##### 



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 January 31, 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 February 28, 2002
|                             |  |  |                                    
|Common Stock, $.10 par value |  |  | 4,393,985 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                          |  |         
|                               |  | January 31, 2002 and July 31, 2001                         |  | 4       
|                              
|                               |  | Consolidated Statements of Income for                      |  |         
|                               |  | the Three and Six Months Ended January 31, 2002 and 2001   |  | 5       
|                              
|                               |  | Consolidated Statements of Cash Flows for                  |  |         
|                               |  | the Six Months Ended January 31, 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 |  | 13      
|                              
|PART II.  OTHER INFORMATION    |  |                                                           
|                              
|ITEM 2                         |  | Changes in Securities and Use of Proceeds                  |  | 14      
|                              
|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 upon receipt of FDA approval, expects to market in
the U.S., a proprietary electrocardiac mapping system technology, the PRIME
ECG.

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 $38.3 million for the six
months ended January 31, 2002, accounting for 95% and 96%, respectively, 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 Cardiopulmonary Systems segment, which accounted for 5% and 4% of
Meridians revenues in its fiscal year ended July 31, 2001 and the six months
ended January 31, 2002, respectively, includes the PRIME ECG and its
telemedicine business. The telemedicine business is currently the principal
source of revenues in the Cardiopulmonary Systems segment. If successfully
introduced, the Companys new PRIME ECG product 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. Based upon results from
its multi-center clinical trial completed in May 2001, Meridian filed a 510(k)
application with the United States Food and Drug Administration (FDA) in July
2001 for clearance to market PRIME ECG in the U.S. FDA clearance is
anticipated to be received early in calendar 2002, with marketing to commence
immediately afterwards. The Company introduced PRIME ECG in certain countries
outside the United States in 2000, having received 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; 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)

