##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

|    |  |                                                                                  
|--- |  | ---------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2002

|     |  |                                                                                         
|---- |  | ----------------------------------------------------------------------------------------
|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: ________________ to _______________

Commission file number: 0-5958

MERIDIAN MEDICAL TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

|                                                    |  |                    
|--------------------------------------------------- |  | -------------------
|Delaware                                            |  | 52-0898764         
|                                                    |  |                    
|(State or other jurisdiction of                     |  | (IRS Employer      
|incorporation or organization)                      |  | Identification No.)
|10240 Old Columbia Road, Columbia, Maryland         |  | 21046              
|                                                    |  |                    
|(Address of principal executive offices)            |  | (Zip Code)         
|Registrants telephone number, including area code: |  | 410-309-6830       
|                                                    |  |                    

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

YES [X]          NO [  ]

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

|                             |  |                                |  | 
|---------------------------- |  | ------------------------------ |  | 
|Class                        |  | Outstanding as of June 4, 2002
|                             |  |                               
|Common Stock, $.10 par value |  | 4,534,045 Shares              





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MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

|                                                                                                |                                                                                               |  |          |   | 
|----------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  | -------- | - | 
|                                                                                                |                                                                                               |  | Page No.
|                                                                                                |                                                                                               |  |         
|PART I.   FINANCIAL INFORMATION                                                                 |                                                                                               |  |          |  
|ITEM 1.   Consolidated Financial Statements                                                     |                                                                                               |  |          |  
|                                                                                                | Consolidated Balance Sheets as of April 30, 2002 and July 31, 2001                            |  |          | 4 | 
|                                                                                               
|
|                                                                                                | Consolidated Statements of Income for the Three and Nine Months Ended April 30, 2002 and 2001 |  |          | 5 | 
|                                                                                               
|
|                                                                                                | Consolidated Statements of Cash Flows for the Nine Months Ended April 30, 2002 and 2001       |  |          | 6 | 
|                                                                                               
|
|                                                                                                | Notes to Consolidated Financial Statements                                                    |  |          | 7 | 
|                                                                                               
|
|ITEM 2.   Managements Discussion and Analysis of Financial Condition and Results of Operations |                                                                                               |  | 10       |  
|                                                                                               
|
|ITEM 3   Quantitative and Qualitative Disclosures About Market Risk                             |                                                                                               |  | 14       |  
|                                                                                               
|
|                                                                                                |                                                                                               |  |          |  
|PART II.   OTHER INFORMATION                                                                    |                                                                                               |  |          |  
|ITEM 6.   Exhibits and Reports on Form 8-K                                                      |                                                                                               |  | 14       |  
|                                                                                               
|
|SIGNATURES                                                                                      |                                                                                               |  | 15       |  

2



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

INTRODUCTION

Meridian Medical Technologies, Inc. (hereinafter referred to as Meridian or
MMT or the Company), a publicly-traded company (NASDAQ: MTEC), operates
its business in two segments: Pharmaceutical Systems and Cardiopulmonary
Systems. The Company is a leading producer of auto-injector drug delivery
devices, which are used for the self-administration of injectable drugs.
Meridian has developed and recently received FDA approval for a proprietary
electrocardiac mapping system technology, the PRIME ECG. The Company feels
that this product is a major breakthrough in cardiac care because it offers
significant potential to save lives and reduce health care costs. The U.S
marketing effort for the PRIME ECG began immediately after FDA clearance was
received.

Meridians auto-injector business is part of its core Pharmaceutical Systems
business. The Pharmaceutical Systems business generated $55.3 million in
revenue in the fiscal year ended July 31, 2001, and $58.6 million for the nine
months ended April 30, 2002, accounting for 95% of Meridians total revenues
for those periods. Meridian sells its auto-injector products to both
commercial and government markets. The principal source of revenues in the
commercial market comes from its EpiPen family of auto-injectors, which are
prescribed primarily for severe allergic reactions. Government revenues are
principally generated from nerve agent antidotes and other emergency medicine
auto-injector products and services marketed to the U.S. Department of Defense
(DoD) and other federal, state and local agencies, particularly those
involved in homeland security, as well as foreign governments. The Company
plans on expanding its Pharmaceutical Systems business through the acquisition
of targeted specialty pharmaceutical products and utilization of its
drug-delivery expertise.

The Cardiopulmonary Systems segment, which accounted for 5% of Meridians
revenues in its fiscal year ended July 31, 2001 and the nine months ended April
30, 2002, includes the PRIME ECG and its telemedicine business. The
telemedicine business is currently the principal source of revenues in the
Cardiopulmonary Systems segment. In March 2002, the Company received clearance
from the FDA to market its new PRIME ECG product in the United States. This
approval is the culmination of years of development and investment in this
product, which the Company feels could generate significant revenues and
profits over time, as it targets a significant worldwide market. The Companys
goal is to establish PRIME ECG as the standard of care in the diagnosis,
treatment and monitoring of heart disease. The Company introduced PRIME ECG in
certain countries outside the United States in 2000, having received the CE
mark approval in Europe.

FORWARD LOOKING STATEMENTS

This report and other written and oral statements made by the Company may
contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act with respect to financial performance and other financial
and business matters. Forward-looking statements are typically identified by
future or conditional verbs or similar expressions regarding events that have
yet to occur. These forward-looking statements are based on the Companys
current expectations and are subject to numerous assumptions, risks and
uncertainties. The following factors, among others, could cause actual results
to differ materially from forward-looking statements or historical performance:
political, economic and competitive conditions; capital availability or costs;
fluctuations in demand for the Companys products; government procurement
timing and policies; technological challenges associated with the development
and manufacture of the Companys products; commercial acceptance of the
Companys products; delays, costs and uncertainties associated with clinical
testing and government approvals required to market new drugs and medical
devices; availability and quality of raw materials; success and timing of
efficiency, cost reduction and quality enhancement programs; regulatory and
contract compliance; relationships with significant customers; adequacy of
product liability insurance; ability to obtain, timing and success of marketing
representatives and strategic alliances; ability to establish and maintain a
sales and marketing infrastructure in support of U.S. PRIME ECG and specialty
pharmaceutical products; uncertainties relating to healthcare reform measures
and third party reimbursement, and adequacy of intellectual property
protection. Meridian assumes no duty to update forward-looking statements.

