<PAGE>

                                   UNITED  STATES
                       SECURITIES  AND  EXCHANGE  COMMISSION
                              WASHINGTON,  D.C.  20549
                                          
                                     FORM  10-Q

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

For the quarterly period ended                MARCH 31, 1998                    
                               ----------------------------------------------

                                         or

/ /   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
                                          
For the transition period from                       to
                               ----------------------    -----------------------

Commission File Number:                          0-21330                        
                       ---------------------------------------------------------

                         AVECOR  CARDIOVASCULAR  INC.                  
--------------------------------------------------------------------------------
          (Exact name of registrant as specified in its charter)

           MINNESOTA                                41-1695729             
------------------------------------     ---------------------------------------
   (State or other jurisdiction of       (I.R.S. Employer Identification No.)
    incorporation or organization)

         7611 NORTHLAND DRIVE,   MINNEAPOLIS,  MINNESOTA            55428
--------------------------------------------------------------------------------
           (Address of principal executive offices)               (Zip Code)


                                (612) 391-9000                              
--------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)

     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 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.

                                             /X/  Yes    / /  No

     As of May 1, 1998, there were 8,032,266 shares of the registrant's $.01 par
value Common Stock outstanding.

<PAGE>

<TABLE>
<CAPTION>
                                       INDEX

Part I.      FINANCIAL  INFORMATION                                               Page(s)
                                                                                  -------
<S>                                                                               <C>
     Item 1. Financial Statements
         
             Consolidated Balance Sheets as of March 31, 1998 (Unaudited)
             and December 31, 1997                                                      3
         
             Consolidated Statements of Operations for the three months ended
             March 31, 1998 and 1997  (Unaudited)                                       4
         
             Consolidated Statements of Cash Flows for the three months ended
             March 31, 1998 and 1997  (Unaudited)                                       5
         
             Notes to Consolidated Financial Statements (Unaudited)                6 -  8

     Item 2. Management's Discussion and Analysis of Financial Condition and
             Results of Operations                                                 9 - 15
         
     Item 3. Quantitative and Qualitative Disclosures About Market Risk                15

Part II.     OTHER  INFORMATION

     Item 1. Legal Proceedings.                                                        16

     Item 2. Changes in Securities and Use of Proceeds.                                16

     Item 3. Defaults Upon Senior Securities.                                          16

     Item 4. Submission of Matters to a Vote of Security Holders.                      16

     Item 5. Other Information.                                                        16

     Item 6. Exhibits and Reports on Form 8-K.                                         16


SIGNATURES                                                                             17

EXHIBIT  INDEX                                                                         18
</TABLE>

                                       2
<PAGE>

PART  I.  FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                           AVECOR CARDIOVASCULAR INC.

                          CONSOLIDATED BALANCE SHEETS
  
                            ----------------------

<TABLE>
<CAPTION>
              ASSETS                                                      
                                                                 March 31,     December 31,
                                                                   1998            1997
                                                                -----------    ------------
<S>                                                             <C>            <C>
Current assets:                                                 (Unaudited)
   Cash and cash equivalents                                    $ 3,087,000     $ 1,215,000
   Short-term investments                                         2,967,000       3,727,000
   Accounts receivable, net                                       9,101,000       8,277,000
   Inventories                                                   10,999,000      10,634,000
   Deferred taxes                                                 1,315,000       1,315,000
   Other current assets                                             410,000         330,000
                                                                -----------    ------------
      Total current assets                                       27,879,000      25,498,000
Property, plant and equipment, net                               16,850,000      16,689,000
Other assets                                                        594,000         572,000
                                                                -----------    ------------
      Total assets                                              $45,323,000     $42,759,000
                                                                -----------    ------------
                                                                -----------    ------------

              LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:                                                       
   Accounts payable                                              $3,508,000     $ 1,978,000
   Accrued expenses                                               3,798,000       3,058,000
   Current portion of long-term debt                                258,000         258,000
                                                                -----------    ------------
      Total current liabilities                                   7,564,000       5,294,000

Deferred grant                                                      146,000         153,000
Long-term debt                                                    4,629,000       4,694,000

