<PAGE>   1
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------
                                    FORM 10-K

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                        COMMISSION FILE NUMBER 000-23213
                             YOUNG INNOVATIONS, INC.
             (Exact Name of Registrant as Specified in its Charter)


             MISSOURI                                   43-1718931
     (State of Incorporation)              (I.R.S. Employer Identification No.)

    13705 SHORELINE COURT EAST,                           63045
        EARTH CITY, MISSOURI                            (Zip Code)
(Address of Principal Executive Offices)


        Registrant's telephone number, including area code: 314-344-0010

           Securities Registered Pursuant to Section 12(b) of the Act:

                                      NONE

          Securities registered pursuant to Section 12(g) of the Act:

                     COMMON STOCK, $0.01 PAR VALUE PER SHARE
                                (Title of Class)

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

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

     The aggregate market value of the Registrant's Common Stock held by
non-affiliates of the Registrant on February 23, 2001 (based on the closing sale
price of $18.625 of the Registrant's Common Stock, as reported on the Nasdaq
National Market on such date) was approximately $52,547,383.

Number of shares outstanding of the Registrant's Common Stock at February 23,
2001:

           6,507,296 shares of Common Stock, par value $.01 per share

     Portions of the Registrant's definitive Proxy Statement to be filed for its
2001 Annual Meeting of Stockholders are incorporated by reference into Part III
of this Report.
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<PAGE>   2

FORWARD LOOKING STATEMENT

     This document (including, without limitation, Item 1 -- "Business" and
Item 7 -- "Management's Discussion and Analysis of Financial Condition and
Results of Operations") includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements other than statements of historical facts
included herein are "forward-looking statements." Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to be
correct. Forward looking statements include statements which are predictive in
nature, which depend upon or refer to future events or conditions and which
include words such as "expects", "anticipates", "intends", "plans", "believes",
"estimates", or similar expressions. These statements are not guaranties of
future performance and the Company makes no commitment to update or disclose any
revisions to forward-looking statements, or any facts, events or circumstances
after the date hereof that may bear upon forward-looking statements. Because
such statements involve risks and uncertainties, actual actions and strategies
and the timing and expected results thereof may differ materially from those
expressed or implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, those disclosed in this Annual
Report and other reports filed with the Securities and Exchange Commission.

     Forward-looking statements involve risk, uncertainty, and their ultimate
validity is affected by a number of factors, both specific and general.
Specific risk factors may be noted along with the statement itself.  However,
other more general risks and uncertainties which are inherent in any
forward-looking statement include, but are not necessarily limited to changes
in:

        -  Demand for the Company's product
        -  Relationships with strategic customers, suppliers and product
           distributors
        -  Competition in each of the Company's product lines
        -  Dependence on and consolidation of distributors
        -  Successful integration of acquisitions
        -  Ability to manage our growth
        -  Availability of acquisition candidates and the need for additional
           capital
        -  Technological change resulting in product obsolescence; dependence on
           new products
        -  Government regulation
        -  Concentration of suppliers
        -  General economic conditions
        -  Operational capabilities due to natural disasters or other similar
           unforeseen events

     This listing of factors is NOT intended to include ALL potential risk
factors. The Company makes no commitment to update these factors or to revise
any forward-looking statements for events or circumstances occurring after the
statement is issued.

     At any time when the Company makes forward-looking statements, it desires
to take advantage of the "safe harbor" which is afforded such statements under
the Private Securities Litigation Reform Act of 1995 when they are accompanied
by meaningful cautionary statements identifying important factors that could
cause actual results to differ materially from those in the forward-looking
statements.

<PAGE>   3


                                     PART I

ITEM 1. BUSINESS.

     Young Innovations, Inc. (the Company) develops, manufactures and markets
supplies and equipment used by dentists, dental hygienists and consumers. The
Company's product offering includes disposable and metal prophy angles, cups,
brushes, panoramic x-ray machines, dental handpieces (drills) and related
components, orthodontic toothbrushes, flavored examination gloves, children's
toothbrushes, children's toothpastes, and infection control products. The
Company's manufacturing and distribution facilities are located in Missouri,
California, Indiana, Tennessee and Texas.

     The Company was incorporated in July 1995 to serve as the parent company
for Young Dental Manufacturing I, LLC ("Young Dental", formerly Young Dental
Manufacturing Company), and The Lorvic Corporation ("Lorvic"). Young Dental
acquired Lorvic in May 1995, adding to Young Dental a new line of infection
control products as well as chemical engineering and manufacturing expertise. In
July 1996, the Company acquired Denticator International, Inc. ("Denticator")
and its line of popular low-cost disposable prophylaxis angles to complement
Young's premium-priced disposable angles. In February 1998, the Company acquired
Panoramic Corporation ("Panoramic"), a leading manufacturer and marketer of
X-ray equipment sold or rented to dental professionals in the United States. In
April 1999, the Company acquired Athena Technology, LLC ("Athena", formerly
Athena Technology, Inc.), which added a line of dental handpieces and related
components to the Company's product line. In June 2000, the Company acquired
substantially all of the assets of Plak Smacker, Inc, which added a line of
orthodontic toothbrushes, children's toothbrushes, flavored examination gloves,
and children's toothpastes to the Company's product line.

          Young Dental was founded in the early 1900's. As one of many small
suppliers to the dental profession, Young Dental's strength was manufacturing
consistently reliable dental products. As dentistry evolved, Young worked with
practicing dentists and academics to identify clinical problems. Young Dental
then used its engineering and manufacturing expertise to create solutions to
those problems. The Company believes that decades of providing innovative
products to meet the evolving needs of the dental profession have earned Young a
strong reputation for quality, reliability and value.

     The Company markets its products primarily in the United States. The
Company also markets its products in several international markets, including
Europe, South America, Central America and the Pacific Rim. International sales
represented less than 10% of the Company's total net sales in 2000.

          The Company is a Missouri corporation with its principal executive
office located at 13705 Shoreline Court East, Earth City, Missouri 63045, in the
St. Louis, Missouri metropolitan area; its telephone number is (314) 344-0010.

See Item 8. Financial Statements and Supplementary Data for financial
information about the professional and retail segments of the Company's
business.

PRODUCTS

     The Company markets disposable and metal prophy angles, cups, brushes and
pastes (collectively, "Prophy Products"), fluorides, infection control products,
dental X-ray equipment, dental handpieces and related components, orthodontic
brushes and supplies, flavored examination gloves, and children's toothbrushes
and toothpastes.

     Prophy Products. The Company believes it manufactures and sells the
broadest line of prophy products in the domestic professional dental products
market. The Company is able to achieve its substantial share of this market by
providing prophy products at both premium and popular prices. The Company
generally prices its Young branded prophy products at premium levels and its
Denticator branded prophy products at popular price levels. The Company's broad
range of prophy products enables it to be a single-source supplier to its
distributors.

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<PAGE>   4


     Prophy products consist of two components: 1) an angle which is attached to
and extends from a standard, low-speed dental handpiece, and 2) a rubber cup or
brush which is attached to the angle and performs the cleaning function. During
the prophylaxis process, the cup or brush is filled with abrasive paste, which
is applied to the teeth as the prophy cup rotates. The dental professional
polishes both the visible portion of the tooth and the subgingival portion
(below the gum line). The Company's prophy products include several
configurations of metal autoclavable prophy angles and single-use disposable
plastic prophy angles. Prophy cups and brushes, which are paired with metal
prophy angles, are sold as single-use items. Disposable prophy angles are sold
as assembled units with a cup or brush already attached. The Company produces
and markets a number of different disposable prophy angles, including both
traditional right angle and contra angle configurations. Virtually all of the
Company's metal prophy angles are sealed against penetration of matter from
patients' mouths (thus reducing the risk of cross-contamination and damage to
the prophy angle) and are designed for easy maintenance. Because such metal
prophy angles function optimally only when used with the Company's cups and
brushes, most dentists who purchase the Company's metal prophy angles also
purchase the Company's cups and brushes.

     Other Preventive Products. The Company's other preventive products include
fluorides used in dental offices and at home to reduce cavities and tooth
sensitivity; applicators used by dental professionals to apply fluoride to
patients' teeth; and plaque disclosants, which are liquids or tablets that
identify the presence of plaque when applied to tooth surfaces.

     Infection Control Products. The Company's line of infection control
products includes products such as indicator tape and tabs used to verify the
effectiveness of a sterilizer; Nyclave wrap used to wrap instruments during
sterilization so that sterility is maintained until use; barrier products used
to wrap operatory knobs, handles and other devices that cannot be sterilized;
and surgical milk and instrument care products used to inhibit corrosion, remove
rust and lubricate hinged instruments in connection with the autoclave process
(sterilization through the use of steam).

     X-Ray Equipment. The Company markets a line of dental X-ray equipment
under the Panoramic brand name. Panoramic's PC 1000 X-ray machine produces a
high quality image of the entire dental arch in one X-ray film. Panoramic
X-ray's present an anatomical assessment of the entire oral cavity and
surrounding structures. The Company believes this allows a dentist to more
accurately diagnose and treat the patient, providing better overall care.
Panoramic's Laser 1000 cephalometric X-ray system allows analysis of the exact
relationship of various anatomical reference points of the patient's anterior
skull profile. General dentists and orthodontists use these calculations to
locate and predict the movement of teeth in order to fit braces and other
orthodontia. The device is used by oral surgeons to detect pathology and also
to determine bone and teeth alignment before and after surgery.

     Handpieces and Components. The Company manufactures and markets a line of
high-speed and low-speed dental handpieces. The Company also offers high-speed
and low-speed handpiece repair services. High-speed handpieces, commonly
referred to as dental drills, are used in a variety of operative and restorative
dental procedures. Low-speed handpieces are used by dentists and dental
hygienists in the teeth cleaning, or prophylaxis procedure. Prophylaxis angles,
such as the disposable or autoclavable prophylaxis angles sold by the Company,
attach to a low-speed handpiece, which provides drive power for the angle.
Low-speed handpieces are also used in certain operative and restorative dental
procedures, though to a lesser extent than high-speed handpieces. The Company's
handpieces are sold under the Athena Champion brand name, as well as through
private label agreements with certain dental distributors.

     Orthodontic and Children's Homecare Products. The Company markets a line of
orthodontic tools, brushes, flavored examination gloves, children's toothbrushes
and toothpastes, and miscellaneous supplies.