3



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements

MERIDIAN MEDICAL TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |          |         |        |        | 
|--------------------- | ----------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------------------------------------ | ------ | ----------- | ------ | -------- | ------- | ------ | ------ | 
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        | April 30,   |        | July 31,
|Assets                |                                                                               | 2002                                                                                                                               |                                   | 2001                                
|                      |                                                                               |                                                                                                                                    |                                   |                                     
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        | (unaudited) |        |          |         |       
|Current assets:       |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      | Cash and cash equivalents                                                     |                                                                                                                                    | $                                 | 10,130                               |        |             | $      | 2,167    |        
|                      | Restricted cash                                                               |                                                                                                                                    |                                   |                                     |        |             |        | 291      |        
|                      | Receivables, less allowances of $239 and $68, respectively                    |                                                                                                                                    |                                   | 9,755                                |        |             |        | 6,834    |        
|                      | Inventories                                                                   |                                                                                                                                    |                                   | 8,903                                |        |             |        | 6,787    |        
|                      | Deferred income taxes                                                         |                                                                                                                                    |                                   | 1,829                                |        |             |        | 1,829    |        
|                      | Other current assets                                                          |                                                                                                                                    |                                   | 1,001                                |        |             |        | 705      |        
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      |                                                                               |                                                                                                                                    | Total current assets              |                                      |        | 31,618      |        |          |         | 18,613 |       
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      | Property, plant and equipment                                                 |                                                                                                                                    |                                   | 27,911                               |        |             |        | 26,091   |        
|                      |                                                                               |                                                                                                                                    | Less  Accumulated depreciation   |                                      |        | (11,785     | )      |          |         | (9,627 | )     
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      |                                                                               |                                                                                                                                    | Net property, plant and equipment |                                      |        | 16,126      |        |          |         | 16,464 |       
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      | Deferred financing fees                                                       |                                                                                                                                    |                                   | 465                                  |        |             |        | 490      |        
|                      | Capitalized software costs, net                                               |                                                                                                                                    |                                   | 1,090                                |        |             |        | 1,331    |        
|                      | Excess of cost over net assets acquired, less
amortization of $6,096          |                                                                                                                                    |                                   | 5,266                                |        |             |        | 5,266    |        
|                      | Other intangible assets, less amortization of $2,103 and
$1,911, respectively |                                                                                                                                    |                                   | 1,166                                |        |             |        | 1,334    |        
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      |                                                                               |                                                                                                                                    | Total assets                      |                                      | $      | 55,731      |        |          | $       | 43,498 |       
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |          |        
|                      |                                                                               |                                                                                                                                    |                                   | Liabilities and Shareholders Equity |        |             |        |          |         |        |        | 
|Current liabilities:  |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      |                                                                               | Accounts payable and other accrued liabilities                                                                                     |                                   | $                                    | 11,456 |             |        | $        | 5,518   |       
|                      |                                                                               | Note payable to bank                                                                                                               |                                   |                                      |       |             |        |          | 71      |       
|                      |                                                                               | Customer deposits                                                                                                                  |                                   |                                      | 99     |             |        |          | 75      |       
|                      |                                                                               | Current portion of long-term debt                                                                                                  |                                   |                                      |       |             |        |          | 1,250   |       
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      |                                                                               |                                                                                                                                    |                                   | Total current liabilities            |        |             | 11,555 |          |         |        | 6,914  | 
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      |                                                                               | Long-term debt  notes payable, net of discount                                                                                    |                                   |                                      |       |             |        |          | 15,813  |       
|                      |                                                                               | Deferred income taxes                                                                                                              |                                   |                                      | 1,775  |             |        |          | 1,775   |       
|                      |                                                                               | Other non-current liabilities                                                                                                      |                                   |                                      | 1,169  |             |        |          | 1,250   |       
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      |                                                                               |                                                                                                                                    |                                   | Total liabilities                    |        |             | 14,499 |          |         |        | 25,752 | 
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|Shareholders equity: |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      |                                                                               | Common stock (voting and non-voting)
Par value $.10 per share; 18,000,000 shares
authorized; 4,514,060 and 3,197,088 shares issued |                                   |                                      | 451    |             |        |          | 320     |       
|                      |                                                                               | Additional capital                                                                                                                 |                                   |                                      | 49,191 |             |        |          | 33,156  |       
|                      |                                                                               | Accumulated other comprehensive loss  cumulative
translation adjustment                                                           |                                   |                                      | (49    | )           |        |          | (227    | )     
|                      |                                                                               | Accumulated deficit                                                                                                                |                                   |                                      | (8,148 | )           |        |          | (15,290 | )     
|                      |                                                                               | Treasury stock, 30,176 shares at cost                                                                                              |                                   |                                      | (213   | )           |        |          | (213    | )     
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      |                                                                               |                                                                                                                                    |                                   | Total shareholders equity           |        |             | 41,232 |          |         |        | 17,746 | 
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |         
|                      |                                                                               | Total liabilities and shareholders equity                                                                                         |                                   | $                                    | 55,731 |             |        | $        | 43,498  |       
|                      |                                                                               |                                                                                                                                    |                                   |                                      |        |             |        |          |        

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

4



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

MERIDIAN MEDICAL TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)