|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |          |         |        |        | 
|--------------------- | --------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------------------------------------ | ------- | ----------- | ------ | -------- | ------- | ------ | ------ | 
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         | January 31, |        | July 31,
|                      |                                                                                               | 2002                                                                                                                                |                                   | 2001                                
|                      |                                                                                               |                                                                                                                                     |                                   |                                     
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         | (unaudited) |        |          |         |       
|Assets                |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|Current assets:       |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      | Cash and cash equivalents                                                                     |                                                                                                                                     | $                                 | 5,345                                |         |             | $      | 2,167    |        
|                      | Restricted cash                                                                               |                                                                                                                                     |                                   |                                     |         |             |        | 291      |        
|                      | Receivables, less allowances of $222 and $68, respectively                                    |                                                                                                                                     |                                   | 9,489                                |         |             |        | 6,834    |        
|                      | Inventories                                                                                   |                                                                                                                                     |                                   | 9,076                                |         |             |        | 6,787    |        
|                      | Deferred income taxes                                                                         |                                                                                                                                     |                                   | 1,829                                |         |             |        | 1,829    |        
|                      | Other current assets                                                                          |                                                                                                                                     |                                   | 798                                  |         |             |        | 705      |        
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               |                                                                                                                                     | Total current assets              |                                      |         | 26,537      |        |          |         | 18,613 |       
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      | Property, plant and equipment                                                                 |                                                                                                                                     |                                   | 27,379                               |         |             |        | 26,091   |        
|                      |                                                                                               |                                                                                                                                     | Less  Accumulated depreciation   |                                      |         | (11,006     | )      |          |         | (9,627 | )     
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               |                                                                                                                                     | Net property, plant and equipment |                                      |         | 16,373      |        |          |         | 16,464 |       
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      | Deferred financing fees                                                                       |                                                                                                                                     |                                   | 443                                  |         |             |        | 490      |        
|                      | Capitalized software costs, net                                                               |                                                                                                                                     |                                   | 1,170                                |         |             |        | 1,331    |        
|                      | Excess of cost over net assets acquired, less
amortization of $6,096 and $6,096, respectively |                                                                                                                                     |                                   | 5,266                                |         |             |        | 5,266    |        
|                      | Other intangible assets, less amortization of $2,039 and
$1,911, respectively                 |                                                                                                                                     |                                   | 1,206                                |         |             |        | 1,334    |        
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               |                                                                                                                                     | Total assets                      |                                      | $       | 50,995      |        |          | $       | 43,498 |       
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               |                                                                                                                                     |                                   | Liabilities and Shareholders Equity |         |             |        |          |         |        |        | 
|Current liabilities:  |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               | Accounts payable and other accrued liabilities                                                                                      |                                   | $                                    | 12,147  |             |        | $        | 5,518   |       
|                      |                                                                                               | Note payable to bank                                                                                                                |                                   |                                      |        |             |        |          | 71      |       
|                      |                                                                                               | Customer deposits                                                                                                                   |                                   |                                      | 56      |             |        |          | 75      |       
|                      |                                                                                               | Current portion of long-term debt                                                                                                   |                                   |                                      |        |             |        |          | 1,250   |       
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               |                                                                                                                                     |                                   | Total current liabilities            |         |             | 12,203 |          |         |        | 6,914  | 
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               | Long-term debt  notes payable, net of discount                                                                                     |                                   |                                      |        |             |        |          | 15,813  |       
|                      |                                                                                               | Deferred income taxes                                                                                                               |                                   |                                      | 1,775   |             |        |          | 1,775   |       
|                      |                                                                                               | Other non-current liabilities                                                                                                       |                                   |                                      | 1,185   |             |        |          | 1,250   |       
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               |                                                                                                                                     |                                   | Total liabilities                    |         |             | 15,163 |          |         |        | 25,752 | 
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|Shareholders equity: |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               | Common stock (voting and non-voting)
Par value $.10 per share; 18,000,000 shares
authorized;  4,392,425 and 3,197,088 shares issued |                                   |                                      | 439     |             |        |          | 320     |       
|                      |                                                                                               | Additional capital                                                                                                                  |                                   |                                      | 46,657  |             |        |          | 33,156  |       
|                      |                                                                                               | Accumulated other comprehensive loss  cumulative
translation adjustment                                                            |                                   |                                      | (226    | )           |        |          | (227    | )     
|                      |                                                                                               | Accumulated deficit                                                                                                                 |                                   |                                      | (10,825 | )           |        |          | (15,290 | )     
|                      |                                                                                               | Treasury stock, 30,176 shares at cost                                                                                               |                                   |                                      | (213    | )           |        |          | (213    | )     
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               |                                                                                                                                     |                                   | Total shareholders equity           |         |             | 35,832 |          |         |        | 17,746 | 
|                      |                                                                                               |                                                                                                                                     |                                   |                                      |         |             |        |         
|                      |                                                                                               | Total liabilities and shareholders equity                                                                                          |                                   | $                                    | 50,995  |             |        | $        | 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 |       | Six Months Ended
|                                                                                 |                  |         |        | January 31,        |       | January 31,     
|                                                                                 |                  |         |        | 2002               |       | 2001             |        | 2002 |       | 2001
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |     
|Net sales                                                                        |                  | $       | 24,958 |                    |       | $                | 14,022 |      |       | $    | 39,735 |     |       | $ | 27,007 |      
|Cost of sales                                                                    |                  |         | 12,279 |                    |       |                  | 8,085  |      |       |      | 20,360 |     |       |   | 15,932 |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Gross profit                                                                     |                  |         | 12,679 |                    |       |                  | 5,937  |      |       |      | 19,375 |     |       |   | 11,075 |      
|                                                                                
|Selling, general, and administrative expenses                                    |                  |         | 3,272  |                    |       |                  | 2,601  |      |       |      | 5,512  |     |       |   | 4,568  |      
|Research and development expenses                                                |                  |         | 974    |                    |       |                  | 719    |      |       |      | 1,964  |     |       |   | 1,502  |      
|Depreciation and amortization                                                    |                  |         | 761    |                    |       |                  | 877    |      |       |      | 1,515  |     |       |   | 1,748  |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|                                                                                 |                  |         | 5,007  |                    |       |                  | 4,197  |      |       |      | 8,991  |     |       |   | 7,818  |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Operating income                                                                 |                  |         | 7,672  |                    |       |                  | 1,740  |      |       |      | 10,384 |     |       |   | 3,257  |      
|                                                                                
|Other expense:                                                                   |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|                                                                                 | Interest expense |         |        | 374                |       |                  |        | 732  |       |      |        | 985 |       |   |        | 1,433 |      
|                                                                                 | Other expense    |         |        | 17                 |       |                  |        | 23   |       |      |        | 83  |       |   |        | 24    |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|                                                                                 |                  |         | 391    |                    |       |                  | 755    |      |       |      | 1,068  |     |       |   | 1,457  |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Income before income taxes and extraordinary
loss                                |                  |         | 7,281  |                    |       |                  | 985    |      |       |      | 9,316  |     |       |   | 1,800  |      
|                                                                                
|Provision for income taxes                                                       |                  |         | 3,329  |                    |       |                  | 500    |      |       |      | 4,206  |     |       |   | 890    |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Income before extraordinary loss                                                 |                  |         | 3,952  |                    |       |                  | 485    |      |       |      | 5,110  |     |       |   | 910    |      
|                                                                                
|Extraordinary loss on debt extinguishment
(net of an income tax benefit of $413) |                  |         | 645    |                    |       |                  |       |      |       |      | 645    |     |       |   |       |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Net income                                                                       |                  | $       | 3,307  |                    |       | $                | 485    |      |       | $    | 4,465  |     |       | $ | 910    |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Earnings per common share:                                                       |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Income before extraordinary loss                                                 |                  | $       | .97    |                    |       | $                | .16    |      |       | $    | 1.41   |     |       | $ | .30    |      
|Extraordinary loss                                                               |                  |         | .16    |                    |       |                  |       |      |       |      | .18    |     |       |   |       |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Net income per common share                                                      |                  | $       | .81    |                    |       | $                | .16    |      |       | $    | 1.23   |     |       | $ | .30    |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Earnings per common share assuming dilution:                                     |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Income before extraordinary loss                                                 |                  | $       | .86    |                    |       | $                | .14    |      |       | $    | 1.23   |     |       | $ | .26    |      
|Extraordinary loss                                                               |                  |         | .14    |                    |       |                  |       |      |       |      | .15    |     |       |   |       |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Net income per common share assuming dilution                                    |                  | $       | .72    |                    |       | $                | .14    |      |       | $    | 1.08   |     |       | $ | .26    |      
|                                                                                 |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|Weighted average shares:                                                         |                  |         |        |                    |       |                  |        |      |       |      |        |     |       |   |        |      
|                                                                                 |                  | Basic   |        |                    | 4,062 |                  |        |      | 3,037 |      |        |     | 3,634 |   |        |       | 3,023 | 
|                                                                                 |                  | Diluted |        |                    | 4,619 |                  |        |      | 3,520 |      |        |     | 4,142 |   |        |       | 3,568 | 