     Assisting and Other Products. The Company's assisting and other products
include disposable aspiration products used to remove blood, saliva and other
matter during dental procedures; cotton roll substitutes used to control saliva
and moisture during dental procedures; matrix bands used for tooth restorations;
rubber dam frames used to isolate teeth during dental procedures; and etching
gels and bonding prep used to condition tooth surfaces for bonding.

     Private Label and OEM Products. In addition to branded products, the
Company designs, develops and produces a limited number of private label and OEM
products for dental distributors and other professional dental product
manufacturers.

MARKETING AND DISTRIBUTION

     The Company markets its prophy, preventive and handpiece products to dental
professionals worldwide primarily through a network of dental product
distributors. The Company actively supports its distributor relationships with
Company sales personnel in the United States, independent sales representatives
in Canada and sales representatives in countries outside of North America. Until
July 1997, the Company used independent non-exclusive sales representatives and
a small number of Company employees for its marketing and sales efforts in the
United States. In an effort to more efficiently market its products, the Company
decided to switch from independent sales representatives to Company employees
who focus on selling the Company's products exclusively.

     The Company also uses non-exclusive distributors to service markets in a
number of other countries. All major distributors of dental


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<PAGE>   5



products in North America sell the Company's products, including Henry Schein,
Inc. and Patterson Dental Company which accounted for 17.0%, and 11.7%
respectively, of the Company's sales in 2000. The Company has no formal
agreements with its distributors which generally purchase products from the
Company by purchase order. The Company believes these arrangements are customary
in the industry. In addition to marketing through distributors in the United
States, the Company sells products directly to dental and dental hygiene
schools, Veterans Administration healthcare facilities and United States
military bases.

     The Company expends considerable effort educating its distributors about
the quality, reliability and features of its products. The Company also
advertises its products through industry publications and direct mail. To
supplement its other marketing efforts, the Company provides product samples to
dental professionals and exhibits its products at industry trade shows. In
addition, the Company seeks to stimulate interest in its products by providing
information and marketing materials to influential lecturers and prominent
experts and consultants in the dental industry.

     The Company's panoramic X-ray products are marketed in the United States
and Canada directly to the end user, primarily by direct mail, trade shows and a
limited amount of advertising in trade and professional journals. Panoramic also
utilizes distributors to market its products in a number of other countries.

     The Company's orthodontic kits and related supplies and flavored
examination gloves are sold directly to orthodontists and dentists. Children's
homecare products are marketed directly to dental professionals, government
"head-start" programs, as well as through retail mass merchandisers.

PRODUCT DEVELOPMENT

     The Company's engineers and chemists are focused on developing innovative
professional dental products and are actively involved in improving the
Company's manufacturing processes. Frequently, these products are designed and
developed in response to needs articulated to the Company by dental
professionals. For example, the Company designed a short prophy cup for its line
of prophy angles to allow for easier access to the back of the patient's mouth.
Many of the new products or product improvements developed by the Company are
patented.

MANUFACTURING AND SUPPLY

     The Company manufactures most of its products and product components other
than X-ray equipment. In May 1999, the Company acquired a one-third interest in
International Assembly Inc. ("IAI"), a contract manufacturer located in Mexico
that assembles a majority of the disposable prophy angles for Young Dental and
Denticator.

     Prophy and Other Products. The Company uses a variety of state-of-the-art
computer numerically controlled machining centers, injection molding machines
and robotic assembly machines and continues to invest in new and more efficient
equipment and production lines. The primary processes involved in manufacturing
the Company's products consist of precision metal turning and milling, rubber
molding, plastic injection molding, component parts assembling and finished
goods packaging.

     Pastes, Liquids and Gels. The Company blends and mixes all of its pastes,
liquids and gels at the Earth City and Brownsville facilities. The Company owns
equipment used to form and dye-cut expanded polyethylene foam and to dye-cut
extruded plastic into finished products and equipment used to package its
products in a variety of container sizes, including prophy paste in unit-dose
containers.

     X-Ray Equipment. Panoramic's X-ray equipment is manufactured and assembled
by a contract manufacturer at Panoramic's premises in Fort Wayne, Indiana. The
contract manufacturer supplies labor, purchases most components and performs
administrative and logistical functions associated with the production of the
machines. Panoramic owns all of the tooling, engineering documentation and
assembly fixtures used in the process. Panoramic manufactures its own X-ray
generators.

     Handpieces and Components. The Company uses a variety of state-of-the-art
computer numerically controlled machines to manufacture a number of the
components required to produce its high-speed and low-speed handpieces. Certain
other handpiece component parts are sourced from a variety of OEMs. The Company
assembles and provides repair services for its handpieces, and offers repair
services for a number of other handpiece brands.

     Orthodontic and Children's Homecare Products. The Company sources most of
its orthodontic, children's homecare products, and flavored examination gloves
from manufacturers in Asia, principally China and Thailand. Certain other
toothbrush and toothpaste products are sourced from domestic manufacturers.

     Supply. The Company purchases a wide variety of raw materials, including
bar steel, brass, rubber and plastic resins from numerous suppliers. The
majority of the Company's purchases are commodities readily available at
competitive prices. The Company also purchases

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<PAGE>   6


certain additional miscellaneous products from other manufacturers for resale.

COMPETITION

     The Company competes with manufacturers of both branded and private label
dental products in each of the markets it serves. According to Strategic Dental
Marketing, Inc., an independent market research firm, the Company had the
largest domestic market share of distributor sales in Prophy Products during
2000, 1999 and 1998.

     The Company believes that dental professionals place major importance on
the proven reliability of the Company's products and are generally not
price-sensitive. Young Dental and Lorvic compete on the basis of the quality and
reliability of their products as well as their reputations. As a result, Young
Dental and Lorvic typically charge premium prices for their products. By
contrast, Denticator, Panoramic, and Plak Smacker products are targeted at more
price-sensitive dental service providers. Panoramic competes with seven
competitors, six of which are foreign manufacturers.

     The markets for the Company's products are highly competitive. The Company
believes that the principal competitive factors in all of its markets are
product features, reliability, name recognition, established distribution
network, customer service and, to a lesser extent, price. The relative speed
with which the Company can develop, complete testing, obtain regulatory approval
and sell commercial quantities of new products is also an important competitive
factor. Some of the Company's competitors have greater financial, research,
manufacturing and marketing resources than the Company and include DENTSPLY
International, Inc., Oral-B Laboratories, StarDental, a division of DentalEZ
Group, KaVo America, Proctor and Gamble Co., Colgate-Palmolive Co., and Planmeca
OY.

EMPLOYEES

     As of December 31, 2000, the Company employed approximately 250 people,
none of whom were covered by collective bargaining agreements. The Company
believes that its relations with its employees are good.

EXECUTIVE OFFICERS OF THE REGISTRANT

     The executive officers of the Company, their ages and their positions with
the Company as of December 31, 2000 are set forth below. All officers serve at
the pleasure of the board.

<TABLE>
<CAPTION>


       NAME                       AGE    POSITION                             PRINCIPAL OCCUPATION DURING PAST 5 YEARS
       ----                       ---    ---------                            ----------------------------------------
<S>                              <C>    <C>                                  <C>
       George E. Richmond........ 67     Chairman of the Board, Chief         President of Young Dental Manufacturing Company
                                         Executive Officer and Director       ("Young Dental") (predecessor to the Company)
                                                                              from 1961 until 1997. Chief Executive Officer
                                                                              and a Director of the Company since its
                                                                              organization in 1995 and Chairman of the Board
                                                                              since 1997. Director of UMB Bank of St. Louis,
                                                                              National Association.

       Alfred E. Brennan......... 48     President, Chief Operating Officer   President since July 1998, Chief Operating
                                         and Director                         Officer of the Company since October 1997, and
                                                                              Director of the Company since August 1997.
                                                                              Senior Associate of Dewar Sloan, a dental
                                                                              consulting company, from 1995 until October
                                                                              1997. President of the Dental Instrument
                                                                              Division of DENTSPLY International, Inc, a
                                                                              manufacturer of dental supplies and equipment
                                                                              from 1991 to 1994. Director of Unico Systems
                                                                              Inc., a dental consulting company.


       Arthur L. Herbst, Jr. .... 37     Executive Vice President of          Chief Financial Officer since February 1999,
                                         Strategic Planning, Chief            Executive Vice President of Strategic Planning
                                         Financial Officer and Director       since October 1998 and a Director of the Company
                                                                              since November 1997.  Vice President and
                                                                              Portfolio Manager with Roberts, Glore & Co, a
                                                                              registered investment advisor, from September
                                                                              1995 to November 1998.  Director of Corporate
                                                                              Finance of DENTSPLY International, Inc. from May
                                                                              1993 through August 1995. Treasurer of GENDEX
                                                                              Corp., a manufacturer of dental and medical
                                                                              equipment, from November 1990 to June 1993.

        Eric J. Stetzel..........  44     Vice President                      Vice President since February 1999, President of
                                                                              Young Acquisitions Company since February 1998,
                                                                              President of Panoramic Rental Corp. since April
                                                                              1998. President of Panoramic Corporation from
                                                                              1986 to February 1998.
</TABLE>



ITEM 2. PROPERTIES.

    The Company's facilities are as follows:

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<PAGE>   7

<TABLE>
<CAPTION>

                DESCRIPTION                  SQUARE FEET       LOCATION                OWNED/LEASED
        ------------------------------------ ----------- --------------------- ------------------------------
<S>                                          <C>         <C>                   <C>

       Corporate Headquarters
           and Manufacturing.............       54,000   Earth City, Missouri              Owned
        Manufacturing....................       12,000   Brownsville, Texas                Owned
        Manufacturing....................       21,000   Sacramento, California  Leased, expires December 2001;
                                                                                       option to purchase
        Office and Manufacturing.........       28,000   Fort Wayne, Indiana               Owned
        Office and Manufacturing.........        4,000   Fort Wayne, Indiana     Leased, expires December 2002
        Office and Distribution..........       24,000   Riverside, California     Leased, expires March 2002

        Distribution.....................       13,000   Morristown, Tennessee   Leased on month to month terms

        Office...........................        3,000   Algonquin, Illinois       Leased, expires March 2005
</TABLE>



     The Company believes that its facilities are generally in good condition.
The Company is in process of expanding its operations in Fort Wayne, Indiana
with additional office and manufacturing space and exploring other expansion
opportunities in Earth City, Missouri.

