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

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FORM 10-Q

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

For the quarterly period ended March 31, 2002

Commission file number 000-23213

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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)

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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 ý    No o

Number
of shares outstanding of the Registrant's Common Stock at April 30, 2002:

8,807,015
shares of Common Stock, par value $.01 per share

ALL
SHARE AND PER SHARE NUMBERS SET FORTH ABOVE GIVE EFFECT TO THE THREE-FOR-TWO STOCK SPLIT EFFECTIVE ON MARCH 28, 2002 FOR HOLDERS OF RECORD AS OF THE CLOSE OF BUSINESS ON
MARCH 22, 2002.

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PART I  FINANCIAL INFORMATION

Item 1. Financial Statements.

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

|                                        |                                                                                                                                                          | March 31,
2002                             |        | December 31,
2001 |       
|--------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------ | ----------------- | ------
|
|Assets                                  |                                                                                                                                                          |                                            |        |                   |       
|Current assets:                         |                                                                                                                                                          |                                            |        |                   |       
|                                        | Cash and cash equivalents                                                                                                                                |                                            | $      |                  |       
|                                        | Trade accounts receivable, net of allowance for doubtful accounts of $310 and $444 in 2002 and 2001, respectively                                        |                                            |        | 8,477             |       
|                                        | Inventories                                                                                                                                              |                                            |        | 7,948             |       
|                                        | Other current assets                                                                                                                                     |                                            |        | 1,860             |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|                                        |                                                                                                                                                          | Total current assets                       |        |                   | 18,285
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Property, plant and equipment, net      |                                                                                                                                                          |                                            | 19,121 |                   |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Other assets                            |                                                                                                                                                          |                                            | 1,287  |                   |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Intangible assets, net                  |                                                                                                                                                          |                                            | 44,384 |                   |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|                                        |                                                                                                                                                          | Total assets                               |        | $                 | 83,077
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Liabilities and Stockholders' Equity    |                                                                                                                                                          |                                            |        |                   |       
|Current liabilities:                    |                                                                                                                                                          |                                            |        |                   |       
|                                        | Current maturities of long-term debt                                                                                                                     |                                            | $      | 120               |       
|                                        | Accounts payable and accrued liabilities                                                                                                                 |                                            |        | 6,494             |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|                                        |                                                                                                                                                          | Total current liabilities                  |        |                   | 6,614 
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Deferred income taxes                   |                                                                                                                                                          |                                            | 4,312  |                   |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Long-term debt, less current maturities |                                                                                                                                                          |                                            | 13,690 |                   |       
|                                        |                                                                                                                                                          |                                            |        |                   |       
|Stockholders' equity:                   |                                                                                                                                                          |                                            |        |                   |       
|                                        | Common stock, voting, $.01 par value, 25,000,000 shares authorized, 8,806,715 and 8,921,390 shares issued and outstanding in 2002 and 2001, respectively |                                            |        | 89                |       
|                                        | Additional paid-in capital                                                                                                                               |                                            |        | 27,824            |       
|                                        | Deferred stock compensation                                                                                                                              |                                            |        | (1,523            | )     
|                                        | Retained earnings                                                                                                                                        |                                            |        | 49,791            |       
|                                        | Common stock in treasury, at cost, 1,412,351 and 1,417,676 shares in 2002 and 2001, respectively                                                         |                                            |        | (17,720           | )     
|                                        |                                                                                                                                                          |                                            |        |                   |       
|                                        |                                                                                                                                                          | Total stockholders' equity                 |        |                   | 58,461
|                                        |                                                                                                                                                          |                                            |        |                   |       
|                                        |                                                                                                                                                          | Total liabilities and stockholders' equity |        | $                 | 83,077
|                                        |                                                                                                                                                          |                                            |        |                   |       

The
accompanying notes are an integral part of these statements.