Shareholders' equity:
   Serial preferred stock, par value $.01 per share;
      authorized 2,000,000 shares; none issued
   Common stock, par value $.01 per share;
      authorized 20,000,000 shares; issued and
      outstanding shares 8,032,000 and 8,021,000                           
      shares at March 31, 1998 and                                         
      December 31, 1997,  respectively                               80,000          80,000
   Additional paid-in capital                                    30,561,000      30,482,000
   Retained earnings                                              2,156,000       1,936,000
   Cumulative translation adjustments                               187,000         120,000
                                                                -----------    ------------
      Total shareholders' equity                                 32,984,000      32,618,000
                                                                -----------    ------------
      Total liabilities and shareholders' equity                $45,323,000     $42,759,000
                                                                -----------    ------------
                                                                -----------    ------------
</TABLE>
   The accompanying notes are an integral part of the consolidated financial 
                                 statements. 

                                      3
<PAGE>

                                AVECOR CARDIOVASCULAR INC.

                          CONSOLIDATED STATEMENTS OF OPERATIONS
                                       (UNAUDITED)

<TABLE>
<CAPTION>

                                           For the three months ended March 31,
                                           ------------------------------------
                                               1998                    1997
                                           ------------            ------------
<S>                                        <C>                     <C>
Net sales                                   $12,456,000            $12,043,000
Cost of sales                                 7,474,000              7,060,000
                                           ------------            ------------
       Gross profit                           4,982,000              4,983,000

Operating expenses:                                               
   Selling, general and                                           
       administrative                         3,808,000              3,350,000
   Research and development                     831,000              1,102,000
                                           ------------            ------------
       Operating income                         343,000                531,000
                                                                  
   Interest income                               86,000                144,000
   Interest expense                             100,000                 71,000
                                           ------------            ------------
Income before                                                     
   income taxes                                 329,000                604,000
Income tax provision                            109,000                217,000
                                           ------------            ------------
        Net income                             $220,000               $387,000
                                           ------------            ------------
                                           ------------            ------------
Earnings per share:                                               
   Basic                                          $0.03                  $0.05
                                           ------------            ------------
                                           ------------            ------------
   Diluted                                        $0.03                  $0.05
                                           ------------            ------------
                                           ------------            ------------
                                                                  
Weighted average shares outstanding:                              
   Common                                     8,021,000              7,844,000

   Common equivalents:                                            
      Options                                     2,000                134,000
      Warrants                                        -                  2,000
                                           ------------            ------------
   Common and common equivalents              8,023,000              7,980,000
                                           ------------            ------------
                                           ------------            ------------
</TABLE>

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

                                     4
<PAGE>


                           AVECOR CARDIOVASCULAR INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)
<TABLE>
<CAPTION>
                                                                       For the three months ended March 31,
                                                                       ------------------------------------
                                                                           1998                    1997
                                                                       ----------               -----------
<S>                                                                    <C>                      <C>
Cash flows from operating activities:                                                        
  Net income                                                           $  220,000               $   387,000
  Adjustments to reconcile net income to net cash provided by                                
   (used in) operating activities:                                                           
       Depreciation and amortization                                      559,000                   342,000
       Accretion of discount on investments                               (48,000)                 (106,000)
       Changes in operating assets and liabilities:                                            
          Accounts receivable                                            (764,000)               (1,275,000)
          Inventories                                                    (364,000)                  544,000
          Other current assets                                            (76,000)                  110,000
          Accounts payable                                              1,516,000                  (313,000)
          Accrued expenses                                                722,000                  (299,000)
                                                                       ----------               -----------
             Net cash provided by (used in) operating activities        1,765,000                  (610,000)
                                                                       ----------               -----------
                                                                                             
Cash flows from investing activities:                                                        
  Purchase of property, plant and equipment                              (711,000)               (8,698,000)
  Purchase of investments                                                       -                (7,803,000)
  Proceeds upon sale or maturity of short-term investments                808,000                 4,186,000
  Cash and investments restricted as to use                                     -                 3,450,000
  Increase in other assets                                                (20,000)                  (45,000)
                                                                       ----------               -----------
       Net cash provided by (used in) investing activities                 77,000                (8,910,000)
                                                                       ----------               -----------
                                                                                             
