SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(X)      Quarterly report for the quarterly period ended  September 30, 1999

                                       OR

(   )    Transition  Report Pursuant  to Section  13 or 15(d) of The  Securities
         Exchange Act of 1934

Commission file number    1-9601
                        -----------

                           K-V PHARMACEUTICAL COMPANY
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         DELAWARE                                         43-0618919
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                2503 SOUTH HANLEY ROAD, ST. LOUIS, MISSOURI 63144
--------------------------------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (314) 645-6600
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

--------------------------------------------------------------------------------
                    (Former name, former address and former
                   fiscal year, if changed since last report)

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

Yes   X            No
    -----              ------

       Title of Class of                                Number of Shares
          Common Stock                        Outstanding as of this Report Date
       -----------------                      ----------------------------------

Class A Common Stock, par value
$.01 per share                                             12,184,585

Class B Common Stock, par value
$.01 per share                                              6,576,641

                                       1
<PAGE>


                                     PART 1
                              FINANCIAL INFORMATION



                                       2
<PAGE>

<TABLE>
<CAPTION>

                   KV PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                   (UNAUDITED)
                               (DOLLARS IN 000'S)


                                                       FOR THE THREE                                FOR THE SIX
                                                        MONTHS ENDED                                MONTHS ENDED
                                                    -------------------------               --------------------------
                                                     9/30/99          9/30/98                9/30/99           9/30/98
                                                     -------          --------               -------          --------
<S>                                               <C>             <C>                     <C>               <C>

Net Revenues                                         $36,011          $26,406                $68,805           $52,075
                                                     -------          -------                -------           -------

Costs and Expenses:
   Manufacturing costs and expenses                   15,693           14,647                 32,225            29,801
   Research and development                            2,076            1,662                  3,904             3,305
   Selling and administrative                         10,401            5,330                 18,447            10,187
   Amortization of intangible assets                     569               40                  1,069                82
                                                      ------          -------                 ------            ------
Total costs and expenses                              28,739           21,679                 55,645            43,375
                                                      ------           ------                 ------            ------

Operating income                                       7,272            4,727                 13,160             8,700
                                                      ------           ------                 ------            ------

Other income (expense):
   Interest expense                                     (503)            (112)                (1,084)             (226)
   Interest and other income                              79              341                    225               632
                                                      ------            ------               -------            ------
Total other income (expense)                            (424)             229                   (859)              406
                                                      ------            ------               -------            ------

Income before income taxes                             6,848            4,956                 12,301             9,106
Provision for income taxes                             2,601            1,894                  4,674             3,474
                                                      ------           ------                -------           -------

Net Income                                           $ 4,247          $ 3,062                $ 7,627           $ 5,632
                                                     =======          =======                =======           =======

Net Income per Common Share-Basic
   (after deducting preferred dividends of $105
   and $105 for the three month periods and $211
   and $210 for the six-month periods of 1999
   and 1998, respectively)                             $0.22            $0.16                  $0.40             $0.30
                                                       =====            =====                  =====             =====

Net Income per Common Share-Diluted                    $0.21            $0.15                  $0.38             $0.28
                                                       =====            =====                  =====             =====

</TABLE>

           SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       3
<PAGE>


                   KV PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                              COMPREHENSIVE INCOME
         FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                   (UNAUDITED)
                               (DOLLARS IN 000'S)

<TABLE>
<CAPTION>

                                                 FOR THE THREE                FOR THE SIX
                                                 MONTHS ENDED                 MONTHS ENDED
                                             ---------------------        ----------------------
                                             9/30/99       9/30/98        9/30/99        9/30/98
                                             -------       -------        -------        -------
<S>                                       <C>            <C>            <C>           <C>

Net income                                    $4,247        $3,062         $7,627          $5,632
                                              ------        ------         ------          ------
Other comprehensive income, net of tax:
   Unrealized losses on securities:
      Unrealized holding losses arising
      during period                               (2)            -            (10)            -
      Reclassification adjustment for
      losses included in net income               25             -             18             -
                                            --------       -------       --------          ------
Other comprehensive income                        23             -              8             -
                                              ------
Comprehensive income                          $4,270        $3,062         $7,635          $5,632
                                              ======        ======         ======          ======

</TABLE>

                                       4


<PAGE>
                   KV PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      SEPTEMBER 30, 1999 AND MARCH 31, 1999
                                 (DOLLARS IN 000'S)

                                            UNAUDITED
                                            09/30/99                03/31/99
ASSETS                                      ---------               ---------
Current Assets:
   Cash and equivalents                        $1,602                 $ 2,617
   Marketable securities,
     available-for-sale                         1,999                   7,523
   Receivables                                 24,088                  18,988
   Receivable, arbitration award                    -                  13,253
   Inventories                                 28,085                  23,653
   Deferred income taxes                        3,390                   3,379
   Prepaid and other current assets               172                     168
                                           ----------           -------------
      Total Current Assets                     59,336                  69,581

