---

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

---

FORM 10-Q

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

For the quarterly period ended September 30, 2001

Commission file number 000-23213

---

YOUNG INNOVATIONS, INC.(Exact name of registrant as specified in its charter)

Missouri

43-1718931(State or other jurisdiction of incorporation
or organization)

(I.R.S. Employer
Identification No.)


13705 Shoreline Court East, Earth City, Missouri 63045(Address of principal executive offices) (Zip Code)

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

---

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or 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 / /

Number
of shares outstanding of the Registrant's Common Stock at October 31, 2001: 6,566,693 shares of Common Stock, par value $.01 per share

---

---

---



PART I  FINANCIAL INFORMATION

Item 1. Financial Statements.

YOUNG INNOVATIONS, INC.  CONSOLIDATED BALANCE SHEETS  (Dollars in thousands, except per share data)

|                                        |                                                                                                                                                          | September 30,
2001                         |        | December 31,
2000 |       
|--------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------ | ----------------- | ------
|
|Assets                                  |                                                                                                                                                          |                                            |        |                   |       
|Current assets:                         |                                                                                                                                                          |                                            |        |                   |       
|                                        | Cash and cash equivalents                                                                                                                                |                                            | $      | 248               |       
|                                        | Trade accounts receivable, net of allowance for doubtful accounts of $452 and $220 in 2001 and 2000, respectively                                        |                                            |        | 9,614             |       
|                                        | Inventories                                                                                                                                              |                                            |        | 7,932             |       
|                                        | Other current assets                                                                                                                                     |                                            |        | 2,175             |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|                                        |                                                                                                                                                          | Total current assets                       |        |                   | 19,969
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Property, plant and equipment, net      |                                                                                                                                                          |                                            | 18,742 |                   |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Other assets                            |                                                                                                                                                          |                                            | 1,609  |                   |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Intangible assets, net                  |                                                                                                                                                          |                                            | 44,565 |                   |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|                                        |                                                                                                                                                          | Total assets                               |        | $                 | 84,885
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Liabilities and Stockholders' Equity    |                                                                                                                                                          |                                            |        |                   |       
|Current liabilities:                    |                                                                                                                                                          |                                            |        |                   |       
|                                        | Current maturities of long-term debt                                                                                                                     |                                            | $      | 591               |       
|                                        | Accounts payable and accrued liabilities                                                                                                                 |                                            |        | 6,411             |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|                                        |                                                                                                                                                          | Total current liabilities                  |        |                   | 7,002 
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Deferred income taxes                   |                                                                                                                                                          |                                            | 3,516  |                   |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Long-term debt, less current maturities |                                                                                                                                                          |                                            | 6,680  |                   |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Stockholders' equity:                   |                                                                                                                                                          |                                            |        |                   |       
|                                        | Common stock, voting, $.01 par value, 25,000,000 shares authorized, 6,558,893 and 6,504,596 shares issued and outstanding in 2001 and 2000, respectively |                                            |        | 65                |       
|                                        | Additional paid-in capital                                                                                                                               |                                            |        | 26,164            |       
|                                        | Retained earnings                                                                                                                                        |                                            |        | 44,475            |       
|                                        | Common stock in treasury, at cost, 253,817 and 308,114 shares in 2001 and 2000, respectively                                                             |                                            |        | (3,017            | )     
|                                        |                                                                                                                                                          |                                            |        |                   |       
|                                        |                                                                                                                                                          | Total stockholders' equity                 |        |                   | 67,687
|                                        |                                                                                                                                                          |                                            |        |                   |       
|                                        |                                                                                                                                                          | Total liabilities and stockholders' equity |        | $                 | 84,885
|                                        |                                                                                                                                                          |                                            |        |                   |       

The
accompanying notes are an integral part of these statements.