Cash flows from financing activities:                                                        
  Net proceeds from sales of common stock                                  79,000                    71,000
  Net proceeds from options exercised                                           -                   529,000
  Borrowings on long-term debt                                                  -                 5,167,000
  Principal payments on long-term debt                                    (65,000)                  (21,000)
                                                                       ----------               -----------
       Net cash provided by financing activities                           14,000                 5,746,000
                                                                       ----------               -----------
                                                                                             
Effect of exchange rates on cash                                           16,000                   (53,000)
                                                                       ----------               -----------
Net increase (decrease) in cash and cash equivalents                    1,872,000                (3,827,000)
                                                                                             
Cash and cash equivalents at beginning of period                        1,215,000                 6,114,000
                                                                       ----------               -----------
Cash and cash equivalents at end of period                             $3,087,000               $ 2,287,000
                                                                       ----------               -----------
                                                                       ----------               -----------
Significant non-cash investing and financing transactions:                                   
  Use of restricted funds for purchase of the U.S. facility                     -               $ 1,000,000
                                                                       ----------               -----------
                                                                       ----------               -----------
</TABLE>

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

                                      5
<PAGE>
                                          
                            AVECOR CARDIOVASCULAR INC.
                                          
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    (Unaudited)
                                          
                            --------------------------


1.   BASIS OF PRESENTATION

     The consolidated financial statements included in this Form 10-Q have been
prepared by AVECOR Cardiovascular Inc. (the Company), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission (SEC). 
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed, or omitted, pursuant to these rules and regulations.  The
year-end balance sheet was derived from audited financial statements, but does
not include all disclosures required by generally accepted accounting
principles.  These unaudited consolidated interim financial statements should be
read in conjunction with the financial statements and related notes included in
the Company's 1997 Annual Report on Form 10-K as filed with the SEC.

     The consolidated interim financial statements presented herein as of 
March 31, 1998 and for the three month periods ended March 31, 1998 and 1997 
reflect, in the opinion of management, all adjustments (which include only 
normal, recurring adjustments) necessary for a fair presentation of financial 
position and the results of operations and cash flows for the periods 
presented.  The results of operations for any interim period are not 
necessarily indicative of results for the full year.

2.   ORGANIZATION

     The Company was incorporated on December 13, 1990.  The Company designs,
develops, manufactures and markets specialty medical devices for heart/lung
bypass surgery and long-term respiratory support.

     The consolidated financial statements include the accounts of AVECOR
Cardiovascular Inc. and its wholly-owned subsidiaries, AVECOR Cardiovascular
Ltd. and AVECOR Foreign Sales Corporation after elimination of all significant
intercompany transactions and accounts.

                                      6
<PAGE>

3.   INVENTORIES

     Inventories consist of the following:

<TABLE>
<CAPTION>
                                March 31,    December 31,
                                  1998           1997
                              -----------    ------------
          <S>                 <C>            <C>
                              (Unaudited)

          Raw materials       $ 3,904,000    $ 3,758,000
          Work-in-process       2,386,000      2,189,000
          Finished goods        4,709,000      4,687,000
                              -----------    ------------
                              $10,999,000    $10,634,000
                              -----------    ------------
                              -----------    ------------
</TABLE>

4.   INDUSTRY SEGMENT INFORMATION

     The Company distributes its products through its direct sales force and
independent sales representatives in the United States, Canada, the United
Kingdom and France.  Additionally, the Company distributes its products through
foreign independent distributors who then market the products directly to
medical institutions.  No one independent distributor or other customer
accounted for 10% or more of the Company's net sales for the three months ended
March 31, 1998 or 1997.

     Total export sales from the U.S. to unaffiliated entities (primarily to
Europe and payable in U.S. dollars) were $1,065,000 and $1,188,000 for the three
months ended March 31, 1998 and 1997, respectively.  Sales to customers located
outside of the United States were approximately 39% and 42% of net sales for the
three month periods ended March 31, 1998 and 1997, respectively.

     At March 31, 1998 and December 31, 1997, consolidated accounts receivable
include $4,694,000 and $4,366,000, respectively, due from customers located
outside of the U.S.