|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |       |       | 
|-------------------------------------------------------------------------------- | ---------------- | ------- | ------ | ------------------ | ----- | ----------------- | ------ | ---- | ----- | ---- | ------ | ----- | ----- | - | ------ | ----- | ----- | 
|                                                                                 |                  |         |        | Three Months Ended |       | Nine Months Ended
|                                                                                 |                  |         |        | April 30,          |       | April 30,        
|                                                                                 |                  |         |        | 2002               |       | 2001              |        | 2002 |       | 2001
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |     
|Net sales                                                                        |                  | $       | 22,270 |                    |       | $                 | 14,774 |      |       | $    | 62,005 |       |       | $ | 41,781 |      
|Cost of sales                                                                    |                  |         | 12,118 |                    |       |                   | 8,649  |      |       |      | 32,478 |       |       |   | 24,581 |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Gross profit                                                                     |                  |         | 10,152 |                    |       |                   | 6,125  |      |       |      | 29,527 |       |       |   | 17,200 |      
|                                                                                
|Selling, general, and administrative expenses                                    |                  |         | 3,242  |                    |       |                   | 2,353  |      |       |      | 8,754  |       |       |   | 6,921  |      
|Research and development expenses                                                |                  |         | 1,335  |                    |       |                   | 757    |      |       |      | 3,299  |       |       |   | 2,259  |      
|Depreciation and amortization                                                    |                  |         | 843    |                    |       |                   | 893    |      |       |      | 2,358  |       |       |   | 2,641  |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|                                                                                 |                  |         | 5,420  |                    |       |                   | 4,003  |      |       |      | 14,411 |       |       |   | 11,821 |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Operating income                                                                 |                  |         | 4,732  |                    |       |                   | 2,122  |      |       |      | 15,116 |       |       |   | 5,379  |      
|Other expense:                                                                   |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|                                                                                 | Interest expense |         |        | 39                 |       |                   |        | 650  |       |      |        | 1,024 |       |   |        | 2,083 |      
|                                                                                 | Other expense    |         |        | 20                 |       |                   |        | 2    |       |      |        | 103   |       |   |        | 26    |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|                                                                                 |                  |         | 59     |                    |       |                   | 652    |      |       |      | 1,127  |       |       |   | 2,109  |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Income before income taxes and extraordinary
loss                                |                  |         | 4,673  |                    |       |                   | 1,470  |      |       |      | 13,989 |       |       |   | 3,270  |      
|Provision for income taxes                                                       |                  |         | 1,996  |                    |       |                   | 706    |      |       |      | 6,202  |       |       |   | 1,596  |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Income before extraordinary loss                                                 |                  |         | 2,677  |                    |       |                   | 764    |      |       |      | 7,787  |       |       |   | 1,674  |      
|Extraordinary loss on debt extinguishment
(net of an income tax benefit of $413) |                  |         |       |                    |       |                   |       |      |       |      | 645    |       |       |   |       |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Net income                                                                       |                  | $       | 2,677  |                    |       | $                 | 764    |      |       | $    | 7,142  |       |       | $ | 1,674  |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Earnings per common share:                                                       |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Income before extraordinary loss                                                 |                  | $       | .60    |                    |       | $                 | .25    |      |       | $    | 2.00   |       |       | $ | .55    |      
|Extraordinary loss                                                               |                  |         |       |                    |       |                   |       |      |       |      | .17    |       |       |   |       |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Net income per common share                                                      |                  | $       | .60    |                    |       | $                 | .25    |      |       | $    | 1.83   |       |       | $ | .55    |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Earnings per common share assuming dilution:                                     |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Income before extraordinary loss                                                 |                  | $       | .53    |                    |       | $                 | .22    |      |       | $    | 1.75   |       |       | $ | .48    |      
|Extraordinary loss                                                               |                  |         |       |                    |       |                   |       |      |       |      | .14    |       |       |   |       |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Net income per common share assuming dilution                                    |                  | $       | .53    |                    |       | $                 | .22    |      |       | $    | 1.61   |       |       | $ | .48    |      
|                                                                                 |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|Weighted average shares:                                                         |                  |         |        |                    |       |                   |        |      |       |      |        |       |       |   |        |      
|                                                                                 |                  | Basic   |        |                    | 4,430 |                   |        |      | 3,063 |      |        |       | 3,893 |   |        |       | 3,036 | 
|                                                                                 |                  | Diluted |        |                    | 5,073 |                   |        |      | 3,459 |      |        |       | 4,447 |   |        |       | 3,462 | 

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

5



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MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

MERIDIAN MEDICAL TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)

|                                                 |                                                                                   |                                        |                                                                    |                                        |         |                   |        |       |        |       |        |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------------------------------------------ | -------------------------------------- | ------- | ----------------- | ------ | ----- | ------ | ----- | ------ | -
|                                                 |                                                                                   |                                        |                                                                    |                                        |         | Nine Months Ended
|                                                 |                                                                                   |                                        |                                                                    |                                        |         | April 30,        
|                                                 |                                                                                   |                                        |                                                                    |                                        |         | 2002              |        | 2001 
|                                                 |                                                                                   |                                        |                                                                    |                                        |         |                   |        |      
|OPERATING ACTIVITIES:                            |                                                                                   |                                        |                                                                    |                                        |         |                   |        |      
|                                                 | Net income                                                                        |                                        | $                                                                  | 7,142                                  |         |                   | $      | 1,674 |       
|                                                 | Adjustments to reconcile net income to net
cash provided by operating activities: |                                        |                                                                    |                                        |         |                   |        |       |       
|                                                 |                                                                                   |                                        | Depreciation and amortization                                      |                                        |         | 2,358             |        |       |        | 2,641 |       
|                                                 |                                                                                   |                                        | Amortization of capitalized software costs                         |                                        |         | 246               |        |       |        | 237   |       
|                                                 |                                                                                   |                                        | Amortization of notes payable discount
and deferred financing fees |                                        |         | 139               |        |       |        | 279   |       
|                                                 |                                                                                   |                                        | Tax benefit related to exercise of
non-qualified stock options     |                                        |         | 1,432             |        |       |        |      |       
|                                                 |                                                                                   |                                        | Extraordinary loss                                                 |                                        |         | 1,058             |        |       |        |      |       
|                                                 | Changes in assets and liabilities                                                 |                                        |                                                                    |                                        |         |                   |        |       |       
|                                                 |                                                                                   |                                        |                                                                    | Receivables                            |         |                   | (2,921 | )     |        |       | 3,509  |  
|                                                 |                                                                                   |                                        |                                                                    | Inventories                            |         |                   | (2,116 | )     |        |       | (847   | )
|                                                 |                                                                                   |                                        |                                                                    | Other current assets                   |         |                   | (296   | )     |        |       | 454    |  
|                                                 |                                                                                   |                                        |                                                                    | Accounts payable and other liabilities |         |                   | 5,962  |       |        |       | (1,810 | )
|                                                 | Other                                                                             |                                        |                                                                    | 40                                     |         |                   |        | 42    |       
|                                                 |                                                                                   |                                        |                                                                    |                                        |         |                   |        |      
|Net cash provided by operating activities        |                                                                                   |                                        | 13,044                                                             |                                        |         |                   | 6,179  |      
|                                                
|INVESTING ACTIVITIES                             |                                                                                   |                                        |                                                                    |                                        |         |                   |        |      
|                                                 |                                                                                   | Purchase of fixed assets               |                                                                    |                                        | (1,820  | )                 |        |       | (2,044 | )    
|                                                 |                                                                                   | Decrease (increase) in restricted cash |                                                                    |                                        | 291     |                   |        |       | (4     | )    
|                                                 |                                                                                   |                                        |                                                                    |                                        |         |                   |        |      
|Net cash used for investing activities           |                                                                                   |                                        | (1,529                                                             | )                                      |         |                   | (2,048 | )    
|                                                
|FINANCING ACTIVITIES                             |                                                                                   |                                        |                                                                    |                                        |         |                   |        |      
|                                                 |                                                                                   | Net payment on lines of credit         |                                                                    |                                        | (71     | )                 |        |       | (1,514 | )    
|                                                 |                                                                                   | Payment of deferred financing fees     |                                                                    |                                        | (465    | )                 |        |       |       |      
|                                                 |                                                                                   | Payment on long-term debt              |                                                                    |                                        | (17,750 | )                 |        |       | (776   | )    
|                                                 |                                                                                   | Proceeds from issuance of common stock |                                                                    |                                        | 14,734  |                   |        |       | 473    |      
|                                                 |                                                                                   |                                        |                                                                    |                                        |         |                   |        |      
|Net cash used for financing activities           |                                                                                   |                                        | (3,552                                                             | )                                      |         |                   | (1,817 | )    
|                                                 |                                                                                   |                                        |                                                                    |                                        |         |                   |        |      
|Net increase in cash                             |                                                                                   |                                        | 7,963                                                              |                                        |         |                   | 2,314  |      
|Cash and cash equivalents at beginning of period |                                                                                   |                                        | 2,167                                                              |                                        |         |                   | 79     |      
|                                                 |                                                                                   |                                        |                                                                    |                                        |         |                   |        |      
|Cash and cash equivalents at end of period       |                                                                                   | $                                      | 10,130                                                             |                                        |         | $                 | 2,393  |      
|                                                 |                                                                                   |                                        |                                                                    |                                        |         |                   |        |       |       