Net property and equipment, less
  accumulated depreciation                     23,991                  18,967

Intangibles and other assets, net
  of amortization                              47,305                  39,442
                                           ----------              ----------

    TOTAL  ASSETS                            $130,632                $127,990
                                             ========                ========

LIABILITIES
Current Liabilities:
   Accounts payable                          $  9,508                $  8,667
   Accrued liabilities                         13,444                  17,090
   Current maturities of long-term debt         1,644                     712
                                           ----------              ----------
     Total Current Liabilities                 24,596                  26,469

Long-term debt                                 22,297                  31,490
Deferred income taxes                             379                     379
Other long-term liabilities                     2,232                   2,104
                                           ----------              ----------
    TOTAL  LIABILITIES                         49,504                  60,442
                                            ---------                --------

Commitments and Contingencies

SHAREHOLDERS' EQUITY

7% Cumulative Convertible Preferred
  Stock, $.01 par value; $25.00
  stated and liquidation value;
  840,000 shares authorized;
  issued and outstanding-240,000
  and 241,000 shares as of
  September 30, 1999 and
  March 31, 1999, respectively
  (convertible into Class A shares                  2                       2
  at a ratio of 3.75 to one)

Class A and Class B Common Stock, $.01
  par value; 150,000,000 and 75,000,000
  shares authorized, respectively; Class
  A-issued 12,220,204 and 11,941,776 as
  of September 30, 1999 and March 31, 1999,
  respectively                                    122                     120

  Class B-issued 6,612,260 and 6,525,180
    as of September 30, 1999 and March 31,
    1999, respectively (convertible into
    Class A shares on a one-for-one basis)         66                      64
Additional paid-in capital                     40,682                  34,531
Retained earnings                              40,328                  32,911
Accumulated comprehensive loss, net               (17)                    (25)
Less:  Treasury Stock 35,619 shares
  each of Class A and Class B Common
  Stock, at cost                                  (55)                    (55)
                                           ------------            ------------

    TOTAL  SHAREHOLDERS'  EQUITY               81,128                  67,548
                                            ---------               ---------

TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                       $130,632                $127,990
                                             ========                ========

           SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       5

<PAGE>

                   KV PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                   (UNAUDITED)
                               (DOLLARS IN 000'S)



                                                      1999             1998
                                                   --------          -------
OPERATING ACTIVITIES
Net Income                                         $  7,627         $ 5,632

Adjustments to reconcile net income
  to net cash provided by operating
   activities:
   Depreciation and amortization                      2,019            872
   Changes in deferred taxes                            (11)           -
   Changes in deferred compensation                     128            259
Changes in operating assets and liabilities:
   (Increase) decrease in receivables                (5,100)         2,575
   Decrease in receivable arbitration award          13,253            -
   Increase in inventories                           (4,432)        (2,040)
   (Increase) decrease in prepaids and
      other assets                                     (471)           376
   (Decrease) increase in accounts
      payable and accrued liabilities                (2,806)           583
                                                  ---------      ---------

  NET CASH PROVIDED BY OPERATING ACTIVITIES          10,207          8,257
                                                  ---------      ---------

INVESTING ACTIVITIES
   Purchase of property and equipment, net           (5,973)        (1,911)
   Sale of marketable securities                      5,532            -
   Product acquisition                               (3,033)           -
                                                  ---------        -------
NET CASH (USED IN) INVESTING ACTIVITIES              (3,474)        (1,911)
                                                  ---------        -------

FINANCING ACTIVITIES
   Principal payments on long-term debt              (9,193)          (116)
   Dividends paid on Preferred Stock                   (210)          (211)
   Exercise of Common Stock options                   1,655            435
                                                  ---------      ---------

NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES                                 (7,748)           108
                                                  ---------      ---------

(DECREASE) INCREASE  IN CASH AND
  CASH EQUIVALENTS                                   (1,015)         6,454
CASH AND CASH EQUIVALENTS AT:
   BEGINNING OF YEAR                                  2,617         18,158
                                                    -------        -------
   END OF PERIOD                                     $1,602        $24,612
                                                     ======        =======

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Portion of product acquisition
   acquired through issuance of:
      Short-term debt                              $   932            -
      Common stock                                  $4,500            -


          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       6

<PAGE>

              NOTES TO SUMMARIZED CONSOLIDATED FINANCIAL STATEMENTS


NOTE A  -  BASIS OF PRESENTATION

         The interim financial  statements  presented here have been prepared in
conformity with the accounting  principles and practices and methods of applying
the same (including  consolidating  practices) reflected in the Annual Report of
the  Company  on Form 10-K for the year  ended  March 31,  1999  filed  with the
Commission,  except that  detailed  footnotes  and  schedules  are not included.
Reference is hereby made to the footnotes and schedules  contained in the Annual
Report.  All  significant  intercompany  balances  and  transactions  have  been
eliminated and, in the opinion of management,  all  adjustments,  which are of a
normal  recurring  nature  only,  necessary  to present a fair  statement of the
results of the Company and its subsidiaries have been made.