ITEM 3. LEGAL PROCEEDINGS.

     The Company and its subsidiaries from time to time are parties to various
legal proceedings arising out of their businesses. Management believes there are
no such proceedings pending or threatened against the Company or its
subsidiaries which, if determined adversely, would have a material effect on the
Company's business, financial condition, results of operations or cash flows.

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

     Not Applicable.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     The Common Stock trades on the Nasdaq National Market under the symbol of
"YDNT." The following table sets forth the high and low closing prices of the
Common Stock as reported by the Nasdaq National Market during the last eight
quarters.

<TABLE>
<CAPTION>

                  --------------------------------------------------------------------------------
                                                                                Market Price
                  --------------------------------------------------------------------------------
                  Quarter                                                   High           Low
                  -------                                                 -------       -------
                  1999
<S>                                                                       <C>           <C>
                  First...............................................    $13.375       $11.75
                  Second..............................................    $14.75        $12
                  Third...............................................    $15           $13.875
                  Fourth..............................................    $14.875       $13.875

                  2000
                  First...............................................    $16.125       $13.25
                  Second..............................................    $17.875       $14.75
                  Third...............................................    $21.75        $15.0625
                  Fourth..............................................    $19.25        $13.5625
                  --------------------------------------------------------------------------------
</TABLE>

     On February 23, 2001, there were approximately 33 holders of record of the
Company's Common Stock.

     The Company has not paid cash dividends on its Common Stock since its
inception. The Company currently intends to retain earnings for use in its
business and, therefore, does not anticipate paying any cash dividends in the
foreseeable future. Payment of cash dividends, if any, will be at the discretion
of the Company's Board of Directors and will be dependent upon the earnings and
financial condition of the Company and any other factors deemed relevant by the
Board of Directors and will be subject to any applicable restrictions contained
in the Company's then existing credit arrangements.


ITEM 6. SELECTED FINANCIAL DATA.

     The following table presents selected financial data of the Company. This
historical data should be read in conjunction with the Consolidated Financial
Statements and the related notes thereto in Item 8 and "Management's Discussion
and Analysis of Financial

                                       6
<PAGE>   8


Condition and Results of Operations" in Item 7. All amounts except per share
data are expressed in thousands.


<TABLE>
<CAPTION>


                                                                      YEAR ENDED DECEMBER 31,
                                                      --------------------------------------------------------
                                                        2000(1)     1999(2)   1998(3)(4)    1997       1996(5)
                                                      ---------   ---------   ---------  ---------   ---------
<S>                                                    <C>         <C>         <C>        <C>         <C>
INCOME STATEMENT DATA:
  Net sales........................................    $ 51,387    $ 42,712    $ 36,595   $ 24,986    $ 21,580
  Cost of goods sold...............................      24,000      18,825      16,467     10,129       9,470
                                                      ---------   ---------   ---------  ---------   ---------
  Gross profit.....................................      27,387      23,887      20,128     14,857      12,110
  Selling, general and administrative expenses.....      13,754      12,195      10,623      7,333       5,790
                                                      ---------   ---------   ---------  ---------   ---------
  Income from operations...........................      13,633      11,692       9,505      7,524       6,320
  Interest expense and other, net..................         108         (32)       (326)       876       1,097
                                                      ---------   ----------  ---------- ---------   ---------
  Income before provision for income taxes               13,525      11,724       9,831      6,648       5,223
  Provision for income taxes.......................       5,220       4,572       3,782      2,538       1,955
                                                      ---------   ---------   ---------  ---------   ---------
  Net income.......................................    $  8,305    $  7,152    $  6,049   $  4,110    $  3,268
                                                       ========    ========    ========   ========    ========
  Basic earnings per share.........................    $   1.28    $   1.09    $   0.89   $   0.86    $   0.74
                                                       ========    ========    ========   ========    ========
  Basic weighted average common shares
     outstanding...................................       6,501       6,566       6,763      4,775       4,444
  Diluted earnings per share.......................    $   1.26    $   1.09    $   0.89   $   0.86    $   0.74
                                                       ========    ========    ========   ========    ========
  Diluted weighted average common shares
     outstanding...................................       6,609       6,586       6,805      4,782       4,444
</TABLE>


<TABLE>
<CAPTION>

                                                                      AS OF DECEMBER 31,
                                                      ---------------------------------------------------------
                                                       2000(1)    1999(2)    1998(3)(4)    1997        1996(5)
                                                      --------    -------    ----------  --------     ---------
<S>                                                    <C>         <C>         <C>        <C>         <C>
BALANCE SHEET DATA:
  Working capital (deficit).....................       $11,578     $ 9,438     $10,100    $16,375     $ (5,772)
  Total assets..................................        69,592      60,336      54,744     45,429       32,481
  Total debt (including current maturities).....           592         893          --         --       16,406
  Stockholders' equity..........................        60,437      52,137      48,201     41,208       10,311
</TABLE>

----------

(1)  On June 13, 2000 the Company acquired substantially all of the assets of
     Plak Smacker. The income statement data for the year ended December 31,
     2000 include results of operations for Plak Smacker from June 13, 2000
     through December 31, 2000. The balance sheet data as of December 31, 2000
     include the Plak Smacker acquisition as of that date.

(2)  On April 2, 1999, the Company acquired Athena. The income statement data
     for the year ended December 31, 1999 include results of operations for
     Athena from April 2, 1999 through December 31, 1999. The balance sheet data
     as of December 31, 1999 include Athena as of that date.

(3)  On February 27, 1998, the Company acquired substantially all of the assets
     of Panoramic. The income statement data for the year ended December 31,
     1998 include results of operations for Panoramic from February 27, 1998
     through December 31, 1998. The balance sheet data as of December 31, 1998
     include the Panoramic acquisition as of that date.

(4)  Weighted average common shares outstanding increased from 1997 to 1998 as a
     result of the issuance of 2.3 million shares in connection with the
     Company's initial public offering in November, 1997.

(5)  On July 22, 1996, the Company acquired substantially all of the assets of
     Denticator. The income statement data for the year ended December 31, 1996
     include results of operations for Denticator from July 22, 1996 through
     December 31, 1996. The balance sheet data as of December 31, 1996 include
     the Denticator acquisition as of that date.


                                       7
<PAGE>   9


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

GENERAL

     The Company develops, manufactures and markets supplies and equipment used
by dentists and dental hygienists. The Company's product offering includes
disposable and metal prophylaxis (prophy) angles, cups, brushes, panoramic X-ray
machines, dental handpieces (drills) and related components, orthodontic
toothbrushes, flavored examination gloves, children's toothbrushes, children's
toothpastes and infection control products. The Company believes it is the
leading manufacturer and distributor of prophylaxis angles and cups (used in
teeth cleaning and polishing procedures) and panoramic X-ray equipment in the
United States.

     The principal components of the Company's growth strategy are to
continuously improve its operating efficiencies, to drive superior internal
growth and to complete strategic acquisitions. In order to help fund the
Company's strategy for growth, the Company completed an initial public offering
of 2.3 million shares of its common stock in November 1997, resulting in net
proceeds of $25.2 million. The Company used the proceeds to repay debt incurred
with previous acquisitions and to fund future strategic acquisitions.

     On February 27, 1998, the Company acquired the assets of Panoramic for
$13.9 million cash plus 62,500 shares of the Company's Common Stock and assumed
approximately $3.9 million of Panoramic's liabilities, of which $2.6 million was
repaid at closing. On April 2, 1999, the Company acquired the stock of Athena.
After a final purchase price adjustment in 2000, the Company paid $4.2 million
in cash plus $232,000 in notes payable to the previous shareholders. On June 13,
2000 the Company acquired the assets of Plak Smacker for approximately $7.1
million in cash. The results of operations for these acquisitions are included
in the consolidated financial statements since the date of acquisition. The
acquisitions were accounted for as purchase transactions.

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, certain items
from the Company's statements of income expressed as a percentage of net sales.

<TABLE>
<CAPTION>

                                                          YEAR ENDED DECEMBER 31,
                                                     ---------------------------------
                                                        2000      1999        1998
                                                        ----      ----        ----
<S>                                                    <C>       <C>         <C>
Net sales.........................................     100.0%    100.0%      100.0%
Cost of goods sold................................      46.7      44.1        45.0
                                                     -------   -------     -------
Gross profit......................................      53.3      55.9        55.0
Selling, general and administrative expenses......      26.8      28.5        29.0
                                                     -------   -------     -------
Income from operations............................      26.5      27.4        26.0
Interest expense and other, net...................        .2       -           (.9)
                                                     -------   -------     -------
Income before income taxes........................      26.3      27.4        26.9
Provision for income taxes........................      10.1      10.7        10.4
                                                     -------   -------     -------
Net income........................................      16.2%     16.7%       16.5%
                                                     =======   =======     =======
</TABLE>


YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

    Net Sales- Net sales increased $8.7 million, or 20.3%, to $51.4 million in
2000 from $42.7 million in 1999. The increase was primarily attributable to the
inclusion of sales of Plak Smacker (acquired on June 13, 2000). The balance of
the increase was due to higher sales of prophy products and x-ray machines
during 2000 as compared to 1999 sales levels.

    Gross Profit- Gross profit increased $3.5 million, or 14.7%, to $27.4
million in 2000 from $23.9 million in 1999. Gross profit was favorably impacted
by the acquisition of Plak Smacker and by the increased prophy product and x-ray
machine sales. Gross margin decreased to 53.3% of net sales in 2000 from 55.9%
in 1999. This decrease was primarily attributable to the inclusion of Plak
Smacker sales which typically earn lower gross margins.

    Selling, General, and Administrative Expenses ("SG&A")- SG&A expenses
increased $1.6 million, or 12.8%, to $13.8 million in 2000 from $12.2 million in
1999 primarily due to the inclusion of expenses of Plak Smacker. As a percent of
net sales, SG&A expenses decreased to 26.8% in 2000 from 28.5% in 1999 due to
operating efficiencies realized from consolidating prior acquisitions and strong
operating expense control.

     Income from Operations- Income from operations increased $1.9 million or
16.6%, to $13.6 million in 2000 from $11.7 million in 1999 as a result of the
factors explained above.

    Interest Expense- Interest expense decreased to $99,000 in 2000 from
$105,000 in 1999.


                                       8

<PAGE>   10

    Other Expense (Income)- Other expense increased $146,000 to $9,000 in 2000
from ($137,000) in 1999 primarily due to a full year inclusion of the Company's
portion of the loss from its investment in International Assembly, Inc. ("IAI")
during 2000.