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

6



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MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



|1. |  | The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
standards (GAAP) for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by GAAP
for complete financial statements. In the opinion of management, the
accompanying unaudited consolidated financial statements contain all
adjustments (consisting of normal recurring accruals) necessary to present
fairly the Companys financial position as of April 30, 2002 and July 31,
2001, the results of its operations for the three-month and nine-month
periods ended April 30, 2002 and 2001, and its cash flows for the
nine-month periods ended April 30, 2002 and 2001. The results of
operations for the three-month and nine-month periods ended April 30, 2002
are not necessarily indicative of the results that may be expected for the
fiscal year ending July 31, 2002. Certain prior period amounts have been
reclassified to conform to current period presentation. The information
included in this Form 10-Q should be read in conjunction with Managements
Discussion and Analysis and financial statements and notes thereto
included in the Meridian Medical Technologies, Inc. 2001 Form 10-K filed
with the Securities and Exchange Commission.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | The Company considers all investments with a maturity of three months or
less on their acquisition date to be cash equivalents. Restricted cash
consisted of cash pledged as collateral on an outstanding letter of
credit, which supported the working capital line of credit at the
Companys Belfast subsidiary. The Company terminated the Belfast line of
credit during the second quarter of fiscal 2002, making the previously
restricted cash available for general corporate use.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|3. |  | Inventories as of April 30, 2002 and July 31, 2001 consisted of the
following (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|                                    |  |                |       |               |  |   |       |  
|----------------------------------- |  | -------------- | ----- | ------------- |  | - | ----- | -
|                                    |  | April 30, 2002 |       | July 31, 2001
|                                    |  |                |       |              
|Components and subassemblies        |  | $              | 6,257 |               |  | $ | 4,750 |  
|Work in process                     |  |                | 2,608 |               |  |   | 2,378 |  
|Finished goods                      |  |                | 934   |               |  |   | 497   |  
|                                    |  |                |       |               |  |   |       |  
|                                    |  |                | 9,799 |               |  |   | 7,625 |  
|Less: inventory valuation allowance |  |                | (896  | )             |  |   | (838  | )
|                                    |  |                |       |               |  |   |       |  
|                                    |  | $              | 8,903 |               |  | $ | 6,787 |  
|                                    |  |                |       |               |  |   |       |  



|4. |  | A reconciliation of net income to comprehensive income is as follows (in
thousands):
|-- |  | ------------------------------------------------------------------------------------

|                                        |  |                    |       |      |                   |   |      |   |      |  |   |       |  |  |   |       |  
|--------------------------------------- |  | ------------------ | ----- | ---- | ----------------- | - | ---- | - | ---- |  | - | ----- |  |  | - | ----- | -
|                                        |  | Three Months Ended |       |      | Nine Months Ended
|                                        |  | April 30,          |       |      | April 30,        
|                                        |  | 2002               |       | 2001 |                   |   | 2002 |   | 2001
|                                        |  |                    |       |      |                   |   |      |   |     
|Net income                              |  | $                  | 2,677 |      |                   | $ | 764  |   |      |  | $ | 7,142 |  |  | $ | 1,674 |  
|Foreign exchange translation adjustment |  |                    | 177   |      |                   |   | (27  | ) |      |  |   | 178   |  |  |   | (58   | )
|                                        |  |                    |       |      |                   |   |      |   |      |  |   |       |  |  |   |       |  
|Comprehensive income                    |  | $                  | 2,854 |      |                   | $ | 737  |   |      |  | $ | 7,320 |  |  | $ | 1,616 |  
|                                        |  |                    |       |      |                   |   |      |   |      |  |   |       |  |  |   |       |  

7



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q



|5. |  | In accordance with Statement of Financial Accounting Standards No. 86,
the Company began amortizing the $1,588,000 of software costs incurred
during fiscal 1999 and 1998 relating to its PRIME ECG product during the
third quarter of fiscal 2000, as it was available for sale. The Company
capitalized $219,000 of additional software costs relating to enhancements
made to its PRIME ECG during the fourth quarter of fiscal 2001.
Amortization of these costs began in the current quarter, when the product
received FDA approval and the enhancements became available for sale.
Amortization, which is being provided on a 5 year, straight-line basis,
totaled $87,000 and $246,000 for the three and nine months ended April 30,
2002, respectively, and is included in cost of sales.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|6. |  | Segment information is as follows (in thousands, except percentage
information):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