5.   NEW ACCOUNTING STANDARD

     In the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting of Comprehensive Income."  The standard
requires the display and reporting of comprehensive income, which includes all
changes in shareholders' equity with the exception of additional investments by
shareholders or distributions to shareholders.  Comprehensive income for the
Company includes net income and translation which is charged or credited to the
cumulative translation account within shareholders' equity.  Comprehensive
income for the first quarter ended March 31, 1998 and 1997 and the year ended
December 31, 1997 was as follows:

                                      7
<PAGE>

<TABLE>
<CAPTION>
                                           First Quarter Ended       Year Ended
                                                 March 31,           December 31,
                                            1998          1997           1997
                                          --------     ---------     ------------
<S>                                       <C>          <C>           <C>
     Net income                           $220,000     $ 387,000     $1,327,000
                         
     Changes in cumulative translation      67,000      (164,000)      (107,000)
                                          --------     ---------     ------------

     Comprehensive income                 $287,000     $ 223,000     $1,220,000
                                          --------     ---------     ------------
                                          --------     ---------     ------------
</TABLE>

6.   NEW ACCOUNTING PRONOUNCEMENT

     In June 1997, the Financial Accounting Standards Board issued Statement
131, "Disclosures About Segments of an Enterprise and Related Information," a
new standard of reporting information about operating or business segments in
financial statements.  The new standard will be effective for the Company's
annual financial statements in 1998.  Although the Company has not specifically
evaluated what impact, if any, this new standard will have on the Company's
current reporting of operating and business segments, the Company believes it
will continue reporting as one operating and business segment.

7.   PATENT MATTERS
     
     In March 1997, the Company filed suit in U.S. District Court for the
District of Minnesota, seeking to invalidate a newly issued U.S. patent held by
a competing manufacturer of blood oxygenators and other medical devices, and
requesting a determination that the Company's Affinity oxygenator does not
infringe the competitor's patent.  The Company filed suit in response to a
December 1996 letter from the competitor, alleging that the Affinity oxygenator
infringes certain claims under the competitor's patent, and requesting
discussion regarding a possible license agreement.  The Company reviewed the
subject patent and concluded, based on an opinion from its patent counsel, that
none of the claims in the patent are infringed by the Affinity oxygenator, and
that the patent is, in any event, invalid.  On October 6, 1997, the Magistrate
Judge of the U.S. District Court vacated a previous order and granted a stay in
the proceedings, including the suspension of discovery, pending the outcome of
the competitor's request for re-issuance of the aforementioned patent.  The
expense and effort potentially required to bring this action, as well as the
outcome of any counterclaim successfully brought against the Company by the
competitor, could have a material adverse effect on the Company's business,
financial condition and results of operations.  See Part II, Item 1, "Legal
Proceedings".

                                      8
<PAGE>

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

     The following is a discussion of the results of operations and financial
condition for the three month period ended March 31, 1998 compared with the
three month period ended March 31, 1997 and should be read in conjunction with
the Company's Consolidated Financial Statements and Notes thereto.

OVERVIEW

     AVECOR Cardiovascular Inc. (the "Company") develops, manufactures and 
markets specialty medical devices for heart/lung bypass surgery and long-term 
respiratory support.  The Company was incorporated on December 13, 1990, and 
in June 1991, acquired the business and assets and assumed certain 
liabilities of the surgical division of SCIMED Life Systems, Inc. (the 
"Predecessor Business"). On December 1, 1992, the Company acquired AVECOR 
Cardiovascular Ltd. (formerly Cardio Med Ltd.) pursuant to which AVECOR 
Cardiovascular Ltd. became a wholly-owned subsidiary of the Company.  AVECOR 
Cardiovascular Ltd. had formerly been a distributor for the Company in the 
United Kingdom.  In October 1995, the Company opened a sales office in France 
which is organized as a wholly-owned subsidiary of AVECOR Cardiovascular Ltd.