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

|                                            |                                              | THREE MONTHS ENDED
MARCH 31, |       
|------------------------------------------- | -------------------------------------------- | ---------------------------- | ------
|
|Net sales                                   |                                              | $                            | 16,513
|                                            | Cost of goods sold                           |                              |       
|                                            |                                              |                              |       
|Gross profit                                |                                              |                              | 8,976 
|                                            | Selling, general and administrative expenses |                              |       
|                                            |                                              |                              |       
|Income from operations                      |                                              |                              | 4,196 
|                                            |                                              |                              |       
|                                            | Other expense (income), net                  |                              |       
|                                            |                                              |                              |       
|Income before provision for income taxes    |                                              |                              | 3,983 
|                                            | Provision for income taxes                   |                              |       
|                                            |                                              |                              |       
|Net income                                  |                                              | $                            | 2,430 
|                                            |                                              |                              |       
|Basic earnings per share                    |                                              | $                            | 0.28  
|                                            |                                              |                              |       
|Diluted earnings per share                  |                                              | $                            | 0.27  
|                                            |                                              |                              |       
|Basic weighted average shares outstanding   |                                              |                              | 8,805 
|                                            |                                              |                              |       
|Diluted weighted average shares outstanding |                                              |                              | 9,147 
|                                            |                                              |                              |       

The
accompanying notes are an integral part of these statements.

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

|                                                     |                                            | THREE MONTHS ENDED
MARCH 31,                                                 |                                         
|---------------------------------------------------- | ------------------------------------------ | ---------------------------------------------------------------------------- | ----------------------------------------
|
|Cash flows from operating activities:                |                                            |                                                                              |                                         
|                                                     | Net Income                                 |                                                                              | $                                       
|                                                     |                                            |                                                                              |                                         
|                                                     |                                            | Adjustments to reconcile net income to cash flows from operating activities |                                         
|                                                     |                                            | Depreciation and amortization                                                |                                         
|                                                     |                                            | Loss on disposal 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:                |                                            |                                                                              |                                         
|                                                     | Purchases 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      |                                                                              |                                         
|                                                     |                                            |                                                                              |                                         
|                                                     |                                            |                                                                              |                                         
|                                                     |                                            |                                                                              |                                         
|Net (decrease) increase in cash and cash equivalents |                                            |                                                                              | (82                                     
|Cash and cash equivalents, beginning of period       |                                            |                                                                              | 82                                      
|                                                     |                                            |                                                                              |                                         
|Cash and cash equivalents, end of period             |                                            | $                                                                            |                                        
|                                                     |                                            |                                                                              |                                         

The
accompanying notes are an integral part of these statements.

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YOUNG INNOVATIONS, INC.  CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS  MARCH 31, 2002  (Dollars in thousands, except share data)

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 2001 Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2002 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, 2001 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.    ORGANIZATION:

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

On
March 12, 2002, the Board of Directors declared a three-for-two stock split of the Company's Common Stock in the form of a stock dividend payable on
March 28, 2002 to shareholders of record as of the close of business on March 22, 2002. All share and per share numbers in this Report give effect to such stock split.

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, Inc. (collectively "Biotrol"). The Company paid approximately $9,300 in cash and expenses. The acquisition was principally financed with borrowings on the Company's credit
facility and cash generated 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 $8,121. The Company is in the process of finalizing the
valuations related to certain assets acquired and upon doing so will adjust the preliminary purchase price allocation if necessary. The results of operations for Biotrol are included in the
consolidated financial statements since June 12, 2001.

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

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and retail. The professional segment sells products to dentists, dental hygienists and dental assistants. The retail segment sells products to consumers through mass merchandisers. There are no
significant determinable assets or interest costs for the retail segment.

The
table below is a summary of certain financial information relating to the two segments:

|                       |  | Three Months Ended
March 31, 2002
|---------------------- |  | ---------------------------------
|
|Net sales              |  | $                                
|Income from operations |  | $                                

|                       |  | Three Months Ended
March 31, 2001
|---------------------- |  | ---------------------------------
|
|Net sales              |  | $                                
|Income from operations |  | $                                

5.    INVENTORIES:

Inventories consist of the following:

March 31,
2002

December 31,
2001Finished products

$
4,274

$
3,340Work in process


1,865


2,030Raw materials and supplies


1,809


1,788Total inventories

$
7,948

$
7,158


6.    PROPERTY, PLANT AND EQUIPMENT:

Property,
plant and equipment consist of the following:

March 31,
2002

December 31,
2001Land

$
1,086

$
1,086Buildings and improvements


7,287


7,448Machinery and equipment


16,000


15,350Equipment rented to others


5,507


5,257Construction in progress


682


60530,562


29,746LessAccumulated depreciation


(11,441
)

(10,987
)Total property, plant and equipment, net

$
19,121

$
18,759


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.