    Provision for Income Taxes- Provision for income taxes increased $648,000 in
2000 to $5.2 million from $4.6 million for 1999 primarily as a result of higher
pre-tax income.


YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

    Net Sales- Net sales increased $6.1 million, or 16.7%, to $42.7 million in
1999 from $36.6 million in 1998. The increase was primarily attributable to the
inclusion of sales of Athena (acquired April 2, 1999) and a full year of
Panoramic (acquired on February 27, 1998). The balance of the increase was due
to higher sales of prophy products and x-ray machines during 1999 as compared to
1998 sales levels.

    Gross Profit- Gross profit increased $3.8 million, or 18.7%, to $23.9
million in 1999 from $20.1 million in 1998. Gross profit was favorably impacted
by the acquisitions of Athena and Panoramic and by the increased prophy product
sales. Gross margin increased to 55.9% of net sales in 1999 from 55.0% in 1998.
This increase was attributable to improvements obtained from the transfer and
consolidation of the majority of the manufacturing operations of the Denticator
product line from California to Missouri. This benefit was partially offset by
the inclusion of Athena sales and Panoramic for the full year, which typically
carry lower margins.

    Selling, General, and Administrative Expenses ("SG&A")- SG&A expenses
increased $1.6 million, or 14.8%, to $12.2 million in 1999 from $10.6 million in
1998 primarily due to the inclusion of expenses of Athena and a full year of
expenses of Panoramic. As a percent of net sales, SG&A expenses decreased to
28.5% in 1999 from 29.0% in 1998.

    Income from Operations- Income from operations increased $2.2 million or
23.0%, to $11.7 million in 1999 from $9.5 million in 1998 as a result of the
factors explained above.

    Interest Expense- Interest expense increased from $0 in 1998 to $105,000 in
1999. The increase was a result of interest on borrowings on the Company's
revolving line of credit during 1999 as well as debt and capital leases
associated with the acquisition of Athena.

    Other Income- Other income decreased $189,000 to $137,000 in 1999 from
$326,000 in 1998 primarily due to less interest income and gains on the disposal
of assets in 1998 as compared to 1999, as well as the inclusion of the Company's
portion of the loss from its investment in IAI during 1999.

    Provision for Income Taxes- Provision for income taxes increased $800,000 in
1999 to $4.6 million from $3.8 million for 1998 primarily as a result of higher
pre-tax income.

LIQUIDITY AND CAPITAL RESOURCES

     On June 13, 2000, the Company acquired substantially all of the assets of
Plak Smacker for approximately $7.1 million in cash. The purchase price was
principally financed with borrowings on the Company's credit facilities and with
cash flows from operations.

     On May 17, 1999, the Company invested approximately $1.0 million in
exchange for a one-third interest in IAI. The investment was principally
financed through cash flows from operations. The Company has an option to
purchase the remaining two-thirds interest in IAI or to sell its one-third
interest back to IAI in early 2001. The Company is in negotiations to extend
this agreement.

     On April 2, 1999, the Company acquired Athena. After a final purchase price
adjustment during 2000, the Company paid approximately $4.2 million in cash and
issued approximately $232,000 in notes payable to the previous shareholders. The
cash portion of the purchase price was principally financed with cash flows from
operations and borrowings on the Company's revolving line of credit.

     On February 27, 1998, the Company acquired the net assets of Panoramic. The
Company paid approximately $13.9 million in cash plus $1.0 million (62,500
shares) of its common stock. The acquisition was principally financed with cash
remaining from the net proceeds of the Company's initial public offering.

     Historically, the Company has financed its operations primarily through
cash flow from operating activities and, to a lesser extent, through borrowings
under its credit facilities. Net cash flow from operating activities was $7.7
million, $8.9 million, and $6.4 million for 2000, 1999 and 1998, respectively.
Capital expenditures for property, plant and equipment were $2.2 million, $1.5
million, and $1.1


                                       9
<PAGE>   11


million in 2000, 1999 and 1998, respectively. The Company has begun construction
of additional manufacturing and office space in Fort Wayne, Indiana. The Company
had paid $552,000 and has additional fixed commitments of approximately $900,000
as of December 31, 2000 relating to this project. The total estimated cost of
this facility is expected to cost approximately $1.7 million. The Company is
also exploring additional manufacturing space in Earth City, MO, which is
expected to cost approximately $2.0 million. Consistent with the Company's
historical capital expenditures, additional future capital expenditures are
expected to include panoramic X-ray machines for rental, injection molding
equipment, computer equipment and upgrades to production machinery and to the
Company's information systems. During 2000, the Company borrowed $9.2 million
under a credit arrangement for the acquisition of Plak Smacker and for working
capital needs. $130,000 remained outstanding on the Company's Line-of-Credit at
December 31, 2000. During March 2001, the Company entered into a one year $20.0
million credit arrangement at an interest rate of LIBOR + 1%. The agreement is
unsecured and contains various financial and other covenants. Management
believes the Company has adequate liquidity and capital resources to meet its
needs on a short and long-term basis.

RECENT FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENT

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"), which requires that all derivatives be
recognized as either assets or liabilities in the statement of financial
position at fair value. The Company is required to adopt this statement no later
than the beginning of fiscal year 2001. The adoption of this statement is not
expected to have an impact on operating results, statement of financial position
or cash flows, as the Company does not currently invest in derivative
instruments.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to market risk related to changes in interest rates.
The value of financial instruments is subject to change as a result of movements
in market rates and prices. Sensitivity analysis is one technique used to
evaluate these impacts. Based upon a hypothetical 10% change in interest rates,
the potential losses in future earnings, fair value and cash flows are not
material.


                                       10
<PAGE>   12




ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Young Innovations, Inc.:

    We have audited the accompanying consolidated balance sheets of Young
Innovations, Inc. (a Missouri corporation) and subsidiaries as of December 31,
2000 and 1999, and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Young
Innovations, Inc. and subsidiaries as of December 31, 2000 and 1999, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.



ARTHUR ANDERSEN LLP

St. Louis, Missouri,
January 31, 2001


                                       11
<PAGE>   13





                             YOUNG INNOVATIONS, INC.

                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>

                                                                                                     December 31
                                                                                                -----------------------
                                                                                                   2000        1999
                                                                                                   ----        ----
                                                        ASSETS

Current assets:
<S>                                                                                             <C>         <C>
   Cash and cash equivalents...............................................................     $       --   $   2,511
   Trade accounts receivable, net of allowance for doubtful accounts of $220 and $228,
     respectively..........................................................................          9,322       5,735
   Inventories.............................................................................          6,144       3,772
   Other current assets....................................................................          1,498       2,420
                                                                                                ----------  ----------
           Total current assets............................................................         16,964      14,438
                                                                                                ----------  ----------
Property, plant and equipment, net.........................................................         13,256      12,523
                                                                                                ----------  ----------
Other assets...............................................................................          1,972       1,359
                                                                                                ----------  ----------
Intangible assets..........................................................................         37,400      32,016
                                                                                                ----------  ----------
                Total assets...............................................................     $   69,592  $   60,336
                                                                                                ==========  ==========

                                         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Revolving line of credit................................................................     $      130  $       --
   Current maturities of long-term debt....................................................            178         373
   Accounts payable and accrued liabilities................................................          5,078       4,627
                                                                                                     -----  ----------
           Total current liabilities.......................................................          5,386       5,000
                                                                                                ----------  ----------
Long-term debt.............................................................................            284         520
                                                                                                ----------  ----------
Deferred income taxes......................................................................          3,485       2,679
                                                                                                ----------  ----------
Stockholders' equity:
   Common stock, voting, $.01 par value, 25,000,000 shares authorized, 6,504,596 and
     6,504,296 shares issued and outstanding in 2000 and 1999, respectively................             65          65
   Additional paid-in capital..............................................................         26,093      26,083
   Retained earnings.......................................................................         37,816      29,511
   Common stock in treasury, at cost, 308,114 and 308,414 shares in 2000 and 1999,
     respectively..........................................................................         (3,537)     (3,522)
                                                                                                ----------  ----------
           Total stockholders' equity......................................................         60,437      52,137
                                                                                                ----------  ----------
                Total liabilities and stockholders' equity.................................     $   69,592  $   60,336
                                                                                                ==========  ==========
</TABLE>


      The accompanying notes are an integral part of these balance sheets.


                                       12
<PAGE>   14


                             YOUNG INNOVATIONS, INC.

                        CONSOLIDATED STATEMENTS OF INCOME
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>


                                                                                    Years Ended December 31
                                                                          ---------------------------------------------
                                                                               2000           1999           1998
                                                                               ----           ----           ----

<S>                                                                       <C>             <C>            <C>
Net sales............................................................     $      51,387   $      42,712  $      36,595
     Cost of goods sold..............................................            24,000          18,825         16,467
                                                                          --------------  -------------  -------------
Gross profit.........................................................            27,387          23,887         20,128
     Selling, general and administrative expenses....................            13,754          12,195         10,623
                                                                          --------------  -------------  -------------
Income from operations...............................................            13,633          11,692          9,505
     Interest expense................................................                99             105             -
     Other expense (income), net.....................................                 9            (137)          (326)
                                                                          --------------  -------------  -------------
Income before provision for income taxes.............................            13,525          11,724          9,831
      Provision for income taxes.....................................             5,220           4,572          3,782
                                                                          --------------  -------------  -------------
Net income...........................................................     $       8,305   $       7,152  $       6,049
                                                                          =============   =============  =============
Basic earnings per share.............................................     $        1.28   $        1.09  $         .89
                                                                          =============   ============== =============
Diluted earnings per share...........................................     $        1.26   $        1.09  $         .89
                                                                          =============   =============  =============
Basic weighted average shares outstanding............................         6,501,491       6,565,621      6,762,522
                                                                          =============   =============  =============
Diluted weighted average shares outstanding..........................         6,609,275       6,586,394      6,804,626
                                                                          =============   =============  =============
</TABLE>













        The accompanying notes are an integral part of these statements.

                                       13

<PAGE>   15




                             YOUNG INNOVATIONS, INC.