     The assets acquired by the Company from the Predecessor Business included
the Company's line of solid silicone membrane oxygenators.  Since that time, the
Company has engaged in extensive product development, resulting in the
introduction and receipt of regulatory approval from the U.S. Food and Drug
Administration (the "FDA") for the following proprietary products:

<TABLE>
<CAPTION>
                          PRODUCT                                APPROVAL DATE
      ------------------------------------------------------------------------
      <S>                                                        <C>
      MYOtherm cardioplegia delivery system. . . . . . . . . .   October 1991
      Signature custom tubing packs. . . . . . . . . . . . . .   July 1993
      Affinity oxygenator. . . . . . . . . . . . . . . . . . .   November 1993
      Affinity blood reservoirs. . . . . . . . . . . . . . . .   July 1994
      Affinity arterial filter . . . . . . . . . . . . . . . .   October 1995
      MYOtherm XP (improved cardioplegia delivery system). . .   July 1997
      Affinity blood pump. . . . . . . . . . . . . . . . . . .   August 1997
      Affinity oxygenator with Trillium bio-passive surface. .   February 1998

</TABLE>

                                      9
<PAGE>

RESULTS OF OPERATIONS

NET SALES

     Net sales increased 3% to $12,456,000 for the three months ended March 31,
1998 from $12,043,000 for the three months ended March 31, 1997.  This increase
was primarily the result of a higher volume of product shipments of the
Company's Signature custom tubing pack line and the Myotherm cardioplegia line. 
These increases were partially offset by decreases in product shipments of the
Affinity line and the silicone membrane oxygenator line.  Overall, average
prices of product shipments declined slightly when compared to the corresponding
period in 1997, principally due to competitive pressures.

     Sales from the Signature custom tubing pack and Myotherm cardioplegia lines
increased approximately $472,000 and $184,000, respectively.  Sales decreases of
$192,000 and $159,000 associated with the Affinity line and the silicone
membrane oxygenator line, respectively, partially offset these increases.

     During the third quarter of 1997, the Company terminated agreements with
its last remaining United States distributor and its only Canadian distributor. 
These markets are now being served by the Company's direct sales force.  Sales
in the territories formerly represented by these distributors increased
approximately $550,000 in the quarter ended March 31, 1998 as compared to the
quarter ended March 31, 1997.  There can be no assurance that revenues in these
territories will be maintained, improve or decline.

     Revenues from distributors in the continental European countries and Asia
declined approximately $114,000 for the three months ended March 31, 1998 when
compared to the corresponding quarter in 1997.  During the latter half of 1997
and continuing into the first quarter of 1998, currencies in Europe and Asia
have weakened substantially as compared to the U.S. dollar.  The Company
believes that these types of fluctuations in currency exchange rates reduce
demand for the Company's products by increasing the price of the Company's
products in the currency of the countries in which the product is sold.  Given
the inherent uncertainty of exchange rates, the Company cannot predict if these
exchange rate variances will remain constant, reverse or worsen.

     The aforementioned factors impacted all of the Company's product lines. 
The revenue declines discussed above were exceeded by revenue growth in the
Company's other domestic and foreign markets.

     Sales to customers located outside of the United States were approximately
39% and 42% of net sales for the three month periods ended March 31, 1998 and
1997, respectively.

     The Company has continued to experience decreased sales to contract
perfusion groups controlled by certain of its competitors.  Sales to contract
perfusion groups controlled by one of the Company's competitors decreased
$233,000 to $141,000 for the three months ended March 31, 1998 from $364,000 for
the three months ended March 31, 1997.  The Company believes that control of
contract perfusion groups by its competitors will continue to have a negative
impact on the Company's ability to market its products to such groups or to
hospitals or other medical providers that contract with competitor-controlled
groups for perfusion services, and could have 

                                      10
<PAGE>

a material adverse effect on the Company's business, financial condition and 
results of operation.  This forward-looking statement is subject to the 
degree of control exerted by the Company's competitors with respect to 
purchasing decisions made by controlled groups of perfusionists, the extent 
of future acquisitions of contract perfusion groups by the Company's 
competitors, the breadth of the Company's product offerings relative to those 
competitors controlling contract perfusion groups, and the degree to which 
the Company's research and development and marketing efforts result in the 
successful commercialization of products with enhanced or superior 
performance characteristics.