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Long-term
debt was as follows:

March 31,
2002

December 31,
2001Revolving credit facility due 2004

$
13,565

$
16,700Capital Lease Obligations


245


28413,810


16,984Lesscurrent portion


120


141$
13,690

$
16,843


8.    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) includes the dilutive effect of stock options and restricted stock, if any, using the treasury stock method. The following table sets forth the computation of
basic and diluted earnings per share:

Q1 2002

Q1 2001Net income

$
2,430

$
1,966Weighted average shares outstanding for basic earnings per share


8,805,000


9,771,000Dilutive effect of stock options and restricted stock


342,000


206,000Weighted average shares outstanding for diluted earnings per share


9,147,000


9,977,000Basic earnings per share

$
.28

$
.20Diluted earnings per share

$
.27

$
.20


9.    COMMITMENTS AND CONTINGENCIES:

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 the claims and intends to vigorously defend this matter. In addition, on January 25, 2002, Young filed a complaint in the United States District Court for the
Eastern District of Missouri asserting that the manufacture of the Sultan disposable prophy angle infringes Young's U.S. Patent No. 5,749,728. The complaint seeks a permanent injunction and
damages.

The
Company and its subsidiaries from time to time are also parties to various legal proceedings arising in the normal course of business. Management believes that none of these
proceedings, if determined adversely, would have a material adverse effect on the Company's financial position, results of operations or liquidity.

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

Critical Accounting Policies

In December 2001, the SEC requested that all registrants include in their MD&A their most critical accounting policies, the judgments and uncertainties
affecting the application of those policies, and the likelihood that materially different amounts would be reported under different conditions using different assumptions. The SEC indicated that a
"critical accounting policy" is one which is both important to the portrayal of the company's financial condition and results and requires management's most difficult, subjective or complex judgments,
often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We believe that the following accounting policies fit this definition:

Allowance
for doubtful accountsAccounts receivable balances are subject to credit risk. Management has attempted to reserve for expected credit losses, sales returns and
allowances, and discounts based upon past experience as well as knowledge of current customer information. We believe that our reserves are adequate. It is possible, however, that the accuracy of our
estimation process could be impacted by unforeseen circumstances. We continuously review our reserve balance and refine the estimates to reflect any changes in circumstances; however, we cannot
guarantee that we will accurately estimate credit losses on these accounts receivable.

InventoryThe
Company values inventory at the lower of cost or market. Management regularly reviews inventory quantities on hand and records a provision for excess or
obsolete inventory based primarily on estimated product demand and other knowledge related to the inventory. Demand for our products can fluctuate and our estimates of future product demand may move
or be inaccurate, in which case we may have understated or overstated the provision required for excess or obsolete inventory. In the future, if our inventory is determined to be overvalued, we would
be required to recognize such costs in our cost of goods sold at the time of such determination. Likewise, if our inventory is determined to be undervalued, we may have over-reported our
cost of goods sold in previous periods and would be required to recognize such additional operating income at the time of sale. Therefore, although we make every effort to ensure the accuracy of our
provision, any significant unanticipated changes could have a significant impact on the value of our inventory and our reported operating results.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001

Net Sales

Net sales increased $2.6 million, or 18.6%, to $16.5 million in the first quarter of 2002 from $13.9 million in the first quarter of 2001.
The increase was primarily attributable to the inclusion of sales of Biotrol (acquired June 12, 2001) as well as increased sales of products in the base business.

Gross Profit

Gross profit increased $1.9 million or 26.2%, to $9.0 million in the first quarter of 2002 from $7.1 million in the first quarter of 2001.
Gross profit was favorably impacted by the acquisition of Biotrol. Gross margin increased to 54.4% of net sales in the first quarter of 2002 from 51.1% in the first quarter of 2001. The increase was
primarily a result of the acquisition of Biotrol which typically has higher margins in addition to manufacturing productivity improvements and cost savings associated with the consolidation of our
Sacramento, CA facility into our Earth City, MO operations.