2

---



YOUNG INNOVATIONS, INC.  CONSOLIDATED STATEMENTS OF INCOME  (In thousands, except per share data)  (unaudited)

|                                            |                                              | Three Months
Ended
September 30, |        | Nine Months
Ended
September 30,
|------------------------------------------- | -------------------------------------------- | -------------------------------- | ------ | -------------------------------
|
|Net sales                                   |                                              | $                                | 16,760 |                                
|                                            | Cost of goods sold                           |                                  |        | 7,865                          
|                                            |                                              |                                  |        |                                
|Gross profit                                |                                              |                                  | 8,895  |                                
|                                            | Selling, general and administrative expenses |                                  |        | 4,882                          
|                                            |                                              |                                  |        |                                
|Income from operations                      |                                              |                                  | 4,013  |                                
|                                            |                                              |                                  |        |                                
|                                            | Other expense, net                           |                                  |        | 70                             
|                                            |                                              |                                  |        |                                
|Income before provision for income taxes    |                                              |                                  | 3,943  |                                
|                                            | Provision for income taxes                   |                                  |        | 1,518                          
|                                            |                                              |                                  |        |                                
|Net income                                  |                                              | $                                | 2,425  |                                
|                                            |                                              |                                  |        |                                
|Basic earnings per share                    |                                              | $                                | 0.37   |                                
|                                            |                                              |                                  |        |                                
|Diluted earnings per share                  |                                              | $                                | 0.36   |                                
|                                            |                                              |                                  |        |                                
|Basic weighted average shares outstanding   |                                              |                                  | 6,552  |                                
|                                            |                                              |                                  |        |                                
|Diluted weighted average shares outstanding |                                              |                                  | 6,720  |                                
|                                            |                                              |                                  |        |                                

The
accompanying notes are an integral part of these statements.

3

---



YOUNG INNOVATIONS, INC.  CONSOLIDATED STATEMENTS OF CASH FLOWS  (Dollars in thousands)  (unaudited)

|                                               |                                                     | Nine Months Ended
September 30,                                              |                                         
|---------------------------------------------- | --------------------------------------------------- | ---------------------------------------------------------------------------- | ----------------------------------------
|
|Cash flows from operating activities:          |                                                     |                                                                              |                                         
|                                               | Net Income                                          |                                                                              | $                                       
|                                               |                                                     |                                                                              |                                         
|                                               |                                                     | Adjustments to reconcile net income to cash flows from operating activities |                                         
|                                               |                                                     | Depreciation and amortization                                                |                                         
|                                               |                                                     | Deferred income taxes                                                        |                                         
|                                               |                                                     | Gain on sale of property, plant and equipment                                |                                         
|                                               |                                                     | Changes in assets and liabilities                                           |                                         
|                                               |                                                     |                                                                              | Trade accounts receivable               
|                                               |                                                     |                                                                              | Inventories                             
|                                               |                                                     |                                                                              | Other current assets                    
|                                               |                                                     |                                                                              | Other assets                            
|                                               |                                                     |                                                                              | Accounts payable and accrued liabilities
|                                               |                                                     |                                                                              |                                         
|                                               |                                                     |                                                                              |                                         
|                                               |                                                     |                                                                              |                                         
|                                               |                                                     |                                                                              |                                         
|                                               |                                                     |                                                                              |                                         
|Cash flows from investing activities:          |                                                     |                                                                              |                                         
|                                               | Payments for acquisitions, net of cash acquired     |                                                                              |                                         
|                                               | Purchases of property, plant and equipment          |                                                                              |                                         
|                                               | Proceeds from sale of property, plant and equipment |                                                                              |                                         
|                                               |                                                     |                                                                              |                                         
|                                               |                                                     |                                                                              |                                         
|                                               |                                                     |                                                                              |                                         
|Cash flows from financing activities:          |                                                     |                                                                              |                                         
|                                               | Borrowings of long-term debt                        |                                                                              |                                         
|                                               | Payments on long- term debt                         |                                                                              |                                         
|                                               | Proceeds from stock options exercised               |                                                                              |                                         
|                                               | Purchases of treasury stock                         |                                                                              |                                         
|                                               |                                                     |                                                                              |                                         
|                                               |                                                     |                                                                              |                                         
|                                               |                                                     |                                                                              |                                         
|Net increase in cash and cash equivalents      |                                                     |                                                                              | 248                                     
|Cash and cash equivalents, beginning of period |                                                     |                                                                              |                                        
|                                               |                                                     |                                                                              |                                         
|Cash and cash equivalents, end of period       |                                                     | $                                                                            | 248                                     
|                                               |                                                     |                                                                              |                                         

The
accompanying notes are an integral part of these statements.