COST OF SALES / GROSS PROFIT

     Gross profit as a percentage of net sales decreased 1.4% to 40.0% for the
three months ended March 31, 1998 from 41.4% for the three months ended March
31, 1997.  The gross profit percentage for the three month period ended March
31, 1998 was unfavorably impacted by significant increases in sales of the
Company's lower-margin Signature custom tubing pack line, and the lower
production volumes experienced late in the fourth quarter of 1997 and early in
the first quarter of 1998, as well as competitive pricing pressures in the
marketplace.  The mix of products sold in any period will influence the cost of
sales and gross profit for the period.

     Affinity oxygenator product costs continued to improve due to efficiency
and material cost improvements, although these improvements were largely offset
by an ongoing decrease in average selling prices.

     The Company's future gross profit margin percentages will be influenced by
the ongoing pressures of the competitive pricing environment, changes in the
sales mix, the required levels of production, new product introductions and the
extent of further product cost improvements through increased manufacturing
efficiencies and reduced material costs, if any.  Given the uncertainty
associated with new product introductions, the ultimate realization of any such
product cost improvements and the continuing price pressures characteristic of
the Company's markets, the Company cannot be certain if its gross profit margin
will be maintained, improve or decline.

SELLING, GENERAL AND ADMINISTRATIVE

     Selling, general and administrative expenses increased 14% to $3,808,000
for the three months ended March 31, 1998 from $3,350,000 for the three months
ended March 31, 1997.  This increase is primarily attributed to costs associated
with the continuing development of a direct sales force in certain of the
Company's territories formerly served by distributors and independent sales
representatives, marketing costs incurred for the introduction of new products,
including the Affinity blood pump, and seasonal trade show costs being more
concentrated in the first quarter in 1998.  As a percent of sales, selling,
general and administrative expenses increased to 30.6% for the three month
period ended March 31, 1998 from 27.8% for the three month period ended March
31, 1997.

     Management anticipates that selling, general and administrative expenses
for 1998 will be higher than 1997 and will approximate 1997 levels as a
percentage of sales.  These forward-looking statements will be influenced by
revenue increases achieved by the Company, its ability to attract and retain
qualified sales personnel as the Company continues to develop its direct sales

                                      11
<PAGE>

force, and the timing and extent of promotional activities associated with the
Affinity oxygenator with Trillium bio-passive surface, the new oxygen
saturation/hemocrit monitor and other new product introductions, if any.

RESEARCH AND DEVELOPMENT

     Research and development expenses decreased 25% to $831,000 for the three
month period ended March 31, 1998 from $1,102,000 for the three month period
ended March 31, 1997.  This decreased spending is a result of the transition
from the completion or near completion of major projects including the Affinity
blood pump, Myotherm XP and the Affinity oxygenator with Trillium bio-passive
surface to a new generation of products including the new oxygen
saturation/hematocrit monitor.

     The Company anticipates that research and development expenses for 1998
will increase approximately 10% over 1997 levels, as the Company continues to
expand and improve its proprietary line of disposable medical devices.  This
forward-looking projection is dependent upon the extent and timing of new
product development and the impact of the regulatory process in obtaining
marketing clearance for new products, including the new oxygen
saturation/hemacrit device which is expected to be submitted to the FDA in the
second quarter of 1998.  The need or desire to modify the Company's existing
products could also influence the level of research and development expenses. 
There can be no assurance, however, that the Company's research and development
efforts will result in additional regulatory submissions to the FDA as set forth
above, if at all, or will result in any commercially successful products.  The
forward-looking statements regarding anticipated regulatory submissions
contained in this paragraph will be impacted by the results of the Company's
development efforts, the availability of any required clinical data, any changes
in the regulatory scheme for such products, and the Company's assessment of the
cost and anticipated benefit of such submissions.

INTEREST INCOME AND EXPENSE

     Interest income decreased to $86,000 for the three months ended March 31,
1998 from $144,000 for the three months ended March 31, 1997.  This decrease in
interest income is primarily due to the use of cash and cash equivalents and
investments for the purchase of manufacturing molds and equipment and additional
inventories needed to support the Company's new products and revenue growth.  At
March 31, 1998, the majority of the Company's cash and cash equivalents were
invested with two investment portfolio managers who invested in bank
certificates of deposit, U.S. government securities, agency paper, money
markets, commercial paper and corporate obligations.

