<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)
[ X ]  Annual report pursuant to section 13 or 15(d) of the Securities Exchange
       Act of 1934

                     For the fiscal year ended May 26, 2002
                                               -------------
                                       or
[   ]  Transition report pursuant to section 13 or 15(d) of the Securities
       Exchange Act of 1934
       For the transition period from ____________ to ___________

                         Commission File Number 1-11344
                                                -------

                       INTERMAGNETICS GENERAL CORPORATION
                       ----------------------------------
             (Exact name of registrant as specified in its charter.)

                     New York                            14-1537454
          -------------------------------             -----------------------
          (State or other jurisdiction of                (I.R.S. Employer
           incorporation or organization)                Identification No.)

              450 Old Niskayuna Road
              Latham, New York                                 12110
     ----------------------------------------         ----------------------
       (Address of principal executive offices)             (Zip Code)

        Registrant's telephone number, including area code (518) 782-1122
                                                           --------------

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

                                      None
                                      ----
                                (Title of Class)


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

                          Common Stock - $.10 par value
                          -----------------------------
                              (Title of each Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                                 YES  X     NO
                                     ---       ---


<PAGE>

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


                                       ii

<PAGE>


The aggregate market value of the voting stock held by non-affiliates of the
registrant is approximately $220,191,246. Such aggregate market value was
computed by reference to the closing price of the Common Stock based on quoted
market prices on August 15, 2002. It assumes that all directors and officers of
the registrant are affiliates. In making such calculation, the registrant does
not determine whether any director, officer or other holder of Common Stock is
an affiliate for any other purpose.

The number of shares of the registrant's Common Stock outstanding, net of
Treasury shares, as of August 15, 2002 was 16,681,155.


                       DOCUMENTS INCORPORATED BY REFERENCE

The information required for Part III below is incorporated by reference from
the registrant's Proxy Statement for its 2002 Annual Meeting of Shareholders to
be filed within 120 days after the end of the registrant's fiscal year.


                                      iii

<PAGE>


                                TABLE OF CONTENTS
<TABLE>

<S>                                                                                                            <C>
PART I............................................................................................................1

ITEM 1.  BUSINESS DESCRIPTION.....................................................................................1
   MAGNETIC RESONANCE IMAGING SEGMENT.............................................................................2
   INSTRUMENTATION SEGMENT........................................................................................8
   ENERGY TECHNOLOGY SEGMENT.....................................................................................11
   RESEARCH AND DEVELOPMENT......................................................................................17
   INVESTMENTS...................................................................................................18
   PERSONNEL.....................................................................................................18
   EXECUTIVE OFFICERS OF THE REGISTRANT..........................................................................18

ITEM 2.  PROPERTIES..............................................................................................20

ITEM 3.  LEGAL PROCEEDINGS.......................................................................................20

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.....................................................21

PART II..........................................................................................................21

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...................................21

ITEM 6.  SELECTED FINANCIAL DATA.................................................................................22

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................23

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCUSSIONS ABOUT MARKET RISK..............................................31

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.............................................................31

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE....................31


PART III.........................................................................................................32

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT......................................................32

ITEM 11. EXECUTIVE COMPENSATION..................................................................................32

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..........................................32

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..........................................................32


PART IV..........................................................................................................32

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K..........................................32
   (a)   FINANCIAL STATEMENTS, SCHEDULE AND EXHIBITS.............................................................32
   (b)   REPORTS ON FORM 8-K.....................................................................................36


SIGNATURES.......................................................................................................37

</TABLE>

                                       iv

<PAGE>


                         SAFE HARBOR STATEMENT UNDER THE
                PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Intermagnetics General Corporation ("Intermagnetics", "Company", "we" or "us")
makes forward-looking statements in this document. Typically, we identify
forward-looking statements with words like "believe," "anticipate," "perceive,"
"expect," "estimate" and similar expressions. Unless a passage describes an
historical event, it should be considered a forward-looking statement. These
forward-looking statements are not guarantees of future performance and involve
important assumptions, risks, uncertainties and other factors that could cause
the Company's actual results for fiscal year 2003 and beyond to differ
materially from those expressed in the forward-looking statements. These
important factors include, without limitation, the assumptions, risks, and
uncertainties set forth in Management's Discussion and Analysis of Financial
Condition and Results of Operations, as well as other assumptions, risks,
uncertainties and factors disclosed throughout this report.

         Except for our continuing obligations to disclose material information
under federal securities laws, we are not obligated to update these
forward-looking statements, even though situations may change in the future. We
qualify all of our forward-looking statements by these cautionary statements.


                                     PART I

ITEM 1. BUSINESS DESCRIPTION

         Intermagnetics has a 30-year history as a leading global developer and
manufacturer of superconducting materials, radio-frequency coils, magnets and
devices utilizing low- and high-temperature superconductors and cryogenic
refrigeration systems. We sell our products primarily in the magnetic resonance
imaging (MRI), analytical instrumentation and industrial processing markets. We
are also investing in the development of high temperature superconducting
materials and products for the Energy Technology market - specifically
transmission and distribution of electric power.

         Superconductive materials lose all resistance to the flow of electrical
current when cooled below a critical temperature. Superconductors offer
advantages over conventional conductors, such as copper or aluminum, by carrying
electricity with virtually no energy loss, and generating comparatively more
powerful magnetic fields. The current principal commercial applications for the
Company's technology are MRI, analytical instrumentation and industrial
processing. The Company also leverages its expertise in superconductivity and
cryogenics to develop materials and products for the electric utility market.

         The Company designs, develops, manufactures and sells products in three
segments, which are named to reflect the markets they serve: Magnetic Resonance
Imaging ("MRI"), Instrumentation and Energy Technology.



                                       1
<PAGE>

          The MRI segment primarily provides products to the diagnostic imaging
market. Our IGC-Magnet Business Group ("IGC-MBG") develops, manufactures and
sells low temperature superconducting ("LTS") magnets. Our wholly-owned
subsidiary, IGC-Medical Advances Inc. ("IGC-MAI"), designs, manufactures and
sells radio frequency ("RF") coils. Through the second quarter of fiscal year
2002, this segment also included our IGC-Advanced Superconductor ("IGC-AS")
division, which manufactured and sold LTS wire.

         Our Instrumentation segment provides cryogenic refrigeration equipment
used primarily in ultra-high vacuum applications, industrial coatings,
analytical instrumentation and semiconductor processing and testing through our
wholly-owned subsidiary, IGC-Polycold Systems Inc. ("IGC-Polycold"). For the
first three quarters of fiscal year 2002, this segment also included IGC-APD
Cryogenics Inc. ("IGC-APD").

         In Energy Technology, our wholly-owned subsidiary, SuperPower, Inc.
("SuperPower") is developing second generation high-temperature superconducting
materials and devices designed to enhance the capacity, reliability and quality
of electrical power transmission and distribution.

         We completed two major divestitures in fiscal year 2002. On October 24,
2001, we sold the assets and business of IGC-AS to Outokumpu Copper Products Oy.
On February 5, 2002, we sold all of the outstanding shares of IGC-APD to
Sumitomo Heavy Industries, Ltd. These transactions are discussed in more detail
in Item 7, "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

         Through May 28, 2000, the activities of IGC-AS were reported in the
former Low Temperature Superconducting Materials segment. Segment data for prior
years has been reclassified to conform with current year presentation.


                       MAGNETIC RESONANCE IMAGING SEGMENT

A. Introduction

         1. About MRI and Other Magnets Generally

         Currently, the single largest commercial application for
superconductivity is the magnetic resonance imaging system ("MRI System").
Hospitals and clinics use MRI Systems for non-invasive, diagnostic imaging. At
the core of an MRI System is a large, highly engineered magnet system. The
magnet system can be based upon a resistive electromagnet, a permanent magnet or
a superconductive magnet. We design and manufacture superconductive magnets,
which typically offer more powerful, high-quality magnetic fields with virtually
no power loss. Higher magnetic field strengths (measured in Tesla) correlate
with improved "signal-to-noise" ratios, which can in turn lead to higher quality
images in shorter acquisition times, typically resulting in higher patient
throughput and improved economics of system ownership. The annual commercial
market for new MRI Systems, upgrades and accessories in calendar year 2002 is
estimated to be within the range of $3 to $3.4 billion worldwide. A small number
of system integrators dominate the MRI industry. They include GE Medical Systems
("GE"), Philips Medical Systems Nederlands B.V. ("Philips"), Siemens Corporation
("Siemens"), Hitachi Medical Corporation ("Hitachi"), Toshiba Corporation
("Toshiba") and Marconi Medical Systems ("Marconi"). In November of 2001,
Philips acquired Marconi. We supply key components to a number of these
integrators.


                                       2
<PAGE>

         Other existing applications for superconductivity include nuclear
magnetic resonance ("NMR") spectroscopy, used in biological and chemical
research and testing of the composition and structure of non-ferrous materials,
and other scientific, defense and research applications. Currently, we do not
participate materially in these non-MRI magnet markets.

         2. About MRI Radio Frequency (RF) Coils Generally

         All MRI Systems use RF coils placed inside the bore of the magnet, or
more generally placed onto the patient. The RF coil acts as an antenna to
transmit and/or receive radio frequency signals from the human body as it lies
inside the strong magnetic field of the MRI System. These radio frequency
signals are transferred electronically to the MRI System computer where they are
reconstructed into a clinically useful diagnostic image.

         Specialized RF coils -- those dedicated to imaging particular parts of
the human anatomy, such as the brain, liver, knee, neck, back, wrist, etc. --
increase the number of diagnostic applications for which an MRI System can be
used. The increased number of applications increases the potential utilization
rate of a given MRI System. In addition, specialized RF coils designed to image
a specific part of the human body will yield a sharper, more detailed image that
typically is more clinically useful than a similar image produced with a
multi-purpose full body RF coil. We believe most MRI Systems benefit from an
array of seven to ten separate specialized RF coils.

         An RF coil must work closely with the MRI System in which it is used.
RF coils cannot be moved easily between MRI Systems manufactured by different
companies, from one field strength magnet to another, or even among different
models manufactured by a single company. Consequently, each MRI System model
creates the opportunity for the development of a new array of RF coils.

         3. About Low Temperature Superconductors Generally

         There are two broad classes of superconductive materials: low
temperature ("LTS") and high temperature ("HTS") superconductors. LTS materials
are metals and alloys that become superconductive when cooled to temperatures
near absolute zero (4.2 Kelvin or minus 452 F). Because of their superior
ductile characteristics, LTS materials generally are used in the form of
flexible wire or cable. HTS materials are composed of ceramic-like compounds
that become superconductive when cooled to temperatures close to that of liquid
nitrogen (77 Kelvin or minus 321 F) and primarily are manufactured in the form
of tape (basically, flat wire). HTS materials are discussed in the Energy
Technology Segment below.


                                       3
<PAGE>

         LTS wire is used today mainly in the manufacture of MRI and NMR
Spectroscopy magnet systems and for high-energy physics applications.

B. Principal Products

         We derived approximately 80% and 68% of our net sales in fiscal years
2002 and 2001, respectively, from the sale of products in the MRI segment. The
increased percentage of MRI segment sales resulted from the divestiture of
IGC-APD, reduced sales within the Instrumentation segment and increased sales
within the MRI segment. Segment data is provided in Note K of the Notes to
Consolidated Financial Statements included in response to Item 8. Our principal
MRI products include:

o        Superconductive MRI Magnet Systems. Through IGC-MBG, we manufacture and
         sell superconductive MRI magnet systems to MRI System integrators for
         use in stationary and mobile applications. We offer a full line of
         superconductive MRI magnet systems with field strengths of 0.5, 1.0,
         1.5 and 3.0 Tesla ("T"). In addition, IGC-MBG is developing a 1.0T
         superconducting open magnet system. We do not expect significant sales
         of this product in fiscal year 2003.

o        RF Coils for MRI Systems. Through IGC-MAI, we manufacture and sell RF
         coils for use in MRI Systems. IGC-MAI's current product line includes
         ten anatomical applications with several product groups available in
         magnetic field strengths from 0.2T to 3.0T, leading to a total of more
         than 100 products.

o        LTS Materials. Through the second quarter of fiscal year 2002, IGC-AS
         manufactured and sold the two principal LTS materials that are
         commercially available for the construction of superconductive magnets:
         niobium-titanium ("NbTi") wire, and niobium-tin ("Nb3Sn") wire. We
         divested this business on October 24, 2001.

C. Marketing

         We market our magnet systems through our own personnel. IGC-MAI markets
its RF coils to MRI System integrators on a direct basis in the U.S, Europe and
Japan and to end-users, such as hospitals, clinics and research facilities with
its own U.S.-based sales force. IGC-MAI markets its RF coils to end-users
outside the U.S. through a combination of distributors and direct contact with
customers in selected markets.

         Export Sales. Products sold to foreign-based companies, such as Philips
in the Netherlands, or Hitachi and Toshiba in Japan, were accounted for as
export sales even if some of the products sold were installed in the U.S. On
that basis, the Company's net export sales (including the Instrumentation
segment) for fiscal years 2002, 2001 and 2000 totaled $127.3, $102.0 and $76.8
million, respectively, most of which were to European customers billed in U.S.
currency.


                                       4
<PAGE>

         Principal Customers. Sales to customers accounting for more than 10% of
our net sales aggregated approximately 72% in fiscal year 2002, 56% of net sales
in fiscal 2001 and 61% of net sales in fiscal 2000. (See Note K of Notes to
Consolidated Financial Statements included in response to Item 8.)

         We sell a substantial portion of our products in the MRI industry to
four customers, one of which is significant. Philips is the principal customer
for our MRI magnet systems. In fiscal year 1999, Intermagnetics and Philips
executed a new sales agreement with an initial five-year term. The term extends
each year such that the agreement will continue in effect on a rolling five-year
basis, unless otherwise terminated in accordance with certain provisions of the
agreement. Under this agreement, Intermagnetics is the sole supplier of certain
MRI magnet systems to Philips. Sales to Philips (including sales by the
Instrumentation segment) amounted to approximately 72%, 56% and 50% of our net
sales for fiscal 2002, 2001 and 2000, respectively.


D. Competition/Market

         U.S. sales of MRI Systems grew in each of calendar years 1999, 2000 and
2001. Our growth in this segment is dependent on our customers' ability to grow
their respective businesses, and on our ability to attract new customers. There
are no assurances that such growth will continue in the future. In addition,
healthcare cost control initiatives and regional economic conditions could
negatively impact continued growth.

         MRI Systems compete indirectly with other diagnostic imaging methods
such as conventional and digital X-ray systems, nuclear medical systems,
ultrasound, PET scans and X-ray CT scanners. Two emerging MRI applications could
provide additional growth opportunities for our products in the future. MRI
System integrators are developing systems that can be used as non-invasive
diagnostic tools for cardiac disease. These systems could replace the need for
interventional X-rays in certain cases. Functional MRI (fMRI), in which
physicians can monitor brain activity (function) as well as brain anatomy, is
another emerging area. We serve this market with our newly developed 3.0T magnet
system. We are well-positioned to supply specialized MRI magnet systems to
address these emerging markets. There are no assurances that these markets will
become significant or that we will be successful in providing commercial
products for these markets.

         Most large MRI Systems suppliers perceive higher field strength imaging
systems (1.0T or greater) that use superconductive magnets to have technical
advantages over MRI Systems that use resistive electromagnets and permanent
magnets, which are limited in field strength either by high power consumption or
by basic material properties. Lower field strength systems generally produce
lower quality images, although rapid gains in computer technology have offset
some of this quality loss. Low field (0.2 to 0.3T) "open" magnet configurations
based on permanent and resistive magnets enjoyed rapid growth in market share
over the past few years. This growth appears to have leveled off and is expected
to decline with the continued introduction of higher field open MRI Systems
based on superconducting magnets. Two such systems have entered the market at
0.7T with another entry at 0.6T. IGC-MBG is developing a more powerful 1.0T
superconducting "open" magnet system for this market segment.


                                       5
<PAGE>

o        Superconductive MRI Magnet Systems. Within the market for
         superconductive MRI magnet systems, our competitors fall into two
         categories: (1) magnet manufacturers that make MRI magnet systems for
         MRI System integrators; and (2) MRI System integrators that manufacture
         superconductive magnet systems for their own use.

         Oxford Magnet Technology Limited ("OMT") is our principal competitor in
         the first category. OMT is a joint-venture between Siemens (51%) and
         Oxford Instruments Group, plc ("Oxford") (49%). OMT supplies MRI magnet
         systems to at least two MRI system integrators: Siemens and Marconi
         (now owned by Philips). OMT sells more superconductive MRI magnet
         systems and has greater production capacity than us; however, we
         believe we compete effectively against OMT on the basis of technology
         and price and that we are capable of ramping our production capacity to
         meet opportunities for business expansion as they arise.

         Competitors in the second category include GE and Toshiba. These
         companies manufacture MRI magnet systems for use in their own MRI
         Systems (although Toshiba also purchases some magnets from third
         parties). While these integrators do not purchase our magnet systems,
         they present a market opportunity for our component products. For
         example, we sell RF coils to GE and Toshiba, and until our divestiture
         of IGC-AS in October 2001, we sold LTS wire to GE.

o        RF Coils for MRI Systems. Our primary competitors for RF coils are
         other independent RF coil manufacturers. We also experience competition
         from MRI System integrators that manufacture RF coils for sale with
         their own MRI Systems.

         Most MRI System integrators outsource RF coil development and
         manufacturing to companies such as IGC-MAI. Siemens and Philips have
         maintained the most extensive in-house coil development activities of
         the major MRI System integrators. Based on input from our customers, we
         believe that outsourcing specialized RF coils generally results in
         lower cost and faster time-to-market than with in-house resources.

         There are several independent RF coil manufacturers of various size. Of
         these companies, we believe that two compete with IGC-MAI against its
         full product range. Competition generally is based upon capacity for
         volume production, price and diagnostic image quality. To remain
         competitive, we must continue to offer high quality, technically
         advanced products while reducing costs. In fiscal year 2002, IGC-MAI
         continued to face increased competitive pressures on both price and new
         technology. Its two main competitors grew in both size and market
         share, mainly as a result of their supply relationship with one major
         MRI System integrator. We are responding to these challenges with
         increased new product development efforts. There are no assurances,
         however, that IGC-MAI will be successful in its commercialization of
         these products.


                                       6
<PAGE>

o        LTS Wire. The single largest commercial market for LTS wire is MRI. In
         fact, most of the LTS wire manufactured by IGC-AS prior to the
         divestiture of this business was used for superconductive MRI magnet
         systems (either internally by IGC-MBG, or externally by other
         customers). We do not anticipate that high temperature superconducting
         wire will be cost-effective for the MRI market at any time in the
         foreseeable future.

F. Patents

         We do not believe that patents are a significant competitive factor in
the conduct of our business in the MRI segment. We directly or indirectly either
own, or license a number of patents relating to RF coils and magnet systems.
There are no assurances that changing technology and/or emerging patents will
not adversely impact our current patent position or competitiveness. In
addition, while we focus on developing and patenting new technologies, there are
no assurances that this technology will become commercially significant or that
competing patents will not be issued.

G. Raw Materials and Inventory

         Most materials and parts used in the manufacturing process for
superconducting magnet systems are ordered for delivery based on production
needs. We have long-term supply agreements with Outokumpu Advanced
Superconductors (formerly IGC-AS) for the supply of LTS wire and with SHI-APD
Cryogenics Inc. (formerly IGC-APD) for the supply of shield coolers - a key
component of our MRI magnet systems. Sumitomo Heavy Industries, which owns
SHI-APD, is now the leading manufacturer of shield coolers. In addition, LTS
wire generally requires long lead times for order placement. An unplanned loss
or severe reduction in supply of either of these components could result in
added cost and temporary production delays. Generally, we invest in inventories
for production of MRI magnet systems based on production schedules required to
fill existing and anticipated customer orders. During fiscal years 2001 and
2002, we had a consignment program with our largest customer. We believe this
arrangement enabled us, and our primary customer, to better respond to market
demand and capture additional market share during a period of very high growth.
This program was scaled back at the end of fiscal year 2002 and we plan to
suspend it in fiscal year 2003.