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>


                                                                                 Unrealized
                                            Additional                Common       Gain on
                                  Common     Paid-In     Retained    Stock in    Marketable    Comprehensive
                                  Stock      Capital     Earnings    Treasury    Securities        Income       Total
                                  -----      -------     --------    --------    ----------        ------       -----

<S>                              <C>      <C>         <C>          <C>         <C>           <C>             <C>
BALANCE, December 31, 1997...     $  67      $ 25,131   $ 16,310      $ (309)         $ 9                      $ 41,208

     Net income..............        -           -         6,049          -            -          $ 6,049         6,049
     Change in unrealized
       gain (loss) on
       marketable
       securities, net of
       tax...................        -           -          -             -            (9)             (9)           (9)
                                                                                                  -------
     Comprehensive income....                                                                     $ 6,040
                                                                                                  =======
     Additional shares
       issued................        1           999        -             -            -                          1,000
     Equity issuance costs...        -           (47)       -             -            -                            (47)
                                  ----      --------   --------    --------       -------                      --------
BALANCE, December 31, 1998...       68        26,083     22,359        (309)           -                         48,201

     Net income..............        -             -      7,152          -             -         $  7,152         7,152
     Common stock in
       treasury,
       purchased.............       (3)            -          -      (3,320)           -                         (3,323)
     Stock options,
       exercised.............        -             -          -         107            -                            107
                                                                                                ---------
     Comprehensive income....                                                                     $ 7,152
                                  ----      --------   --------    --------       -------       =========      --------
BALANCE, December 31, 1999...       65        26,083     29,511      (3,522)           -                         52,137

     Net income..............        -             -      8,305           -            -         $  8,305         8,305
     Common stock in
       treasury,
       purchased.............        -             -          -        (104)           -                           (104)
     Stock options,
       exercised.............        -            10          -          89            -                             99
                                                                                                ---------
     Comprehensive income....                                                                     $ 8,305
                                  ----      --------   --------    --------       -------       =========      --------
BALANCE, December 31, 2000
                                  $ 65      $ 26,093   $ 37,816    $ (3,537)      $    -                       $ 60,437
                                  ====      ========   ========    =========      =======                      ========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       14

<PAGE>   16







                             YOUNG INNOVATIONS, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>


                                                                                          Years Ended December 31
                                                                                   --------------------------------------
                                                                                       2000         1999         1998
                                                                                       ----         ----         ----
<S>                                                                                 <C>           <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income.................................................................       $   8,305     $   7,152    $   6,049
                                                                                     ---------     ---------    ---------
   Adjustments to reconcile net income to cash flows from operating
       activities-
       Depreciation and amortization..........................................           2,694         2,270        1,698
       Deferred income taxes..................................................             884           962          661
       Gain on sale of equipment..............................................             (24)            -          (13)
       Changes in assets and liabilities-
         Trade accounts receivable............................................          (2,329)          354       (2,103)
         Inventories..........................................................          (1,098)           61         (154)
         Other current assets.................................................             887          (236)        (198)
         Other assets.........................................................            (113)           23          (58)
         Accounts payable and accrued liabilities.............................          (1,507)       (1,685)         560
                                                                                     ---------     ---------    ---------
           Net cash flows provided by operating activities....................           7,699         8,901        6,442
                                                                                     ---------     ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Payments for acquisitions, net of cash acquired............................          (7,088)       (4,640)     (13,875)
   Payments for investment in IAI.............................................               -        (1,050)           -
   Purchases of property, plant and equipment.................................          (2,176)       (1,478)      (1,058)
   Other investing activities.................................................            (464)            -          114
                                                                                     ---------     ---------    ---------
           Net cash flows used in investing activities........................          (9,728)       (7,168)     (14,819)
                                                                                     ---------     ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments of long-term debt.................................................            (607)         (343)           -
   Borrowings on revolving line of credit.....................................           9,191         4,500            -
   Payments on revolving line of credit.......................................          (9,061)       (4,500)           -
   Proceeds from stock options exercised......................................              99           107            -
   Common stock in treasury, purchased .......................................            (104)       (3,323)           -
   Equity issuance costs......................................................               -             -          (47)
                                                                                     ---------     ---------    ---------
           Net cash flows used in financing activities........................            (482)       (3,559)         (47)
                                                                                     ---------     ---------    ---------
Net decrease in cash and cash equivalents.....................................          (2,511)       (1,826)      (8,424)
Cash and cash equivalents, beginning of period................................           2,511         4,337       12,761
                                                                                     ---------     ---------    ---------
Cash and cash equivalents, end of period......................................       $       -     $   2,511    $   4,337
                                                                                     =========     =========    =========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       15

<PAGE>   17



                             YOUNG INNOVATIONS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

1.  DESCRIPTION OF BUSINESS:

Young Innovations, Inc. (the Company) develops, manufactures and markets
supplies and equipment used by dentists, dental hygienists and consumers. The
Company's product offering includes disposable and metal prophy angles, prophy
cups, prophy brushes, handpieces (dental drills) and related components,
panoramic x-ray machines, fluorides and infection control products, orthodontic
brushes, flavored examination gloves, as well as children's toothbrushes and
toothpastes used for home care. The Company's manufacturing facilities are
located in Missouri, California, Indiana and Texas. Export sales were less than
10% of total net sales for 2000, 1999 and 1998.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Young Innovations,
Inc. formed in July 1995 and its direct and indirect wholly owned subsidiaries,
Young Dental Manufacturing I, LLC. (Young Dental, formerly Young Dental
Manufacturing Company), Young Acquisitions Company and Panoramic Rental Corp.
(collectively, Panoramic), Athena Technology, LLC. (Athena, formerly Athena
Technology, Inc.) and Young PS Acquisitions, LLC (Plak Smacker). Panoramic is
included since its acquisition on February 27, 1998, Athena is included since
its acquisition on April 2, 1999 and Plak Smacker is included since its
acquisition on June 13, 2000. All significant intercompany accounts and
transactions are eliminated in consolidation.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include all highly liquid investments with an initial
maturity of three months or less.

INVENTORIES

Inventories are stated at the lower of cost (which includes material, labor and
manufacturing overhead) or market. Cost is determined by the first-in, first-out
(FIFO) method.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Expenditures for repairs and
maintenance are charged to expense as incurred, and additions and improvements
that significantly extend the lives of assets are capitalized. Upon disposition,
cost and accumulated depreciation are eliminated from the related accounts and
any gain or loss is reflected in the statement of income. The Company provides
depreciation using the straight-line method over the estimated useful lives of
the assets ranging from 3 to 39 years.

OTHER ASSETS

On May 17, 1999, the Company acquired a one-third interest in International
Assembly, Inc., a Texas corporation (IAI). The Company paid approximately $1,050
in cash for this investment. The Company has an option to purchase the remaining
two-thirds interest in IAI or to sell its one-third interest back to IAI in
early 2001.

The Company purchases certain services from IAI at amounts less than would be
paid to unrelated parties. These services totaled $632 in 2000 and $174 from May
17, 1999 through December 31, 1999. The investment is being accounted for under
the equity method of accounting. Equity income (losses) (using a 3 month lag) is
recorded net, after reduction of goodwill amortized straight-line over 10 years.
Goodwill of approximately $931 is based upon the excess of the amount paid for
its


                                       16
<PAGE>   18


interest in IAI over the fair value of its portion of IAI's net assets
at the date of the investment. The Company's share of losses and goodwill
amortization for IAI is included in other expenses and totaled $203 for the
period from October 1, 1999 to September 30, 2000 and $80 for the period from
May 17, 1999 to September 30, 1999. The Company's portion of IAI's income
(loss), net of goodwill amortization, for the fourth quarter 2000 is expected
to be less than $25.

Other assets also include notes receivable and costs related to patents issued
to the Company and pending patent applications. Capitalized patent costs are
amortized on a straight-line basis over the estimated useful lives of the
patents, generally 17 years.

INTANGIBLE ASSETS

Intangible assets, consisting of goodwill, are stated at cost less accumulated
amortization. Amortization is determined using the straight-line method over
periods ranging from 10 to 40 years.

LONG-LIVED ASSETS

If facts and circumstances suggest that a long-lived asset may be impaired, the
carrying value is reviewed. If this review indicates that the carrying value of
the asset will not be recovered, as determined based on projected undiscounted
cash flows related to the asset over its remaining life, the carrying value of
the asset is reduced to its estimated fair value.

USE OF ESTIMATES

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that effect the reported amounts of assets and
liabilities, disclosures of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reported period. Actual results could differ from those estimates.


FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial instruments consist principally of cash and accounts payable. The
estimated fair value of these instruments approximates their carrying value.

ADVERTISING COSTS

Advertising costs are expensed when incurred.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs are expensed when incurred and totaled $602, $802
and $749 for 2000, 1999 and 1998, respectively.

REVENUE RECOGNITION

Revenue from the sale of products is recorded at the time of passage of title,
generally when the products are shipped. Revenue from the rental of equipment to
others is recognized on a month-to-month basis as the revenue is earned.

EQUIPMENT RENTED TO OTHERS

Since the acquisition of Panoramic in 1998, the Company owns x-ray equipment
rented on a month-to-month basis to customers. Installation costs of the
equipment are capitalized and amortized over four years. A liability for the
removal costs of the equipment expected to be returned to the Company is
included in accounts payable and accrued liabilities at December 31, 2000 and
1999.

OTHER EXPENSE (INCOME)

                                       17
<PAGE>   19


Other expense (income) includes the Company's portion of losses from its
investment in IAI, interest income, sale of scrap, and other miscellaneous
income and expense items, all of which are not directly related to the Company's
primary business. In 2000, 1999 and 1998, interest income totaled $119, $139 and
$216, respectively.


INCOME TAXES

The Company has accounted for income taxes under SFAS No. 109, an asset and
liability approach to accounting and reporting for income taxes. Deferred income
taxes are provided for temporary differences between the financial statement
carrying amounts and the tax bases of existing assets and liabilities.

SUPPLEMENTAL CASH FLOW INFORMATION

Cash flows from operating activities include $4,020, $4,014 and $3,379 for the
payment of federal and state income taxes and $99, $105, and $-0- for the
payment of interest during 2000, 1999, and 1998, respectively.

3.  ACQUISITIONS:

On June 13, 2000 the Company acquired substantially all of the assets and
assumed a portion of the liabilities of Plak Smacker. The Company paid $7,053 in
cash. The acquisition was principally financed with borrowings on the Company's
credit facilities and through cash flows from operations. The acquisition was
accounted for as a purchase transaction. The preliminary purchase price was
allocated based upon estimates of fair value of assets and liabilities. This
excess of purchase price (as preliminarily allocated) over the estimated fair
value of net assets acquired (goodwill) was $6,126 and is being amortized over
30 years. The results of operations for Plak Smacker are included in the
consolidated financial statements since June 13, 2000.