     Interest expense for the three month period ended March 31, 1998 was
$100,000 compared to $71,000 for the three month period ended March 31, 1997 and
was exclusively due to the mortgage on the Company's new U.S. facility.  The
closing on the facility purchase occurred in late January 1997.

                                      12
<PAGE>

INCOME TAX PROVISION

     For the three month periods ended March 31, 1998 and 1997, tax provisions
of $109,000 and $217,000 were recorded, respectively.  The tax provisions
recorded correspond to the pretax income for those respective periods.  These
provisions vary from the statutory U.S. federal corporate rate primarily due to
losses incurred by the Company's French subsidiary for which no tax benefit has
been recognized because of uncertainty of realization, offset by the generation
of research and experimentation credits.

NET INCOME

     Net income was $220,000 or $.03 per share, on a diluted basis, for the
three month period ended March 31, 1998 compared to net income of $387,000 or
$.05 per share, on a diluted basis, for the three month period ended March 31,
1997.

LIQUIDITY AND CAPITAL RESOURCES

     For the three months ended March 31, 1998, the Company's operating
activities provided net cash of $1,765,000 compared to $610,000 used in
operating activities for the same period in 1997.  The net change of
approximately $2,375,000 is primarily the result of increased accounts payable
balances principally due to the timing of check runs and increased accrued
expenses.  These cash provisions were partially offset by uses of cash for the
three months ended March 31, 1998, when compared to the three months ended March
31, 1997, for increased inventories, primarily related to supporting the
Company's new product lines, and increased accounts receivable balances which is
principally related to the Company's increased revenues during the three months
ended March 31, 1998.

     Cash expenditures for capital additions totaled $711,000 for the three
months ended March 31, 1998 compared to $1,458,000 for three months ended March
31, 1997.  These expenditures were primarily related to equipment, molds and
tooling necessary to further production, increase production efficiencies,
improve quality and reduce raw material costs of the Affinity blood pump,
Myotherm XP and the Affinity oxygenator and related blood reservoirs.  The 1997
expenditures also include $760,000 of furniture, fixtures and equipment
additions for the Company's U.S. facility.

     The Company's capital expenditures for 1998 are expected to be
approximately $4,000,000.  This estimate includes additional equipment, molds
and tooling for the new oxygen saturation/hematocrit device, Affinity blood
pump, Myotherm XP, and for furthering production and related efficiencies of the
Affinity oxygenator line.

     The Company believes that its existing cash and cash equivalents and
investments as well as anticipated cash generated from operations will be
sufficient to satisfy the Company's cash requirements for the foreseeable
future.

     The foregoing forward-looking statements relating to the amount of capital
expenditures and ultimate cash usage are dependent on the progress of the
Company's product development efforts, the timing of the receipt of FDA
marketing clearances for any future products, any 

                                      13
<PAGE>

inventory growth related to changes in sales levels and the investment made 
in opportunities to further existing products' production and related 
efficiencies, quality and cost improvements.

FOREIGN CURRENCY TRANSACTIONS

     Transactions by the Company's international subsidiaries are negotiated,
invoiced and paid in various foreign currencies, primarily pounds sterling, and
U.S. dollars.  Accordingly, the Company is currently subject to risks associated
with fluctuations in exchange rates between the various currencies.

     Substantially all of the Company's other international transactions are
denominated in U.S. dollars.  Fluctuations in currency exchange rates in other
countries may therefore reduce the demand for the Company's products by
increasing the price of the Company's products in the currency of the countries
in which the products are sold.

YEAR 2000 ISSUES

     Computer programs have historically been written to abbreviate dates by 
using two digits instead of four digits to identify a particular year.  The 
so-call "Year 2000" problem or "millennium bug" is the inability of computer 
software or hardware to recognize or properly process dates ending in "00."  
As the year 2000 approaches, significant attention is being focused on 
updating or replacing such software and hardware in order to avoid system 
failures, miscalculations or business interruptions that might otherwise 
result.