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)

|                                                     |                                                                                              |                                            |                                                                    |                                        |         |                  |        |      |       |       |        |  
|---------------------------------------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------------------------------------ | -------------------------------------- | ------- | ---------------- | ------ | ---- | ----- | ----- | ------ | -
|                                                     |                                                                                              |                                            |                                                                    |                                        |         | Six Months Ended
|                                                     |                                                                                              |                                            |                                                                    |                                        |         | January 31,     
|                                                     |                                                                                              |                                            |                                                                    |                                        |         | 2002             |        | 2001
|                                                     |                                                                                              |                                            |                                                                    |                                        |         |                  |        |     
|OPERATING ACTIVITIES:                                |                                                                                              |                                            |                                                                    |                                        |         |                  |        |     
|                                                     | Net income                                                                                   |                                            | $                                                                  | 4,465                                  |         |                  | $      | 910  |      
|                                                     | Adjustments to reconcile net income to net cash
provided by (used for) operating activities: |                                            |                                                                    |                                        |         |                  |        |      |      
|                                                     |                                                                                              |                                            | Depreciation and amortization                                      |                                        |         | 1,515            |        |      |       | 1,748 |       
|                                                     |                                                                                              |                                            | Amortization of capitalized software costs                         |                                        |         | 161              |        |      |       | 157   |       
|                                                     |                                                                                              |                                            | Amortization of notes payable discount and
deferred financing fees |                                        |         | 139              |        |      |       | 204   |       
|                                                     |                                                                                              |                                            | Extraordinary loss                                                 |                                        |         | 1,058            |        |      |       |      |       
|                                                     | Changes in assets and liabilities                                                            |                                            |                                                                    |                                        |         |                  |        |      |      
|                                                     |                                                                                              |                                            |                                                                    | Receivables                            |         |                  | (2,655 | )    |       |       | (327   | )
|                                                     |                                                                                              |                                            |                                                                    | Inventories                            |         |                  | (2,289 | )    |       |       | (646   | )
|                                                     |                                                                                              |                                            |                                                                    | Other current assets                   |         |                  | (93    | )    |       |       | 299    |  
|                                                     |                                                                                              |                                            |                                                                    | Accounts payable and other liabilities |         |                  | 6,167  |      |       |       | (3,141 | )
|                                                     | Other                                                                                        |                                            |                                                                    | (92                                    | )       |                  |        | 42   |      
|                                                     |                                                                                              |                                            |                                                                    |                                        |         |                  |        |     
|Net cash provided by (used for) operating activities |                                                                                              |                                            | 8,376                                                              |                                        |         |                  | (754   | )   
|                                                    
|INVESTING ACTIVITIES                                 |                                                                                              |                                            |                                                                    |                                        |         |                  |        |     
|                                                     |                                                                                              | Purchase of fixed assets                   |                                                                    |                                        | (1,288  | )                |        |      | (646  | )    
|                                                     |                                                                                              | Decrease (increase) in restricted cash     |                                                                    |                                        | 291     |                  |        |      | (3    | )    
|                                                     |                                                                                              |                                            |                                                                    |                                        |         |                  |        |     
|Net cash used for investing activities               |                                                                                              |                                            | (997                                                               | )                                      |         |                  | (649   | )   
|                                                    
|FINANCING ACTIVITIES                                 |                                                                                              |                                            |                                                                    |                                        |         |                  |        |     
|                                                     |                                                                                              | Net (payments) proceeds on lines of credit |                                                                    |                                        | (71     | )                |        |      | 1,651 |      
|                                                     |                                                                                              | Payment on long-term debt                  |                                                                    |                                        | (17,750 | )                |        |      | (526  | )    
|                                                     |                                                                                              | Proceeds from issuance of common stock     |                                                                    |                                        | 13,620  |                  |        |      | 303   |      
|                                                     |                                                                                              |                                            |                                                                    |                                        |         |                  |        |     
|Net cash (used for) provided by financing activities |                                                                                              |                                            | (4,201                                                             | )                                      |         |                  | 1,428  |     
|                                                     |                                                                                              |                                            |                                                                    |                                        |         |                  |        |     
|Net increase in cash                                 |                                                                                              |                                            | 3,178                                                              |                                        |         |                  | 25     |     
|Cash and cash equivalents at beginning of period     |                                                                                              |                                            | 2,167                                                              |                                        |         |                  | 79     |     
|                                                     |                                                                                              |                                            |                                                                    |                                        |         |                  |        |     
|Cash and cash equivalents at end of period           |                                                                                              | $                                          | 5,345                                                              |                                        |         | $                | 104    |     
|                                                     |                                                                                              |                                            |                                                                    |                                        |         |                  |        |     