         IGC-MAI believes that there are alternative suppliers at competitive
prices for most of the parts, materials and components that it purchases for the
manufacture of its RF coils. There are, however, discrete electrical components
and mechanical housings that are sole sourced because of the uniqueness of their
specifications. In the event that a sole source supplier cannot meet demand, a
re-engineering or re-tooling of the sourced component would be required.


                                       7
<PAGE>

H. Warranty

         We have not had significant expense to date for performance of our
warranty obligations in the MRI segment.


                             INSTRUMENTATION SEGMENT
                             -----------------------

A. Introduction

         Our Instrumentation segment provides low-temperature solutions
primarily to original equipment manufacturers (OEM's) in a variety of
industries. In fiscal year 2002, we made a number of changes in this segment
aimed at maximizing strategic value. These changes included moving IGC-Polycold
from multiple locations in San Rafael to one larger facility in Petaluma,
California; transferring the manufacturing and sales of two mixed-gas
refrigeration product lines from IGC-APD to IGC-Polycold; and divesting
IGC-APD's remaining business through a sale of the outstanding shares of IGC-APD
to Sumitomo Heavy Industries, Ltd.

         As a result of these changes, this segment now consists of one
wholly-owned subsidiary, IGC-Polycold, which designs, manufactures and sells low
temperature refrigeration equipment. Results for the first three quarters of
fiscal year 2002 also include sales from IGC-APD. In addition, in the second
quarter of fiscal year 2001, the Company divested a third subsidiary formerly
included in this segment, InterCool Energy Corporation ("ICE"), which sold
refrigerants (see Note C of the Notes to Consolidated Financial Statements
included in response to Item 8).

         Segment data is provided in Note K of the Notes to Consolidated
Financial Statements included in response to Item 8.

B. Principal Products

         IGC-Polycold manufactures and sells a line of low temperature
refrigeration systems in the -40 to -203 Celsius range. IGC-Polycold's
refrigeration systems are used in several markets, including optical coating,
semiconductor manufacturing, magnetic media, decorative coating, optical
networking, flat panel display, detector cooling and roll/web coating.

         The Instrumentation segment has typically not derived significant sales
from semiconductor manufacturers in the past, but has targeted new product
development for this market. Historically, the semiconductor market has been
cyclical based on demand for technology products such as personal computers and
cellular phones. Accordingly, while our traditional recurring revenue base of
the business has not been affected by the downturn in the semiconductor
industry, we have not experienced the incremental growth we anticipated from our
product lines that serve the semiconductor market. In fiscal year 2001, we
experienced a significant increase in demand for our products from the
telecommunications industry for equipment used in the manufacture of optical
filters. This demand decreased significantly after the first quarter of fiscal
year 2002 resulting from a downturn in this market.


                                       8
<PAGE>

         IGC-APD's product line included shield coolers (refrigerators) used in
the production of MRI magnet systems, a specialized cryogenic refrigeration
system sold under the registered tradename CryoTiger (R) and specialized water
pump systems and cryopumps sold under the registered tradenames AquaTrap (R) and
Marathon (R) that are used primarily in the manufacture of semiconductors. We
transferred the CryoTiger and AquaTrap product lines to IGC-Polycold prior to
the sale of IGC-APD.

         IGC-Polycold also licenses certain mixed gas refrigerant technology to
third parties for use in markets in which the Company does not otherwise
participate.

C. Marketing

         IGC-Polycold markets refrigeration systems through a direct sales force
managed from Petaluma, California, two key distributors located in Japan and
Germany, and through a worldwide network of sales representatives. In fiscal
year 2000, IGC-APD and IGC-Polycold began marketing combined product lines as
"Cool Solutions (TM)". IGC-Polycold has retained the rights to the "Cool
Solutions" trademark application.

         IGC-APD marketed shield coolers through a direct sales force located in
Allentown, Pennsylvania, its office in Sunnyvale, California and its office in
the U.K. IGC-APD's other cryogenic products were marketed worldwide through its
direct sales force and through scientific and vacuum equipment sales
representatives and distributors. Prior to the sale to Sumitomo Heavy
Industries, IGC-APD and Daikin Industries, Ltd., a Japanese company, agreed to
terminate their worldwide partnership pursuant to which the parties sold common
cryopumps under the "Marathon" trademark in well-defined territories.


D. Competition/Market

         IGC-Polycold believes its major competitors include some small
manufacturers in the Far East and one small manufacturer in Europe. In addition,
IGC-Polycold experiences some competition from Helix Technology Corporation
(which markets its products under the names "CTI Cryogenics" and "CTI") in
limited applications. IGC-Polycold also competes with the use of liquid nitrogen
as an alternative to IGC-Polycold's low temperature refrigeration systems. The
Company generally competes in this area on the basis of total cost of ownership,
as well as price, availability and product quality. In addition, the CryoTiger
refrigeration system competes against alternative technologies including
Stirling refrigerators and open-cycle coolers that rely on reservoirs of liquid
nitrogen, which must be replenished periodically. Although the initial purchase
price for a CryoTiger refrigerator may exceed the price of a comparable liquid
nitrogen cooler, we believe lower operating and maintenance costs and greater
ease of use offset this higher initial cost. Finally, there are no assurances
that emerging technology will not adversely impact IGC-Polycold's
competitiveness.


                                       9
<PAGE>

E. Patents

         Patents are a significant competitive factor in some areas of our
Instrumentation segment. Our CryoTiger and AquaTrap lines are based upon
patented proprietary technology. While IGC-Polycold does have some patent
protection for its products, patents currently are not a significant competitive
factor for its other products. Patents may become more significant in the
future, however, as IGC-Polycold develops new products. One of the Company's
keys to success in marketing its refrigeration products will depend on its
continued ability to obtain patents, maintain trade secret protection and
operate without infringing on the proprietary rights of others. There are no
assurances that changing technology and/or emerging patents will not adversely
impact our current patent position or competitiveness. In addition, while we
focus on developing and patenting new technologies, there are no assurances that
this technology will become commercially significant or that competing patents
will not be issued. No patents that the Company considers significant expire
during the next five years.

F. Raw Materials and Inventory

         IGC-Polycold generally maintains a sufficient inventory of raw
materials, assembled parts and partially and fully assembled major components to
meet production requirements. IGC-Polycold purchases certain major standard
components for its products from a single source. While alternative sources are
available, an unplanned loss or severe reduction in supply from this source
could result in added cost and temporary production delays.

G. Warranty

         Warranty reserves were increased in fiscal year 2002 as a result of the
introduction of product lines from IGC-APD and the introduction of new products
from IGC-Polycold.


                                       10
<PAGE>


                            ENERGY TECHNOLOGY SEGMENT
                            -------------------------

A. Introduction

         The U.S. Department of Energy has reported that much of the nation's
electrical transmission and distribution infrastructure is rapidly becoming
incapable of meeting the demands of our modern economy. This is because there
has been a material decline in investment in this infrastructure by service
providers, largely due to deregulation of the electric utility industry.
Deregulation has also resulted in exponential growth in electricity transactions
at the wholesale level, which has placed a burden on the existing
infrastructure. Increasing congestion indicates that the ability to move
electricity over the existing wires is limited. Energy Technology is an emerging
industry dedicated to providing more efficient, reliable and environmentally
responsible means of generating, transmitting and distributing electricity.
High-temperature superconducting (HTS) materials could become a key solution. We
are focusing on HTS-based devices that address a potential market for more
efficient, reliable and environmentally friendly electric transmission and
distribution, which we expect will be easier to permit and license than the
conventional counterparts.

         HTS materials are composed of ceramic-like compounds that become
superconducting at higher temperatures than those required to maintain
superconductivity in LTS materials. HTS materials typically remain
superconducting when cooled to temperatures similar to that of liquid nitrogen
(77 Kelvin or minus 321 F). Accordingly, HTS materials usually require less
sophisticated and less costly cryogenic refrigeration systems than LTS
materials, making them well-suited for use in devices such as HTS cables,
transformers and fault current limiters and controllers.

         We have maintained an HTS program since shortly after these materials
were first identified in 1986. Initially, the Company and others pursued the
development of "First Generation" HTS wires and tapes using Bismuth-based
materials. The Company and others have incorporated First Generation conductors
into successful prototype products. Despite improvements in First Generation
wires and tapes, we believe that the high cost of raw materials required for
these conductors (notably, high-purity silver), the high labor content and
certain performance limitations will prevent widespread commercialization.

         More recently, we shifted our focus to "Second Generation" HTS
conductors. These conductors are based on less expensive metal alloy substrates
(e.g., nickel) and can be manufactured using a far less labor-intensive process
than First Generation conductors. Based on these factors, and the superior
performance demonstrated by Second Generation conductors, we believe these
conductors can reach cost and performance levels necessary for commercialization
of electric power devices. Our wholly-owned subsidiary, SuperPower, Inc.,
develops Second Generation materials and electric power devices that utilize HTS
materials. SuperPower intends to incorporate HTS wire products (initially,
First- and subsequently, Second-Generation) into electric power devices (see
"Principal Products" below) for sale primarily into the electric power utility
marketplace.

         We believe that Second Generation HTS conductors can be made in
sufficient quantity and length, and with cost and performance attributes that
will meet the commercial requirements of the applications we are pursuing.
However, we expect that it will take at least until mid-decade to reach such
commercial thresholds. To date, Second Generation HTS conductors have been
demonstrated successfully by us or other entities only in short lengths on a
laboratory scale. There can be no assurance that we will be successful in
extending the laboratory results to a manufacturing scale with cost and
performance levels adequate for successful commercialization or that end-user
utilities will accept the new products we are developing.


                                       11
<PAGE>

B. Principal Products

         (i) Second Generation HTS Conductor

         As a pre-requisite to developing commercially successful HTS-based
electric power devices, we intend to develop, manufacture and sell (both
internally and externally) Second Generation HTS conductor. To that end, in
January 2000 we entered into a three-year Cooperative Research and Development
Agreement (CRADA) (the "LANL/ANL Agreement") with two U.S. Department of Energy
national laboratories (the Los Alamos National Laboratory ("LANL") and the
Argonne National Laboratory ("ANL")). Under this agreement, LANL and ANL are
assisting us in scaling up certain promising HTS deposition processes to
commercial manufacturing levels. We are responsible for approximately half of
the $2.5 million cost under the LANL/ANL Agreement, with the laboratories
sharing the other half. In May, 2001, we negotiated an exclusive license with
LANL to certain HTS technology that we believe will provide a competitive
advantage in the manufacture and sale of Second Generation HTS material. We also
have exclusive access to technology developed under the CRADA, and the first
right to negotiate an exclusive license within a field of use, for reasonable
terms and conditions, to additional inventions made by LANL and ANL under the
agreement. In addition, we announced in June 2000 the signing of a contract with
UT-Battelle for the U.S. Department of Energy ("DOE Agreement") for the first
phase of a three-year project to commercialize the manufacturing process for
Second Generation HTS conductors. We currently expect the project to be extended
to April 2004. This contract complements the LANL/ANL Agreement. SuperPower and
DOE will share the costs of $4.5 million project. The first phase was completed
in March 2001 and the second phase was begun in March 2001. The Company expects
the program to continue for two more phases, comprising a total of 18 months.
Also, in February 2001 the Company received $800,000 from the Dual Use Science &
Technology (DUST) office and the Air Force Research Laboratory (AFRL) at Wright
Patterson Air Force Base to assist in the scale up of Second Generation HTS
manufacturing. During this 33 month program, SuperPower will match the $800,000
in funding. We expect the DUST office to add $450,000 for this program this
year, which SuperPower will also match. In August 2001, the Company executed a
3-year CRADA with the AFRL at Wright Patterson Air Force Base also related to
Second Generation HTS manufacturing.

         (ii) HTS-Based Electric Power Devices

         Using initially First Generation and, subsequently, Second Generation
HTS conductor, we intend to develop electric power devices for sale primarily
into the electric power utility marketplace. IGC-SuperPower would manufacture
and sell HTS materials and components for integration into products such as HTS
cables, transformers and fault current limiters.


                                       12
<PAGE>

                  (a) HTS Transmission Cable: An HTS transmission cable can
                  carry three to five times more power than a conventional
                  copper cable system. This has potential advantages in
                  circumstances where new underground installation is too
                  expensive, the terrain too difficult or where overhead right
                  of way is not available, or is difficult to license. Given
                  their high current-carrying capacity and other attractive
                  characteristics, HTS cables may open up new alternatives in
                  network design. A superconducting cable would also eliminate
                  environmental concerns caused by leaks, fires or explosions
                  because it does not use oil like conventional cables. HTS
                  cables could be retrofitted into existing conventional cable
                  ducts allowing for the delivery of more power as well as
                  creating conduit space for telecommunications cable. HTS
                  cables could also ensure that service reliability will be
                  maintained as the demand for electricity grows and would
                  improve operating efficiency through lower line losses.

                           We participated in the first known "real world"
                  demonstration of an HTS cable in a project led by Southwire
                  Company. The 30m, 12.5kV, 1,250A HTS power cable was
                  commissioned in February 2000 and currently provides power to
                  three Southwire plants.

                           In August, 2001, we announced that SuperPower would
                  develop and install a First Generation power cable in an urban
                  right-of-way in Albany, New York. The New York State Energy
                  Research and Development Authority awarded IGC-SuperPower six
                  million dollars ($6,000,000) for this project. We believe it
                  is critical to the success of this project to engage a cable
                  partner rather than just a cable component supplier. Once a
                  partner is secured, we expect the project to take
                  approximately four years to complete. While we initially
                  targeted this as a three year project, we have decided to
                  expand the project to include an additional phase in which we
                  will design, build and test a Second Generation cable
                  prototype.

                           (b) HTS Fault Current Limiter: In the electrical
                  transmission and distribution system, a short circuit (fault
                  condition) may result from events such as lightning striking a
                  power line, or downed trees or utility poles. Such events
                  create a surge of current through the electric power grid
                  system that can cause serious damage to grid equipment.
                  Circuit breakers are deployed within electric distribution and
                  transmission substations to protect equipment from damage.
                  However, due to continuing growth of power demands and
                  increased interconnections between power distribution
                  networks, transmission networks, and power generation sources,
                  fault current levels are increasing to levels that exceed the
                  original fault current interrupting capabilities of the
                  circuit breakers. Application of high-temperature
                  superconducting (HTS) fault current limiters (FCL), would
                  reduce the available fault current to a safer level within the
                  operating limit of existing circuit breakers, without
                  resorting to other expensive measures such as breaker or
                  transformer replacement, bus splitting or construction of new
                  substations.


                                       13
<PAGE>

                           Together with General Atomics, SuperPower
                  participated in the demonstration of an HTS fault current
                  limiter/controller in 1999. Los Alamos National Laboratory
                  recently refurbished this distribution level FCL unit with
                  SuperPower's assistance. It has undergone several successful
                  tests, which proved the FCL design concept and also validated
                  the modified component designs. SuperPower believes that a
                  market for the HTS fault current limiting technologies exists
                  at higher voltage levels typical of transmission substations.
                  We have recently initiated a program to develop, design,
                  manufacture and demonstrate a 138kV HTS fault current limiter.
                  The completion of this effort is dependent upon partial
                  funding from private and government sources. Although
                  SuperPower has received verbal offers of such support, there
                  is no guarantee that formal agreements committing these funds
                  will be signed.

                  (c) HTS Transformer: Conventional copper-wound, oil-filled
                  transformers are heavy, costly and of massive size relative to
                  output. They are also susceptible to fire and explosion and
                  can damage the environment should the oil leak. HTS technology
                  has the potential to enhance operating cost, performance and
                  flexibility while offering reductions in both size and weight.
                  Specifically, HTS transformers would eliminate the fire,
                  explosion and environmental hazard associated with
                  conventional oil-filled transformers, run indefinitely at
                  rated and above rated power without reduction of transformer
                  life, provide more power per unit volume in existing
                  substations, and increase operational electrical efficiency.
                  Initially, HTS will have to compete against conventional
                  copper-based transformer technology to gain acceptance and
                  market share.

                           Together with our partner Waukesha Electric Systems
                  (an operating unit of SPX Corporation), we successfully
                  developed and tested a 1 MVA HTS transformer prototype using
                  First Generation conductor. This project was completed in
                  1999. We currently are working with Waukesha to complete a
                  5/10 MVA HTS transformer prototype. Our expectation is that
                  this prototype will be installed in Waukesha's switchyard
                  early in 2003. This will be after extensive factory acceptance
                  testing, which will be completed by the end of 2002. Once
                  energized, the prototype is expected to remain in Waukesha's
                  switchyard for a sufficient period to obtain important
                  operating data and to demonstrate reliability for utility
                  application. The ultimate goal of the program is to develop a
                  30/60 MVA HTS transformer for the commercial market. We
                  believe that Second Generation material will be required for
                  commercial success. In the interim, until this occurs, further
                  research and development is contemplated to address high
                  voltage dielectric insulation requirements and the
                  introduction of load tap changing capability. We have a
                  Product Development Agreement with Waukesha to commercialize
                  HTS transformers.

                                       14
<PAGE>

         The company maintains a long-term perspective on the development of the
market for HTS technology and the described devices. The company plans to
continue to pace its rate of investment based on the progress of the requisite
technology and the perceived willingness of industry to adopt HTS devices. As a
result, any or all of the described devices and their product development
schedules will be examined on a regular basis and may result in readjustment to
later dates or be cancelled altogether.

C. Marketing

         The Company intends to reach the electric utility marketplace via
strategic relationships with existing suppliers of electric power equipment.
While a strategic relationship already exists with Waukesha Electric Systems, we
believe it will be necessary to obtain additional strategic partners covering
cable manufacturing, refrigeration systems and device integration in order for
us to compete successfully. There can be no assurance that such strategic
partners will be found, or that such partners will be successful in bringing any
of our products to market.

D. Competition/Market

         With respect to HTS-based products, we anticipate that we will
participate principally as a developer and manufacturer of materials and
components. These materials and components are necessary to enable HTS cable,
transformer and fault current limiting technologies, and associated cryogenic
refrigeration systems to succeed. We will also be a developer and supplier of
Second Generation HTS conductors (i.e., wires/tapes). We believe that we can
compete effectively by leveraging Intermagnetics' experience in superconducting
materials and cryogenic refrigeration systems, and its long track record of
world-class technical achievements and profitable commercialization of LTS
products.

         We believe our most significant U.S.-based competitor for HTS conductor
is American Superconductor Corporation, which has established strategic
development and/or marketing relationships with a number of existing suppliers
and users of electric power equipment. Internationally, competitors include NKT,
Pirelli, Sumitomo and Furukawa for cables, and Siemens and ABB for transformers
and FCL's. We also compete with 3M, Sumitomo and Fujikura on Second Generation
conductor.

         The underlying economics for HTS-based products appear to be
attractive. However, potential commercial end-users lack experience with such
products in field operations. This, along with the cost of currently existing
First Generation HTS materials, has tended to limit the adoption rate,
especially in the context of larger, more expensive applications such as those
for utility power plants and electric networks. Managers of electric utilities
focus on issues of long-term reliability, compatibility and maintenance, and
must make investments with a 40-year time horizon. For this reason, only the
most forward-looking utilities have begun to test prototype HTS systems.
HTS-based products ultimately will need to justify themselves in economic and
performance terms before widespread adoption can take place. Before HTS wire or
cables can replace conventional conductors available today, the
price/performance relationship of HTS must be demonstrated reliably. On the
basis of forecasted improved performance in Second Generation HTS conductor, we
expect to achieve HTS conductor selling prices that will stimulate broad,
commercial demand. However, there are many technical hurdles that must be
overcome before this goal can be attained and there are no assurances that a
market for these products will develop.


                                       15
<PAGE>

         We do not believe our current overall operations depend upon successful
market acceptance of HTS-based products or devices, nor are the Company's
continued operations necessarily dependent on its success in the HTS
marketplace. If HTS-based products or devices do become commercially viable,
however, we believe that, as a leader in superconductivity, we would benefit
from participating in that market. Accordingly, while representing a relatively
high-risk, long-term investment of its resources, we perceive HTS technology as
being of important strategic interest.