Selling, General, and Administrative Expenses

SG&A expenses increased $.8 million or 20.8% to $4.8 million in the first quarter of 2002 from $4.0 million in the first quarter of 2001. The
increase was primarily the result of the inclusion of Biotrol expenses. This increase was partially offset by the elimination of the amortization of goodwill in accordance with the adoption of
SFAS 142, which was $278,000 for the first three months of 2001. As a percent of net sales, SG&A expenses increased to 28.9% in 2002 from 28.4% in 2001 primarily as a result of higher
historical SG&A spending at Biotrol.

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Income from Operations

Income from operations increased $1.0 million or 33.0%, to $4.2 million in the first quarter of 2002 from $3.2 million in the first quarter
of 2001. The increase was a result of the items explained above.

Other Expense / (Income), Net

Other expense, net increased $254,000 to $213,000 in the first quarter of 2002 from ($41,000) in the first quarter of 2001. The increase was primarily
attributable additional interest expense resulting from borrowings on the Company's credit facility's as well as increased expense associated with the Company's one third interest in International
Assembly, Inc.

Provision for Income Taxes

Provision for income taxes increased $323,000 for the first quarter of 2002 to $1.6 million from $1.2 million in the first quarter of 2001. The
effective tax rate in 2002 of 39.0% compares to 38.5% for 2001, reflecting the phase-in of the 35% federal tax rate.

Liquidity and Capital Resources

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 flow from operating activities was $4.1 million and $3.1 million for the first three months of 2002 and 2001, respectively. Capital expenditures for property,
plant and equipment were $1.0 million and $1.1 million for the first 3 months of 2002 and 2001, respectively. Consistent with the Company's historical capital expenditures, future
capital expenditures are expected to include facility improvements, panoramic X-ray machines for the Company's rental program, production machinery and information systems.

On
November 2, 2001, the Company purchased 1,050,000 shares of its common stock from George E. Richmond, its Chairman for approximately $14.9 million. The purchase was
financed through borrowings on the Company's credit facility.

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

During
March 2001, the Company entered into a one-year $20.0 million credit agreement. The agreement was amended in April and September 2001, to extend
the term to three-years and increase the borrowing capacity to $40.0 million. Borrowings under the agreement bear interest at rates ranging from LIBOR + 1% to
LIBOR + 2.25% or Prime to Prime + .5%. Administrative fees for this agreement range from .15% to .25% of the unused balance. The agreement is unsecured and contains various
financial and other covenants and limitations on indebtedness. As of March 31, 2002 and December 31, 2001, the Company was in compliance with all of these covenants. As of
March 31, 2002, the Company had $13.6 million in outstanding borrowings under this agreement and $22.3 million available for borrowing taking into account the financial covenants.
Management believes through its operating cash flows as well as borrowing capabilities, the Company has adequate liquidity and capital resources to meet its needs on a short and long-term
basis.

Recent Financial Accounting Standards Board Statements

In June 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 as well as all business combinations for which the date of acquisition is July 1, 2001 or
later to be accounted for using the purchase method of accounting. The adoption of SFAS No. 141 did 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. The Company stopped amortizing goodwill effective January 1, 2002 in accordance with provisions above. Other intangible assets will continue to be amortized over
their

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estimated useful lives. In the comparable quarter of the prior year, goodwill amortization was $278,000. In addition, the Company is in the process of performing its initial goodwill impairment test.

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 is required to be implemented by the Company by January 1, 2003. Adoption of SFAS
No. 143 is not expected to 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 was implemented by the Company on January 1, 2002.
The adoption of SFAS No. 144 did not have a material impact on the consolidated financial statements of the Company.

Forward-Looking Statements

Investors are cautioned that this press 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 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 risk and
uncertainties include, but are not limited to, those disclosed in the Company's Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The
Company finances a portion of its working capital and capital requirements with cash from borrowings under a revolving credit facility. Due to the variable interest rate feature on
the debt, the Company is exposed to interest rate risks. The Company does not use derivatives to manage its interest rate risks.

10

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PART II  OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K



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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.                                                 
|----------- |  | ------------------------------------------------------------------------
|May 9, 2002 |  | /s/ARTHUR L. HERBST, JR.                                                
|            |  |                                                                         
|Date        |  | Arthur L. Herbst, Jr.
Executive Vice President & Chief Financial Officer

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