On April 2, 1999, the Company acquired Athena. After a final purchase price
adjustment in the second quarter of 2000, the Company paid $4,241 in cash and
issued $232 in notes payable to the previous shareholders. The cash portion of
the purchase price was principally financed with cash flows from operations and
borrowings on the Company's revolving line of credit. The acquisition was
accounted for as a purchase transaction. The purchase price was allocated based
upon estimates of fair values. This excess of purchase price over estimated fair
value of net assets (goodwill) was $4,747 and is being amortized over 40 years.
The results of operations for Athena are included in the consolidated financial
statements since April 2, 1999.

On February 27, 1998, the Company acquired substantially all of the assets and
assumed certain liabilities of Panoramic. The Company paid $13,875 in cash and
issued $1,000 (62,500 shares) of common stock. The cash portion of the purchase
price was principally financed with the net proceeds remaining from the
Company's initial public offering. The acquisition was accounted for as a
purchase transaction. The purchase price was allocated based upon estimates of
fair value. The excess of purchase price over the estimated fair value of net
assets acquired (goodwill) was $10,445 and is being amortized over 40 years. The
results of operations for Panoramic are included in the consolidated financial
statements since February 27, 1998.

4.  SEGMENT INFORMATION:

Segment information has been prepared in accordance with Statement of Financial
Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an
Enterprise and Related Information." In 2000, with the acquisition of Plak
Smacker, the Company has two operating segments according to SFAS No. 131:
professional and retail. The professional segment sells products to dentists and
dental hygienists. The retail segment sells products to consumers through mass
merchandisers. The Company believes it is appropriate to aggregate business
units into the segments presented below. This aggregation is due to similarities
in economic characteristics, customers, the nature of the products and the
nature of the production processes.

The table below is a summary of certain financial information relating to the
two segments for 2000.

                                       18
<PAGE>   20
<TABLE>
<CAPTION>

                                                                Professional     Retail       Consolidated
                                                                ------------     ------       ------------
<S>                                                             <C>              <C>          <C>
        Net sales............................................      $ 48,737       $ 2,650        $51,387
        Income from operations...............................      $ 13,428       $   205        $13,633
</TABLE>



5.  CONCENTRATIONS OF CUSTOMERS:

The Company generates trade accounts receivable in the normal course of
business. The Company grants credit to distributors and customers throughout the
world and generally does not require collateral to secure the accounts
receivable. The Company's credit risk is concentrated among two distributors
accounting for 30% and 29% of accounts receivable as of December 31, 2000 and
1999, respectively.

6.  INVENTORIES:

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                                         December 31
                                                                                     ---------------------
                                                                                       2000       1999
                                                                                       ----       ----
<S>                                                                                  <C>         <C>
         Finished products......................................................       $ 3,708    $ 1,373
         Work in process........................................................         1,569      1,467
         Raw materials and supplies.............................................           867        932
                                                                                       -------    -------
                    Total inventories...........................................       $ 6,144    $ 3,772
                                                                                       =======    =======
</TABLE>

7.  PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                                        December 31
                                                                                   -----------------------
                                                                                      2000        1999
                                                                                      ----        ----
<S>                                                                                <C>          <C>
         Land.................................................................       $    508    $    508
         Buildings and improvements...........................................          4,068       3,988
         Machinery and equipment..............................................         12,427      11,664
         Equipment rented to others...........................................          4,966       4,605
         Construction in progress.............................................            552           -
                                                                                     --------     -------
                                                                                       22,521      20,765

         Less-  Accumulated depreciation......................................         (9,265)     (8,242)
                                                                                     --------    --------
                    Total property, plant and equipment, net..................       $ 13,256    $ 12,523
                                                                                     ========    ========
</TABLE>


Machinery and equipment under capital lease and related accumulated depreciation
was $794 and $238 at December 31, 2000 and was $794 and $121 at December 31,
1999.

8.  OTHER ASSETS:

Other assets consist of the following:

<TABLE>
<CAPTION>
                                                                                           December 31
                                                                                         -----------------
                                                                                          2000     1999
                                                                                          ----     ----
<S>                                                                                      <C>      <C>
         Patents.....................................................................    $ 315    $ 313
         Investment in IAI...........................................................      767      970
</TABLE>




                                       19

<PAGE>   21

<TABLE>
<S>                                                                                      <C>      <C>
         Notes receivable, long-term.................................................        500       --
         Other.......................................................................        390       76
                                                                                          ------   ------
                    Total other assets...............................................     $1,972   $1,359
                                                                                          ======   ======
</TABLE>


9.  INTANGIBLE ASSETS:

Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                                                        December 31
                                                                                   -----------------------
                                                                                      2000        1999
                                                                                      ----        ----
<S>                                                                                <C>         <C>
         Goodwill.............................................................       $ 40,977    $ 34,592
         Less-  Accumulated amortization......................................         (3,577)     (2,576)
                                                                                     --------    --------
                    Total intangible assets...................................       $ 37,400    $ 32,016
                                                                                     ========    ========
</TABLE>

Amortization of goodwill totaled $1,001, $848, and $698 for 2000, 1999, and
1998, respectively.

10.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES:

Accounts payable and accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                                                         December 31
                                                                                     ---------------------
                                                                                       2000       1999
                                                                                       ----       ----
<S>                                                                                   <C>        <C>
         Accounts payable.......................................................       $ 1,491    $   767
         Accrued salaries and bonuses...........................................         1,191      1,675
         Accrued expenses and other ............................................         2,396      2,185
                                                                                       -------    -------
                    Total accounts payable and accrued liabilities..............       $ 5,078    $ 4,627
                                                                                       =======    =======
</TABLE>

11.  LONG-TERM DEBT AND CREDIT ARRANGEMENTS:

In April 1999 and again in June 2000, the Company entered into one-year
revolving credit arrangements, which provide a line of credit up to $5,000 at an
interest rate of LIBOR + 1%. During 2000, the Company had borrowed $9,191 and
re-paid $9,061 under these arrangements. At December 31, 2000, the Company had
an outstanding revolving line of credit balance of $130. During 1999, the
Company borrowed $4,500 from the line and repaid the entire balance. There was
no balance outstanding at December 31, 1999. Capitalized lease obligations of
$462 were also outstanding at December 31, 2000.

Future maturities of the line of credit and capital lease obligations are as
follows:

<TABLE>
<S>                                                                                       <C>
                              2001.................................                       $  308
                              2002.................................                          141
                              2003.................................                           75
                              2004.................................                           68
                                                                                          ------
                              Total..............................                         $  592
                                                                                          ======
</TABLE>


12.  COMMON STOCK:

During 2000, the Company repurchased 7,500 shares of its common stock for $104
and reissued 7,800 shares in conjunction with stock option exercises for $99.
During 1999, the Company completed the repurchase of 277,500 shares





                                       20

<PAGE>   22

for $3,323 and reissued 9,000 shares in conjunction with a stock option exercise
for $107. In March 1999, the Company authorized the repurchase of up to 300,000
shares of its common stock.

13.  STOCK OPTIONS:

The Company adopted the 1997 Stock Option Plan (the Plan) effective in November
1997 and amended the Plan in 1999. A total of 650,000 shares of Common Stock are
reserved for issuance under this plan which is administered by the compensation
committee of the Board of Directors (Compensation Committee). Participants in
the Plan will be those employees whom the Compensation Committee may select from
time to time and those nonemployee directors as the Company's Board of Directors
may select from time to time. As of December 31, 2000, 622,800 options had been
granted.

A summary of the options outstanding and exercisable are as follows:

<TABLE>
<CAPTION>
                                                                                                 Weighted
                                                                                Range of         Average
                                                                                Exercise         Exercise
                                                                  Shares         Prices           Price
                                                                  ------    ---------------     ---------
<S>                                                              <C>        <C>                 <C>
          Outstanding, January 1, 1998.....................       234,600   $12.00 - $13.50       $12.03
          Granted..........................................       133,000   $12.38 - $17.50       $14.83
          Exercised........................................             -          -                -
          Forfeited........................................        19,200        $12.00           $12.00
                                                                 --------
          Outstanding, December 31, 1998...................       348,400   $12.00 - $17.50       $13.10
                                                                 ========
          Exercisable at December 31, 1998.................        58,750   $12.00 - $17.50       $13.13
                                                                 ========

          Outstanding, January 1, 1999.....................       348,400   $12.00 - $17.50       $13.10
          Granted..........................................       254,000   $12.69 - $13.94       $13.91
          Exercised........................................         9,000        $12.00           $12.00
          Forfeited........................................        68,100   $12.00 - $17.00       $12.59
                                                                 --------
          Outstanding, December 31, 1999...................       525,300   $12.00 - $17.50       $13.58
                                                                 ========
          Exercisable at December 31, 1999.................        91,575   $12.00 - $17.50       $13.28
                                                                 ========

          Outstanding, January 1, 2000.....................       525,300   $12.00 - $17.50       $13.58
          Granted..........................................         -              -                -
          Exercised........................................         7,800   $12.00 - $15.00       $12.77
          Forfeited........................................         4,900   $12.00 - $15.00       $13.22
                                                                 --------
          Outstanding, December 31, 2000...................       512,600   $12.00 - $17.50       $13.60
                                                                 ========
          Exercisable at December 31, 2000.................       292,000   $12.00 - $17.50       $13.49
                                                                 ========
</TABLE>

The weighted average remaining contractual life of the options outstanding at
December 31, 2000 is 8.0 years. As of January 1, 2001, 323,650 shares were
exercisable with a range of exercise prices from $12.00 - $17.50 with a weighted
average price of $13.36.

The Compensation Committee of the Board of Directors establishes vesting
schedules for each option issued under the Plan. Outstanding options generally
vest over four years. The exercise price was equal to the fair value of the
common stock at the date of grant. All options expire 10 years from the grant
date.