|                          |                         |                          |   |                    |        |                   |   |        |        |      |   |        |        |   |   |        |        |  
|------------------------- | ----------------------- | ------------------------ | - | ------------------ | ------ | ----------------- | - | ------ | ------ | ---- | - | ------ | ------ | - | - | ------ | ------ | -
|                          |                         |                          |   | Three Months Ended |        | Nine Months Ended
|                          |                         |                          |   | April 30,          |        | April 30,        
|                          |                         |                          |   | 2002               |        | 2001              |   | 2002   |        | 2001
|                          |                         |                          |   |                    |        |                   |   |        |        |     
|Revenues:                 |                         |                          |   |                    |        |                   |   |        |        |      |   |        |        |   |   |       
|                          | Pharmaceutical systems  |                          | $ | 20,333             |        |                   | $ | 13,986 |        |      | $ | 58,644 |        |   | $ | 39,987 |       
|                          | Cardiopulmonary systems |                          |   | 1,937              |        |                   |   | 788    |        |      |   | 3,361  |        |   |   | 1,794  |       
|                          |                         |                          |   |                    |        |                   |   |        |        |      |   |        |        |   |   |       
|                          |                         | Total revenues           |   | $                  | 22,270 |                   |   | $      | 14,774 |      |   | $      | 62,005 |   |   | $      | 41,781 |  
|                          |                         |                          |   |                    |        |                   |   |        |        |      |   |        |        |   |   |        |       
|Operating income (loss):  |                         |                          |   |                    |        |                   |   |        |        |      |   |        |        |   |   |       
|                          | Pharmaceutical systems  |                          | $ | 5,830              |        |                   | $ | 2,965  |        |      | $ | 18,076 |        |   | $ | 7,960  |       
|                          | Cardiopulmonary systems |                          |   | (1,098             | )      |                   |   | (843   | )      |      |   | (2,960 | )      |   |   | (2,581 | )     
|                          |                         |                          |   |                    |        |                   |   |        |        |      |   |        |        |   |   |       
|                          |                         | Total operating income   |   | $                  | 4,732  |                   |   | $      | 2,122  |      |   | $      | 15,116 |   |   | $      | 5,379  |  
|                          |                         |                          |   |                    |        |                   |   |        |        |      |   |        |        |   |   |        |       
|Operating income (loss)%: |                         |                          |   |                    |        |                   |   |        |        |      |   |        |        |   |   |       
|                          | Pharmaceutical systems  |                          |   | 28.7               | %      |                   |   | 21.2   | %      |      |   | 30.8   | %      |   |   | 19.9   | %     
|                          | Cardiopulmonary systems |                          |   | (56.7              | %)     |                   |   | (107.0 | %)     |      |   | (88.1  | %)     |   |   | (143.9 | %)    
|                          |                         |                          |   |                    |        |                   |   |        |        |      |   |        |        |   |   |       
|                          |                         | Total operating income % |   |                    | 21.2   | %                 |   |        | 14.4   | %    |   |        | 24.4   | % |   |        | 12.9   | %
|                          |                         |                          |   |                    |        |                   |   |        |        |      |   |        |        |   |   |       



|7. |  | Effective August 1, 2001, the Company early adopted Statement of
Financial Accounting Standards No. 142, Goodwill and Intangible Assets
(SFAS No. 142) which resulted in discontinuing the amortization of
goodwill. Under the Statement, goodwill will be carried at its book value
as of August 1, 2001 and any future impairment of goodwill will be
recognized as an operating expense in the period of impairment. However,
under the terms of the Statement, identifiable intangibles with
identifiable lives will continue to be amortized. Amortization expense
for the three and nine months ended April 30, 2002 was $64,000 and
$192,000, respectively, which represented the amortization relating to the
identified intangible assets still required to be amortized under SFAS No.
142. For each of the next five years, intangible amortization expense
relating to these identified intangibles is expected be approximately
$256,000.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Company has two reporting units, Pharmaceutical Systems and
Cardiopulmonary Systems. As of April 30, 2002, the Pharmaceutical Systems
unit has $4.7 million of net goodwill, while the Cardiopulmonary unit has
$541,000 of net goodwill. There were no changes in the goodwill balance
during the year. The Company completed its transitional impairment test
of its goodwill balance (excess of cost over net assets) as of January 31,
2002. The results of the impairment test indicated that there was no
impairment. The Company is required to test the value of its goodwill at
least annually.                                                                                                                                                                                                                                                                                                                                            

8



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q



| |  | As required by SFAS No. 142, the results for periods prior to adoption
have not been restated. A reconciliation of previously reported net income
and earnings per share to the amounts adjusted for the exclusion of
goodwill amortization net of the related income tax effect follows (in
thousands, except per share data):
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                           |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |      |       | 
|------------------------------------------ | -------------------------------------------------- | ----------------------------------------- | ----- | ------------------ | ----- | ----------------- | --- | ---- | ----- | ---- | ----- | ---- | ----- | - | ----- | ---- | ----- | 
|                                           |                                                    |                                           |       | Three Months Ended |       | Nine Months Ended
|                                           |                                                    |                                           |       | April 30,          |       | April 30,        
|                                           |                                                    |                                           |       | 2002               |       | 2001              |     | 2002 |       | 2001
|                                           |                                                    |                                           |       |                    |       |                   |     |      |       |     
|Reported income before extraordinary loss  |                                                    | $                                         | 2,677 |                    |       | $                 | 764 |      |       | $    | 7,787 |      |       | $ | 1,674 |     
|Add back goodwill amortization, net of tax |                                                    |                                           |      |                    |       |                   | 284 |      |       |      |      |      |       |   | 852   |     
|                                           |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |     
|                                           |                                                    | Adjusted income before
extraordinary loss |       | $                  | 2,677 |                   |     | $    | 1,048 |      |       | $    | 7,787 |   |       | $    | 2,526 | 
|                                           |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |     
|Reported net income                        |                                                    | $                                         | 2,677 |                    |       | $                 | 764 |      |       | $    | 7,142 |      |       | $ | 1,674 |     
|Add back goodwill amortization, net of tax |                                                    |                                           |      |                    |       |                   | 284 |      |       |      |      |      |       |   | 852   |     
|                                           |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |     
|                                           |                                                    | Adjusted net income                       |       | $                  | 2,677 |                   |     | $    | 1,048 |      |       | $    | 7,142 |   |       | $    | 2,526 | 
|                                           |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |     
|Basic earnings per share:                  |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |     
|                                           | As reported net income per share                   |                                           | $     | 0.60               |       |                   | $   | 0.25 |       |      | $     | 1.83 |       |   | $     | 0.55 |      
|                                           | Goodwill amortization, net of tax                  |                                           |       |                   |       |                   |     | 0.09 |       |      |       |     |       |   |       | 0.28 |      
|                                           |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |     
|                                           |                                                    | Adjusted basic earnings per share         |       | $                  | 0.60  |                   |     | $    | 0.34  |      |       | $    | 1.83  |   |       | $    | 0.83  | 
|                                           |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |     
|Earnings per share assuming dilution:      |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |     
|                                           | As reported net income per share
assuming dilution |                                           | $     | 0.53               |       |                   | $   | 0.22 |       |      | $     | 1.61 |       |   | $     | 0.48 |      
|                                           | Goodwill amortization, net of tax                  |                                           |       |                   |       |                   |     | 0.08 |       |      |       |     |       |   |       | 0.25 |      
|                                           |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |     
|                                           |                                                    | Adjusted diluted earnings per share       |       | $                  | 0.53  |                   |     | $    | 0.30  |      |       | $    | 1.61  |   |       | $    | 0.73  | 
|                                           |                                                    |                                           |       |                    |       |                   |     |      |       |      |       |      |       |   |       |     