     The Company has reviewed its internal information systems and believes that
the costs and effort to address the Year 2000 problem will not be material to
its business, financial condition or results of operations, and, to the extent
necessary, may be resolved through replacement and upgrades to the software it
licenses from third parties.  The Company has also reviewed its OnCourse
software product, the software embedded in its Affinity blood pump console and
the software for its saturation/hematocrit monitor under development and
believes them to be Year 2000 compliant.  However, the Year 2000 problem may
also adversely impact the Company by affecting the business and operations of
parties with which the Company transacts business.  The Company has not
initiated any formal communication with such parties regarding the Year 2000
problem, and is unable to determine the likelihood or potential impact of any
such event.  There can be no assurance that the Company will be able to
effectively address Year 2000 issues internally in a cost-efficient manner and
without interruption to its business, or that Year 2000 difficulties encountered
by its suppliers, customers or other parties will not have a material impact on
the Company's business, financial condition and results of operations.

NEW ACCOUNTING PRONOUNCEMENTS

     In June 1997, the Financial Accounting Standards Board issued Statement
131, "Disclosures About Segments of an Enterprise and Related Information," a
new standard of reporting information about operating or business segments in
financial statements.  The new standard will be effective for the Company's
annual financial statements in 1998.  Although the Company has not specifically
evaluated what impact, if any, this new standard will have on the Company's
current reporting of operating and business segments, the Company believes it
will continue reporting as one operating and business segment.

                                      14
<PAGE>

CERTAIN IMPORTANT FACTORS

     Except for the historical financial information contained herein, this 
Form 10-Q contains certain forward-looking statements.  For this purpose, any 
statements contained in this Form 10-Q that are not statements of historical 
fact may be deemed to be forward-looking statements.  Without limiting the 
foregoing, words such as "may," "will," "expect," "believe," "anticipate," 
"estimate" or "continue," the negative or other variations thereof, or 
comparable terminology, are intended to identify forward-looking statements.  
These statements by their nature involve substantial risks and uncertainties, 
and actual results may differ materially depending on a variety of factors, 
including the progress of product development and clinical studies, the 
timing of and ability to obtain regulatory approvals, the extent to which the 
Company's products gain market acceptance, the introduction of competitive 
products by others, the pricing related to competitive products, litigation 
regarding patent and other intellectual property rights, the availability of 
third-party reimbursement and other factors.  Additional information 
regarding these factors is contained in the Company's Annual Report on Form 
10-K for the year ended December 31, 1997 under the heading "Important 
Factors".

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable.

                                      15
<PAGE>

                           PART II.    OTHER  INFORMATION

ITEM 1.   LEGAL PROCEEDINGS.
     
          During the quarter ended March 31, 1998, there were no material
          developments in the Company's suit seeking to invalidate a newly 
          issued U.S. patent held by a competing manufacturer of blood 
          oxygenators and other medical devices, and requesting a determination 
          that the Company's Affinity oxygenator does not infringe the 
          competitor's patent.  Further information regarding the suit was 
          previously reported in the Company's Annual Report on Form 10-K for 
          the year ended December 31, 1997.
          
ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.
          
          None

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.

          None

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
          
          None
          
ITEM 5.   OTHER INFORMATION.

          None

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

            (a) Exhibits:
                         
                The exhibits to this Quarterly Report on Form 10-Q are listed in
                the Exhibit Index beginning on page 18 of this Report.

            (b) Reports on Form 8-K:
               
                None
                                          
                                       16
<PAGE>
                                          
                                          
                                     SIGNATURES

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


                                   AVECOR  CARDIOVASCULAR  INC.  


         March 12, 1998            By /s/ Anthony Badolato            
---------------------------        -----------------------------------------
          Date                     Anthony Badolato
                                   Chief Executive Officer
          

         March 12, 1998            By /s/ Gregory J. Melsen           
---------------------------        -----------------------------------------
          Date                     Gregory J. Melsen
                                   Vice President-Finance, Treasurer and Chief
                                   Financial Officer
                                   (Principal Financial and Accounting Officer)

                                      17
<PAGE>

                             AVECOR CARDIOVASCULAR INC.
                                          
                         EXHIBIT INDEX TO QUARTERLY REPORT
                                    ON FORM 10-Q
                        For the Quarter Ended March 31, 1998

<TABLE>
<CAPTION>

Item No.       Description                   Method of Filing
--------       -----------                   ----------------
<S>       <C>                           <C>
27.1      Financial Data Schedule       Filed herewith electronically

</TABLE>

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