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 January 31, 2002 and July
31, 2001, the results of its operations for the three-month and six-month
periods ended January 31, 2002 and 2001, and its cash flows for the
six-month periods ended January 31, 2002 and 2001. The results of
operations for the three-month and six-month periods ended January 31,
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 quarter, making the previously restricted cash available
for general corporate use.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|3. |  | Inventories as of January 31, 2002 and July 31, 2001 consisted of the
following (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

|                                    |  |                  |        |               |  |   |       |  
|----------------------------------- |  | ---------------- | ------ | ------------- |  | - | ----- | -
|                                    |  | January 31, 2002 |        | July 31, 2001
|                                    |  |                  |        |              
|Components and subassemblies        |  | $                | 5,517  |               |  | $ | 4,750 |  
|Work in process                     |  |                  | 3,433  |               |  |   | 2,378 |  
|Finished goods                      |  |                  | 1,062  |               |  |   | 497   |  
|                                    |  |                  |        |               |  |   |       |  
|                                    |  |                  | 10,012 |               |  |   | 7,625 |  
|Less: inventory valuation allowance |  |                  | (936   | )             |  |   | (838  | )
|                                    |  |                  |        |               |  |   |       |  
|                                    |  | $                | 9,076  |               |  | $ | 6,787 |  
|                                    |  |                  |        |               |  |   |       |  



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

|                                        |  |                    |       |                  |  |      |     |      |  |   |       |  |  |   |     |  
|--------------------------------------- |  | ------------------ | ----- | ---------------- |  | ---- | --- | ---- |  | - | ----- |  |  | - | --- | -
|                                        |  | Three Months Ended |       | Six Months Ended
|                                        |  | January 31,        |       | January 31,     
|                                        |  | 2002               |       | 2001             |  | 2002 |     | 2001
|                                        |  |                    |       |                  |  |      |     |      |  |   |       |  |  |   |    
|Net income                              |  | $                  | 3,307 |                  |  | $    | 485 |      |  | $ | 4,465 |  |  | $ | 910 |  
|Foreign exchange translation adjustment |  |                    | (45   | )                |  |      | 7   |      |  |   | 1     |  |  |   | (31 | )
|                                        |  |                    |       |                  |  |      |     |      |  |   |       |  |  |   |     |  
|Comprehensive income                    |  | $                  | 3,262 |                  |  | $    | 492 |      |  | $ | 4,466 |  |  | $ | 879 |  
|                                        |  |                    |       |                  |  |      |     |      |  |   |       |  |  |   |     |  

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. Amortization,
which is being provided on a 5 year, straight-line basis, totaled $81,000
and $161,000 for the three and six months ended January 31, 2002,
respectively, and is included in cost of sales. 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 will begin when the enhancements are available for sale.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|6. |  | Segment information is as follows (in thousands, except percentage
information):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

|                           |                         |                          |   |                    |        |                  |   |        |        |      |   |        |        |   |   |        |        |  
|-------------------------- | ----------------------- | ------------------------ | - | ------------------ | ------ | ---------------- | - | ------ | ------ | ---- | - | ------ | ------ | - | - | ------ | ------ | -
|                           |                         |                          |   | Three Months Ended |        | Six Months Ended
|                           |                         |                          |   | January 31,        |        | January 31,     
|                           |                         |                          |   | 2002               |        | 2001             |   | 2002   |        | 2001
|                           |                         |                          |   |                    |        |                  |   |        |        |     
|Revenues:                  |                         |                          |   |                    |        |                  |   |        |        |      |   |        |        |   |   |       
|                           | Pharmaceutical systems  |                          | $ | 24,223             |        |                  | $ | 13,476 |        |      | $ | 38,311 |        |   | $ | 26,001 |       
|                           | Cardiopulmonary systems |                          |   | 735                |        |                  |   | 546    |        |      |   | 1,424  |        |   |   | 1,006  |       
|                           |                         |                          |   |                    |        |                  |   |        |        |      |   |        |        |   |   |       
|                           |                         | Total revenues           |   | $                  | 24,958 |                  |   | $      | 14,022 |      |   | $      | 39,735 |   |   | $      | 27,007 |  
|                           |                         |                          |   |                    |        |                  |   |        |        |      |   |        |        |   |   |       
|Operating income (loss):   |                         |                          |   |                    |        |                  |   |        |        |      |   |        |        |   |   |       
|                           | Pharmaceutical systems  |                          | $ | 8,796              |        |                  | $ | 2,619  |        |      | $ | 12,246 |        |   | $ | 4,995  |       
|                           | Cardiopulmonary systems |                          |   | (1,124             | )      |                  |   | (879   | )      |      |   | (1,862 | )      |   |   | (1,738 | )     
|                           |                         |                          |   |                    |        |                  |   |        |        |      |   |        |        |   |   |       
|                           |                         | Total operating income   |   | $                  | 7,672  |                  |   | $      | 1,740  |      |   | $      | 10,384 |   |   | $      | 3,257  |  
|                           |                         |                          |   |                    |        |                  |   |        |        |      |   |        |        |   |   |       
|Operating income (loss) %: |                         |                          |   |                    |        |                  |   |        |        |      |   |        |        |   |   |       
|                           | Pharmaceutical systems  |                          |   | 36.3               | %      |                  |   | 19.4   | %      |      |   | 32.0   | %      |   |   | 19.2   | %     
|                           | Cardiopulmonary systems |                          |   | (152.9             | %)     |                  |   | (161.0 | %)     |      |   | (130.8 | %)     |   |   | (172.8 | %)    
|                           |                         |                          |   |                    |        |                  |   |        |        |      |   |        |        |   |   |       
|                           |                         | Total operating income % |   |                    | 30.7   | %                |   |        | 12.4   | %    |   |        | 26.1   | % |   |        | 12.1   | %
|                           |                         |                          |   |                    |        |                  |   |        |        |      |   |        |        |   |   |       