         Because of the perceived commercial potential of HTS materials, HTS
research is a highly competitive field, and currently involves many commercial
and academic institutions around the world that may have more substantial
economic and human resources to devote to HTS research and development than the
Company. There can be no assurances that we will have sufficient resources to
bring HTS products to market or that emerging patents will not adversely impact
our competitiveness. In addition, there can be no assurance that we will achieve
a commercially significant position in this emerging marketplace.

E. Patents

         We believe that our current patent position, together with our expected
ability to obtain licenses from other parties, will provide us with sufficient
access to relevant intellectual property to develop and sell HTS wires and
system components consistent with our business plan. However, the patent
situation in HTS is unusually complex, and many participants are continuously
filing new patents aggressively. Since the discovery of high temperature
superconductors in 1986, rapid technical advances have resulted in the filing of
a large number of patent applications relating to superconductivity worldwide.
Many patents and patent applications overlap and are contested. A protracted
interference proceeding in the U.S. regarding the fundamental Second Generation
HTS composition Yttrium Barium Copper Oxygen (YBCO) reached its conclusion in
favor of Lucent Technologies Inc. However, a considerable number of intellectual
property ownership issues with respect to HTS materials and processes remain
contested. A number of patents and patent applications of third parties relate
to our current and future products. We may need to acquire licenses for those
patents, successfully contest the scope or validity of those patents, or design
around patented processes or applications.

         We have obtained a non-exclusive license to Lucent Technology's HTS
patent portfolio, including a license to the patent application covering YBCO,
one of the key raw materials we are developing for use in Second Generation HTS
conductors. Lucent's YBCO patent application is expected to issue as a U.S.
patent. We believe that the Lucent patent portfolio has been, or will be,
licensed broadly on a non-exclusive basis to other HTS technology participants,
including several of our competitors.

         We are developing a manufacturing process for Second Generation HTS
conductor using the combination of Buffer Layer Deposition and Superconductor
Deposition coating processes developed by LANL. We have obtained exclusive
licenses to LANL's relevant patents and patent applications in this area and we
have the right to obtain a license to technology developed by LANL under our
existing CRADA. We believe that we will be able to obtain such licenses on
commercially reasonable terms, but there can be no assurance that this will be
the case. We have also applied for patents in related process and equipment
technology invented by SuperPower employees. Other companies that compete with
us are also developing Second Generation HTS using competing processes. There is
no guarantee that the process we are developing will be the most commercially
viable one.


                                       16
<PAGE>

         A number of other companies (including HTS competitors) have filed
patent applications, and in some instances have been issued patents, on various
aspects of HTS composition of matter, HTS wire processing, HTS wire
architecture, and HTS component and subsystem design and fabrication. We would
be required to obtain licenses under any patents issued or pending patents that
might cover the materials, processes, architectures, components or devices that
we wish to use, develop or sell.

F. Raw Materials and Inventory

         First Generation conductors currently require relatively high
proportions of silver in the manufacturing process. This adds significant
expense to the cost of the conductor and is one of the reasons we believe First
Generation conductors will not achieve widespread commercial success. We expect
to order parts and components for demonstration devices based on needs,
utilizing multiple sources. For early demonstration prototypes, and prior to the
availability of Second Generation material, we expect that First Generation HTS
conductor will be available from multiple sources. However, the manufacturing of
even First Generation material is not yet an established business for the
current suppliers, and our ability to procure such materials in adequate
quantities and with acceptable prices cannot be assured. We anticipate
purchasing raw materials that include precursors and nickel alloy tape for
scaling up the manufacture of Second Generation conductor. These materials are
available from multiple sources. We currently do not maintain significant
quantities of inventory of any of the supplies used in Second Generation
conductor or for our device development needs.

G. Warranty

         The Energy Technology Segment has not experienced any warranty
obligations to date.


                            RESEARCH AND DEVELOPMENT
                            ------------------------

         Our research and development activities are important to our continued
success in new and existing markets. Externally funded development programs have
directly increased sales of design services and products and, at the same time,
assisted in expanding our technical capabilities without burdening operating
expenses. While many of our government contracts require that we share any new
technology resulting from the contract with the government, which includes the
right to transfer such technology to other government contractors, we currently
do not expect such rights to have a material adverse impact on our future
operations.


                                       17
<PAGE>

         External funding covers a substantial portion of our research and
development expenditures, principally from the U.S. government. In fiscal 2002,
approximately 34% of total research and development activities were paid by such
external programs compared to approximately 43% in fiscal years 2001 and 2000,
respectively. During fiscal years 2002, 2001 and 2000, product research and
development expenses in all segments, including externally funded amounts, were
$22,482,000, $16,591,000 and $11,038,000, respectively.

         We can experience, in any given year, significant increases or
decreases in external funding depending on our success in obtaining funded
contracts.

                                   INVESTMENTS
                                   -----------

See Note D of the Notes to Consolidated Financial Statements included in
response to Item 8 for a description of our investments.

                                    PERSONNEL
                                    ---------

         On May 26, 2002, we employed 546 people. We experienced a significant
reduction in our workforce as a result of the divestiture of IGC-AS and IGC-APD,
as well as from reduced demand in our Instrumentation segment.

         There is great demand for trained scientific and technical personnel as
well as for key management personnel, and our growth and success will require us
to attract and retain such personnel. Many of the prospective employers of such
personnel are larger and have greater financial resources than the Company and
may be in a better position to compete for prospective employees.

                      EXECUTIVE OFFICERS OF THE REGISTRANT
                      ------------------------------------

         At the end of fiscal 2002, the executive officers of the Company were:

Name                      Position                                        Age
----                      --------                                        ---

Glenn H. Epstein          Chairman and Chief Executive Officer            44


Michael K. Burke          Executive Vice President and                    44
                          Chief Financial Officer

Leo Blecher               Sector President - MRI                          56

Philip J. Pellegrino      Sector President - Energy Technology            53

David Thielman            Vice President and General Manager -            46
                          IGC-Polycold Systems Inc.


                                       18
<PAGE>

         Glenn H. Epstein was elected Chairman of the Board effective May 26,
2002. He became the Company's Chief Executive Officer on June 1, 1999. Mr.
Epstein joined the Company on May 5, 1997 as its President and Chief Operating
Officer. Prior to joining the Company, Mr. Epstein worked for Oxford Instruments
Group, plc in various capacities between 1986 and April 1997, including the
position of President of Nuclear Measurements Group, Inc., a wholly-owned
subsidiary of Oxford. Mr. Epstein also worked for the General Electric Company
between 1981 and 1985.

         Michael K. Burke was appointed Executive Vice President and Chief
Financial Officer on December 17, 2001. He is also the Company's Treasurer. In
May 2000, Mr. Burke became the chief financial officer at Hydrogen Burner
Technology, Inc., a manufacturer of onsite hydrogen generators and integrated
fuel processors for fuel-cell applications. Prior to that, he was a managing
director in the U.S. investment banking department of CIBC Oppenheimer Corp.
(now CIBC World Markets) having joined the firm in 1995. Prior to joining CIBC
Oppenheimer he was a director within the global investment banking division of
Barclays Bank Group and was team leader of its New York-based infrastructure
finance unit.

         Leo Blecher was appointed Sector President - MRI on October 16, 2001.
He previously held the title of Vice President and General Manager of IGC-MBG.
He originally joined the Company in 1988 as Manager of Technology Projects.
Prior to joining the Company, Mr. Blecher held various positions of
responsibility with Israel Aircraft Industry, holding the title of Manager -
Engineering and Project Manager, for the Space Technology Division.

         Philip J. Pellegrino joined the Company as Sector President - Energy
Technology on October 19, 2001. He is also the President of SuperPower, Inc. Mr.
Pellegrino was president, chief executive officer and a director of the
Independent System Operator in New England, which administers the region's
wholesale electricity markets, centrally dispatches power generation and
exercises operational control over the bulk transmission system. Prior to
joining ISO New England, Mr. Pellegrino worked for more than 21 years at the New
York Power Authority (NYPA) in increasingly responsible positions, including his
final position as Senior Vice President, Transmission Business Unit, and for 6
years at the American Electric Power Service Corporation, where he began his
career.

         David Thielman was appointed Vice President and General Manager of
IGC-Polycold Systems Inc. on January 8, 2002. Mr. Thielman previously served in
progressively responsible engineering and senior management positions in his 13
year career with Milwaukee-based APW Corporation. At APW, he was appointed
general manager of the company's Dallas and Austin, Texas, facilities. Prior to
APW, he worked for 10 years at The Trane Company in LaCrosse, Wisconsin, where
he began his career.



                                       19
<PAGE>

ITEM 2. PROPERTIES

         Our corporate headquarters and IGC-MBG are located in approximately
146,000 square feet of space located in Latham, New York (the "Latham
Facility"). We own the Latham Facility, which is subject to a mortgage. (See
Note E of the Notes to Consolidated Financial Statements included in response to
Item 8 hereto.)

         We lease approximately 65,000 square feet of office and manufacturing
space in nearby Schenectady, New York, which SuperPower currently occupies. The
lease has a 20 year term ending in October 2019.

         IGC-MAI leases approximately 24,000 square feet in a multi-tenant
building located in the Milwaukee County Research Park's Technology Innovation
Center (the "Research Park"). Approximately 9,000 square feet are used for
office space with the remaining space dedicated to lab, assembly, shipping and
material storage. The lease expires in August 2003.

         IGC-Polycold Systems Inc. leases approximately 70,000 square feet of
manufacturing and office space in Petaluma, California. The lease expires in
October of 2011.

         Upon the divestiture of IGC-AS, we assigned our lease to IGC-AS' office
and production facility located in Waterbury, Connecticut. The thirty-year
prepaid lease, which expires in December, 2021, includes approximately 212,700
square feet (of which 57,900 square feet are presently being used).

         IGC-APD operated out of a building, which it owns, in Allentown,
Pennsylvania totaling approximately 56,550 square feet. This property
transferred to the new owners upon our sale of all of the outstanding shares of
IGC-APD in February, 2002. See Note E of the Notes to Consolidated Financial
Statements included in response to Item 8 hereto for a description of IGC-APD's
obligations under revenue bonds issued in connection with the purchase of this
building and our guarantee under that bond.

         We believe our current facilities are adequate and suitable for our
current and near-term needs.


ITEM 3. LEGAL PROCEEDINGS

         Neither the Company nor any of its subsidiaries is a party to any
material legal proceeding. The Company is, from time to time, a party to
litigation arising in the normal course of its business.

         To our knowledge, no director, officer, affiliate of the Company,
holder of 5% or more of the Company's Common Stock, or associate of any of the
foregoing, is a party adverse to, or has a material interest adverse to, the
Company or any of its subsidiaries in any proceedings.


                                       20
<PAGE>

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

         Not applicable.


                                     PART II

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

         At the beginning of fiscal year 2002, our Common Stock was traded on
the American Stock Exchange under the symbol IMG. On July 11, 2001, the
Company's stock began trading on the Nasdaq National Market under the ticker
symbol IMGC. The high and low sales prices of the Common Stock for each
quarterly period for the last two fiscal years, based on quoted market prices,
are shown below.


                                              Closing Prices(1)
                                              -----------------

Fiscal Year 2002                                     High                   Low
----------------                                     ----                   ---
Quarter Ended August 26, 2001                     36.6000               25.4900
Quarter Ended November 25, 2001                   32.7500               18.2600
Quarter Ended February 25, 2002                   28.4200               21.9600
Quarter Ended May 26, 2002                        27.2500               22.1000

Fiscal Year 2001
----------------
Quarter Ended August 27, 2000                     19.2747               10.5892
Quarter Ended November 26, 2000                   29.1667               16.6054
Quarter Ended February 25, 2001                   25.4289               13.2353
Quarter Ended May 27, 2001                        29.1667               19.5980

------------------
 (1)     The closing prices have been adjusted to reflect a three percent stock
         dividend distributed on August 25, 2000, to stockholders of record on
         August 4, 2000, and a two percent stock dividend distributed on August
         31, 2001 to shareholders of record on August 14, 2001.

         There were approximately 1,439 holders of record of Common Stock as of
August 15, 2002. The Company has not paid cash dividends in the past ten years,
and it does not anticipate that it will pay cash dividends or adopt a cash
dividend policy in the near future. On July 26, 2001, the Company announced that
after August 2001, it was discontinuing its policy of granting annual stock
dividends. Under the Company's bank agreements, prior bank approval is required
for cash dividends in excess of the Company's net income for the year to which
the dividend pertains.


                                       21
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

         The following selected financial information has been taken from the
consolidated financial statements of the Company. The selected statement of
operations data and the selected balance sheet data set forth below should be
read in conjunction with, and is qualified in its entirety by, Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
Consolidated Financial Statements and related Notes included in response to
Items 7 and 8.

<TABLE>
<CAPTION>

                                                (Dollars in Thousands Except Per Share Amounts)
                                 ---------------- --------------- ---------------- --------------- ----------------
For the Fiscal Year Ended           May 26, 2002    May 27, 2001     May 28, 2000    May 30, 1999     May 31, 1998
                                    ------------    ------------     ------------    ------------     ------------
<S>                                 <C>             <C>              <C>             <C>              <C>
Net sales                             $ 153,294     $ 138,157        $ 112,772        $ 102,871        $  95,894
Gross Margin                             61,901        58,528           40,766           32,739           35,685

Income (loss) before
  Income taxes                           30,275        18,026           10,506           (8,241)           4,744

Net income (loss)                        20,589        11,067            6,452           (7,029)           2,753
Per common share:
   Basic                                   1.26          0.72             0.48            (0.54)            0.21

   Diluted                                 1.19          0.67             0.45            (0.54)            0.20

At End of Fiscal Year                      2002          2001             2000             1999             1998
                                      ---------     ---------        ---------        ---------        ---------

Working capital                       $  93,113     $  60,370        $  44,816        $  34,389         $ 45,493
Total assets                            177,225       152,158          127,977          125,458          127,776
Long-term debt
 (net of current maturities)              4,668         6,185           26,524           26,631           28,833
Retained earnings/(accumulated
 deficit)                                15,999        (4,590)          (6,159)          (8,061)          (1,081)
Shareholders' equity                    147,394       115,015           78,463           72,173           83,801

</TABLE>

----------
(a)      Income (loss) per common share has been computed during each period
         based on the weighted average number of shares of Common Stock
         outstanding plus dilutive potential common shares (where applicable).

(b)      The Company did not pay a cash dividend on its Common Stock during any
         of the periods indicated.

(c)      Net income (loss) per common share has been restated to give effect to
         the 2% stock dividend distributed in August 2001, 3% stock dividend
         distributed in August 2000, and 2% stock dividend distributed in
         September 1998 and September 1997.


                                       22
<PAGE>


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

         Intermagnetics General Corporation ("Intermagnetics", "Company", "we"
or "us") makes forward-looking statements in this document. Typically, we
identify forward-looking statements with words like "believe," "anticipate,"
"perceive," "expect," "estimate" and similar expressions. Unless a passage
describes an historical event, it should be considered a forward-looking
statement. These forward-looking statements are not guarantees of future
performance and involve important assumptions, risks, uncertainties and other
factors that could cause the Company's actual results for fiscal year 2003 and
beyond to differ materially from those expressed in the forward-looking
statements. These important factors include, without limitation, the
assumptions, risks, and uncertainties set forth in this Management's Discussion
and Analysis of Financial Condition and Results of Operations, as well as other
assumptions, risks, uncertainties and factors disclosed throughout our Annual
Report on Form 10-K.

         Except for our continuing obligations to disclose material information
under federal securities laws, we are not obligated to update these
forward-looking statements, even though situations may change in the future. We
qualify all of our forward-looking statements by these cautionary statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES
------------------------------------------

         The Company's discussion and analysis of its financial condition and
results of operations are based upon; in part the Company's consolidated
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America (GAAP). The
preparation of these financial statements requires the Company to make estimates
and judgments that affect assets, liabilities, revenues, expenses and related
disclosure of contingent liabilities.

         The Company recognizes revenue and profit on long-term development
contracts based upon the lesser of, milestones achieved or costs incurred plus
earned profit. Some of these contracts require the Company to contribute to the
development effort. Should the actual costs exceed the estimates for these
development efforts and the Company was not successful in securing additional
funding it may be necessary to record additional expense.

         The Company maintains a reserve for inventory that may become damaged
in the manufacturing process or technologically obsolete. If technology advances
more rapidly than expected, manufacturing processes improve substantially or the
market for our products declines substantially, additional reserves may be
required.

         The provision for warranty for potential defects with our manufactured
products is based on historical experience for the period the product was under
warranty during the fiscal year. The Company believes this reserve is adequate
based on the evaluation criteria, procedures in place to control the
manufacturing process and pre-testing of newly developed products to ensure
their manufacturability prior to commercial introduction. If product quality
declines the Company may require additional provisions.


                                       23
<PAGE>

         The Company maintains a provision for potential environmental
remediation for businesses disposed of during the current fiscal year. These
provisions are based upon estimates from environmental engineers that have
visited the sites and understand the scope of the project, should a cleanup be
required. The Company believes these provisions are adequate based on estimates
from environmental engineers.

         The Company records an investment impairment charge when it believes an
investment has experienced a decline in value that is other than temporary.
Future adverse changes in market conditions or poor operating results of
underlying investments could result in losses or an inability to recover the
carrying value of the investment. Should this occur the Company would be
required to record an impairment charge in the future.

COMPANY OVERVIEW
----------------

         We operate in three reportable operating segments: Magnetic Resonance
Imaging (MRI), Instrumentation, and Energy Technology. The MRI segment consists
primarily of the manufacture and sale of magnet systems (by the IGC-Magnet
Business Group) and radio frequency coils (by IGC-Medical Advances Inc.). These
products are used principally in the medical diagnostic imaging market. Until
October 24, 2001 this segment also included the manufacture and sale of
low-temperature superconducting wire by our IGC-Advanced Superconductor division
("IGC-AS"). The Instrumentation segment consists of refrigeration equipment
produced by IGC-Polycold Systems Inc. ("IGC-Polycold"). These systems are used
primarily in ultra-high vacuum applications, industrial coatings, analytical
instrumentation, medical diagnostics and semiconductor processing and testing.
For the first three quarters of fiscal year 2002, this segment also included
IGC-APD Cryogenics Inc ("IGC-APD"). The Energy Technology segment, operated
through SuperPower, Inc. is developing second generation, high-temperature
superconducting materials that we expect to use in devices designed to enhance
capacity, reliability and quality of transmission and distribution of electrical
power.

         We completed two major divestitures in fiscal year 2002. On October 24,
2001, we sold the assets and business of IGC-AS to Outokumpu Copper Products Oy.
On February 5, 2002, we sold all of the outstanding shares of IGC-APD to
Sumitomo Heavy Industries, Ltd. These transactions are discussed in more detail
below.

         Through February 25, 2001, the Company reported its operations in four
segments: Electromagnetics, Low-Temperature Superconductors, Refrigeration, and
Energy Technology. The change to these segments reflects our continued focus on
commercial market applications of core technology. The resulting reporting
segments are intended to relate to the primary markets which each serves, rather
than the technologies that give rise to individual products. Prior year segment
data has been reclassified to conform to current year presentation. Through
October 2000, the Refrigeration Segment included a refrigerant business that we
exited for strategic reasons.


                                       24
<PAGE>

         Intersegment sales and transfers are accounted for as if the sales or
transfers were to third parties, that is, at current market prices. The Company
evaluates the performance of its reportable segments based on operating income
(loss). The Company operates on a 52/53-week fiscal year ending the last Sunday
during the month of May.

         We also have a foreign sales corporation located in Barbados, which we
plan to discontinue as a result of the Extraterritorial Income Exclusion Act of
2000. The Act provides for an exclusion from gross income of a percentage of
income attributable to certain activities performed outside the United States.
This exclusion is designed to parallel the treatment of foreign-sourced income
by other countries and contains no requirement for a separate foreign entity to
obtain the benefit.