4

---



YOUNG INNOVATIONS, INC.  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS  SEPTEMBER 30, 2001  (Dollars in thousands)

GENERAL:

This report includes information in a condensed format and should be read in conjunction with the audited consolidated financial statements and the footnotes
included in the Company's 2000 Annual Report on Form 10-K. The results of operations for the nine months ended September 30, 2001 are not necessarily indicative of the
results expected for the full year or any other interim period.

The
accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles for interim financial information and with the
instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles have been condensed, or omitted, pursuant to the rules of the Securities and Exchange Commission. In our opinion, the
statements include all adjustments necessary (which are of a normal recurring nature) for the fair presentation on the results of the interim periods presented.

The
balance sheet at December 31, 2000 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.

1.  DESCRIPTION OF BUSINESS:

Young Innovations, Inc. (the Company) develops, manufactures and markets supplies and equipment for the professional and retail dental markets. The
Company's product offering includes disposable and metal prophy angles, cups, brushes, panoramic x-ray machines, handpieces, orthodontic toothbrushes, flavored gloves, children's
toothbrushes, children's toothpastes, and infection control products. The Company's manufacturing and distribution facilities are located in Missouri, California, Colorado, Indiana and Texas.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

The consolidated financial statements include the accounts of Young Innovations, Inc. and its direct and indirect wholly owned subsidiaries. All
significant inter-company accounts and transactions are eliminated in consolidation.

3.  ACQUISITIONS:

On June 12, 2001 the Company acquired substantially all of the assets and assumed a portion of the liabilities of the Biotrol and Challenge subsidiaries
of Pro-Dex Corporation (Biotrol/Challenge). The Company paid $9,343 in cash. The acquisition was principally financed with borrowings on the Company's credit facility 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, which is
subject to adjustment upon obtaining complete valuation information. Management believes that finalization of the purchase price allocation will not have a material impact on the consolidated results
of operations or financial position of the company. This excess of purchase price (as preliminarily allocated) over the estimated fair value of net assets acquired (goodwill) is $7,975 and is being
amortized over 40 years. The results of operations for Biotrol/Challenge are included in the consolidated financial statements since June 12, 2001.

5

---

On June 13, 2000 the Company acquired substantially all of the assets and assumed a portion of the liabilities of Plak Smacker, Inc (Plak Smacker). The Company paid $7,053 in
cash. The acquisition was principally financed with borrowings on the Company's credit facility and through cash flows from operations. The acquisition was accounted for as a purchase transaction. The
purchase price was allocated based upon the fair value of assets and liabilities. This excess of purchase price over the estimated fair value of net assets acquired (goodwill) was $6,211 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.

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." With the acquisition of Plak Smacker in June 2000, 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 retail customers 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
following tables present certain financial information about the Company's two business segments:

|                       |  | Three Months Ended
September 30, 2001 |        | Nine Months Ended
September 30, 2001
|---------------------- |  | ------------------------------------- | ------ | ------------------------------------
|
|Net sales              |  | $                                     | 15,627 |                                     
|Income from operations |  | $                                     | 3,965  |                                     

|                       |  | Three Months Ended
September 30, 2000 |        | Nine Months Ended
September 30, 2000
|---------------------- |  | ------------------------------------- | ------ | ------------------------------------
|
|Net sales              |  | $                                     | 13,017 |                                     
|Income from operations |  | $                                     | 3,454  |                                     

5.  INVENTORIES:

Inventories consist of the following:

September 30,
2001

December 31,
2000Finished products

$
3,498

$
3,708Work in process


2,423


1,569Raw materials and supplies


2,011


867Total inventories

$
7,932

$
6,144


6

---

6.  PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consist of the following:

September 30,
2001

December 31,
2000Land

$
1,086

$
508Buildings and improvements


7,515


4,068Machinery and equipment


14,883


12,427Equipment rented to others


5,295


4,966Construction in progress


487


55229,266


22,521LessAccumulated depreciation


(10,524
)

(9,265
)Total property, plant and equipment, net

$
18,742

$
13,256


7.  CREDIT ARRANGEMENTS AND NOTES PAYABLE:

The Company has a credit arrangement that provides for a three-year, unsecured revolving credit facility with an aggregate commitment of
$40 million. Borrowings under the arrangement bear interest at rates ranging from LIBOR +1% to LIBOR +2.25% or Prime to Prime +.5%. Administrative fees for this arrangement range from .15% to
 .25% of the unused balance. The agreement is unsecured and contains various financial and other covenants.

Long-term
debt was as follows:

September 30,
2001

December 31,
2000Revolving credit facility due 2004 with an average interest rate of 4.49% at September 30, 2001

$
6,936

$
130Capital Lease Obligations


335


4627,271


592Lesscurrent portion


591


308$
6,680

$
284


8.  COMMON STOCK:

During the first nine months of 2001, the Company reissued 55,697 shares in conjunction with stock option exercises for $617 and purchased 1,400 shares of
treasury stock for $26. In November 2001, the Company repurchased 700,000 shares of its common stock for approximately $15,000 from its Chairman and Chief Executive Officer George Richmond.

9.  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 that none of
these proceedings would have a material adverse effect on the Company's financial position, results of operations and liquidity.

7

---



Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

RESULTS
OF OPERATIONS

Three Months Ended September 30, 2001 Compared to Three Months Ended September 30, 2000

Net Sales

Net sales increased $2.6 million, or 18.5%, to $16.8 million in their third quarter of 2001 from $14.1 million in the third quarter of
2000. The increase was primarily a result of the addition of Biotrol/Challenge sales in the third quarter of 2001 as well as increased sales of products in the base business. Biotrol/Challenge was
acquired on June 12, 2001.

Gross Profit

Gross profit increased $1.6 million or 21.9%, to $8.9 million in the third quarter of 2001 from $7.3 million in the third quarter of 2000.
Gross profit benefited from the acquisition of Biotrol/Challenge and from strong sales in the base business. Gross margin increased to 53.1% of net sales in the third quarter of 2001 from 51.6% in the
third quarter of 2000. The increase was primarily a result of improved production efficiency in the manufacturing operations.

Selling, General, and Administrative Expenses

SG&A expenses increased $1.1 million or 29.7% to $4.9 million in the third quarter of 2001 from $3.8 million in the third quarter of 2000.
The increase was primarily the result of the inclusion of
Biotrol/Challenge. As a percent of net sales, SG&A expenses increased to 29.1% in 2001 from 26.6% in 2000 primarily as a result of higher SG&A spending at Biotrol/Challenge which was acquired in
June 2001.

Income from Operations

Income from operations increased $479,000 or 13.6%, to $4.0 million in the third quarter of 2001 from $3.5 million in the third quarter of 2000.
The increase was a result of the items explained above.

Other Expense, Net

Other expense, net decreased $23,000 to $70,000 in the third quarter of 2001 from $93,000 in the third quarter of 2000. The decrease was attributable to the
Company's portion of the loss from its investment in International Assembly, Inc. (IAI) being lower than in the year earlier period and other income being higher. This was partially offset by
increased interest expense during the quarter.

Provision for Income Taxes

Provision for income taxes increased $202,000 for the third quarter of 2001 to $1.5 million from $1.3 million in the third quarter of 2000.