|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 either a change in accounting principle (with respect to the
transitional impairment test conducted within six months of adoption) or
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 six
months ended January 31, 2002 was $64,000 and $128,000, 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 completed its transitional impairment test of its goodwill
(excess of cost over net assets) balance as of January 31, 2002. The
first step of the impairment test identifies potential impairment and
compares the fair value of the reporting unit with its carrying amount,
including goodwill. The Company has two reporting units, Pharmaceutical
Systems and Cardiopulmonary Systems. As of January 31, 2002, the
Pharmaceutical Systems unit has $4,725,000 of net goodwill, while the
Cardiopulmonary Systems unit has $541,000 of net goodwill. There were no
changes in the goodwill balances during the year. The results of the
impairment test indicated that there was no impairment and therefore the
Company does not need to perform the second step of the impairment test,
which would have required the Company to measure the amount of the
impairment loss, if any. 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 |       | Six Months Ended
|                                           |                                                    |                                           |       | January 31,        |       | January 31,     
|                                           |                                                    |                                           |       | 2002               |       | 2001             |     | 2002 |      | 2001
|                                           |                                                    |                                           |       |                    |       |                  |     |      |      |     
|Reported income before extraordinary loss  |                                                    | $                                         | 3,952 |                    |       | $                | 485 |      |      | $    | 5,110 |      |       | $ | 910 |     
|Add back goodwill amortization, net of tax |                                                    |                                           |      |                    |       |                  | 284 |      |      |      |      |      |       |   | 568 |     
|                                           |                                                    |                                           |       |                    |       |                  |     |      |      |      |       |      |       |   |     |     
|                                           |                                                    | Adjusted income before
extraordinary loss |       | $                  | 3,952 |                  |     | $    | 769  |      |       | $    | 5,110 |   |     | $    | 1,478 | 
|                                           |                                                    |                                           |       |                    |       |                  |     |      |      |      |       |      |       |   |     |     
|Reported net income                        |                                                    | $                                         | 3,307 |                    |       | $                | 485 |      |      | $    | 4,465 |      |       | $ | 910 |     
|Add back goodwill amortization, net of tax |                                                    |                                           |      |                    |       |                  | 284 |      |      |      |      |      |       |   | 568 |     
|                                           |                                                    |                                           |       |                    |       |                  |     |      |      |      |       |      |       |   |     |     
|                                           |                                                    | Adjusted net income                       |       | $                  | 3,307 |                  |     | $    | 769  |      |       | $    | 4,465 |   |     | $    | 1,478 | 
|                                           |                                                    |                                           |       |                    |       |                  |     |      |      |      |       |      |       |   |     |     
|Basic earnings per share:                  |                                                    |                                           |       |                    |       |                  |     |      |      |      |       |      |       |   |     |     
|                                           | As reported net income per share                   |                                           | $     | 0.81               |       |                  | $   | 0.16 |      |      | $     | 1.23 |       |   | $   | 0.30 |      
|                                           | Goodwill amortization, net of tax                  |                                           |       |                   |       |                  |     | 0.09 |      |      |       |     |       |   |     | 0.19 |      
|                                           |                                                    |                                           |       |                    |       |                  |     |      |      |      |       |      |       |   |     |     
|                                           |                                                    | Adjusted basic earnings per share         |       | $                  | 0.81  |                  |     | $    | 0.25 |      |       | $    | 1.23  |   |     | $    | 0.49  | 
|                                           |                                                    |                                           |       |                    |       |                  |     |      |      |      |       |      |       |   |     |     
|Earnings per share assuming dilution:      |                                                    |                                           |       |                    |       |                  |     |      |      |      |       |      |       |   |     |     
|                                           | As reported net income per share
assuming dilution |                                           | $     | 0.72               |       |                  | $   | 0.14 |      |      | $     | 1.08 |       |   | $   | 0.26 |      
|                                           | Goodwill amortization, net of tax                  |                                           |       |                   |       |                  |     | 0.08 |      |      |       |     |       |   |     | 0.15 |      
|                                           |                                                    |                                           |       |                    |       |                  |     |      |      |      |       |      |       |   |     |     
|                                           |                                                    | Adjusted diluted earnings per share       |       | $                  | 0.72  |                  |     | $    | 0.22 |      |       | $    | 1.08  |   |     | $    | 0.41  | 
|                                           |                                                    |                                           |       |                    |       |                  |     |      |      |      |       |      |       |   |     |     