RESULTS OF OPERATIONS
---------------------

         During fiscal 2002 we completed two major divestitures. On October 24,
2001, we sold the assets and business of IGC-AS to Outokumpu Copper Products Oy.
On February 5, 2002, we sold all of the outstanding shares of IGC-APD to
Sumitomo Heavy Industries, Ltd. Additionally the Company had non-recurring
expenses of about $1.5 million related to moving our San Rafael California plant
and our mixed gas product line to Petaluma, California. Throughout the following
analysis reference will be made to on-going operations. When we refer to
on-going operations we are excluding the effect of IGC-AS and IGC-APD in both
fiscal 2001 and 2002 as well as the effect of the nonrecurring expense in fiscal
2002.

         For the year ended May 26, 2002, sales increased by 11.0% or $15.1
million, to $153.3 million, compared with an increase of 22.5% for the preceding
year. On-going operations had sales increase of $24.3 million to $144.3 million,
or 20.2%.

         Sales of the MRI segment increased by $28.9 million, or 31.0%,
primarily a result of increased product demand, by Philips Medical Systems (PMS)
as well as other customers. This increase more than offset a decline in sales of
low-temperature superconducting wire resulting from the sale of essentially all
of the assets of IGC-AS. Sales from on-going operations in the MRI segment
increased $34.3 million or nearly 40.0%. In the prior year, MRI segment sales
increased by $16.4 million, or 21.2%, most of which was a result of strong
demand by PMS and the transfer of magnet production from our former French joint
venture (AISA) for the entire year, versus only a partial year in fiscal 2000.
These increases more than offset a decline in sales of low-temperature
superconducting wire to external customers, as more of the total wire production
was devoted to internal needs.

         Sales of the Instrumentation segment decreased by $15.7 million, or
36.8%, to $26.9 million from $42.6 million. Approximately $8.0 million or 51.0%
of the total decline from fiscal 2001 resulted from a decrease in product demand
for refrigeration equipment caused, in part, from a slow down in the economy. In
addition, we experienced unusually high sales in this segment in the prior
fiscal year. Another $6.4 million or 40.8% of the decline was related to the
sale of IGC-APD and the relocation of our San Rafael, California plant to a new
modern facility in Petaluma, California. Sales from on-going operations in this
segment declined $10.7 million or about 35% relating to decreased customer
demand and unusually high sales in the prior fiscal year. In the prior fiscal
year, sales of Instrumentation products increased by $9.0 million, or 26.9%,
resulting from a large increase in demand for the Company's refrigeration
equipment in areas such as optical filters used to increase capacity of the data
transmitted on fiber optic cable networks. This increase was partially offset by
a $3.8 million, or 75.1% decline in the sale of refrigerants resulting from our
decision to exit the refrigerant business.


                                       25
<PAGE>

         Sales in the Energy Technology segment increased by $2.0 million, or
121.4%, to $3.6 million primarily from increased outside funding for
superconducting devices. The Company continues to focus its efforts on
successfully manufacturing second-generation superconductor and first generation
devices. In the prior year sales in the Energy Technology segment were
essentially unchanged at $1.6 million. The Company believes, in general, that
first generation conductors (consisting of ceramic compounds in a silver matrix)
will be unable to achieve cost and performance targets necessary to make devices
produced with this material economically feasible. Accordingly, we are
developing conductors in which the superconducting compounds are deposited on a
lower-cost substrate. While they have not yet resulted in increased sales, we
have developed important relationships and cooperative agreements for the
pursuit of this approach, and we continue to seek additional partners to assist
in the development and marketing of these products.

         Gross margin in fiscal 2002 increased $3.4 million to $61.9 million.
About $14.4 million is related to increased customer demand, active cost
reduction programs and improved product mix from magnet systems and additional
customer funding for research and development. These increases were offset by a
reduction of $4.6 million resulting from disposed businesses mentioned
previously as well as a decrease of about $5.9 million relating to reduced
demand for instrumentation products. Additionally, prior year margin had the
benefit of $1.4 million of inventory recovered from the related restructuring
recorded in fiscal 2000. As a percent of sales, margins decreased to 40% from
42%. Margins on an on-going basis would have increased $5.8 million to $56.1
million primarily as a result of increased demand for magnet systems, active
cost reduction programs and improved product mix as well as additional customer
funding for research and development. Again, increased margins on an on-going
basis were offset by reduced contribution related to decreased customer demand
within the Instrumentation Sector. In the previous years, excluding the effects
of inventory written off in restructurings in fiscal 2000 and recoveries in
fiscal 2001, gross margins increased to $57.2 million, or 41% of sales, from
$42.2 million, or 37% in fiscal 2000. This increase was due principally to the
large increase in sales, coupled with an improved mix of sales in both RF coils
and instrumentation. In addition, the substantial reduction in refrigerant sales
resulting from the previously described decision to exit that business helped
improve gross margins, as these were low-margin sales.


                                       26
<PAGE>

         Product research and development increased $5.3 million or 56% to $14.9
million. Approximately $2.4 million of this increase was a result of increased
efforts of the MRI segment relating to new magnet and RF coil designs. The
Company expects to generate initial sales from these development activities
within the coming fiscal year. Another $2.6 million is related to our efforts to
develop second-generation superconductor and first-generation devices for the
Energy Technology market. We view this as a longer-term investment that is not
expected to generate near-term sales. Finally, in fiscal 2002 the Company
increased research and development in the Refrigeration segment by about
$300,000. This effort is dedicated to understanding our customer's needs and
creating a product to satisfy those needs. We expect the results of this effort
will generate initial sales in fiscal 2003. In the prior fiscal year product
research and development increased by 52.1% to $9.5 million, from $6.3 million
in fiscal 2000. Substantially all of the increase was due to programs to develop
new magnet systems, new refrigeration applications to broaden the
Instrumentation product line and a substantial increase in our HTS activities in
the Energy Technology segment.

         Marketing, general and administrative expenses decreased by about $1.8
million, or 6.7%. The majority of this decrease is related to the sale of IGC-AS
and IGC-APD. Spending in the MRI segment declined from prior year as a result of
reduced selling expenses and legal fees related to patent defense. These
reductions were partially offset by increased spending for information
technology, primarily related to increased staffing. Marketing expense in the
Instrumentation segment increased in accordance with our business model to focus
on customer intimacy. Finally, there was modest increased spending from the
Energy Technology segment in fiscal 2002 related to increased staffing. On an
on-going basis marketing, general and administrative would have increased about
$1.3 million or 6.6% had the sale of businesses not occurred. In fiscal 2001
these expenses increased by about $4.2 million or 18.0%. In addition to a
substantial increase in the level of expenditures devoted to the Energy
Technology segment, we also had higher compensation costs resulting from both
increased staff levels and higher incentive compensation resulting from the
improved overall performance. In addition, we had higher consulting and
stock-based compensation costs and certain expenditures associated with a
termination of the company's traditional defined benefit pension plan and
subsequent transition to a fixed, defined contribution plan.

         Amortization of intangible assets decreased $1.1 million as a result of
the adoption of Statement of Accounting Standard No. 142, "Goodwill and Other
Intangible Assets." In the prior year amortization of intangible assets
increased by about $1.1 million resulting from a full year of amortization of
the intangible assets acquired in connection with the termination of our AISA
joint venture.

         Overall for fiscal 2002, operating income increased about $1.0 million
or 5.4% to $19.6 million. This increase includes the effect of the disposition
of certain businesses, expenses related to the transfer of mixed gas and the
move of our San Rafael California plant to Petaluma California. On an on-going
basis, operating income would have increased approximately $760,000 or 3.9%. It
is important to note that prior year includes the benefit of $1.2 million of
operating income related to the recovery of a restructuring charge. Without that
benefit in the prior year, operating income from on-going operations would have
increased $1.9 million or 10.6%. In the prior year operating income more than
doubled to $18.6 million due primarily to the much higher level of sales and
gross margins.


                                       27
<PAGE>

         Interest income increased about $600,000 or 42% to nearly $2.0 million.
This increase is due primarily to increased cash. Interest expense decreased
$1.3 million or 67% to nearly $700,000 related primarily to the conversion of
our subordinated debentures. During fiscal 2000 our ownership in an investment
that was accounted for using the equity method of accounting was diluted below
20%, and, accordingly, we ceased applying the equity method. Also, in fiscal
2000, we recorded a recovery of a portion ($1.6 million) of a fiscal 1999
provision for guarantees of indebtedness of a UK company in which we had an
investment. The investment had also been written off in fiscal 1999, and in
fiscal 2000, proceeds from the company's liquidation reduced our obligation
under the guarantee.

         On October 24, 2001, we divested our low-temperature superconducting
(LTS) materials business, IGC-Advanced Superconductors of Waterbury,
Connecticut, for more than $33.5 million. The purchase price consisted of a $4
million note, payable over two years, which was recorded at present value of
$3.8 million, and the balance in cash. The agreement between Intermagnetics and
Outokumpu Copper Products Oy, a subsidiary of the Outokumpu Group of Finland,
also includes a six-year strategic supply arrangement that will expand
Outokumpu's existing superconducting materials business. Intermagnetics will
purchase from Outokumpu a substantial portion of the LTS wire it requires
internally, primarily for manufacturing superconducting magnet systems for
magnetic resonance imaging systems. Intermagnetics will receive up to an
additional $4 million if it attains specified levels of LTS wire purchases over
the first two years of the agreement. Excluding that payment, the sale resulted
in a one-time pre-tax gain of approximately $15.4 million. Additionally, the
Company recorded stock based compensation expense of $795,000 related to the
sale.

         On February 5, 2002, the Company sold the stock of its subsidiaries
IGC-APD Cryogenics, Inc and IG-Europe, Ltd. The sale was subject to a stock
purchase agreement between the Company and Sumitomo Heavy Industries (SHI) of
Japan dated January 7, 2002. The sale to SHI included only the helium related
assets of these subsidiaries and the assumption of related liabilities. The
purchase consideration was arrived at by arms length negotiation and consisted
of $9.5 million in cash paid on February 5, 2002. The Company was also able to
withdraw an additional $1.2 million in cash prior to closing. The net pretax
gain from the sale was $10,000. The agreement includes a six-year strategic
supply agreement under which the Company will purchase from SHI shield coolers
it requires internally, primarily for manufacturing superconducting magnet
systems. The mixed-gas portion of the refrigeration systems business, previously
conducted at IGC-APD, was transferred and integrated into IGC-Polycold, Inc.
Additionally, the Company recorded stock based compensation expense of $528,000
related to the sale.


                                       28
<PAGE>

         In connection with these dispositions the Company has established a
liability for environmental remediation and penalties of approximately $2.0
million. Essentially all of this liability remains on our balance sheet at the
end of fiscal 2002.

         During fiscal 2002 the Company evaluated the probability of realizing
the value of our investments in Ultralife Batteries Inc. and Kryotech. As a
result, the Company determined these investments were impaired and accordingly
wrote down Ultralife Batteries Inc. to current market value as of November 23,
2001 and Kryotech to zero, its estimated value. The write down amounted to $6.3
million and was due to a decline in fair market value of these investments,
which, in the opinion of management, is other than temporary.

         In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of our
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income and capital
gains during the periods in which those temporary differences become deductible.
Management considers projected future taxable income, the character of such
income and tax planning strategies in making this assessment. The Company had
Federal taxable income of approximately $18,900,000 in fiscal 2002, $13,500,000
in fiscal 2001 and $6,500,000 in fiscal 2000. Based upon the level of historical
taxable income and projections for future taxable income over the periods in
which the deferred tax assets are deductible, management believes it is more
likely than not that the Company will realize the benefits of the remaining
deductible differences. The amount of the deferred tax assets considered
realizable, however, could be reduced in the near term if estimates of future
taxable income are reduced.

         Looking forward, we expect to continue to maintain our investment in
Energy Technology in order to be ready when the market for these products begins
to develop, which we believe will be about the middle of the decade. Despite
this investment, and relatively flat sales from on-going operations, we expect
net operating profit to increase in fiscal 2003 by about 10% compared to
reported fiscal 2002 as a result of our streamlined business focus, cost
containment and manufacturing efficiencies. A portion of this growth is expected
to come from sales of high (3.0T) field and open magnet systems as well as new
products being developed at IGC-Medical Advances and IGC-Polycold. These
products were being developed at the end of last fiscal year and continue to be
developed now. Our customers are intimately involved in the definition and
development of these products. Additionally, the Company has an active cost
cutting program in each of its divisions to increase earnings. These
expectations are based on the following assumptions, among others:

         o        The market for MRI systems continues to grow;
         o        Customer acceptance of the new products being developed
                  throughout the Company;


                                       29
<PAGE>

         o        Current order trends for MRI magnets to continue;
         o        New products achieve the level of growth and market acceptance
                  expected;
         o        The slowing economy doesn't cause any further pullback in
                  Instrumentation orders; and,
         o        We are able to maintain gross margins through continued
                  production cost reductions and manufacturing efficiencies.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

         We generated approximately $15 million in cash from operating
activities. Primarily this cash is a result of continued proactive management of
our balance sheet, which is also reflected in our operating efficiency.
Investing activities provided approximately $29 million, primarily from the sale
of divisions partially offset by cash used for the purchase of plant property
and equipment for machinery and tooling required for new product introduction
and research and development as well as increased capacity. Additionally we
received $4.3 million from the exercise of stock options and $700,000 as
repayments of employee loans. We used $2.5 million of this cash on financing
activities, as principal payments for long-term debt. We had a net increase in
cash of $45.8 million, bringing our cash balance to $73.5 million.

         See the consolidated statement of cash flows, located elsewhere in this
report, for further details on sources and uses of cash.

         During fiscal year 2001, the final $18.9 million of our 5 3/4%
convertible subordinated debentures were converted into 1,369,217 shares of our
Common Stock at $13.584 per share. Additionally, we issued 80,988 shares of
Common Stock valued at an average of $19.200 per share to induce early
conversion and in lieu of all accrued interest.

         Our capital and resource commitments at August 1st, 2002 consisted of
capital equipment commitments of $725,000.

         We have a $50 million unsecured line of credit with three banks.
Borrowings under the line bear interest at the London Interbank Offered Rate
(LIBOR) or prime plus an applicable margin at our option. The credit line
expires in October 2004. There are currently no borrowings under the credit
line.

         We believe we have adequate resources to meet our needs for the
short-term from our existing cash balances, our expected cash generation in the
current fiscal year, and our line of credit. Longer-term, with substantial
increases in sales volume and/or unusually large research and development or
capital expenditure requirements to pursue new opportunities in the Energy
Technology segment, we could need to raise additional funds. We would expect to
be able to do so through additional lines of credit, public offerings or private
placements of securities. However, in the event funds were not available from
these sources, or on acceptable terms, we would expect to manage our growth
within the financing available.


                                       30
<PAGE>

         Inflation has not had a material impact on our financial statements.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCUSSIONS ABOUT MARKET RISK

         The Company's exposure to market risk through derivative financial
instruments and other financial instruments, such as investments in short-term
marketable securities and long-term debt, is not material. The financial
instruments of the Company that are interest rate dependent are revenue bonds
issued in connection with the acquisition of certain land, building and
equipment, an unsecured line of credit and a mortgage payable. The Company
manages interest rates through various methods within contracts. On its mortgage
payable, the Company negotiated an "interest rate swap" agreement that, in
effect, fixes the rate at 6.88%. With respect to its unsecured line of credit,
the Company may elect to apply interest rates to borrowings under the line which
relate to either the London Interbank Offered Rate or prime, whichever is most
favorable. (See Note E of the Notes to Consolidated Financial Statements
included in response to Item 8 for more details regarding these instruments.)
The Company's objective in managing its exposure to changes in interest rates is
to limit the impact of changing rates on earnings and cash flow and to lower its
borrowing costs. Additionally, the Company makes certain estimates about
inventory value, collectability of accounts receivable, warranty expense and
market acceptance and pricing of new product under development. We use factors
such as probability of use, ability of a customer to pay, historical experience
of product repair and customer need and or acceptance of new products in making
the associated estimates. These estimates are believed to be reasonable and
based on information available at the time the estimate is made.

         The Company does not believe that its exposure to commodity and foreign
exchange risks are material. We limit our exposure to these risks by
denominating contracts, such as our contract with PMS, in dollars.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         Attached hereto and filed as part of this report are the consolidated
financial statements and supplementary data listed in the list of Financial
Statements and Schedules included in response to Item 14 of this report.


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

         None



                                       31
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information concerning directors called for by Item 10 of Form 10-K
will be set forth under the heading "Election of Directors" in the Company's
definitive proxy statement relating to the 2002 Annual Meeting of Shareholders
(the "Proxy Statement"), and is hereby incorporated herein by reference.

         The information concerning executive officers called for by Item 10 of
Form 10-K is set forth in "Item 1. Business" of this annual report on Form 10-K.


ITEM 11. EXECUTIVE COMPENSATION

         The information with respect to compensation of certain executive
officers and all executive officers of the Company as a group to be contained
under the headings "Executive Compensation" and "Certain Transactions" in the
Proxy Statement is hereby incorporated herein by reference.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information with respect to ownership of the Company's Common Stock
by management and by certain other beneficial owners to be contained under the
heading "Security Ownership of Certain Beneficial Owners and Management" in the
Proxy Statement is hereby incorporated herein by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information with respect to certain relationships and related
transactions to be contained under the heading "Certain Transactions" in the
Proxy Statement is hereby incorporated herein by reference.


                                     PART IV

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

         (a)      FINANCIAL STATEMENTS, SCHEDULE AND EXHIBITS


                                       32
<PAGE>

Attached hereto and filed as part of this report are the financial statements,
schedule and the exhibits listed below.

1. Financial Statements

         Report of Independent Accountants

         Consolidated Balance Sheets as of May 26, 2002 and May 27, 2001

         Consolidated Statements of Operations for fiscal years ended May 26,
         2002, May 27, 2001 and May 28, 2000

         Consolidated Statements of Changes in Shareholders' Equity and
         Comprehensive Income (Loss) for fiscal years ended May 26, 2002, May
         27, 2001 and May 28, 2000

         Consolidated Statements of Cash Flows for the fiscal years ended May
         26, 2002, May 27, 2001 and May 28, 2000

         Notes to Consolidated Financial Statements

2. Financial Statement Schedule

         II Valuation and Qualifying Accounts

         All other schedules are not required or are inapplicable and,
therefore, have been omitted.

3. Exhibits

Articles of Incorporation and By-laws

         3.1      Restated Certificate of Incorporation (1) (Exhibit 3)

         3.2      By-laws, as amended (2) (Exhibit 3.1)

Instruments defining the rights of security holders, including indentures

*        4.1      Form of Common Stock certificate

*        4.2      Loan and Agency Agreement among Intermagnetics General
                  Corporation, IGC-APD Cryogenics Inc., IGC-Polycold Systems,
                  Inc., IGC-Superpower, LLC, Medical Advances, Inc. and First
                  Union National Bank and the other banks party hereto with
                  First Union National Bank, as agent and JP Morgan Chase Bank,
                  as successor to the Chase Manhattan Bank, as syndication agent
                  and Keybank National Association, as documentation agent dated
                  September 19, 2001.


                                       33
<PAGE>

Material Contracts


*+       10.1     Employment Agreement dated July 23, 2002 between
                  Intermagnetics General Corporation and Glenn H. Epstein

*+       10.2     Employment Agreement dated October 19, 2001 between
                  Intermagnetics General Corporation and Philip J. Pellegrino

         10.3     Purchase Agreement dated October 4, 2001 between
                  Intermagnetics General Corporation as Seller and Outokumpu
                  Copper Products Oy and Outokumpu Advanced Superconductors Inc.
                  as Buyer (3) (Exhibit 2.1)

 +       10.4     1990 Stock Option Plan (4) (Appendix A)

         10.5     Agreements dated April 29, 1999 between Philips Medical
                  Systems Nederlands B.V. and Intermagnetics General Corporation
                  for sales of magnet systems (5) (Exhibit 10.7)

 +       10.6     Employment Agreement dated April 20, 1998 between
                  Intermagnetics General Corporation and Carl H. Rosner (11)
                  (Exhibit 10.1)

 +       10.7     Enhanced Benefit Plan (2) (Exhibit 10.10)

 +       10.8     Executive Stock Purchase Plan (2) (Exhibit 10.11)

         10.9     Patent License Agreement dated June 30, 2000 between
                  Intermagnetics General Corporation and Lucent Technologies GRL
                  Corporation (6) (Exhibit 10.2)

 +      10.10    2000 Stock Option and Stock Award Plan (7) (Appendix A)

Subsidiaries of the registrant

*        21       Subsidiaries of the Company

Consents of experts and counsel

*        24       Consent of PricewaterhouseCoopers LLP with respect to the
                  Registration Statements Numbers 2-80041, 2-94701, 33-2517,
                  33-12762, 33-12763, 33-38145, 33-44693, 33-50598, 33-55092,
                  33-72160, 333-10553, 333-42163, 333-75269 and 333-64822 on
                  Form S-8.


