C>           <C>             <C>             <C>
    Net sales                    $25,713       $24,711         $24,385         $28,075
    Gross profit                   9,735         8,721           8,239          10,738
    Net earnings (loss)              128        (1,375)         (5,819)          1,099
    Earnings (loss) per common
      share (2)
        Basic and diluted            .01          (.14)           (.58)            .11
</TABLE>

     (1)  The sum of the quarters does not equal the fiscal year due to rounding
          and changes in the calculation of weighted average shares.

     (2)  Earnings (loss) per common share in 1998 was retroactively restated to
          reflect the total shares issued after the 3% stock dividends described
          in Note M.

     The third  quarter of 1998 includes an impairment charge of $4,121,000 (see
          Note C).













                                      -66-
<PAGE>


                          E-Z-EM, Inc. and Subsidiaries

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)

<TABLE>
<CAPTION>
    Column A                      Column B                 Column C                    Column D                  Column E
    --------                      --------                 --------                    --------                  --------
                                                           Additions
                                                 --------------------------------
                                                     (1)                    (2)
                                   Balance                              Charged to                               Balance
                                     at          Charged to                other                                  at end
                                  beginning      costs and               accounts-     Deductions-                 of
   Description                    of period       expenses               describe       describe                 period
   -----------                    ---------       --------               --------       --------                 ------
<S>                               <C>               <C>                                 <C>                       <C>
Fifty-two weeks
  ended May 31, 1997

Allowance for
  doubtful accounts....              $527           $451                                  $48 (a)                   $930
                                      ===            ===                                   ==                        ===

Fifty-two weeks
  ended May 30, 1998

Allowance for
  doubtful accounts....              $930           $286                                  $68 (a)                 $1,148
                                      ===            ===                                   ==                      =====

Fifty-two weeks
  ended May 29, 1999

Allowance for
  doubtful accounts....            $1,148           $250                                 $370 (a)                 $1,028
                                    =====            ===                                  ===                      =====
</TABLE>

(a) Amounts written off as uncollectible.






                                      -67-