|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. Additionally during the quarter, 290,985 shares of common stock
were issued upon the exercise of warrants and options issued previously,
generating net proceeds of $3.1 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 $443,000 of
financing fees relating to the new credit facility, which will be
amortized over the life of the loan. These fees were not paid as of
January 31, 2002 and have therefore been treated as a non-cash financing
transaction. The Company has no outstanding debt at January 31, 2002.                                                                                                                                                                                                                                                                                                                        

9



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC
FORM 10-Q

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

The Quarter in Review

MMTs net income increased 330.0% for the quarter ended January 31, 2002 from
the adjusted second quarter of the prior year on revenues of $25.0 million.
Excluding the extraordinary loss from debt extinguishment, net income for the
quarter increased 413.9% from the adjusted quarter last year. Net income was
$3.3 million ($0.81 basic and $0.72 diluted earnings per share) as compared to
an adjusted net income of $769,000 ($0.25 basic and $0.22 diluted earnings per
share) for the second quarter last year. Excluding the extraordinary loss, net
income for the quarter was $4.0 million ($0.97 basic and $0.86 diluted earnings
per share). 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).

On a year to date basis, net income for the six months ended January 31, 2002
was $4.5 million ($1.23 basic and $1.08 diluted earnings per share) on revenues
of $39.7 million. Excluding the extraordinary loss, net income was $5.1
million ($1.41 basic and $1.23 diluted earnings per share). This compares to
adjusted net income of $1.5 million ($0.49 basic and $0.41 diluted earnings per
share) on revenues of $27.0 million for the six months ended January 31, 2001.

Revenues of MMTs two business segments and total gross profit for the three
and six -month periods ended January 31, 2002 and 2001 are as follows:

|                             |                    |      |                    |        |                  |      |        |       |  |   |        |        |  |   |        |        | 
|---------------------------- | ------------------ | ---- | ------------------ | ------ | ---------------- | ---- | ------ | ----- |  | - | ------ | ------ |  | - | ------ | ------ | 
|                             |                    |      | Three Months Ended |        | Six Months Ended
|                             |                    |      | January 31,        |        | January 31,     
|($ in thousands)             |                    | 2002 |                    | 2001   |                  | 2002 |        | 2001 
|                             |                    |      |                    |        |                  |      |        |       | 
|Pharmaceutical Systems:      |                    |      |                    |        |                  |      |        |       |  |   |        |        |  |   |        |       
|                             | Commercial Systems |      | $                  | 10,113 |                  |      | $      | 6,168 |  |   | $      | 19,116 |  |   | $      | 14,018 | 
|                             | Government Systems |      |                    | 14,110 |                  |      |        | 7,308 |  |   |        | 19,195 |  |   |        | 11,983 | 
|                             |                    |      |                    |        |                  |      |        |       |  |   |        |        |  |   |        |       
|Total Pharmaceutical Systems |                    |      | 24,223             |        |                  |      | 13,476 |       |  |   | 38,311 |        |  |   | 26,001 |       
|Cardiopulmonary Systems      |                    |      | 735                |        |                  |      | 546    |       |  |   | 1,424  |        |  |   | 1,006  |       
|                             |                    |      |                    |        |                  |      |        |       |  |   |        |        |  |   |        |       
|Total Revenues               |                    |      | 24,958             |        |                  |      | 14,022 |       |  |   | 39,735 |        |  |   | 27,007 |       
|                             |                    |      |                    |        |                  |      |        |       |  |   |        |        |  |   |        |       
|Gross Profit                 |                    | $    | 12,679             |        |                  | $    | 5,937  |       |  | $ | 19,375 |        |  | $ | 11,075 |       
|                             |                    |      |                    |        |                  |      |        |       |  |   |        |        |  |   |        |       
|Gross Profit %               |                    |      | 50.8               | %      |                  |      | 42.3   | %     |  |   | 48.8   | %      |  |   | 41.0   | %     
|                            
|EBITDA (1)                   |                    | $    | 8,497              |        |                  | $    | 2,673  |       |  | $ | 11,977 |        |  | $ | 5,138  |       
|                             |                    |      |                    |        |                  |      |        |       |  |   |        |        |  |   |        |       

(1)  EBITDA represents operating income plus or minus other income (expense)
and plus depreciation and amortization. EBITDA is not a measure of performance
or financial condition 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.