                                       34
<PAGE>

Certifications of Chief Executive Officer and Chief Financial Officer

*        99.1     Certification of Chief Executive Officer pursuant to 18 U.S.C.
                  Section 1350, as added by Section 906 of the Sarbanes-Oxley
                  Act of 2002.

*        99.2     Certification of Chief Financial Officer pursuant to 18 U.S.C.
                  Section 1350, as added by Section 906 of the Sarbanes-Oxley
                  Act of 2002.
-------------------------------------------------------------------------
         (1)      Exhibit incorporated herein by reference to the Annual Report
                  on Form 10-K filed by the Company for the fiscal year ended
                  May 31, 1998.

         (2)      Exhibit incorporated herein by reference to the Annual Report
                  on Form 10-K filed by the Company for the fiscal year ended
                  May 28, 2000.

         (3)      Exhibit incorporated herein by reference to the Current Report
                  on Form 8-K filed by the Company on November 8, 2001.

         (4)      Exhibit incorporated herein by reference to the Proxy
                  Statement dated September 27, 1999 for the 1999 Annual Meeting
                  of Shareholders.

         (5)      Exhibit incorporated herein by reference to the Annual Report
                  on Form 10-K filed by the Company for the fiscal year ended
                  May 30, 1999.

         (6)      Exhibit incorporated herein by reference to the Quarterly
                  Report on Form 10-Q filed by the Company for the quarter ended
                  August 27, 2000.

         (7)      Exhibit incorporated herein by reference to the Proxy
                  Statement dated September 25, 2000 for the 2000 Annual Meeting
                  of Shareholders.

*        Filed with the Annual Report on Form 10-K for the fiscal year ended May
         26, 2002.

+        Management contract or compensatory plan or arrangement required to be
         filed as an exhibit to this annual report on Form 10-K.


                                       35
<PAGE>

         The Company agrees to provide the SEC upon request with copies of
certain long-term debt obligations which have been omitted pursuant to the
applicable rules.

         The Company agrees to furnish supplementally a copy of omitted
Schedules and Exhibits, if any, with respect to Exhibits listed above upon
request.

(b) REPORTS ON FORM 8-K

         None.


                                       36
<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                    INTERMAGNETICS GENERAL CORPORATION


Date: August 23, 2002
                                    By:  /s/ Glenn H. Epstein
                                        ---------------------------------------
                                         Glenn H. Epstein
                                         Chairman and Chief Executive Officer


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

         Each person in so signing also makes, constitutes and appoints Glenn H.
Epstein, President and Chief Executive Officer, Michael K. Burke, Executive Vice
President and Chief Financial Officer, and each of them, his true and lawful
attorneys-in-fact, in his name, place and stead to execute and cause to be filed
with the Securities and Exchange Commission any or all amendments to this
report.

<TABLE>
<CAPTION>

Name                                        Capacity                                    Date
----------------------------------------------------------------------------------------------------------
<S>                                         <C>                                     <C>
/s/ Glenn H. Epstein                        Chairman and                            August 23, 2002
---------------------------                 Chief Executive Officer
   Glenn H. Epstein                         (principal executive
                                            officer)

/s/ Michael K. Burke                        Executive Vice President and            August 23, 2002
---------------------------                 Chief Financial
   Michael K. Burke                         Officer (principal financial
                                            and accounting officer)

/s/ John M. Albertine                       Director                                August 23, 2002
---------------------------
   John M. Albertine

/s/ Larry G. Garberding                     Director                                August 23, 2002
-----------------------
   Larry G. Garberding

/s/ Michael E. Hoffman                      Director                                August 23, 2002
----------------------
   Michael E. Hoffman

/s/ James S. Hyde                           Director                                August 23, 2002
---------------------------
   James S. Hyde

/s/ Thomas L. Kempner                       Director                                August 23, 2002
---------------------
   Thomas L. Kempner


/s/ Sheldon Weinig                          Director                                August 23, 2002
---------------------------
   Sheldon Weinig

</TABLE>


                                       37
<PAGE>




                             1. Financial Statements



                                       38
<PAGE>


                       Report of Independent Accountants

To the Board of Directors and
Stockholders of Intermagnetics General Corporation:

In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) present fairly, in all material respects, the
financial position of Intermagnetics General Corporation and its subsidiaries at
May 26, 2002 and May 27, 2001, and the results of their operations and their
cash flows for each of the three years in the period ended May 26, 2002 in
conformity with accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement schedule listed in
the index appearing under Item 14(a)(2) presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. These financial statements and
financial statement schedule are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

As discussed in Notes O and P to the consolidated financial statements, on May
28, 2001 the Company adopted Statement of Financial Accounting Standards No.
142, "Goodwill and Other Intangible Assets" and Statement of Financial
Accounting Standards No. 133, "Accounting For Derivative Instruments and Hedging
Activities."



/s/ PricewaterhouseCoopers LLP
Albany, New York
July 12, 2002



                                       39
<PAGE>

CONSOLIDATED BALANCE SHEETS
INTERMAGNETICS GENERAL CORPORATION
(Dollars in Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>

                                                                   May 26,              May 27,
                                                                    2002                 2001
                                                                  ---------            ----------
<S>                                                               <C>                  <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                       $ 73,517              $ 27,675
  Trade accounts receivable, less allowance
    (May 26, 2002 - $293; May 27, 2001 - $496)                      20,612                21,615
  Costs and estimated earnings in excess of
    billings on uncompleted contracts                                  428                   642
  Inventories:
    Consigned products                                               2,799                 7,176
    Finished products                                                  659                 2,142
    Work in process                                                  7,405                12,768
    Materials and supplies                                           9,054                12,337
                                                                  --------              --------
                                                                    19,917                34,423

  Deferred income taxes                                              1,497                 3,362
  Prepaid expenses and other                                         2,037                 1,228
                                                                  --------              --------
    TOTAL CURRENT ASSETS                                           118,008                88,945

PROPERTY, PLANT AND EQUIPMENT
  Land and improvements                                              1,128                 1,479
  Buildings and improvements                                        12,172                18,243
  Machinery and equipment                                           31,788                41,604
  Leasehold improvements                                             3,705                   923
                                                                  --------              --------
                                                                    48,793                62,249
  Less allowances for depreciation and amortization                 23,310                37,787
                                                                  --------              --------
                                                                    25,483                24,462
  Equipment in process of construction                               2,854                 2,801
                                                                  --------              --------
                                                                    28,337                27,263

INTANGIBLE AND OTHER ASSETS
  Available for sale securities                                      2,833                 6,145
  Other investments                                                                        3,500
  Goodwill                                                          13,750                13,750
  Other intangibles, less accumulated amortization
     (May 26, 2002- $5,746; May 27, 2001 - $3,765)                   8,759                10,890
  Note receivable                                                    3,861
  Other assets                                                       1,677                 1,665
                                                                  --------              --------

    TOTAL ASSETS                                                  $177,225              $152,158
                                                                  ========              ========
</TABLE>



                                       40
<PAGE>



<TABLE>
<CAPTION>

                                                                          May 26,       May 27,
                                                                            2002         2001
                                                                       -----------    ---------
<S>                                                                    <C>            <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Current portion of long-term debt                                    $     267      $   2,445
  Accounts payable                                                        10,757         10,749
  Salaries, wages and related items                                        6,386          5,777
  Accrual for compensated absences                                           835          1,063
  Customer advances and deposits                                           1,007          2,054
  Product warranty reserve                                                 1,326          1,474
  Accrued income taxes                                                     2,332          2,143
  Other liabilities and accrued expenses                                   1,985          2,870
                                                                       ---------      ---------
    TOTAL CURRENT  LIABILITIES                                            24,895         28,575

LONG-TERM DEBT, less current portion                                       4,668          6,185
DEFERRED INCOME TAXES                                                                     2,383
DERIVATIVE LIABILITY                                                         268

SHAREHOLDERS' EQUITY
  Preferred Stock, par value $.10 per share:
    Authorized - 2,000,000 shares
      Issued and outstanding - May 26, 2002 - None;
      May 27, 2001 - None
  Common Stock, par value $.10 per share:
    Authorized - 40,000,000 shares
    Issued and outstanding (including shares in treasury):
      May 26, 2002 - 17,333,459 shares;
      May 27, 2001 - 16,693,997 shares                                     1,733          1,671
  Additional paid-in capital                                             137,419        127,303
  Notes receivable from employees                                           (799)        (1,501)
  Retained earnings/(accumulated deficit)                                 15,999         (4,590)
  Accumulated other comprehensive loss                                      (906)        (2,047)
                                                                       ---------      ---------
                                                                         153,446        120,836
  Less cost of Common Stock in treasury
    May 26, 2002 - 671,316 shares
    May 27, 2001 - 661,282 shares                                         (6,052)        (5,821)
                                                                       ---------      ---------
                                                                         147,394        115,015
                                                                       ---------      ---------


    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                         $ 177,225      $ 152,158
                                                                       =========      =========

</TABLE>

See notes to consolidated financial statements



                                       41
<PAGE>

CONSOLIDATED INCOME STATEMENTS
INTERMAGNETICS GENERAL CORPORATION
(Dollars in Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>

                                                                                       Fiscal Year End
                                                                        -----------------------------------------------
                                                                          May 26,           May 27,            May 28,
                                                                           2002              2001               2000
                                                                        ------------       ---------          ---------
<S>                                                                     <C>                <C>                <C>
Net sales                                                               $ 153,294          $ 138,157          $ 112,772

Cost of products sold                                                      91,393             80,990             70,616
Inventory (recovered) written off in restructuring                                            (1,361)             1,390
                                                                        ---------          ---------          ---------
                                                                           91,393             79,629             72,006
                                                                        ---------          ---------          ---------

Gross margin                                                               61,901             58,528             40,766

Product research and development                                           14,855              9,541              6,271
Marketing, general and administrative                                      25,422             27,255             23,107
Amortization of intangible assets                                           1,979              3,094              2,011
Restructuring charges                                                                                                80
                                                                        ---------          ---------          ---------
                                                                           42,256             39,890             31,469
                                                                        ---------          ---------          ---------

Operating income                                                           19,645             18,638              9,297

Interest and other income                                                   1,957              1,374              1,175
Interest and other expense                                                   (652)            (1,986)            (1,965)
Gain on sale of divisions                                                  15,385
Write down of investments                                                  (6,290)
Realized gain on available for sale securities                                230                                   615
Recovery of investment in unconsolidated affiliate                                                                1,620
Equity in net loss of unconsolidated affiliates                                                                    (236)
                                                                        ---------          ---------          ---------
Income before income taxes                                                 30,275             18,026             10,506
Provision for income taxes                                                  9,686              6,959              4,054
                                                                        ---------          ---------          ---------

NET INCOME                                                              $  20,589          $  11,067          $   6,452
                                                                        =========          =========          =========

Net Income per Common Share:
  Basic                                                                 $    1.26          $    0.72          $    0.48
                                                                        =========          =========          =========
  Diluted                                                               $    1.19          $    0.67          $    0.45
                                                                        =========          =========          =========

</TABLE>


See notes to consolidated financial statements.


                                       42
<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
INTERMAGNETICS GENERAL CORPORATION
(Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                                                      Fiscal Year Ended
                                                                                           ----------------------------------------
                                                                                             May 26,        May 27,         May 28,
                                                                                              2002           2001            2000
                                                                                           ---------       --------        --------
<S>                                                                                        <C>             <C>             <C>
OPERATING ACTIVITIES
Net income                                                                                 $ 20,589        $ 11,067        $  6,452
Adjustments to reconcile net income to net cash provided by
  operating activities:
    Depreciation and amortization                                                             5,803           7,086           6,380
    Proceeds from the sale of assets                                                                          1,812
    Non-cash restructuring charges                                                                                            2,000
    Recovery of investment in unconsolidated affiliate                                                                       (1,341)
    Gain on sale of divisions                                                               (15,385)
    Write down of investments                                                                 6,290
    Premium on debt conversion                                                                                1,037
    Provision for deferred taxes                                                               (532)          1,790             708
    Equity in net loss of unconsolidated affiliates including amortization                                                      236
    Loss on sale and disposal of assets                                                         173              21             248
    Gain on sale of available for sale securities                                              (230)                           (615)
    Change in discount on note receivable                                                       (57)
    Stock based compensation                                                                    539             470             460
Change in operating assets and liabilities (excluding changes resulting from
          sale of divisions and the net effects of restructuring):
      (Increase) decrease in accounts receivable and costs and estimated
         earnings in excess of billings on uncompleted contracts                             (1,583)            587           1,719
      (Increase) decrease in inventories and prepaid expenses and other                      (1,688)        (14,831)          5,875
      Increase in accounts payable and accrued expenses                                         731           8,999           2,851
                                                                                           --------        --------        --------
   NET CASH PROVIDED BY OPERATING ACTIVITIES                                                 14,650          18,038          24,973

INVESTING ACTIVITIES
Purchases of property, plant and equipment                                                  (11,598)         (5,192)         (5,287)
Proceeds from sale of equipment                                                                                 174
Proceeds from sale of available for sale securities                                           1,300                           1,369
AISA termination payments                                                                                                    (4,750)
Payments on financial guarantee, net                                                                                           (623)
Purchase of patent rights                                                                                    (1,085)
Proceeds from sale of divisions                                                              39,002
                                                                                           --------        --------        --------
    NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                      28,704          (6,103)         (9,291)

FINANCING ACTIVITIES
Repayment of short-term borrowings                                                                                           (4,850)
Repayments from (loans to) employees                                                            702             165          (1,666)
Redemption of Preferred Stock                                                                                                  (682)
Proceeds from sales of Common Stock, including the exercise of stock options                  4,328           4,720           2,559
Principal payments on note payable and long-term debt                                        (2,445)         (1,428)           (317)
                                                                                           --------        --------        --------
    NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                       2,585           3,457          (4,956)

EFFECT OF EXCHANGE RATES ON CASH                                                                (97)           (244)           (482)
                                                                                           --------        --------        --------

INCREASE IN CASH AND CASH EQUIVALENTS                                                        45,842          15,148          10,244

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                             27,675          12,527           2,283
                                                                                           --------        --------        --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                 $ 73,517        $ 27,675        $ 12,527
                                                                                           ========        ========        ========

SUPPLEMENTAL  SCHEDULE OF NON-CASH INVESTING AND
  FINANCING ACTIVITIES:

Issuance of Warrants to purchase Common Stock                                                              $  1,097
                                                                                                           ========

Issuance of Note Payable for redemption of Preferred Stock                                                                 $  2,192
                                                                                                                           ========

Issuance of Treasury Stock for redemption of Preferred Stock                                                               $  4,126
                                                                                                                           ========

Issuance of Common Stock upon conversion of principal amount of debentures                                 $ 18,894        $    871
                                                                                                           ========        ========

Exchange of Common Stock in partial payment of exercise
  price on options                                                                         $    231                        $    643
                                                                                           ========                        ========

Tax benefit from exercise of stock options                                                 $  3,690        $    586        $     84
                                                                                           ========        ========        ========
</TABLE>

See notes to consolidated financial statements.


                                       43
<PAGE>

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY AND COMPREHENSIVE
INCOME (LOSS)
INTERMAGNETICS GENERAL CORPORATION
Fiscal Years Ended May 26, 2002, May 27, 2001 and May 28, 2000
(Dollars in Thousands)

<TABLE>
<CAPTION>


                                                                                                   Additional
                                                                                     Common          Paid-in        Accumulated
                                                                                      Stock          Capital          Deficit
                                                                                 ------------     ------------     ------------
<S>                                                                              <C>              <C>              <C>
Balances at May 30, 1999                                                         $   1,352        $  82,175        $  (8,061)
Comprehensive income:
   Net Income                                                                                                          6,452
   Unrealized gain on available for
      sale securities, net
   Unrealized loss on foreign currency
      translation

         Total comprehensive income

Tax benefit from exercise of stock options                                                               84
Issuance of 440,160 shares of Common Stock,
  including receipt of 24,345 shares of
  Treasury Stock and recognition of $386,000 of
  compensation expense, upon exercise of stock options
  and sale of 32,865 shares to IGC Savings Trust                                        42            4,158
Issuance of 64,113 shares upon conversion of debentures                                  6              865
Issuance of 631,128 Treasury shares upon conversion of
    Series A Preferred Stock                                                                           (885)
Stock based compensation                                                                                 37
Purchase of 114,000 shares of Treasury Stock
Notes receivable from employees for purchase of
    Common Stock
Stock dividend                                                                          71            4,480           (4,550)
                                                                                 ---------        ---------        ---------

Balances at May 28, 2000                                                             1,471           90,914           (6,159)

Comprehensive income:
   Net Income                                                                                                         11,067
   Unrealized loss on available for
      sale securities
   Unrealized loss on foreign currency
      translation

         Total comprehensive income

Repayment of note receivable from employees
Tax benefit from exercise of stock options                                                              586
Issuance of 527,290 shares of Common Stock, upon exercise
  of stock options and sale of 6,400 shares to IGC Savings
  Trust                                                                                 53            4,667
Issuance of 15,300 shares of Common Stock and other
  stock based compensation                                                               2              538
Issuance of 1,450,205 shares of Common Stock upon
  conversion of debentures and write-off of deferred
  financing costs                                                                      142           20,019
Issuance of warrants to acquire 105,600 shares of Common Stock                                        1,097
Stock dividend adjustment including payment in lieu of
  fractional shares                                                                                     (11)
Stock dividend                                                                           3            9,495           (9,498)
                                                                                 ---------        ---------        ---------

Balances at May 27, 2001                                                             1,671          127,305           (4,590)

Comprehensive income:
   Net Income                                                                                                         20,589
   Reclassification adjustments - write down of investments
   Reclassification adjustments - available for sale securites
   Reclassification adjustments - foreign currency translation
   Unrealized loss on available for sale securities, net
   Unrealized gain on foreign currency translation
   Transitional adjustment - on derivatives
   Loss on derivative

         Total  comprehensive income

Net repayments
Deferred taxes                                                                                        3,690
Stock based compensation                                                                              1,928
Issuance of 639,583 shares of Common Stock ,
 including exercise of stock options and sale of 7,673
 shares to IGC Savings Trust                                                            62            4,285
Receipt of treasury stock, upon exercise of stock options                                               231
Stock dividend adjustment of (121) shares and payments for
    fractional shares                                                                                   (18)
                                                                                 ---------        ---------        ---------

Balances at May 26, 2002                                                         $   1,733        $ 137,421        $  15,999
                                                                                 =========        =========        =========

<PAGE>

<CAPTION>

                                                                 Accumulated
                                                                     Other                         Notes
                                                                 Comprehensive    Treasury     Receivable      Comprehensive
                                                                 Income (Loss)     Stock     from Employees    Income (Loss)
                                                                --------------  ----------   -------------- ----------------
<S>                                                             <C>             <C>          <C>             <C>
Balances at May 30, 1999                                        $    (668)      $  (9,624)
Comprehensive income:
   Net Income                                                                                                     $   6,452
   Unrealized gain on available for
      sale securities, net                                            874                                               874
   Unrealized loss on foreign currency
      translation                                                    (482)                                             (482)
                                                                                                                  ---------
         Total comprehensive income                                                                               $   6,844
                                                                                                                  =========
Tax benefit from exercise of stock options
Issuance of 440,160 shares of Common Stock,
  including receipt of 24,345 shares of
  Treasury Stock and recognition of $386,000 of
  compensation expense, upon exercise of stock options
  and sale of 32,865 shares to IGC Savings Trust                                     (643)
Issuance of 64,113 shares upon conversion of debentures
Issuance of 631,128 Treasury shares upon conversion of
    Series A Preferred Stock                                                        5,011
Stock based compensation                                                              162
Purchase of 114,000 shares of Treasury Stock                                         (727)
Notes receivable from employees for purchase of
    Common Stock                                                                                (1,666)
Stock dividend
                                                                ---------       ---------    ---------            ---------

Balances at May 28, 2000                                             (276)         (5,821)      (1,666)

Comprehensive income:
   Net Income                                                                                                     $  11,067
   Unrealized loss on available for
      sale securities                                              (1,527)                                           (1,527)
   Unrealized loss on foreign currency
      translation                                                    (244)                                             (244)
                                                                                                                  ---------
         Total comprehensive income                                                                               $   9,296
                                                                                                                  =========
Repayment of note receivable from employees                                                        165
Tax benefit from exercise of stock options
Issuance of 527,290 shares of Common Stock, upon exercise
  of stock options and sale of 6,400 shares to IGC Savings
    Trust
Issuance of 15,300 shares of Common Stock and other
  stock based compensation
Issuance of 1,450,205 shares of Common Stock upon
  conversion of debentures and write-off of deferred
  financing costs
Issuance of warrants to acquire 105,600 shares of Common Stock
Stock dividend adjustment including payment in lieu of
    fractional shares
Stock dividend
                                                                ---------       ---------    ---------            ---------

Balances at May 27, 2001                                           (2,047)         (5,821)      (1,501)

Comprehensive income:
   Net Income                                                                                                     $  20,589
   Reclassification adjustments - write down of investments         1,583                                             1,583
   Reclassification adjustments - available for sale securites       (311)                                             (311)
   Reclassification adjustments - foreign currency translation      1,051                                             1,051
   Unrealized loss on available for sale securities, net             (750)                                             (750)
   Unrealized gain on foreign currency translation                   (164)                                             (164)
   Transitional adjustment - on derivatives                          (128)                                             (128)
   Loss on derivative                                                (140)                                             (140)
                                                                                                                  ---------
         Total  comprehensive income                                                                              $  21,730
                                                                                                                  =========
Net repayments                                                                                     702
Deferred taxes
Stock based compensation
Issuance of 639,583 shares of Common Stock ,
 including exercise of stock options and sale of 7,673
 shares to IGC Savings Trust
Receipt of treasury stock, upon exercise of stock options                            (231)
Stock dividend adjustment of (121) shares and payments for
    fractional shares
                                                                ---------       ---------    ---------

Balances at May 26, 2002                                        $    (906)      $  (6,052)   $    (799)
                                                                =========       =========    =========

</TABLE>

See notes to consolidated financial statements.