In accordance with SFAS No. 123, "Accounting for Stock-Based Compensation," the
Company elected APB Opinion No. 25, "Accounting for Stock Issued to Employee,"
and related interpretations in accounting for the Plan. Accordingly, no
compensation cost has been recognized for the Plan. Had compensation costs for
the Plan been determined based upon the fair value of the options at the grant
date consistent with the methodology prescribed under SFAS No. 123, the
Company's net income and earnings per share would approximate the pro forma
amounts below:


                                       21

<PAGE>   23

<TABLE>
<CAPTION>
                                          Year Ended                       Year Ended                    Year Ended
                                       December 31, 2000               December 31, 1999             December 31, 1998
                                 ------------------------------    ---------------------------    -------------------------
                                       As             Pro              As            Pro              As           Pro
                                    Reported         Forma          Reported        Forma          Reported       Forma
                                    --------         -----          --------        -----          --------       -----
                                           Unaudited                       Unaudited                     Unaudited
<S>                                <C>             <C>               <C>          <C>              <C>          <C>
   Net income..................    $ 8,305         $ 7,556           $ 7,152      $ 6,668          $ 6,049      $ 5,541
   Earnings per share:
     Basic.....................    $  1.28         $  1.16           $  1.09      $  1.02          $   .89      $   .82
     Diluted...................    $  1.26         $  1.14           $  1.09      $  1.01          $   .89      $   .81
</TABLE>

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions: (i) dividend yield of 0%; (ii) expected volatility of 27.8% and
45.0% for 1999 and 1998, respectively; (iii) risk free interest rate of 6.4% and
5.3% for 1999 and 1998, respectively; and (iv) expected life of 8.8 years for
1999 and 8.0 years for 1998. The weighted average fair value of the options at
the grant date was $7.47 and $9.09 for 1999 and 1998, respectively. No options
were granted in 2000.

14.  EARNINGS PER SHARE:

Basic earnings per share (Basic EPS) is computed by dividing net income by the
weighted average number of shares of common stock outstanding during the period.
Diluted earnings per share (Diluted EPS) include the dilutive effect of stock
options, if any, using the treasury stock method. For 2000, 1999 and 1998, the
weighted average shares outstanding during the period of 6,501,491, 6,565,621,
and 6,762,522, respectively, used for Basic EPS, was increased by the dilutive
impact of stock options of 107,784, 20,773, and 42,104, respectively, for a
total of 6,609,275, 6,586,394, and 6,804,626 shares, respectively, used for
Diluted EPS.

15.       QUARTERLY FINANCIAL DATA (UNAUDITED):

<TABLE>
<CAPTION>
                                                             1ST QTR.   2ND QTR.    3RD QTR.    4TH QTR.      YEAR
                                                             --------   --------    --------    --------      ----
2000
----
<S>                                                          <C>        <C>         <C>         <C>        <C>
Net sales.................................................... $10,191    $11,860     $14,139     $15,197    $51,387
Gross profit.................................................   5,753      6,463       7,298       7,873     27,387
Net income...................................................   1,757      1,967       2,125       2,456      8,305
Earnings per share - basic...................................     .27        .30         .33         .38       1.28
Earnings per share - diluted.................................     .27        .30         .32         .37       1.26

1999
----
Net sales....................................................  $8,951    $10,674     $10,762     $12,325    $42,712
Gross profit.................................................   5,002      5,963       5,999       6,923     23,887
Net income...................................................   1,560      1,677       1,817       2,098      7,152
Earnings per share - basic...................................     .23        .26         .28         .32       1.09
Earnings per share - diluted.................................     .23        .26         .28         .32       1.09
</TABLE>

16.  INCOME TAXES:

The components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
                                                                               Years Ended December 31
                                                                           --------------------------------
                                                                             2000       1999       1998
                                                                             ----       ----       ----
<S>                                                                        <C>        <C>        <C>
          Current.....................................................       $ 4,336    $ 3,610    $ 3,121
          Deferred....................................................           884        962        661
                                                                             -------    -------    -------
                     Total provision for income taxes.................       $ 5,220    $ 4,572    $ 3,782
                                                                             =======    =======    =======
</TABLE>


The income tax provisions are different from the amount computed by applying the
U.S. federal income tax rates to income before provision for income taxes. The
reasons for these differences are as follows:





                                       22

<PAGE>   24

<TABLE>
<CAPTION>
                                                                               Years Ended December 31
                                                                           --------------------------------
                                                                             2000       1999       1998
                                                                             ----       ----       ----
<S>                                                                        <C>         <C>         <C>
          Income before provision for income taxes....................     $  13,525   $ 11,724    $ 9,831
          U.S. federal income tax rate................................           34%        34%        34%
                                                                           ---------   --------    -------
                     Computed income taxes............................         4,599      3,986      3,343
          Goodwill amortization.......................................           135        128         97
          Other.......................................................            69         53        (26)
                                                                           ---------   --------    -------
                     Provision for federal income taxes...............         4,803      4,167      3,414
          State income taxes, net of federal tax benefit..............           417        405        368
                                                                           ---------   --------    -------
                     Provision for income taxes.......................     $   5,220   $  4,572    $ 3,782
                                                                           =========   ========    =======
          Effective tax rate..........................................           39%        39%        38%
                                                                           =========   ========    =======
</TABLE>


Temporary differences that gave rise to deferred income tax assets and
liabilities are as follows:

<TABLE>
<CAPTION>
                                                                                             December 31
                                                                                      ---------------------
                                                                                         2000       1999
                                                                                         ----       ----
<S>                                                                                   <C>        <C>
         Deferred income tax assets:
           Trade accounts receivable............................................       $    85   $     85
           Inventories..........................................................           182        182
           Accrued liabilities..................................................           755        833
                                                                                       -------   --------
                    Total deferred income tax assets............................         1,022      1,100
                                                                                       -------   --------
         Deferred income tax liabilities:
           Property, plant and equipment........................................        (1,723)    (1,409)
           Intangibles..........................................................        (1,284)      (849)
           Other................................................................          (478)      (421)
                                                                                       -------   --------
                    Total deferred income tax liabilities.......................        (3,485)    (2,679)
                                                                                       -------   --------
         Net deferred income tax liability......................................       $(2,463)  $ (1,579)
                                                                                       =======   ========
</TABLE>

Current deferred income tax assets of $1,022 and $1,100 are included in other
current assets as of December 31, 2000 and 1999, respectively.

17.  MAJOR CUSTOMERS:

The percentage of net sales to major distributors to total net sales consist of
the following:

<TABLE>
<CAPTION>
                                                                                      Years Ended
                                                                                      December 31
                                                                              -----------------------------
                     Distributor                                                2000      1999      1998
                     -----------                                                ----      ----      ----
<S>                                                                           <C>       <C>       <C>
          Henry Schein, Inc.................................................  17.0%     17.7%     17.4%
          Patterson Dental Company..........................................  11.7      14.7      13.1
</TABLE>


18.  SALES OF EQUIPMENT RENTED TO OTHERS:

Panoramic periodically sells x-ray equipment that has been rented to customers
in its normal course of business. The Company recognizes revenue for the
proceeds of such sales and records as cost of goods sold the net book value of
the equipment. Net sales of the equipment were $1,434, $1,170 and $801 for 2000,
1999 and 1998, respectively and gross profit




                                       23

<PAGE>   25


from the sales was $712, $642 and $416 for 2000, 1999 and 1998, respectively.

19.  EMPLOYEE BENEFITS:

The Company has a defined contribution 401(k) plan covering substantially all
full-time employees meeting service and age requirements. Contributions to the
Plan can be made by an employee through deferred compensation and through a
discretionary employer contribution. Compensation expense related to this plan
was $234, $26, and $26 for 2000, 1999 and 1998, respectively. The company also
has certain nonqualified bonus and profit sharing plans covering substantially
all employees. A majority of these plans were redesigned or eliminated for 2000.
Compensation expense related to these plans was $6, $638, and $742 in 2000,
1999, and 1998, respectively. The Company also provides certain healthcare
insurance benefits for substantially all employees.

20.  RELATED-PARTY TRANSACTIONS:

The Company sells products to, and pays for services from, a corporation in
which a principal stockholder of the Company has an equity interest. Net sales
to such corporation totaled $77, $86, and $54 in 2000, 1999, and 1998,
respectively. Amounts paid for services totaled $3, $3 and $7 in 2000, 1999 and
1998, respectively.

Since the acquisition of Panoramic in 1998, the Company provides administrative
services for a corporation in which an officer of the Company has an equity
interest. This corporation provides financing for certain purchasers of the
Company's products. Net sales of the Company's products through financing
arrangements with such corporation totaled $0, $277, and $1,051 during 2000,
1999, and 1998, respectively. Net sales from such corporation totaled $16, $18
and $16 in 2000, 1999, and 1998 and the accounts receivable from the corporation
totaled $12, $4 and $246 at December 31, 2000, 1999 and 1998, respectively.

In August 2000, the Company loaned an officer of the Company $500 in accordance
with a three year unsecured promissory note at an interest rate of 6.27% payable
annually. The note is included in other long-term assets on the balance sheet at
December 31, 2000. Interest income of $13 related to this note was recorded in
2000.

21.  COMMITMENTS AND CONTINGENCIES:

The Company and its subsidiaries are from time to time parties to various legal
proceedings arising out of their businesses. Management believes there are no
such proceedings pending or threatened against the Company or its subsidiaries
which, if determined adversely, would have a material adverse effect on the
Company's business, financial condition, results of operations or cash flows.

The Company has begun construction of additional manufacturing and office space
in Fort Wayne, Indiana. The Company had paid $552,000 and has additional fixed
commitments of approximately $900,000 as of December 31, 2000 relating to this
project.

22.  ACCOUNTING STANDARD NOT YET IMPLEMENTED:

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"), which requires that all derivatives be
recognized as either assets or liabilities in the statement of financial
position at fair value. The adoption of SFAS 133 is not expected to have a
material effect on the Company's financial position or results of operations, as
the Company does not hold any derivative instruments.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

    None.




                                       24

<PAGE>   26




                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     (a)  Information concerning the Company's directors called for by this item
          will be included in the Company's definitive Proxy Statement prepared
          in connection with the 2001 Annual Meeting of Stockholders and is
          incorporated herein by reference. Such proxy statement will be filed
          with the Commission within 120 days after the close of the Company's
          fiscal year.
     (b)  Reference is made to "Executive Officers of the Registrant" in Part I.

ITEM 11. EXECUTIVE COMPENSATION.