Nine Months Ended September 30, 2001 Compared to Nine Months Ended September 30, 2000

Net Sales

Net sales increased $9.5 million, or 26.3%, to $45.7 million for the first nine months of 2001 from $36.2 million for the first nine
months of 2000. The increase was primarily a result of the addition of a full period of Plak Smacker sales and partial inclusion of Biotrol/Challenge sales in the first nine months of 2001 as well as
growth in some of the base business products. Plak Smacker was acquired on June 13, 2000. Biotrol/Challenge was acquired on June 12, 2001.

8

---

Gross Profit

Gross profit increased $4.4 million or 22.7%, to $23.9 million for the first nine months of 2001 from $19.5 million for the first nine
months of 2000. Gross profit benefited from the acquisitions of Biotrol/Challenge and Plak Smacker and through strong sales in the other base businesses. Gross margin decreased to 52.4% of net sales
for the first nine months of 2001 from 53.9% of net sales for the comparable period in 2000. The decrease was primarily a result of the inclusion of a full period of sales of Plak Smacker products,
which typically carry lower gross margins.

Selling, General, and Administrative Expenses

SG&A expenses increased $3.3 million, or 33.3%, to $13.1 million for the first nine months of 2001 from $9.8 million for the first nine
months of 2000. The increase in SG&A expenses is primarily attributable to the inclusion of Biotrol/Challenge and Plak Smacker. As a percent of net sales, SG&A expenses increased to 28.6% in 2001 from
27.1% in 2000 primarily as a result of higher SG&A spending at Biotrol/Challenge, which was acquired in June 2001.

Income from Operations

Income from operations increased $1.2 million or 12.0%, to $10.9 million for the first nine months of 2001 from $9.7 million for the first
nine months of 2000. The increase was a result of the items explained above.

Other Expense, Net

Other expense, net decreased $116,000 to $42,000 for the first nine months of 2001 from $158,000 for the comparable period in 2000. The decrease was primarily
attributable to the Company's portion of the loss from its investment in IAI being lower than in the year earlier period. This was partially offset by increased interest expense in the first nine
months of 2001 than in 2000.

Provision for Income Taxes

Provision for income taxes increased $471,000 in 2001 to $4.2 million from $3.7 million in 2000.

Liquidity and Capital Resources

On June 12, 2001, the Company acquired substantially all of the assets of Biotrol/Challenge for approximately $9.3 million in cash. The purchase
price was principally financed with borrowings on the Company's credit facility and with cash flows from operations.

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 facility and with cash flows from operations.

Historically,
the Company has financed its operations primarily through cash flow from operating activities and, to a lesser extent, through borrowings under its credit facility. Net
cash flows from operating activities were $8.8 million and $4.2 million for the first nine months of 2001 and 2000, respectively. Capital expenditures for property, plant and equipment
were $6.5 million and $1.9 million for the first nine months of 2001 and 2000, respectively. During the first nine months of 2001, the Company spent $3.4 million for additional
land and buildings at its Earth City, MO and its Ft. Wayne, IN locations as well as approximately $3.1 million of machinery and equipment, panoramic X-ray machines and other capital
expenditures to update various operations. Consistent with the Company's historical capital expenditures, future capital expenditures are expected to include building improvements, the purchase of
panoramic X-ray machines for rental, injection molding equipment and upgrades to production machinery and the Company's information systems.

9

---

In March 2001, the Company entered into a three year $20 million credit arrangement, which was amended in September 2001 to increase the borrowing capacity to
$40 million. Borrowings made under this arrangement will bear interest at rates ranging from LIBOR +1% to LIBOR +2.25% or Prime to Prime +.5%. Administrative fees for this arrangement range
from .15% to .25% of the unused balance. As of September 30, 2001, $6.9 million was outstanding under the arrangement resulting in $33.1 million available for borrowing. The
agreement is unsecured and contains various financial and other covenants. The credit arrangement will be used to fund future acquisitions, stock repurchases, and may be used for working capital,
capital expenditures as well as other corporate needs.

In
November 2001, the Company purchased 700,000 shares of its common stock for approximately $15 million from its Chairman and Chief Executive Officer George Richmond.
The Company drew on its credit arrangement to fund the purchase.