|8. |  | On December 5, 2001, the Company completed a private placement of 727,000
shares of its voting common stock, $0.10 par value per share. The
transaction generated net proceeds of $10.3 million. In conjunction with
this transaction, the Company issued to the lead placement agent a warrant
to purchase 36,350 shares of voting common stock at a price of $18.60 per
share. During the quarter ended April 30, 2002, 121,636 shares of common
stock were issued upon the exercise of stock options previously issued,
generating net proceeds of $1.1 million. Year to date, 589,972 shares of
common stock were issued upon the exercise of warrants and options issued
previously, generating net proceeds of $4.4 million.                                                                                                      
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|9. |  | During the quarter ended January 31, 2002, the Company repaid in full its
$2.75 million senior term loan with International Nederlanden (U.S.)
Capital Corporation and its $15 million senior subordinated note with
Nomura Holding America, Inc. (Nomura), primarily using proceeds from
stock issuances and cash generated from operations. The Company also
cancelled its $6.5 million revolving line of credit with ING and its GBP
145,000 line of credit for the Northern Ireland operations, which enabled
the Company to release previously restricted cash. The Company recorded
an extraordinary loss on debt extinguishment of $645,000, net of $413,000
of related tax benefit. This loss consisted of unamortized debt discount
and unamortized deferred financing fees relating to the ING and Nomura
credit facilities.
|  
|   |  | On January 31, 2002, the Company obtained a $20 million senior revolving
credit loan and acquisition line from Fleet National Bank (Fleet). The
Fleet line expires on November 30, 2004. The Company deferred $465,000 of
financing fees relating to the new credit facility, which will be
amortized over the life of the loan. The Company has no outstanding debt
at April 30, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                               

9



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q



|10. |  | In April 2002, the FASB issued SFAS No. 145 Recission of FASB Statements
No. 4, 44, and 62, Amendment of FASB Statement No. 13, and Technical
Corrections (SFAS No. 145) which, in most circumstances, will require
gains and losses on extinguishments of debt to be classified as income or
loss from continuing operations rather than as extraordinary items as
previously required under SFAS No. 4. The Company will adopt the new
standard effective August 1, 2002, and anticipates that, upon adoption,
the extraordinary loss recorded as a result of the Companys early
extinguishment of debt will be reclassified to loss from continuing
operations.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 2.   Managements Discussion and Analysis of Financial Condition and Results of Operations

The Quarter in Review

MMTs net income increased 155.4% for the quarter ended April 30, 2002 from the
adjusted second quarter of the prior year on revenues of $22.3 million. Net
income was $2.7 million ($0.60 basic and $0.53 diluted earnings per share) as
compared to an adjusted net income of $1.0 million ($0.34 basic and $0.30
diluted earnings per share) for the third quarter last year. For comparative
purposes, last years reported net income was adjusted to reflect the pro forma
impact of SFAS No. 142, Goodwill and Other Intangible Assets, which the
Company adopted effective August 1, 2001. This allowed the Company to stop
amortizing its excess of cost over net assets acquired. The adoption of this
standard in the first quarter of fiscal 2002 had the impact of reducing
quarterly amortization expense by approximately $284,000 (or approximately
$0.08 per diluted share). See Note 7 of the Notes to Consolidated Financial
Statements, incorporated herein by reference, for additional information on the
adoption of SFAS No. 142.

On a year to date basis, net income for the nine months ended April 30, 2002
was $7.1 million ($1.83 basic and $1.61 diluted earnings per share) on revenues
of $62.0 million. Excluding the extraordinary loss, net income was $7.8
million ($2.00 basic and $1.75 diluted earnings per share). This compares to
adjusted net income of $2.5 million ($0.83 basic and $0.73 diluted earnings per
share) on revenues of $41.8 million for the nine months ended April 30, 2001.

Revenues of MMTs two business segments and total gross profit for the three
and nine-month periods ended April 30, 2002 and 2001 are as follows:

|                             |                    |      |                    |        |                   |      |        |        |  |   |        |        |  |   |        |        | 
|---------------------------- | ------------------ | ---- | ------------------ | ------ | ----------------- | ---- | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                             |                    |      | Three Months Ended |        | Nine Months Ended
|                             |                    |      | April 30,          |        | April 30,        
|($ in thousands)             |                    | 2002 |                    | 2001   |                   | 2002 |        | 2001  
|                             |                    |      |                    |        |                   |      |        |       
|Pharmaceutical Systems:      |                    |      |                    |        |                   |      |        |        |  |   |        |        |  |   |        |       
|                             | Commercial Systems |      | $                  | 10,535 |                   |      | $      | 10,305 |  |   | $      | 29,651 |  |   | $      | 24,323 | 
|                             | Government Systems |      |                    | 9,798  |                   |      |        | 3,681  |  |   |        | 28,993 |  |   |        | 15,664 | 
|                             |                    |      |                    |        |                   |      |        |        |  |   |        |        |  |   |        |       
|Total Pharmaceutical Systems |                    |      | 20,333             |        |                   |      | 13,986 |        |  |   | 58,644 |        |  |   | 39,987 |       
|Cardiopulmonary Systems      |                    |      | 1,937              |        |                   |      | 788    |        |  |   | 3,361  |        |  |   | 1,794  |       
|                             |                    |      |                    |        |                   |      |        |        |  |   |        |        |  |   |        |       
|Total Revenues               |                    |      | 22,270             |        |                   |      | 14,774 |        |  |   | 62,005 |        |  |   | 41,781 |       
|                             |                    |      |                    |        |                   |      |        |        |  |   |        |        |  |   |        |       
|Gross Profit                 |                    | $    | 10,152             |        |                   | $    | 6,125  |        |  | $ | 29,527 |        |  | $ | 17,200 |       
|                             |                    |      |                    |        |                   |      |        |        |  |   |        |        |  |   |        |       
|Gross Profit %               |                    |      | 45.6               | %      |                   |      | 41.5   | %      |  |   | 47.6   | %      |  |   | 41.2   | %     
|EBITDA (1)                   |                    | $    | 5,642              |        |                   | $    | 3,093  |        |  | $ | 17,617 |        |  | $ | 8,231  |       
|                             |                    |      |                    |        |                   |      |        |        |  |   |        |        |  |   |        |       

(1)  EBITDA represents operating income plus or minus other income (expense)
and plus depreciation and amortization. EBITDA is not a measure of performance
under generally accepted accounting principles, but is presented to provide
additional information related to operating results. EBITDA should not be
considered in isolation or as a substitute for other measures of financial
performance or liquidity under generally accepted accounting principles. While
EBITDA is frequently used as a measure of operations and the ability to meet
debt service requirements, it is not necessarily comparable to other similarly
titled captions of other companies due to potential inconsistencies in the
method of calculation.