    Information concerning this item will be included under the captions
"Executive Compensation" and "Option Grants" in the Company's definitive Proxy
Statement prepared in connection with the 2001 Annual Meeting of Stockholders
and is incorporated herein by reference. Such proxy statement will be filed with
the Commission within 120 days after the close of the Company's fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

    Information concerning this item will be included under the caption
"Securities Ownership of Management and Certain Beneficial Owners" in the
Company's definitive Proxy Statement prepared in connection with the 2001 Annual
Meeting of Stockholders and is incorporated herein by reference. Such proxy
statement will be filed with the Commission within 120 days after the close of
the Company's fiscal year.






ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

    Information concerning this item will be included under the caption "Certain
Relationships and Related Party Transactions" in the Company's definitive Proxy
Statement prepared in connection with the 2001 Annual Meeting of Stockholders
and is incorporated herein by reference. Such proxy statement will be filed with
the Commission within 120 days after the close of the Company's fiscal year.


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.








                                       25

<PAGE>   27

     (a)(1) Financial Statements-- Reference is made to Item 8 hereof:
           Consolidated Balance Sheets - December 31, 2000 and 1999
           Consolidated Statements of Income - Years ended December 31, 2000,
           1999, and 1998
           Consolidated Statements of Stockholders' Equity - Years ended
           December 31, 2000, 1999, and 1998
           Consolidated Statements of Cash Flows - Years ended December 31,
           2000, 1999, and 1998
           Notes to Consolidated Financial Statements - December 31, 2000

     (a)(2) Financial Statement Schedule -- The following financial statement
schedule of the Company is included for the years ended December 31, 1998, 1999
and 2000:

                 Schedule II Valuation and Qualifying Accounts.

    All other financial statement schedules are omitted for the reason that they
are not required or are not applicable, or the required information is shown in
the financial statements or the notes thereto.

     (a)(3) Exhibits -- See the Exhibit Index for the exhibits filed as a part
of or incorporated by reference into this report.




EXHIBIT
NUMBER            DESCRIPTION
------            -----------

3.1*       Articles of Incorporation of Registrant and Statement of Correction

3.2*       By-Laws of Registrant

10.1*      Escrow Agreement dated May 4, 1995 among Young Dental Manufacturing
           Company, Chemical Venture Capital Associates, P. Jeffrey Leck, John
           F. Kirtley, Richard C. Nemanick, Lorvic Holdings, Inc. and Boatmen's
           Trust Company.

10.2*      Contingent Payment Agreement dated as of May 4, 1995, by and between
           Young Dental Manufacturing Company, The Richard C. Nemanick Trust and
           Boatmen's Trust Company.

10.3*      Young Dental Manufacturing Company Pension Bonus Plan dated as of
           April 12, 1983.

10.4*      Young Dental Manufacturing Company Profit Sharing Plan dated as of
           January 1, 1987.

10.5***    1997 Stock Option Plan of the Registrant, as amended.

10.6***    Employment Agreement dated October 1, 1999, by and between Young
           Innovations, Inc. and Alfred E. Brennan, Jr. (revised from agreement
           dated October 8, 1997)

10.7**     Asset Purchase and Sale Agreement dated February 16, 1998 between
           Registrant and Panoramic Corporation.

10.8***    Employment Agreement dated July 6, 1999, by and between Young
           Innovations, Inc. and Arthur L. Herbst, Jr.

10.9***    Employment Agreement dated October 25, 1999, by and between Young
           Innovations, Inc. and Eric J. Stetzel.

10.10****  Promissory Note dated August 7, 2000, in the amount of $500,000
           payable by Alfred E. Brennan, Jr. to Young Innovations, Inc.

10.11****  Employment Agreement dated July 25, 2000, by and between Young
           Innovations, Inc. and George E. Richmond.

10.12****  Consulting Agreement dated January 8, 2001, by and between Young
           Innovations, Inc. and Richard G. Richmond.

21****     Subsidiaries of the Registrant

23****     Consent of Arthur Andersen LLP






                                       26

<PAGE>   28

24         Power of Attorney (included on Signature page)


--------------------------------
*     Filed as an Exhibit to Registrant's Registration Statement No. 333-34971
      on Form S-1 and incorporated herein by reference.
**    Filed as an Exhibit to Registrant's Current Report on Form 8-K filed on
      March 11, 1998 and incorporated herein by reference.
***   Filed as an Exhibit to Registrant's Report on Form 10-K filed on March 30,
      2000 and incorporated herein by reference.
****  Filed herewith.

    (b)   Reports on Form 8-K, none.

    (c)   See the exhibit index for the exhibits filed as part of or
          incorporated by reference in this report.

                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) 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.

Dated: March 23, 2001

                                           YOUNG INNOVATIONS, INC.

                                           By:    /s/ GEORGE E. RICHMOND
                                                  ----------------------------
                                                      George E. Richmond
                                                      Chief Executive Officer

    Each person whose signature appears below constitutes and appoints George E.
Richmond and Alfred E. Brennan his true and lawful attorneys-in-fact and agents,
each acting alone, with full powers of substitution and re-substitution for him
or her and in his or her name, place and stead, in any and all capacities, to
sign any and all amendments to this report, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, each acting alone, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

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


<TABLE>
<CAPTION>

                       SIGNATURE                               TITLE                                DATE
                       ---------                               -----                                ----
<S>                                             <C>                                            <C>
             /s/   GEORGE E. RICHMOND           Chief Executive Officer, Director              March 23, 2001
                   -------------------------    (Principal Executive Officer)
                   George E. Richmond

             /s/   ALFRED E. BRENNAN            President, Chief Operating Officer,            March 23, 2001
                   -------------------------    Director
                   Alfred E. Brennan

             /s/   ARTHUR L. HERBST, JR.        Executive Vice President, Chief Financial      March 23, 2001
                   -------------------------    Officer, Director
                   Arthur L. Herbst, Jr.        (Principal  Financial Officer and
                                                Principal Accounting Officer)

             /s/   RICHARD G. RICHMOND          Director                                       March 23, 2001
                   -------------------------
                   Richard G. Richmond

             /s/   RICHARD P. CONERLY           Director                                       March 23, 2001
                   -------------------------
                   Richard P. Conerly

             /s/   CONNIE H. DRISKO             Director                                       March 23, 2001
                   -------------------------
                   Connie H. Drisko

             /s/   JAMES R. O'BRIEN             Director                                       March 23, 2001
                   -------------------------
                   James R. O'Brien

             /s/   CRAIG E. LABARGE             Director                                       March 23, 2001
                   -------------------------
                   Craig E. LaBarge

             /s/   BRIAN F. BREMER              Director                                       March 23, 2001
                   -------------------------
                   Brian F. Bremer
</TABLE>






                                       27


<PAGE>   29


                                  EXHIBIT INDEX

EXHIBIT
NUMBER            DESCRIPTION
-------           -----------

3.1*       Articles of Incorporation of Registrant and Statement of Correction

3.2*       By-Laws of Registrant

10.1*      Escrow Agreement dated May 4, 1995 among Young Dental Manufacturing
           Company, Chemical Venture Capital Associates, P. Jeffrey Leck, John
           F. Kirtley, Richard C. Nemanick, Lorvic Holdings, Inc. and Boatmen's
           Trust Company.

10.2*      Contingent Payment Agreement dated as of May 4, 1995, by and between
           Young Dental Manufacturing Company, The Richard C. Nemanick Trust and
           Boatmen's Trust Company.

10.3*      Young Dental Manufacturing Company Pension Bonus Plan dated as of
           April 12, 1983.

10.4*      Young Dental Manufacturing Company Profit Sharing Plan dated as of
           January 1, 1987.

10.5***    1997 Stock Option Plan of the Registrant, as amended.

10.6***    Employment Agreement dated October 1, 1999, by and between Young
           Innovations, Inc. and Alfred E. Brennan, Jr. (revised from agreement
           dated October 8, 1997)

10.7**     Asset Purchase and Sale Agreement dated February 16, 1998 between
           Registrant and Panoramic Corporation.

10.8***    Employment Agreement dated July 6, 1999, by and between Young
           Innovations, Inc. and Arthur L. Herbst, Jr.

10.9***    Employment Agreement dated October 25, 1999, by and between Young
           Innovations, Inc. and Eric R. Stetzel.

10.10****  Promissory Note dated August 7, 2000, in the amount of $500,000
           payable by Alfred E. Brennan, Jr. to Young Innovations, Inc.

10.11****  Employment Agreement dated July 25, 2000, by and between Young
           Innovations, Inc. and George E. Richmond.

10.12****  Consulting Agreement dated January 8, 2001, by and between Young
           Innovations, Inc. and Richard G. Richmond.

21****     Subsidiaries of the Registrant

23****     Consent of Arthur Andersen LLP

25         Power of Attorney (included on Signature page)


-------------------------------
*     Filed as an Exhibit to Registrant's Registration Statement No. 333-34971
      on Form S-1 and incorporated herein by reference.
**    Filed as an Exhibit to Registrant's Current Report on Form 8-K filed on
      March 11, 1998 and incorporated herein by reference.
***   Filed as an Exhibit to Registrant's Report on Form 10-K filed on March 30,
      2000 and incorporated herein by reference.
****  Filed herewith.



                                       28


<PAGE>   30


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To Young Innovations, Inc.:

         We have audited in accordance with auditing standards generally
accepted in the United States, the consolidated financial statements of Young
Innovations, Inc. and subsidiaries included in this Form 10-K Annual Report and
have issued our report thereon dated January 31, 2001. Our audits were made for
the purpose of forming an opinion on those statements taken as a whole. Schedule
II included in this Form 10-K Annual Report is the responsibility of the
Company's management and is presented for the purpose of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.



ARTHUR ANDERSEN LLP

St. Louis, Missouri
January 31, 2001










                                       29

<PAGE>   31


                             YOUNG INNOVATIONS, INC.

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                  YEARS ENDED DECEMBER 31, 1998, 1999, and 2000
                                 (IN THOUSANDS)



                                    ADDITIONS
                   ------------------------------------------

<TABLE>
<CAPTION>
                                  BALANCE         CHARGED TO                                          BALANCE
                                  BEGINNING       COSTS AND                                            AT END
                                   OF YEAR        EXPENSES        ACQUISITIONS      DEDUCTIONS        OF YEAR
                                   -------        --------        ------------      ----------        -------
Allowance for doubtful
 Receivables
<S>                              <C>             <C>              <C>               <C>               <C>
1998......................           $ 80           $ 87             $ 37               $ 20           $ 184
1999......................            184            126               70                152             228
2000......................            228            (25)             100                 83             220
</TABLE>









                                       30