New Accounting Standards

In July 2001, the Financial Accounting Standards Board adopted SFAS No. 141 "Business Combinations" and No. 142, "Goodwill and Intangible
Assets." SFAS No. 141 requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting. SFAS No. 141 is required to be
implemented for all acquisitions initiated after June 30, 2001 and all business combinations accounted for using the purchase method for which the date of acquisition is July 1, 2001 or
later. Adoption of SFAS No. 141 will not impact the consolidated financial statements of the Company.

Under
SFAS No. 142, goodwill is no longer subject to amortization over its useful life; rather, it is subject to at least annual assessments of impairment. Also, under SFAS
No. 142, an intangible asset should be recognized if the benefit of the intangible is obtained through contractual or other legal rights or if the intangible asset can be sold, transferred,
licensed, rented or exchanged. Such intangibles will be amortized over their useful lives. Certain intangibles have indefinite useful lives and will not be amortized. SFAS No. 142 will be
implemented by the Company on January 1, 2002. All goodwill and intangible assets acquired after June 30, 2001 will be immediately subject to the provisions of SFAS No. 142. The
Company is currently in the process of assessing the future impact of adoption of SFAS No. 142.

In
June 2001, the Financial Accounting Standards Board issued SFAS No. 143, "Accounting for Asset Retirement Obligations." Under SFAS No. 143, the fair value of a liability for an
asset retirement obligation is required to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized
as part of the carrying amount of the long-lived asset. SFAS No. 143 will be implemented by the Company on January 1, 2002. Adoption of SFAS No. 143 will not have a material impact on the consolidated
financial statements of the Company.

In
August 2001, the Financial Accounting Standards Board issued SFAS No. 144, "Accounting for the Impairment of Disposal of Long-Lived Assets." SFAS No. 144 addresses financial
accounting and reporting for the impairment of long-lived assets and for the long-lived assets to be disposed of and supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of." SFAS No. 144 establishes a single accounting model for long-lived assets to be disposed of by sale and resolves implementation issues related to SFAS No. 121.
SFAS No. 144 will be implemented by the Company on January 1, 2002. Adoption of SFAS No. 144 will not have a material impact on the consolidated financial statements of the Company.

Forward-Looking Statements

Investors are cautioned that this report as well as other reports and oral statements by Company officials may contain certain forward-looking statements as
defined in the Private Securities Litigation

10

---

and Reform Act of 1995. 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 the Company's Annual Report on Form 10-K for the year ended December 31, 2000 and other reports filed with
the Securities and Exchange Commission.

Item 3.  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.

11

---



PART II  OTHER INFORMATION

Item 1.  Legal Proceedings

On May 24, 2001, Sultan Dental Products, Ltd. ("Sultan") filed a complaint in the United States District Court for the Southern District of New
York (which was subsequently dismissed by the plaintiff and refiled in the United States District Court for the District of New Jersey on October 16, 2001) asserting that the Young disposable
prophy angle infringes a patent that is exclusively licensed to Sultan. The complaint seeks a permanent injunction and unspecified damages. While this matter is in its early stages, the Company
believes it has meritorious defenses to such claims and intends to vigorously defend this matter.

Item 6.  Exhibits and Reports on Form 8-K

(a)
Exhibits.

4.1

Amendment No. 2, dated September 28, 2001, to the Credit Facilities Agreement among Bank of America, N.A., the other lenders listed therein and the Company dated March 20, 2001, as amended.


(b)
Reports on Form 8-K.



12

---





SIGNATURE

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

|                      |  |  |  | YOUNG INNOVATIONS, INC.                                                                                             
|--------------------- |  |  |  | --------------------------------------------------------------------------------------------------------------------
|November 13, 2001Date |  |  |  | /s/ Arthur L. Herbst, Jr.Arthur L. Herbst, Jr.
Executive Vice President Strategic Planning &
Chief Financial Officer

13

---

QuickLinks