10



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

Commercial Systems revenue for the quarter ended April 30, 2002 was $10.5
million, a slight increase from the $10.3 million in the comparable prior year
period. Demand for the Companys EpiPen product remains strong, and the
pharmaceutical manufacturing and R&D service business has maintained its
volume. The third quarter of the prior year included the introduction of the
EpiPen 2-Pak, which generated $3.4 million in revenues. These initial revenues
reflected sales which were primarily to stock the product with retailers.
Excluding these revenues from prior year, the current quarter Commercial
Systems sales increased more than 20%.

Year to date, Commercial Systems revenue was $29.7 million, $5.3 million higher
than the first nine months of last year, reflecting a 23.4% increase in EpiPen
sales and a 9.2% increase in pharmaceutical manufacturing and R&D services
revenue.

Government Systems revenues were $9.8 million in the quarter ended April 30,
2002 compared to $3.7 million in the third quarter of fiscal 2001, an increase
of 166.2%. Military revenues (DoD and foreign government) were $8.6 million
for the quarter ended April 30, 2002, an increase of 137.1% from the same
period last year. DoD revenues were 115.5% higher than the same quarter last
year, reflecting the heightened military readiness, while foreign government
revenues increased 295.4% for the quarter due to the timing of procurements by
foreign military customers. Homeland Security sales were $1.2 million for the
three months ended April 30, 2002 versus $55,000 for the three month period
ended April 30, 2001, and are projected to approach $8 million for the year.
This dramatic increase reflects shipments of nerve agent antidotes and other
military auto-injector products to state and local first responders under the
Metropolitan Medical Response System (MMRS), and to other non-military
agencies, such as the Department of Health and Human Services (HHS), as a
response to the terrorist attacks of September 11, 2001.

On a year to date basis, Government Systems revenues were $29.0 million for the
nine months ended April 30, 2002, compared to $15.7 million for the same period
last year. The year to date increase reflects increases in Homeland Security
sales as described above, as well as increases in DoD revenues due to the
heightened domestic military readiness, and foreign government revenues due to
the timing of procurements. Overall the Company expects revenue from this unit
will approximate $37 million for the full fiscal year, based on heightened
global military preparedness, increased attention to Homeland Security, and as
a result of the Companys foreign marketing efforts.

Cardiopulmonary Systems revenues were $1.9 million for the three months ended
April 30, 2002 compared to $788,000 for the three months ended April 30, 2001.
Year to date revenues increased to $3.4 million this year from $1.8 million
last year. These increases were primarily due to stronger telemedicine sales
during this quarter and the previous quarter. MMTs distributor of
telemedicine products, SHL Telemedicine Ltd. (SHL), is party to a joint
venture with Philips Medical Systems to market cardiology telemedicine products
and services in targeted markets in Europe. The increased telemedicine
revenues include orders placed as a result of this continued market expansion.
Additionally, on February 8, 2002, SHL announced that it had signed an
agreement to acquire Raytel Medical Corporation (Nasdaq:RTEL), a U.S. provider
of remote cardiac monitoring and testing. SHL has advised Meridian that SHL
plans to use this acquisition as an entry into the U.S. market. Meridian
expects that if successful, this acquisition could result in increased demand
for its telemedicine products.

In March 2002, the Company obtained approval from the FDA to market its PRIME
ECG product in the U.S. The Company then prepared for the U.S. launch of PRIME
ECG by investing in a sales and marketing infrastructure to support the
product. The Company plans to maintain on-going marketing efforts to support
sales, education and promotional activities. A strategy has also been
formulated for product cost-justification and reimbursement. Additionally, the
Company announced the hiring of Mr. Carl J. Rebert as President,
Cardiopulmonary Systems. Mr. Rebert will have overall responsibility for the
segment.

Gross profits increased to 45.6% of revenues during the third quarter of 2002
totaling $10.2 million, and 47.6% year to date. This compares to 41.5% for the
third quarter of the prior year, and 41.2% prior year to date. The increased
gross profit percentage is a result of significantly higher production volume,
production efficiencies, and increased revenues from higher margin sales
involving Commercial, Foreign and Homeland Security product lines. For reasons
discussed above, the Company may not sustain this gross profit margin in future
periods.

11



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

Operating costs were $5.4 million for the three months ended April 30, 2002
compared to $4.0 million incurred in the same period of last year. Adjusting
the third quarter of last year for the adoption of SFAS No. 142, this
represents a $1.7 million, or 45.7% increase. Selling, general and
administrative expenses (SG&A) were 37.8% higher than the same quarter last
year, due to the Companys investment in the marketing infrastructure for PRIME
ECG, and expenses relating to market research and product analysis for
specialty pharmaceuticals. The Company also had increases in R&D expense,
reflecting new product development efforts to support the Companys specialty
pharmaceutical growth strategy. Year to date operating expenses were $14.4
million, compared to an adjusted prior year expense of $11.0 million. As a
percent of revenues, the current quarter and year to date operating expenses
decreased from those of the prior year, adjusted for the adoption of SFAS No.
142.

Interest expense was $39,000 in the third quarter of fiscal 2002 compared to
$650,000 for the same quarter last year. This large decrease reflects the
payoff of all of the Companys debt during the second quarter. Year to date
interest expense of $1.0 million is lower than the $2.1 million of the prior
year, due to lower interest rates, lower average outstanding loan balances, and
the payoff of all of the Companys debt during the second quarter of fiscal
2002.

The provision for income taxes was $2.0 million for the three months ended
April 30, 2002, and $6.2 million year to date, reflecting effective tax rates
of 42.7% and 44.3%, respectively. The Company takes no consolidated tax
benefit from foreign losses, which approximated $133,000 and $1.2 million for
the third quarter and year to date, respectively. U.S. pre-tax income, taxed
at the statutory rate, is higher than the consolidated pre-tax income, which
inflates the effective rate. The effective rate has decreased as compared to
fiscal 2001s effective rate of 52.0% primarily due to the adoption of SFAS No.
142, which resulted in discontinuing the amortization of goodwill, thereby
eliminating a permanent book-to-tax difference, and bringing the effective rate
closer to the statutory rate.