                                       44
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTERMAGNETICS GENERAL CORPORATION

NOTE A - ACCOUNTING POLICIES

Basis of Presentation:

The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant inter-company transactions have been
eliminated in consolidation. It is the Company's policy to reclassify prior year
consolidated financial statements to conform to current year presentation.

The Company operates on a 52/53 week fiscal year ending the last Sunday during
the month of May.

Cash Equivalents:

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

Revenue Recognition:

Sales are recognized as of the date of shipment or upon customer acceptance,
which is based on product test results.

Sales to the United States Government or its contractors under research and
development cost reimbursement contracts are recorded as costs are incurred and
include estimated earned profits.

The Company recognizes revenue on long-term development contracts based upon the
lesser of, milestones achieved or costs incurred plus earned profit. Some of
these contracts require the Company to contribute to the development effort.

The Company accrues for possible future claims arising under terms of various
warranties (one to three years) made in connection with the sale of products.

Inventories:

Inventories are stated at the lower of cost (first-in, first-out) or market
value. At May 26, 2002 and May 27, 2001 the Company had reserves for excess and
obsolete inventory of $ 1,064,000 and $4,025,000 respectively.

Property, Plant and Equipment:

Land and improvements, buildings and improvements, machinery and equipment and
leasehold improvements are recorded at cost. Depreciation is computed using the
straight-line method in a manner that is intended to amortize the cost of such
assets over their estimated useful lives. Leasehold improvements are amortized
on a straight-line basis over the remaining initial term of the lease or
estimated useful life, whichever is shorter. For financial reporting purposes,
the Company provides for depreciation of property, plant and equipment over the
following estimated useful lives:

              Land improvements                          25 years
              Buildings and improvements             7 - 40 years
              Machinery and equipment                3 - 15 years
              Leasehold improvements                 2 - 15 years

Significant additions or improvements extending assets' useful lives are
capitalized; normal maintenance and repair costs are expensed as incurred.

The cost of fully depreciated assets remaining in use is included in the
respective asset and accumulated depreciation accounts. When items are sold or
retired, related gains or losses are included in net income.


                                       45
<PAGE>

Investments:

Certain investments are categorized as available for sale securities in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." Available
for sale securities are reported at fair value, with unrealized gains and losses
included in shareholders' equity. Realized gains and losses and other than
temporary losses for securities classified as available for sale are included in
earnings and are determined using the specific identification method for
determining the cost of securities sold.

Income Taxes:

Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

Investment and other tax credits are included in net income when realized.

Foreign Currency Translation:

Foreign currency translation adjustments arise from conversion of the Company's
foreign subsidiary's financial statements to US currency for reporting purposes,
and are included in Other Comprehensive Income (Loss) in shareholders' equity on
the accompanying consolidated balance sheets. Realized foreign currency
transaction gains and losses are included in interest and other expense in the
accompanying consolidated income statements.

Goodwill and Other Intangibles:

The ratable amortization of goodwill and other intangibles with indefinite lives
is replaced with periodic tests of the goodwill's impairment and that
identifiable intangible assets other than goodwill are amortized over their
useful lives.

Impairment of Long-Lived Assets:

Long-lived assets, including intangible assets, used in the Company's operations
are reviewed for impairment when circumstances indicate that the carrying amount
of an asset may not be recoverable. The primary indicators of recoverability are
the associated current and forecasted undiscounted operating cash flows.

Stock-Based Compensation:

The intrinsic value method of accounting is used for stock-based compensation
plans. Under the intrinsic value method, compensation cost is measured as the
excess, if any, of the quoted market price of the stock at the grant date over
the amount an employee must pay to acquire the stock.

Per Share Amounts:

Basic earnings per share excludes dilution and is computed by dividing income
available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution that could occur if securities or other contracts to issue Common Stock
were exercised or converted into Common Stock or resulted in the issuance of
Common Stock that then shared in the earnings of the entity.

Comprehensive Income:

Comprehensive income (loss) consists of net income (loss), net unrealized gains
(losses) on available-for-sale securities, foreign currency translation
adjustments and gain (loss) on derivative activity and is presented in the
consolidated statements of changes in shareholders' equity and comprehensive
income (loss).


                                       46
<PAGE>


Use of Estimates:

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets, liabilities, revenue and expenses and the
disclosure of contingent assets and liabilities, to prepare these consolidated
financial statements in conformity with accounting principles generally accepted
in the United States of America. Actual results could differ from those
estimates.

New Accounting Pronouncements:

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset
Retirement Obligation." This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible, long-lived
assets and the associated asset retirement costs. It applies to legal
obligations associated with the retirement of long-lived assets that result from
the acquisition, construction, development and (or) the normal operation of a
long-lived asset, except for certain obligations of lessees. As used in this
Statement, a legal obligation is an obligation that a party is required to
settle as a result of an existing or enacted law, statute, ordinance, or written
or oral contract or by legal construction of a contract under the doctrine of
promissory estoppel. This statement is effective for financial statements issued
for fiscal years beginning after June 15, 2002. Management does not expect the
adoption of SFAS No. 143 to have a material effect on the Company's financial
statements.

In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", ("SFAS No. 144") which supersedes Statement of
Financial Accounting Standards 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 method for long-lived assets to be disposed of
by sale, whether previously held and used or newly acquired, and extends the
presentation of discontinued operations to include more disposal transactions.
SFAS No. 144 also requires that an impairment loss be recognized for assets
held-for-use when the carrying amount of an asset (group) is not recoverable.
The carrying amount of an asset (group) is not recoverable if it exceeds the sum
of the undiscounted cash flows expected to result from the use and eventual
disposition of the asset (group), excluding interest charges. Estimates of
future cash flows used to test the recoverability of a long-lived asset (group)
must incorporate the entity's own assumptions about its use of the asset (group)
and must factor in all available evidence. SFAS No. 144 is effective for the
Company for the first quarter of Fiscal 2003. Management has not yet determined
the impact that the adoption of SFAS No. 144 will have on the Company's
consolidated financial statements.

In April 2002, the Financial Accounting Standards Board issued SFAS No. 145,
"Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections as of April 2002". This Standard addresses a
number of items related to leases and other matters. The Company is required to
adopt this Standard beginning in the first quarter of fiscal 2003. The Company
does not expect the adoption of SFAS No. 145 to have a material effect on its
financial statements.

In June 2002, the Financial Accounting Standards Board issued SFAS 146,
"Accounting for Costs Associated with Exit or Disposal Activities". This
Standard addresses the recognition, measurement and reporting costs that are
associated with exit or disposal activities. SFAS No.146 is effective for exit
or disposal activities that are initiated after December 31, 2002. The Company
does not expect the adoption of SFAS No. 146 to have a material effect on its
financial statements.

NOTE B - DISPOSITIONS

IGC - Advanced Superconductors
------------------------------

On October 25, 2001, the Company sold substantially all of the assets of IGC-AS,
a division that manufactures low temperature superconducting wire and tape. The
sale was subject to a purchase agreement, dated October 4, 2001, between the
Company and Outokumpu Copper Products Oy and Outokumpu Advanced Superconductors
Inc. (together, the "Purchasers"). The purchase consideration was arrived at by
arms length negotiation and consisted of $29.8 million in cash paid on October
25 and the recording of a note receivable of $4 million, with a net present
value of $3.8 million, due in two years from the closing date. The net pretax
gain from the sale was $15.4 million. The agreement also includes a six-year
strategic supply arrangement under which the Company will purchase from
Outokumpu a substantial portion of the LTS wire it requires internally,
primarily for manufacturing superconducting magnet systems. The Company can earn
up to $4 million as a performance payment if it attains specified levels of LTS
wire purchases over the next two years. In connection with the sale of IGC-AS,
the Company has recorded a $1.5 million liability related to environmental
investigation and potential remediation costs to be incurred by the Company
under certain property transfer laws of the State of Connecticut. Management has
estimated this liability based upon information provided by environmental
consultants. Additionally, the Company recorded an expense of about $795,000 for
stock based compensation related to the sale.


                                       47
<PAGE>

IGC - APD Cryogenics, Inc.
--------------------------

On February 5, 2002, the Company sold the stock of its subsidiaries IGC-APD
Cryogenics, Inc. and IG-Europe, Ltd. The sale was subject to a stock purchase
agreement between the Company and Sumitomo Heavy Industries (SHI) of Japan dated
January 7, 2002. The sale to SHI included only the helium related business. The
purchase consideration was arrived at by arms length negotiation and consisted
of $9.5 million in cash paid on February 5, 2002. The Company was also able to
withdraw an additional $1.2 million in cash prior to closing. The net pretax
gain from the sale was $10,000. The agreement includes a six-year strategic
supply agreement under which the Company will purchase from SHI shield coolers
it requires internally, primarily for manufacturing superconducting magnet
systems. The mixed-gas portion of the refrigeration systems business previously
conducted at IGC-APD was transferred and integrated into IGC-Polycold, Inc.
Additionally, the Company recorded stock based compensation expense of $528,000
related to the sale.

NOTE C - RESTRUCTURING

Refrigerant Business
In February 2000, the Company decided to exit its refrigerant business, a part
of the Instrumentation segment, over a 15 month period. As a result, the Company
recorded a restructuring charge of $2,000,000 including liabilities recorded of
$191,000, comprised of the following:

(Dollars in Thousands)

    Inventory write-down                                  $1,770
    Write-down of equipment                                   39
    Severance costs                                          191
                                                          ------
                                                          $2,000
                                                          ======

Under the exit plan, the Company terminated all but two of its employees in
fiscal 2000. The plan involved continuing operations through a master
distributor while attempting to find a buyer for the business, and contemplated
sales of product through May 2001, at which time operations would cease. The
Company paid a total of $92,000 and $99,000 in fiscal 2001 and 2000,
respectively, in severance costs.

In October 2000, the Company sold the remaining assets for approximately
$1,800,000. These assets consisted primarily of inventory. As a result, the
Company recorded a recovery of the restructuring charge of approximately
$1,300,000.

Selected financial data for this business follows:

(Dollars in Thousands)
                                                FY 2001          FY 2000
                                            ------------     ------------

Sales                                          $ 1,253          $ 5,031

Net Income (loss) (including
  restructuring charges or recovery)               728           (2,938)



                                       48
<PAGE>


NOTE D - INVESTMENTS

Available for Sale Securities:

The Company owns 850,753 shares of the Common Stock of Ultralife Batteries Inc.,
as of May 26, 2002 and May 27, 2001, which are accounted for as "Available for
Sale Securities." During fiscal 2002, the Company wrote this investment down to
fair market value. The write down amounted to $2.8 million and in the opinion of
management is other than temporary. Realized gains from the sale of such
securities amounted to $615,000 in fiscal 2000. There were no sales in fiscal
2002 or fiscal 2001.

During fiscal 2002, the Company sold its shares in Powercold Corporation for
total proceeds of $1,300,000 with a gross realized gain on the sale of $230,000.
The gross realized gain was based on specific identification of such securities.
In connection with the sale, net unrealized holding gain of $311,000 has been
reclassified from accumulated other comprehensive income. The Company owned
1,354,785 shares of Powercold Corporation, as of May 27, 2001.

The cost and market value of the Company's Available for Sale Securities as of
May 26, 2002 and May 27, 2001 were:

(Dollars in Thousands)

                                              May 26, 2002      May 27, 2001
                                              ------------      ------------
Cost                                            $  3,471          $  7,306
Gross unrealized (loss) gain                        (638)           (1,161)
                                                --------          --------
Market Value                                    $  2,833          $  6,145
                                                ========          ========


Other Investments:

The Company owns approximately 15% of the Common Stock of KryoTech, a
privately-held corporation, acquired at a cost of $4,750,000. During fiscal
2002, the Company wrote this investment down to zero due to a decline in fair
value, which, in the opinion of management is other than temporary. Until
December 1999, the Company accounted for its investment in KryoTech using the
equity method of accounting because it owned more than 20% of the common shares.
The initial acquisition cost exceeded the underlying equity in net assets by
$3,645,000, which was being amortized over a period of 15 years. During fiscal
2000, when our ownership position fell below 20%, the Company began accounting
for the remaining investment value of approximately $3.5 million using the cost
method.

NOTE E - NOTES PAYABLE AND LONG-TERM DEBT

The Company increased its unsecured line of credit from $27,000,000 to
$50,000,000 in September 2001, and changed the expiration date from October 2002
to October 2004. The line of credit was not in use at May 26, 2002 or May 27,
2001. The Company may elect to apply interest rates to borrowings under the line
which relate to either the London Interbank Offered Rate (LIBOR) or prime plus
the applicable margin. The line of credit agreement provides for various
covenants, including requirements that the Company maintain specified financial
ratios.

Long-term debt consists of the following:

 (Dollars in Thousands)
                                               May 26, 2002       May 27, 2001
                                               -------------      -------------

Revenue bonds                                                          $1,350
Notes payable                                                           2,096
Mortgage payable                                    $4,935              5,184
                                                    ------             ------
                                                     4,935              8,630
Less current portion                                   267              2,445
                                                    ------             ------
Long-term debt                                      $4,668             $6,185
                                                    ======             ======



                                       49
<PAGE>

Revenue bonds consist of IGC-APD's obligation under an agreement with an
Economic Development Authority with respect to revenue bonds issued in
connection with the acquisition of certain land, building and equipment acquired
at a total cost of $2,408,000. The bonds bear interest at a weekly adjustable
annual rate (convertible to fixed rate at the option of the Company) which
averaged 4.51% for the year ended May 27, 2001. The bonds mature serially in
amounts ranging from $100,000 in December 1999 to $200,000 in December 2009. In
the event of default or upon the occurrence of certain conditions, the bonds are
subject to mandatory redemption at prices ranging from 100% to 103% of face
value. As long as the interest rate on the bonds is adjustable weekly, the bonds
are redeemable at the option of the holder at face value. Under the terms of the
revenue bond agreement monthly advance payments to restricted cash accounts in
amounts sufficient to meet the interest and principal payments on the bonds when
due. The balance of these accounts, included in "Cash and Cash Equivalents" on
the accompanying consolidated balance sheets, was $43,000 at May 27, 2001. On
February 5, 2002 SHI assumed the Company's obligations with respect to the
revenue bonds in connection with the sale of IGC-APD.

Notes payable at May 27, 2001 consisted of $1,000,000 due for the purchase of
certain patent rights and $1,096,000 representing the final installment of the
purchase price of Polycold Systems, Inc. The note relating to patent rights is
non-interest bearing and was paid in September 2001. The note relating to
Polycold Systems Inc. bore interest at three-month LIBOR (3.99% at May 27, 2001)
and was paid in June 2001.

The mortgage payable bears interest at the rate of LIBOR (2.63% at May 26, 2002
and 4.259% at May 27, 2001) plus 0.9%, and is payable in monthly installments of
$50,000, including principal and interest, through October 2005 with a final
payment of $3,943,000 due in November 2005. The loan is collateralized by land
and buildings and certain equipment acquired at a cost of approximately
$10,800,000.

The Company has entered into interest rate swap agreements to reduce the effect
of changes in interest rates on certain of its floating rate long-term debt. At
May 26, 2002, the Company had outstanding interest rate swap agreements with a
commercial bank, having a total original notional principal amount of
approximately $4,935,000. Those agreements effectively change the Company's
interest rate exposure on its mortgages due 2005 to a fixed 6.88%. The interest
rate swap agreement matures at the time the related notes mature. The Company is
exposed to credit loss in the event of non-performance by the other parties to
the interest rate swap agreement. However, the Company does not anticipate
non-performance by the counterparties.

Aggregate maturities of long-term debt for the next five fiscal years are: 2003
- $267,000; 2004 - $284,000; 2005 - $307,000; 2006 - $4,076,000; and 2007 - $0.

Interest paid for the years ended May 26, 2002, May 27, 2001, and May 28, 2000,
amounted to $479,000, $1,151,000 and $1,725,000 respectively.

NOTE F - SHAREHOLDERS' EQUITY

In July 2001, the Company declared a 2% stock dividend to be distributed on all
outstanding shares, except Treasury Stock, on August 31, 2001 to holders of
record on August 14, 2001. The consolidated financial statements have been
adjusted retroactively to reflect this stock dividend in all numbers of shares,
prices per share and earnings per share.

In June 2000, the Company declared a 3% stock dividend to be distributed on all
outstanding shares, except Treasury Stock, on August 25, 2000 to holders of
record on August 4, 2000. The consolidated financial statements have been
adjusted retroactively to reflect this stock dividend in all numbers of shares,
prices per share and earnings per share.

The Company has established three stock option plans: the 1981 Stock Option
Plan, the 1990 Stock Option Plan, and the 2000 Stock Option and Stock Award
Plan. Shares and prices per share have been adjusted to reflect the 2% stock
dividend declared in July 2001 and the 3% stock dividend declared June 2000. A
total of 3,668,913 shares had been authorized for grant under the 1990 plan and
714,000 shares have been authorized under the 2000 Plan. All remaining grants
under the 1981 Plan were exercised during the year ended May 28, 2000. Options
granted under the 1990 and 2000 Stock Option and Stock Award Plans have lives
ranging from five to ten years and vest over periods ranging from one to five
years.