Commercial Systems revenue for the quarter ended January 31, 2002 was $10.1
million, $3.9 million higher than in the comparable prior year period. The
64.0% increase in revenue resulted from 84.5% higher sales of EpiPens in the
current quarter compared to the same quarter in the prior year, offset slightly
by a 13.0% decrease in pharmaceutical manufacturing and R&D services revenue.
The increase in EpiPen was due to a number of factors including demand growth,
an increase in the retail inventory requirements, and the discontinuation of a
competitive product. R&D revenue is subject to fluctuations in the number and
timing of projects, reflecting its variable nature from period to period.

10



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC
FORM 10-Q

Year to date, Commercial Systems revenue was $19.1 million, $5.1 million higher
than the first six months of last year, reflecting a 39.0% increase in EpiPen
sales and a 20.7% increase in pharmaceutical manufacturing and R&D services
revenue.

Government Systems revenues were $14.1 million in the quarter ended January 31,
2002 compared to $7.3 million in the second quarter of fiscal 2001. Homeland
Security sales were $5.4 million for the three months ended January 31, 2002
versus $388,000 for the three month period ended January 31, 2001. 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). These
products are intended to enhance civilian defense against potential chemical
agent terrorist attacks. As the increased level of Homeland Security sales are
a direct result of the terrorist attacks of September 11, 2001, the Company
does not believe that this rate of demand growth will be sustained in future
periods. Military revenues were $8.7 million for the quarter ended January 31,
2002, an increase of 25.6% from the same period last year. DoD revenues were
62.9% higher than the same quarter last year, reflecting the heightened
domestic military readiness, while foreign government revenues decreased 13.4%
for the quarter due to the timing of procurements by the foreign military
customers.

On a year to date basis, Government Systems revenues were $19.2 million for the
six months ended January 31, 2002, compared to $12.0 million for the same
period last year. The year to date increase reflects changes described in the
second quarter above. Overall the Company expects military based revenues will
increase this year as compared to fiscal 2001, based on heightened global
military preparedness, and as a result of the Companys foreign marketing
efforts.

The Company announced during the quarter that the U.S. Army received approval
from the Food and Drug Administration (FDA) for the Armys New Drug Application
(NDA) for its Antidote Treatment Nerve Agent Auto-injector (ATNAA). The ATNAA
utilizes Meridians patented multichambered auto-injector technology and
delivers two antidotes in a single injection while maintaining separation of
the two drugs in both the injector and at the injection site. The development
of the multichambered auto-injector and the subsequent FDA approval were the
result of an ongoing collaboration between Meridian and the United States Army
Medical Research & Materiel Command (USAMRMC) based at Fort Detrick in
Frederick, Maryland. The Company expects that the ATNAA will take the place of
its Mark-I auto-injector in sales to the military. Full-scale, automated
production will be dependent upon satisfactory validation of machinery designed
for this purpose.

Cardiopulmonary Systems revenues were $735,000 for the three months ended
January 31, 2002 compared to $546,000 for the three months ended January 31,
2001. Year to date revenues increased to $1.4 million this year from $1.0
million last year. This increase was primarily due to stronger telemedicine
sales during the 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.

The Company continued to invest in the development of its PRIME ECG sales and
marketing infrastructure in Europe during the quarter. In addition,
preparation is continuing domestically for the U.S. launch of PRIME ECG with
on-going marketing efforts to support sales, education and promotional
activities with physician tested message statements. A strategy is also being
formulated for product cost-justification and reimbursement. A 510(k)
application was submitted to the U.S. FDA in fiscal 2001 for clearance to
market PRIME in the United States. The FDA review is on-going, and the Company
expects to receive clearance in early calendar 2002.

11



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##### 



MERIDIAN MEDICAL TECHNOLOGIES, INC
FORM 10-Q

Gross profits increased to 50.8% of revenues during the second quarter of 2002
totaling $12.7 million, and 48.8% year to date. This compares to 42.3% for the
second quarter of the prior year, and 41.0% prior year to date. The increased
gross profit percentage is a result of significantly higher production volume,
increasing production efficiencies, as well as a favorable product mix, with
increased revenues from higher margin sales involving Commercial and Homeland
Security product lines. For reasons discussed above, the Company may not
sustain this gross profit margin in future periods.

Operating costs were $5.0 million for the three months ended January 31, 2002
compared to $4.2 million incurred in the same period of last year. Adjusting
the second quarter of last year for the adoption of SFAS No. 142, this
represents a $1.1 million, or 28.0% increase. Selling, general and
administrative expenses (SG&A) were 25.8% higher than the same quarter last
year, due to the Companys investment in the marketing infrastructure for PRIME
ECG, expenses relating to market research and product analysis for specialty
pharmaceuticals, and incentives earned for the early achievement of Company
goals. 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 $9.0 million, compared to an
adjusted prior year expense of $7.3 million. As a percent of revenues, the
current quarter and year to date operating expenses decreased from those of the
prior year, adjusted for SFAS No. 142.