Liquidity and Capital Resources

Total cash as of April 30, 2002 was $10.1 million, an increase of $8.0 million
from July 31, 2001. The Company generated $13.0 million in cash from
operations in the first nine months of fiscal 2002 attributable mostly to net
income, non-cash depreciation and amortization, and higher accounts payable and
other liabilities, offset by higher accounts receivable and inventories.
Investing activities in the first nine months of fiscal 2002 used $1.5 million
of cash for capital additions, offset by the release of restricted cash.
Financing activities used $3.6 million, primarily from the payoff of all of the
Companys credit facilities, offset by the sale of stock through a private
placement, and stock option and warrant exercises. The Company presently has
no outstanding debt, and has obtained a $20 million senior revolving credit
loan and acquisition line from Fleet National Bank.

During the quarter ended April 30, 2002, the Company issued 121,636 shares of
common stock upon the exercise of certain stock options, generating proceeds to
the Company of $1.1 million.

Working capital at April 30, 2002 was $20.0 million, up from $11.7 million at
July 31, 2001. The increase was primarily attributable to higher cash ($8.0
million), higher accounts receivable ($2.9 million), higher inventory ($2.1
million), and lower current portion of long-term debt ($1.3 million), offset by
higher accounts payable and other accrued liabilities ($6.0 million). At April
30, 2002, accounts receivable were $9.8 million, representing 37
days-sales-outstanding, and inventories were $8.9 million representing a
turn-over rate of 5.5 times per year.

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MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

Critical Accounting Policies

Revenue Recognition

The majority of the Companys revenues involve sales of medical products to
commercial, military, and governmental customers. Revenues are recognized as
products are shipped and title has transferred to the customer. In addition,
we earn substantial revenues from the Base Maintenance contract with the DoD.
The Base Maintenance contract calls for production of auto-injectors, the
retention by the Company of key personnel and facilities to assure expertise
for manufacturing auto-injectors, the management of the U.S. Armys Shelf Life
Extension Program, and the pre-stocking of critical components to enhance
readiness and mobilization capability. Revenues from this contract are
recognized ratably over the contract term, with the exception of revenue from
product sales which are recorded upon acceptance by the customer, and revenue
from the component prestocking program which are recognized as the raw
materials have been accepted by the customer and title has passed to the
customer.

Inventory Obsolescence Allowance

In determining the allowance for inventory obsolescence, the Company assesses
the inventory on-hand on a part-by-part basis and makes a judgment regarding
the parts future utilization. Allowances are recorded as deemed appropriate
based on the parts likelihood of use.

Long-Term Asset Impairment

In determining the whether an impairment has occurred, the Company reviews its
long-lived assets, including property, plant and equipment and other intangible
assets, for indicators such as the nature of the asset, historical or future
profitability measurements, the future economic benefit of the assets, as well
as other external market conditions that may be present. If impairment
indicators are present or other factors exist that indicate that the asset may
not be recoverable, the Company determines whether an impairment has occurred
through the use of an undiscounted cash flow analysis. If undiscounted cash
flows are not sufficient to recover the asset carrying amount, a loss is
recognized for the difference between the carrying amount and the estimated
fair value of the asset. Fair value is estimated using discounted cash flow
analysis.

The Company has capitalized software costs related to the development of PRIME
ECG. The Company evaluates capitalized software costs for recoverability
against anticipated future revenues, and writes down or writes off a portion of
the capitalized costs if recoverability is in question.

The Company has excess of cost over net assets acquired (goodwill) related to
each of two reporting units. As required by SFAS No. 142, the Company will
test the value of its goodwill annually by determining whether the fair value
of each reporting unit exceeds the carrying amount of its net assets, including
goodwill. Any impairment that results from applying the methodology required
by SFAS No. 142 will be recorded as a charge against operations.

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MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

ITEM 3.   Quantitative and Qualitative Disclosure About Market Risk

The Companys earnings are affected by fluctuations in the value of the U.S.
dollar, as compared to foreign currencies, as a result of transactions in
foreign markets. At April 30, 2002, the result of a uniform 10% strengthening
or weakening in the value of the dollar relative to the currencies in which the
Companys transactions are denominated would have resulted in a $123,000
increase or decrease, respectively, in operating income for the nine months
ended April 30, 2002. This calculation assumes that each exchange rate would
change in the same direction relative to the U.S. dollar. In addition to the
direct effects of changes in exchange rates, which change the dollar value of
the resulting sales, changes in exchange rates also affect the volume of sales
or the foreign currency sales price as competitors services become more or
less attractive. The Companys sensitivity analysis of the effects of changes
in foreign currency exchange rates does not factor in a potential change in
sales levels or local currency prices.

PART II  OTHER INFORMATION

ITEM 6.   Exhibits and Reports on Form 8-K:



|(a) |  | Exhibits                                                                                                                
|--- |  | ------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Exhibit 10.39 Change of Control Agreement between the Company and Mr. Carl J. Rebert dated
May 6, 2002. Filed herewith.*
|   
|    |  | * Management contract, compensatory plan or arrangement.                                                                
|   
|(b) |  | Reports on Form 8-K                                                                                                     
|   
|    |  | No reports on Form 8-K were filed during the three months ended April 30,
2002.                                         

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MERIDIAN MEDICAL TECHNOLOGIES, INC.
FORM 10-Q

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.



|             |  |                                     |  |                              
|------------ |  | ----------------------------------- |  | -----------------------------
|             |  | MERIDIAN MEDICAL TECHNOLOGIES, INC.
|             |  |                                     |  | Registrant                   
|June 4, 2002 |  | By:                                 |  | /S/ JAMES H. MILLER          
|             |  |                                     |  |                              
|Date         |  |                                     |  | James H. Miller              
|             |  |                                     |  | President and                
|             |  |                                     |  | Chief Executive Officer      
|             |  |                                     |  | (Principal Executive Officer)
|June 4, 2002 |  | By:                                 |  | /S/ DENNIS P. OBRIEN        
|             |  |                                     |  |                              
|Date         |  |                                     |  | Dennis P. OBrien            
|             |  |                                     |  | Vice President-Finance       
|             |  |                                     |  | and Chief Financial Officer  
|             |  |                                     |  | (Principal Financial and     
|             |  |                                     |  | Accounting Officer)          

15