                                       50
<PAGE>


Option activity under these plans was as follows:

<TABLE>
<CAPTION>

                                                                 Fiscal Year Ended
                          ------------------------------------------------------------------------------------------------
                                    May 26, 2002                     May 27, 2001                    May 28, 2000
                          --------------------------------- -------------------------------- -----------------------------
                                             Weighted                          Weighted                        Weighted
                                              Average                          Average                          Average
                             Number          Exercise          Number          Exercise         Number          Exercise
                           of Shares           Price          of Shares          Price        of Shares          Price
                          ---------------------------         ----------------------------    -----------------------------
<S>                       <C>                <C>              <C>              <C>            <C>               <C>
Outstanding,
  beginning of year          2,022,452        $ 9.325           2,412,863       $ 8.145          2,020,967      $ 8.542
Granted                        448,546         25.272             256,794        20.625            987,282        7.861
Exercised                     (644,318)         8.808            (563,375)        9.342           (407,317)       8.740
Forfeited                      (45,165)        14.055             (83,831)       10.092           (188,070)       9.621
                             ---------                          ---------                        ---------
Outstanding,
  end of year                1,781,515         13.406           2,022,452         9.325          2,412,863        8.145
                             =========                          =========                        =========

Exercisable,
  end of year                  801,366        $ 8.746             792,537       $ 7.993          1,073,626      $ 8.966
                             =========                          =========                        =========

</TABLE>

<TABLE>
<CAPTION>

                                                                      May 26, 2002
                            --------------------------------------------------------------------------------------------
                                             Options Outstanding                             Options Exercisable
                            ------------------------------------------------------    ----------------------------------
                                                    Weighted          Weighted                                Weighted
                                                     Average          Average                                  Average
Range of Option                     Number          Exercise         Remaining               Number           Exercise
 Exercise Prices                 Outstanding          Price       Contractual Life        Exercisable           Price
----------------            ------------------------------------------------------  ------------------- ---------------
<S>                          <C>                    <C>            <C>                    <C>                 <C>
$3.1403 to $6.2804                   184,300         $ 5.0212          2.0 years               146,831        $ 4.8146
$6.2805 to $9.4206                   859,155           7.4883          3.4 years               498,246          7.4119
$9.4207 to $12.5608                   51,584          10.1242          3.1 years                49,869         10.1314
$12.5609 to $15.701                   27,069          13.9427          4.0 years                24,967         13.8594
$15.7011 to $18.8412                  37,584          16.8784          3.8 years                21,924         16.8173
$18.8413 to $21.9814                 154,794          20.5082          8.7 years                33,828         20.6400
$21.9815 to $25.1216                 203,995          23.4806          9.6 years                 2,349         23.4900
$25.1217 to $28.2618                 207,720          26.0053          7.3 years                18,655         26.1653
$28.2619 to $31.402                   55,314          29.3611          8.7 years                 4,698         31.4020
                                   ---------        ---------          ---------               -------        --------
                                   1,781,515        $ 13.4062          5.0 years               801,366        $ 8.7461
                                   =========                                                   =======

</TABLE>

In connection with the license of patent rights, the Company issued warrants to
purchase 105,060 shares of its Common Stock at a price of $18.98 per share.
These warrants were valued at $1,097,000, which was capitalized as part of the
cost of the patent rights and expire in 2007.

Following are the shares of Common Stock reserved for issuance and the related
exercise prices for the outstanding stock options and outstanding warrants at
May 26, 2002:
                                                  Number         Exercise Price
                                                Of Shares           Per Share
                                                ---------        --------------

2000 Stock Option and Stock Award Plan           1,170,968          $4.56 to
1990 Stock Option Plan                             603,793          $31.40
Warrants                                           105,060          $18.98
                                                 ---------
Shares reserved for issuance                     1,879,821
                                                 =========

The following pro forma net income and earnings per share information has been
determined as if the Company had accounted for stock-based compensation awarded
under its stock option plans using the fair value-based method. The pro forma
effect on net income for fiscal years 2002, 2001 and 2000 is not representative
of the pro forma effect on net income in future years because, as required by
SFAS No. 123, "Accounting for Stock Based Compensation," no consideration has
been given to awards granted prior to fiscal 1996.


                                       51
<PAGE>

(Dollars in Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>

                                                                          Fiscal Year Ended
                             --------------------------    ---------------------------     --------------------------
                                   May 26, 2002                   May 27, 2001                   May 28, 2000
                             --------------------------    ---------------------------     --------------------------
                                 As                            As                             As
                             Reported     Pro Forma         Reported   Pro Forma           Reported    Pro Forma
                             --------------------------    ---------------------------     --------------------------
<S>                          <C>          <C>               <C>        <C>                 <C>           <C>
Net income                    $20,589      $18,627           $11,067      $  9,522         $ 6,452       $ 5,022
Earnings per Common
   Share:
   Basic                      $  1.26      $  1.14           $  0.72      $   0.62         $  0.48       $  0.38
                              =======      =======           =======      ========         =======       =======
   Diluted                    $  1.19      $  1.08           $  0.67      $   0.58         $  0.45       $  0.35
                              =======      =======           =======      ========         =======       =======

</TABLE>


The weighted average fair value of each option granted under the 1990 Stock
Option Plan and the 2000 Stock Option and Award Plan during fiscal years 2002,
2001 and 2000 was $15.647, $14.123 and $4.385, respectively. The fair value of
each option grant was estimated on the date of the grant using the Black-Scholes
Model with the following weighted average assumptions. The risk-free interest
rates for fiscal years 2002, 2001 and 2000 were 3.2%, 4.8% and 6.1%,
respectively. The expected volatility of the market price of the Company's
Common Stock for fiscal years 2002, 2001 and 2000 grants was 73.3%, 68.8% and
55.1%, respectively. The expected average term of the granted options for fiscal
2002, 2001 and 2000 was 5.1 years, 6.5 years and 4.8 years, respectively. There
was no expected dividend yield for the options granted for fiscal years 2002,
2001 and 2000.

During the years ended May 26, 2002, May 27, 2001 and May 28, 2000, in
connection with the grant of stock options to consultants, the Company has
recognized compensation cost in the amount of $0, $293,000 and $37,000,
respectively. Also, in connection with the exercise of certain stock options in
fiscal 2000, the Company recognized $386,000 of compensation expense. During the
year ended May 26, 2002, the Company issued 15,756 shares of Common Stock at a
fair market value of $26.26 per share as compensation to the Board of Directors.
During the year ended May 27, 2001, the Company issued 15,759 shares of Common
Stock at a fair market value of $16.147 per share as compensation to the Board
of Directors. In addition, during the year ended May 28, 2000 the Company issued
631,128 shares of Treasury Stock for partial redemption of Preferred Stock and
21,012 shares at a fair market value of $8.321 per share as compensation to the
Board of Directors.


NOTE G - RETIREMENT PLANS

The Company had a non-contributory, defined benefit plan covering all eligible
employees. Benefits under the plan were based on years of service and employees'
career average compensation. The Company's funding policy was to contribute
annually an amount sufficient to meet or exceed the minimum funding standard
contained in the Internal Revenue Code. Contributions were intended to provide
not only for benefits attributable to service to date, but also for those
expected to be earned in the future. As of December 31, 1998, the Company froze
all pension benefits except for approximately 50 bargaining unit employees at a
subsidiary. In September 2000, the Company received approval from the Internal
Revenue Service to terminate the plan. In November 2000, the Company terminated
the plan and settled nearly all its obligations by purchasing annuity contracts
or making lump-sum distributions in an amount determined by the plan's actuary.
The remaining plan assets were distributed to the plan participants on a
pro-rata basis. Such distributions were completed during August 2001. The
Company recorded termination and settlement costs of approximately $588,000
during the fiscal year ended May 27, 2001, and curtailment gain of $1,465,000 in
the fiscal year ended May 28, 2000.


                                       52
<PAGE>



The following tables set forth the Bargaining unit plan's funded status at May
26, 2002 and May 27, 2001 and the terminated plan amounts for the year ended May
27, 2001:

(Dollars in Thousands)
<TABLE>
<CAPTION>

                                                            Terminated              Bargaining Unit Plan
                                                               Plan                   Fiscal Year Ended
                                                           --------------     ----------------------------------
                                                           May 27, 2001       May 26, 2002        May 27, 2001
                                                           --------------     ---------------     --------------
<S>                                                        <C>                <C>                 <C>
Change in benefit obligation during year:
  Benefit obligation at beginning of year                       $ 4,093               $ 581
  Service cost                                                        -                   -               $ 25
  Interest cost                                                     145                  43                 38
  Benefit payments                                                    -                 (33)                (2)
  Administrative expenses                                             -                   -                  -
  Actuarial (gain) or loss                                            -                  34                 49
  Acquisitions or (divestitures)                                   (470)                  -                 471
  Settlements                                                         -                   -                  -
  Curtailments                                                   (3,768)                  -                  -
                                                           --------------     ---------------     --------------
  Benefit obligation at end of year                               $   0             $   625                $581
                                                           ==============     ===============     ==============

Change in plan assets during year:
  Fair value of plan assets at beginning of year                $ 6,277               $ 753       $          -
  Employer contributions                                              -                   -                  -
  Benefit payments                                                    -                 (33)                (2)
  Administrative expenses                                             -                   -                  -
  Actual return on plan assets                                      225                 (42)                91
  Acquisitions or (divestitures)                                   (664)                  -                664
  Settlements                                                    (5,838)                  -                  -
                                                           --------------     ---------------     --------------
  Fair value of plan assets at end of year                        $   0             $   678              $ 753
                                                           ==============     ===============     ==============

Reconciliation of funded status at end of year:
  Funded status                                                   $   -               $  53             $  172
  Unrecognized net transition (asset) or obligation                   -                   -                  -
  Unrecognized prior service cost                                     -                (163)              (178)
  Unrecognized net (gain) or loss                                     -                 146                 11
                                                           --------------     ---------------     --------------
  Net amount recognized                                           $   0          $       36          $       5
                                                           ==============     ===============     ==============

Amounts recognized in the Consolidated Balance
  Sheet at end of year:
                                                           --------------     ---------------     --------------
  Prepaid benefit cost                                            $   0              $   36             $    5
                                                           ==============     ===============     ==============

Net periodic benefit cost recognized for year                     $   -               $   -              $   -
  Service cost                                                      145                   -                 25
  Interest cost                                                     145                  43                 38
  Expected return on plan assets                                   (225)                (60)               (53)
  Amortization of net transition obligation                           3                   -                  -
  Amortization of prior service cost                                  3                 (15)               (15)
  Amortization of net gain                                          (27)                  -                  -
                                                           --------------     ---------------     --------------
  Net periodic benefit cost                                       $(101)               $(32)         $      (5)
                                                           ==============     ===============     ==============

Additional amounts recognized for year:
  Settlement (gain) or loss                                    $    800
Weighted-average assumptions for year:
  Discount rate                                                    8.00%               7.50%              8.00%
  Rate of compensation increases                                   4.50%                  -               4.50%
  Expected long-term rate of return on plan assets                 8.00%               8.00%              8.00%

Weighted-average assumptions at end of year:
  Discount rate                                                       -                7.25%              7.50%
  Rate of compensation increases                                      -                   -               4.50%
</TABLE>

                                       53
<PAGE>


The Company also maintains an employee savings plan, covering substantially all
employees, under Section 401(k) of the Internal Revenue Code. Under this plan,
the Company makes a contribution for all employees and matches a portion of
participants' contributions. Expenses under the plan during the fiscal years
ended May 26, 2002, May 27, 2001 and May 28, 2000 aggregated $633,000, $663,000
and $588,000, respectively.

The Company also maintains supplemental retirement and disability plans for
certain of its executive officers. These plans utilize life insurance contracts
for funding purposes. Expenses under these plans were $28,000, $21,000 and
$21,000 for the fiscal years ended May 26, 2002, May 27, 2001 and May 28, 2000,
respectively.


NOTE H - INCOME TAXES

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

(Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                       Fiscal Year Ended
                                                    ---------------------------------------------------------
                                                    May 26, 2002         May 27, 2001        May 28, 2000
                                                    ----------------     ----------------    ----------------
<S>                                                 <C>                  <C>                 <C>
Current
     Federal                                                $9,303               $4,532              $2,573
     State                                                     870                  560                 611
     Foreign                                                    45                   77                 162
                                                    ----------------     ----------------    ----------------
          Total current                                     10,218                5,169               3,346
Deferred
     Federal                                                  (486)               1,522                 664
     State                                                     (46)                 268                  44
                                                    ----------------     ----------------    ----------------
          Total deferred                                      (532)               1,790                 708
                                                    ----------------     ----------------    ----------------
Provision for income taxes (benefit)                        $9,686               $6,959              $4,054
                                                    ================     ================    ================

</TABLE>


The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities are as follows:

(Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                           May 26, 2002        May 27, 2001
                                                                         ----------------    ----------------
<S>                                                                      <C>                 <C>
Deferred tax assets:
     Inventory reserves                                                            $443              $1,175
     Non-deductible accruals                                                        992               1,372
     Product warranty reserve                                                       503                 649
     Equity in net loss of unconsolidated affiliate                                 469                 469
     Restructuring and other accruals                                                89                 917
     Unrealized loss on available for sale securities                             2,359
     Capital loss carry forward                                                                       1,120
                                                                         ----------------    ----------------

          Total gross deferred tax assets                                         4,855               5,702
     Less valuation allowance                                                      (191)             (1,311)
                                                                         ----------------    ----------------

          Deferred tax assets                                                     4,664               4,391
                                                                         ----------------    ----------------
Deferred tax liabilities:
     Depreciation and amortization differences                                     (822)               (447)
     Intangibles                                                                 (1,746)             (2,342)
     Pension curtailment gain                                                      (549)               (549)
     Other, net                                                                     (36)                (74)
                                                                         ----------------    ----------------

          Total gross deferred tax liabilities                                   (3,153)             (3,412)
                                                                         ----------------    ----------------

     Net deferred tax assets                                                     $1,511                $979
                                                                         ================    ================
</TABLE>



                                       54
<PAGE>


The foregoing assets and liabilities are classified in the accompanying
consolidated balance sheets as follows:

(Dollars in Thousands)                            May 26, 2002    May 27, 2001
                                                  ------------    -------------

Net current deferred tax assets                        $1,497          $3,362
Net long-term deferred tax assets/(liabilities)            14         (2,383)
                                                  ------------    -------------
                                                      $ 1,511           $ 979
                                                  ============    =============

During the years reported, the Company adjusted the valuation allowance to an
amount it believes is necessary to reduce deferred taxes to an amount which is
more likely than not to be realized.

The changes made to the valuation allowance during fiscal 2002 and 2000 were a
decrease of $1,120,000 and $209,000, respectively. There were no changes in
fiscal 2001.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income and capital gains during
the periods in which those temporary differences become deductible. Management
considers projected future taxable income, the character of such income and tax
planning strategies in making this assessment. The Company had Federal taxable
income of approximately $18,900,000 in fiscal 2002, $13,500,000 in fiscal 2001
and $6,500,000 in fiscal 2000. Based upon the level of historical taxable income
and projections for future taxable income over the periods in which the deferred
tax assets are deductible, management believes it is more likely than not the
Company will realize the benefits of the remaining deductible differences. The
amount of the deferred tax assets considered realizable, however, could be
reduced in the near term if estimates of future taxable income are reduced.

The reasons for the differences between the provision for income taxes (benefit)
and the amount of income tax (benefit) determined by applying the applicable
statutory Federal tax rate to income (loss) before income taxes are as follows:

(Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                      Fiscal Year Ended
                                               ----------------------------------------------------------------
                                               May 26, 2002            May 27, 2001             May 28, 2000
                                               ---------------         ---------------          ---------------
<S>                                            <C>                     <C>                      <C>
Pretax income (loss) at statutory
   tax rate (34%)                                    $10,446                  $6,184                   $3,572
State taxes, net of Federal benefit                      548                     546                      432
Benefit of Foreign Sales                                (759)                   (600)                    (425)
Amortization of intangibles                               73                     539                      539
Capital loss carry forward used                       (1,120)                                            (209)
Change in valuation allowance
Other, net                                               498                     290                      145
                                               ---------------         ---------------          ---------------

Provision for income taxes                            $9,686                  $6,959                   $4,054
                                               ===============         ===============          ===============

</TABLE>

The Company paid income taxes, net of cash refunds received, of $6,200,000
during the year ended May 26, 2002; $3,650,000 during the year ended May 27,
2001; and received $50,000 in net tax refunds during May 28, 2000.


                                       55
<PAGE>

NOTE I - PER SHARE INFORMATION

The following table provides calculations of basic and diluted earnings per
share:

(Dollars in Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>

                                                                          Fiscal Year Ended
                                                  -------------------------------------------------------------
                                                  May 26, 2002           May 27, 2001              May 28, 2000
                                                  ------------           ------------              ------------
<S>                                               <C>                    <C>                       <C>
Income available to
  Common shareholders                             $    20,589              $    11,067              $     6,452
                                                  ===========              ===========              ===========

Weighted average shares                            16,336,181               15,363,208               13,378,100

Dilutive potential Common
  Shares:
    Warrants                                           31,404                    7,817
    Convertible Preferred Stock                                                                         544,004
    Stock options                                     881,027                1,124,004                  447,876
                                                  -----------              -----------              -----------
Adjusted weighted average
  Shares                                           17,248,612               16,495,029               14,369,980
                                                  ===========              ===========              ===========

Net income (loss) per Common Share:
    Basic                                         $      1.26              $      0.72              $      0.48
                                                  ===========              ===========              ===========
    Diluted                                       $      1.19              $      0.67              $      0.45
                                                  ===========              ===========              ===========

</TABLE>

For fiscal 2001 and 2000, shares issuable upon conversion of convertible
debentures are considered in calculating "diluted" earnings per share, but have
been excluded, as the effect would be anti-dilutive. Additionally, shares
issuable upon exercise of stock options in which the market value is lower than
the exercise price have also been excluded, as the effect would be
anti-dilutive.

In July 2001 the Company declared a 2% stock dividend to be distributed on all
outstanding shares, except Treasury Stock, on August 31, 2001 to holders of
record on August 14, 2001. The Company distributed a 3% stock dividend on August
25, 2000. The distribution has been made from the Company's authorized but
unissued shares. All data with respect to earnings per share, weighted average
shares outstanding and Common Stock equivalents have been adjusted to reflect
these stock dividends.

NOTE J - COMMITMENTS AND CONTINGENCIES

The Company leases certain manufacturing facilities and equipment under
operating lease agreements expiring at various dates through October 2019.
Certain of the leases provide for renewal options. Total rent expense was
$1,267,669, $907,000 and $731,000 for the years ended May 26, 2002, May 27, 2001
and May 28, 2000, respectively.

Future minimum rental commitments, excluding renewal options, under the
noncancellable leases covering certain manufacturing facilities and equipment
through the term of the leases are as follows:

      Fiscal Year
      -----------

       2003                     $ 1,268,000
       2004                       1,117,000
       2005                       1,096,000
       2006                       1,122,000
       2007                       1,208,000
                                -----------
      Total                     $ 5,812,000
                                ===========

                                       56
<PAGE>

In addition to operating lease agreements, the Company also has a maintenance
agreement for $113,000 per year, through January 2004, for a computer system.

At May 26, 2002, the Company's capital equipment commitments were approximately
$770,000.

The Company is subject to certain claims and lawsuits arising in the normal
course of business. Based on information currently available, it is the opinion
of management, based upon advice of counsel, that the ultimate resolution of
these matters would not have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows. However,
based on future developments and as additional information becomes known, it is
possible that the ultimate resolution of such matters could have a material
adverse effect on the Company's financial statements in future periods.