Interest expense was $374,000 in the second quarter of fiscal 2002 compared to
$732,000 for the same quarter last year. This large decrease reflects the
payoff of all of the Companys debt during the current quarter. Year to date
interest expense of $1.0 million is lower than the $1.4 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 $3.3 million for the three months ended
January 31, 2002, and $4.2 million year to date, reflecting effective tax rates
of 45.7% and 45.1%, respectively. The Company takes no consolidated tax
benefit from the foreign losses, which approximated $537,000 and $1.1 million
for the second 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.

12



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MERIDIAN MEDICAL TECHNOLOGIES, INC
FORM 10-Q

Liquidity and Capital Resources

Total cash as of January 31, 2002 was $5.3 million, an increase of $3.2 million
from July 31, 2001. The Company generated $8.4 million in cash from operations
in the first six 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 six months of fiscal 2002 used $1.0 million of cash for
capital additions, offset by the release of restricted cash. Financing
activities used $4.2 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 January 31, 2002, the Company issued 727,000 shares of
common stock upon the completion of a private placement transaction, generating
net proceeds to the Company of $10.3 million. The Company also issued 290,985
shares of common stock upon the exercise of certain stock options and warrants,
generating proceeds to the Company of $3.1 million. The proceeds from these
transactions were used to repay the Companys outstanding debt in full.

Working capital at January 31, 2002 was $14.3 million, up from $11.7 million at
July 31, 2001. The increase was primarily attributable to higher cash ($3.2
million), higher accounts receivable ($2.7 million), higher inventory ($2.3
million), and lower current portion of long-term debt ($1.3 million), offset by
higher accounts payable and other accrued liabilities ($6.6 million). At
January 31, 2002, accounts receivable were $9.5 million, representing 38
days-sales-outstanding, and inventories were $9.1 million representing a
turn-over rate of 5.1 times per year.

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 January 31, 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 $110,000 increase or decrease, respectively, in operating income
for the six months ended January 31, 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.

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MERIDIAN MEDICAL TECHNOLOGIES, INC
FORM 10-Q

PART II  OTHER INFORMATION

ITEM 2.Changes in Securities and Use of Proceeds

During the quarter ended January 31, 2002, the Company issued 727,000 shares of
common stock upon the completion of a private placement transaction, generating
gross proceeds to the Company of $11.3 million, and net proceeds of $10.3
million. Additionally, the Company issued to the lead placement agent a
warrant to purchase 36,350 shares of common stock at an exercise price of
$18.60 per share. These 763,350 shares were registered for resale on a Form
S-3 filed December 18, 2001. The shares were issued pursuant to an exemption
by reason of Section 4(2) under the Securities Act of 1933, as amended (the
Securities Act) and Regulation D thereunder.

During the quarter ended January 31, 2002, the Company issued an aggregate of
267,822 shares of common stock upon the exercise of warrants at an exercise
price of $11.00 per share. The Company received aggregate proceeds of $2.9
million from the warrant exercises. The shares were issued pursuant to an
exemption by reason of Section 4(2) under the Securities Act. Additionally
during the quarter, 23,163 shares of common stock were issued upon the exercise
of stock options, generating proceeds of $241,000. The proceeds from the
warrant and option exercises and the private placement were used to repay the
Companys outstanding debt in full.

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

The Company held its annual meeting of stockholders on December 6, 2001 (the
Annual Meeting). A total of 2,439,262 shares of common stock were
represented at the Annual Meeting in person or by proxy. The stockholders
voted to reelect Bruce M. Dresner and David L. Lougee as directors with
2,437,853 and 2,437,752 votes cast for each nominee, respectively, and 1,409
and 1,510 votes withheld, respectively. James H. Miller, Robert G. Foster and
Thomas L. Anderson remained in office as continuing directors following the
meeting. The stockholders also voted to ratify the selection by the Board of
Directors of Ernst & Young LLP as independent auditors of the Company for the
fiscal year with 2,424,537 votes cast for ratification, 13,200 votes against,
and 1,525 abstentions or broker-nonvotes.

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



|(a) |  | Exhibits
|--- |  | --------

|      |  |                                                                                                                     
|----- |  | --------------------------------------------------------------------------------------------------------------------
|10.37 |  | Loan and Security Agreement between the Company and Fleet
National Bank dated January 30, 2002. Filed herewith.     
|     
|10.38 |  | Independent Consultant Agreement between the Company and
Thomas L. Anderson dated December 6, 2001. Filed herewith.*



|    |  | *Management contract, compensatory plan or arrangement.                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Reports on Form 8-K                                                                                                                             
|   
|    |  | On December 13, 2001, the Company filed a Form 8-K reporting the December
5, 2001 completion of the Companys private placement of common stock.

14



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MERIDIAN MEDICAL TECHNOLOGIES, INC
FORM 10-Q

SIGNATURES

Pursuant to the requirement 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                                                                                             
|                 
|                 
|                 
|March 8, 2002Date |  | By:      /s/ JAMES H. MILLERJames H. Miller
President and
Chief Executive Officer
(Principal Executive Officer)                                
|                 
|                 
|                 
|March 8, 2002Date |  | By:      /s/ DENNIS P. OBRIENDennis P. OBrien
Vice PresidentFinance
and Chief Financial Officer
(Principal Financial and
Accounting Officer)

15