NOTE K - SEGMENT AND RELATED INFORMATION

The Company operates in three reportable segments: Magnetic Resonance Imaging
(MRI), Instrumentation, and Energy Technology. The MRI segment consists
primarily of the manufacture and sale of magnets (by the IGC-Magnet Business
Group) and radio frequency coils (by IGC-Medical Advances Inc.), which are used
principally in the medical diagnostic imaging market. Until October 25, 2001
this segment also included the manufacture and sale of low-temperature
superconducting wire (by IGC-Advanced Superconductors, also known as IGC-AS).
The Company sold substantially all of the assets of IGC-AS on October 25, 2001.
The Instrumentation segment consists of the manufacture and sale of
refrigeration equipment (by IGC-Polycold Systems Inc.), used primarily in
ultra-high vacuum applications, industrial coatings, analytical instrumentation,
medical diagnostics and semiconductor processing and testing. This segment also
included IGC-APD Cryogenics Inc., which manufactured and sold refrigeration
equipment. The Company transferred the mixed-gas portion of IGC-APD to
IGC-Polycold and sold the remaining IGC-APD business in a stock sale effective
February 5, 2002. The Energy Technology segment, operated through SuperPower
Inc., is developing second generation, high-temperature superconducting (HTS)
materials that we expect to use in devices designed to enhance capacity,
reliability and quality of transmission and distribution of electrical power.

In fiscal 2000, the Company reported its operations in four segments:
Electromagnetics, Low-Temperature Superconductors, Refrigeration, and Energy
Technology. The change in the current year reflects our continued focus on
commercial market applications of core technology. The resulting reporting
segments are intended to relate to the primary markets which each serve, rather
than the technologies that give rise to individual products. Prior year segment
data has been reclassified to conform with current year presentation.

The accounting policies of the reportable segments are the same as those
described in Note A of the Notes to Consolidated Financial Statements.
Inter-segment sales and transfers are accounted for as if the sales or transfers
were to third parties, that is, at current market prices. The Company evaluates
the performance of its reportable segments based on operating income (loss).

Summarized financial information concerning the Company's reportable segments is
shown in the following table:


                                       57
<PAGE>

(Dollars in Thousands)
<TABLE>
<CAPTION>

                                             -----------------------------------------------------------
                                                                    May 26, 2002
                                             -----------------------------------------------------------
                                              Magnetic
                                              Resonance                         Energy
                                               Imaging       Instrumentation   Technology      Total
                                             ------------    -------------    -----------    -----------
<S>                                          <C>             <C>              <C>            <C>
Net sales to external customers:
   Magnet systems & components                $120,738                                          $120,738
   Refrigeration equipment                                     $ 26,891                           26,891
   Refrigerants
   Other                                         2,092                           $  3,573          5,665
                                              --------         --------          --------       --------
      Total                                    122,830           26,891             3,573        153,294
Inter-segment net sales                                           3,481                            3,481
Segment operating profit (loss)                 27,776           (3,272)           (6,719)        17,785
Total assets                                  $158,332         $ 10,128          $  8,765       $177,225
Additions to plant, property and equipment       4,544            3,391             3,663         11,598
Depreciation and amortization expense            4,522              568               713          5,803

<CAPTION>

                                             -----------------------------------------------------------
                                                                 May 27, 2001
                                             -----------------------------------------------------------
                                              Magnetic
                                              Resonance                         Energy
                                               Imaging       Instrumentation   Technology      Total
                                             ------------    -------------    -----------    -----------
<S>                                          <C>             <C>              <C>            <C>
Net sales to external customers:
   Magnet systems & components                $ 86,428                                         $ 86,428
   Refrigeration equipment                    $ 41,313          41,313
   Refrigerants                                                  1,253           1,253
   Other                                         7,549                        $  1,614            9,163
                                              --------        --------        --------         --------
      Total                                     93,977          42,566           1,614          138,157
Inter-segment net sales                                          4,029                            4,029
Segment operating profit (loss)                 18,925           5,121          (4,292)          19,754
Total assets                                  $123,559        $ 23,084        $  5,515         $152,158
Additions to plant, property and equipment       3,111             586           1,495            5,192
Depreciation and amortization expense            6,135             608             343            7,086

</TABLE>



                                       58
<PAGE>


(Dollars in Thousands)

<TABLE>
<CAPTION>

                                             -----------------------------------------------------------
                                                                 May 28, 2000
                                             -----------------------------------------------------------
                                              Magnetic
                                              Resonance                         Energy
                                               Imaging       Instrumentation   Technology      Total
                                             ------------    -------------    -----------    -----------
<S>                                          <C>             <C>              <C>            <C>
Net sales to external customers:
   Magnet systems & components                 $ 67,223                                       $ 67,223
   Refrigeration equipment                                      $ 28,515                        28,515
   Refrigerants                                                    5,030                         5,030
   Other                                         10,337                         $ 1,667         12,004
                                               --------        ---------        -------      ---------
      Total                                      77,560           33,545          1,667        112,772
Inter-segment net sales                                            2,414                         2,414
Segment operating profit (loss)                  14,063           (3,329)        (1,732)         9,002
Total assets                                   $103,637         $ 21,562         $2,778       $127,977
Additions to plant, property and                  4,083              472            732          5,287
equipment
Depreciation and amortization expense             4,516            1,514            350          6,380

</TABLE>


<TABLE>
<CAPTION>

                                                           May 26, 2002      May 27, 2001      May 28, 2000
                                                           ------------      ------------      ------------
<S>                                                        <C>               <C>               <C>
Reconciliation of income before income taxes:

Total operating profit from reportable segments               $ 17,785          $ 19,754          $  9,002
Inter-company profit in ending inventory                         1,860            (1,116)              295
                                                              --------          --------          --------
Net operating profit                                            19,645            18,638             9,297
Interest and other income                                        1,957             1,374             1,790
Interest and other expense                                        (652)           (1,986)           (1,965)
Gain on sale of division                                        15,385
Write down of investments                                       (6,290)
Gain on available for sale securities                              230
Equity in net loss of unconsolidated affiliates                                                       (236)
Recovery of investment in unconsolidated affiliates                                                  1,620
                                                              --------          --------          --------
Income before income taxes                                    $ 30,275          $ 18,026          $ 10,506
                                                              ========          ========          ========

</TABLE>



                                       59
<PAGE>


Net sales to two customers of the Company's MRI segments were each in excess of
10% of the Company's total net sales in fiscal 2000 and 2001. During fiscal
2002, the Company's MRI segment had one customer with sales in excess of 10% of
the Company's total net sales. Net sales to each of these customers during the
last three fiscal years were as follows:



                                             Fiscal Year Ended
                             ----------------------------------------------
                                  May 26,        May 27,          May 28,
    (Dollars in Thousands)         2002           2001             2000
                             ----------------------------------------------
      Customer A                 $ 110,483      $ 76,824         $ 56,098
      Customer B                                  10,000           12,286
                             ----------------------------------------------
       Total                     $ 110,483      $ 86,824         $ 68,384
                             ==============================================


Net sales by country, based on the location of the customer, for the last three
fiscal years were as follows:

                                             Fiscal Year Ended
                             ----------------------------------------------
                                  May 26,        May 27,          May 28,
    (Dollars in Thousands)         2002           2001             2000
                             ----------------------------------------------
      United States              $   26,042     $  36,114        $  35,992
      Netherlands                   107,891        76,824           56,860
      Other countries                19,361        25,219           19,920
                          -------------------------------------------------

       Total                     $  153,294     $ 138,157        $ 112,772
                          =================================================

All significant long-lived assets of the Company are located within the United
States.

NOTE L - FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107, "Disclosures About
Fair Value of Financial Instruments". Although the estimated fair value amounts
have been determined by the Company using available market information and
appropriate valuation methodologies, the estimates presented are not necessarily
indicative of the amounts that the Company could realize in current market
exchanges.

The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:

Cash and cash equivalents, receivables, and accounts payable and accrued
expenses: The carrying amounts reported in the consolidated balance sheets
approximate their fair values because of the short maturities of these
instruments.

Available for sale securities and other investments: The fair value of available
for sale securities is estimated based on quoted market prices (see Note D) at
the balance sheet date.

Long-term debt: The carrying value of long-term debt, including current portion,
was approximately $4,935,000 at May 26, 2002, while the estimated fair value was
$4,935,000, based upon interest rates available to the Company for issuance of
similar debt with similar terms and discounted cash flows for remaining
maturities.

                                       60
<PAGE>


NOTE M - ACCUMULATED OTHER
COMPREHENSIVE INCOME (LOSS)

The accumulated balances for each classification of accumulated other
comprehensive income (loss) are as follows:

<TABLE>
<CAPTION>

                                                                                             Accumulated
                                            Foreign                                            Other
                                           Currency      Available for       Derivative      Comprehensive
                                            Items       Sale Securities      Liability      Income (Loss)
                                           --------     ----------------    ------------    -------------
<S>                                        <C>          <C>                 <C>             <C>
Balances at May 30, 1999                    $(160)          $  (508)            $   -           $  (668)

Current period change - 2000                 (482)              874                 -               392
                                            -----           -------             -----           -------

Balances at May 28, 2000                     (624)              366                 -              (276)

Current period change - 2001                 (244)           (1,527)                -            (1,771)
                                            -----           -------             -----           -------

Balances at May 27, 2001                     (886)           (1,161)                -            (2,047)

Current period change - 2002                  886               523              (268)            1,141
                                            -----           -------             -----           -------
Balances at May 26, 2002                    $ -             $  (638)            $(268)          $  (906)
                                            =====           =======             =====           =======

</TABLE>

The related tax effects allocated to each component of accumulated other
comprehensive income (loss) are as follows:

                                        Before-Tax   Tax (Expense)    Net-of-Tax
                                           Amount     or Benefit        Amount
                                        ----------   -------------    ----------

Balance at May 30, 1999                 $  (948)        $   280         $  (668)
Foreign currency
  translation adjustments                  (482)              -            (482)
Unrealized gains (losses)
  on available for sale
  securities                              1,332            (458)            874
                                        -------         -------         -------
Balance at May 28, 2000
                                            (98)           (178)           (276)
Foreign currency
  translation adjustments                  (244)              -            (244)
Unrealized gains (losses)
  on available for sale
  securities                             (1,705)            178          (1,527)
                                        -------         -------         -------
Balance at May 27, 2001                  (2,047)              -          (2,047)
Foreign currency
  translation adjustments                   886               -             886
Available for sale securities               523               -             523
Derivative Liability                       (268)              -            (268)
                                        -------         -------         -------
Balance at May 26, 2002                 $  (906)           $  -         $  (906)
                                        =======         =======         =======


                                       61
<PAGE>


NOTE N - QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Summarized quarterly financial data for fiscal 2002 and 2001 are as follows:

(Dollars in Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>

                                                                             Earnings Per:
                                                                         ---------------------
                               Net           Gross           Net          Basic        Diluted
                               Sales         Margin         Income         Share        Share
                             --------        ------       ---------       ------       ------
<S>                          <C>             <C>          <C>             <C>          <C>
2002 Quarter Ended
  August 26, 2001             $40,089       $17,239          $3,640       $ .23         $ .21
  November 25, 2001            38,971        16,034          10,387         .64           .60
  February 24, 2002            37,201        14,619           3,118         .19           .18
  May 26, 2002                 37,034        14,011           3,444         .21           .20

2001 Quarter Ended
  August 27, 2000             $31,711       $12,843          $2,427       $ .17         $ .16
  November 26, 2000            32,425        15,185           3,139         .20           .18
  February 25, 2001            34,297        14,060           2,890         .18           .17
  May 27, 2001                 39,724        16,440           2,611         .17           .15

</TABLE>

NOTE O - GOODWILL AND OTHER INTANGIBLE ASSETS

Effective May 28, 2001, the Company adopted Statement of Financial Accounting
Standards No. 142 (FAS No. 142), "Goodwill and Other Intangible Assets". FAS No.
142 changed the accounting for goodwill from an amortization method to an
impairment-only approach. An initial transition impairment test was required as
of May 28, 2001. The Company completed this initial transition impairment test
during the second quarter of 2002 which did not result in any impairment
charges. For purposes of applying FAS No. 142, the Company has determined that
the reporting units are consistent with the operating segments identified in
Note K, Segment and Related Information. Fair values of reporting units and the
related implied fair values of their respective goodwill were established using
public company analysis and discounted cash flows.

During fiscal 1997, the Company acquired IGC-Medical Advances Inc. and in fiscal
1998, IGC-Polycold Inc. In connection with the acquisitions, approximately
$13,750,000 is recorded as goodwill.

During 1999, the Company completed an agreement with Alstom, S.A. ("Alstom") to
terminate the parties' joint venture, ALSTOM Intermagnetics ("AISA"). AISA, a
previously 45% owned unconsolidated joint venture located in Belfort, France,
was created for the manufacture and sale of superconductive MRI magnet systems
under license from the Company. Effective December 31, 1999, AISA's magnet
production was consolidated in the Company's Latham, New York facility, and AISA
ceased production of superconductive MRI magnet systems. Under the termination
agreement, the Company sold its interest in AISA to Alstom for $300,000. In
consideration of the contractual rights of AISA and Alstom under the termination
agreement, the Company paid AISA $9,000,000 for the purchase of certain assets
with an approximate fair value of $250,000, and other intangibles, comprising
future production rights, as well as technology and a covenant not to compete,
with a total value of $8,750,000.

On June 30, 2000, the Company entered into a non-exclusive, royalty-free
agreement to license certain US and international patents and pending patents
related to superconducting materials and devices. In connection with the
agreement, the Company agreed to pay a lump sum fee payable in two installments.
Additionally, the Company granted the licensor warrants to purchase 105,060
shares of the Company's Common Stock at a price of $18.98 per share. Total costs
of $3,097,000 are included in Other Intangibles on the accompanying balance
sheets.


                                       62
<PAGE>

The components of other intangibles are as follows:

(Dollars in Thousands)

<TABLE>
<CAPTION>

                                                  As of May 26, 2002
                                  -------------------------------------------------------

                                  Gross Carrying      Accumulated       Weighted Average
                                      Amount          Amortization          Life
                                  --------------      ------------    -------------------
<S>                               <C>                 <C>             <C>
Amortized Intangible Assets
     Production Rights                $ 8,750            $3,845             5.5
     Patents                            3,832               674            17.9
     Trade Name                           960               264            20.0
     Unpatented Technology                930               930            20.0
     Other                                 33                33             5.0
                                      -------            ------            -----
                                      $14,505            $5,746             9.8


<CAPTION>

                                                  As of May 27, 2001
                                  ------------------------------------------------------

                                  Gross Carrying      Accumulated       Weighted Average
                                      Amount          Amortization          Life
                                  --------------      ------------    ------------------
<S>                               <C>                 <C>             <C>
Amortized Intangible Assets
     Production Rights                 $ 8,750           $2,253             5.5
     Patents                             3,944              430            17.9
     Trade Name                            960              216            20.0
     Unpatented Technology                 930              837            20.0
     Other                                  71               29             5.0
                                       -------           ------            -----
                                       $14,655           $3,765             9.8

</TABLE>

Aggregate amortization expense for the years ended May 26, 2002, May 27, 2001
and May 28, 2000 was $1,979,000 and $3,094,000 and $2,011,000, respectively.

Estimated Amortization Expense:

For the year ending May 2003                $1,817
For the year ending May 2004                $1,817
For the year ending May 2005                $1,817
For the year ending May 2006                $  359
For the year ending May 2007                $  225

All intangibles are amortized on a straight-line basis.

The table below shows the effect on net income had FAS 142 been adopted in prior
periods.

(Dollars in Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>

                                                           For the Years Ended
                                                 -----------------------------------------
                                                    May 26,        May 27,         May 28,
                                                     2002           2001            2000
                                                 -----------------------------------------
<S>                                              <C>             <C>             <C>
Net income                                       $   20,589      $   11,067      $   6,452

Goodwill amortization                                                 1,165          1,165
                                                 ----------      ----------      ---------
Adjusted net income                              $   20,589      $   12,232      $   7,617
                                                 ==========      ==========      =========

Basic earnings per share:
Net income per common share                      $     1.26      $     0.72      $    0.48

Effect of accounting change                               -            0.08           0.09
                                                 ----------      ----------      ---------
Adjusted net income per common share             $     1.26      $     0.80      $    0.57
                                                 ==========      ==========      =========

Diluted earnings per share:
Net income per common share                      $     1.19      $     0.67      $    0.45

Effect of accounting change                                            0.07           0.08
                                                 ----------      ----------      ---------
Adjusted net income per common share             $     1.19      $     0.74      $    0.53
                                                 ==========      ==========      =========

</TABLE>

NOTE P - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

On May 28, 2001, the Company adopted the provisions of FAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities". This standard requires that
all derivative instruments be recognized on the balance sheet at their fair
value and changes in fair value be recognized immediately in earnings, unless
the derivatives qualify as hedges in accordance with the Standard. The change in
fair value for those derivatives that qualify as hedges is recorded in
shareholders' equity as other comprehensive income (loss). The Company has an
interest rate swap which qualifies as a cash flow hedge as defined in the
standard and accordingly, on the date of adoption, the Company recognized an
initial transition adjustment of $128,000 which was recorded as a derivative
liability and other comprehensive loss. During 2002 the fair value of the
interest rate swap declined an additional $140,000.


                                            63
<PAGE>

                       INTERMAGNETICS GENERAL CORPORATION
                       ----------------------------------
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                            (Dollars in Thousands)
-----------------------------------------------------------------------------------------------------------------------------------
                   COL. A                COL. B                       COL. C                        COL. D             COL. E
-----------------------------------------------------------------------------------------------------------------------------------
                                                                        Additions
                                                         ---------------------------------
                                        Balance at       Charged to          Charged to
                                         Beginning       Costs and         Other Accounts-        Deductions-        Balance at
                 DESCRIPTION             of Period        Expenses            Describe             Describe          End of Period
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>              <C>               <C>                    <C>                <C>
Year Ended May 27, 2002

Deducted from asset accounts:
  Allowance for doubtful accounts           $ 496          $ 230                                    $ 433   (3)          $ 293

  Reserve for inventory obsolescence        4,025            366                                    3,327   (5)          1,064

Included in liability accounts:
  Product warranty reserve                  1,474            697                                      845   (1)          1,326

  Contract adjustment reserve (4)             228                                                     170                   58

Year Ended May 27, 2001

Deducted from asset accounts:
  Allowance for doubtful accounts           $ 478          $ 206                                    $ 188   (3)          $ 496

  Reserve for inventory obsolescence       10,470          1,725                                    8,170   (5)          4,025

Included in liability accounts:
  Product warranty reserve                  2,059            458                                    1,043   (1)          1,474

  Contract adjustment reserve (4)             221              7                                                           228

Year Ended May 28, 2000

Deducted from asset accounts:
  Allowance for doubtful accounts           $ 401          $ 166                                     $ 89   (3)          $ 478

  Reserve for inventory obsolescence        8,282          2,665            1,770   (7)             2,247   (5)         10,470

Included in liability accounts:
  Product warranty reserve                  1,577            808               40   (2)               366   (1)          2,059

  Contract adjustment reserve (4)             301                                                      80   (6)            221
  Upgrade Reserve (4)                          40                                                      40   (2)              0

</TABLE>

(1)  Cost of warranty performed.
(2)  Adjustments to accruals.
(3)  Write-off uncollectible accounts.
(4)  Classified in the Balance Sheet with other liabilities and accrued
     expenses.
(5)  Write-off or sale of obsolete inventory.
(6)  Cost to finalize contracts.
(7)  Restructuring charges

                                       64
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                                   3. Exhibits
















                                       65
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                                   3. Exhibits
                                  Exhibit Index

Exhibit
-------

4.1      Form of Common Stock certificate


4.2      Loan and Agency Agreement among Intermagnetics General Corporation,
         IGC-APD Cryogenics Inc., IGC-Polycold Systems, Inc., IGC-Superpower,
         LLC, Medical Advances, Inc. and First Union National Bank and the other
         banks party hereto with First Union National Bank, as agent and JP
         Morgan Chase Bank, as successor to the Chase Manhattan Bank, as
         syndication agent and Keybank National Association, as documentation
         agent dated September 19, 2001

10.1     Employment Agreement dated July 23, 2002 between Intermagnetics General
         Corporation and Glenn H. Epstein

10.2     Employment Agreement dated October 19, 2001 between Intermagnetics
         General Corporation and Philip J. Pellegrino

21       Subsidiaries of the Company

23       Consent of Independent Auditors (PricewaterhouseCoopers LLP)

99.1     Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
         1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.

99.2     Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
         1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.