NOTE  B  -  INVENTORIES

         Inventories consist of ($ in 000's):


                                         September 30, 1999      March 31, 1999
                                         ------------------      --------------

         Finished products                        $12,661             $11,411
         Work-in-process                            3,307               2,282
         Raw materials and supplies                12,117               9,960
                                                ---------           ---------

                                                  $28,085             $23,653
                                                  =======             =======

<PAGE>


NOTE C - EARNINGS PER SHARE

         The  following  table sets forth the  computation  of basic and diluted
earnings per share:

<TABLE>
<CAPTION>


                                               FOR THE THREE MONTHS ENDED               FOR THE SIX MONTHS ENDED

NUMERATOR:                                    9/30/99             9/30/98             9/30/99             9/30/98
                                              -------             -------             -------             -------
<S>                                         <C>                 <C>                  <C>               <C>

Net income                                     $ 4,247             $ 3,062              $ 7,627            $ 5,632

Preferred Stock dividends                         (105)               (105)                (210)             (211)
                                              --------            --------             --------          --------

Numerator for basic earnings per
   Share-income available to common
   Shareholders                                  4,142               2,957                7,417              5,421

Effect of dilutive securities:
   Preferred Stock dividends                       105                 105                  210                211
                                              --------            --------             --------           --------

Numerator for diluted earnings per
   Share-income available to
   common Shareholders after
   assumed conversions                          $4,247              $3,062               $7,627             $5,632
                                                ======              ======               ======             ======

DENOMINATOR:
Denominator for basic earnings per
   Share-weighted-average shares                18,693              18,198               18,533             18,172
                                               -------             -------              -------            -------

Effect of dilutive securities:
   Employee stock options                          623                 918                  595                919
   Convertible Preferred Stock                     900                 904                  900                904
                                                ------              ------            ---------          ---------

Dilutive potential Common Shares                 1,523               1,822                1,495              1,823
                                                 -----               -----             --------           --------

   Denominator for diluted earnings
      per share-adjusted weighted-average
      shares and assumed conversions            20,216              20,020               20,028             19,995
                                                ======              ======               ======             ======

BASIC EARNINGS PER SHARE (1):                   $0.22               $0.16                $0.40              $0.30
                                                =====               =====                =====              =====

DILUTED EARNINGS PER SHARE (1) (2):             $0.21               $0.15                $0.38              $0.28
                                                =====               =====                =====              =====

<FN>


(1)   The two-class method for Class A and Class B Common Stock is not presented
      because the earnings per share are  equivalent to the if converted  method
      since  dividends  were not declared or paid and each class of common stock
      has equal ownership of the Company.

(2)   Employee  stock options to purchase  179,250  shares at September 30, 1999
      and 750 shares at  September  30, 1998 of Class A and Class B Common Stock
      are not included in the computation of diluted  earnings per share because
      their  exercise price was greater than the average market price during the
      quarter and as such are considered anti-dilutive.

</FN>
</TABLE>

<PAGE>



NOTE D - SEGMENT  FINANCIAL  INFORMATION

         The  reportable  segments  of the Company are  specialty  generics  and
contract services. Segment operating results are measured based on income before
taxes.

<TABLE>
<CAPTION>

                                                                                            Corporate
                                         Specialty         Contract           All         Expenses and
                                          Generics         Services          Other        Eliminations      Consolidated
                                         ---------         --------          --------     ------------      ------------
For the Three Months Ended
September 30, 1999  ($ in 000's)
--------------------------------
<S>                                      <C>           <C>                  <C>          <C>                <C>

Revenues                                     $26,286       $10,934              $8,892      $(10,101)           $36,011
Depreciation and amortization                     22           439                  34           569              1,064
Income before income taxes                    12,139           513               1,280        (7,084)             6,848
Capital expenditures                             202         3,543                  39             -              3,784


For the Three Months Ended
September 30, 1998  ($ in 000's)
--------------------------------

Revenues                                     $22,294        $6,385              $3,447       $(5,720)           $26,406
Depreciation and amortization                     18           361                  20            40                439
Income before income taxes                     9,464          (595)                624        (4,537)             4,956
Capital expenditures                              20         1,323                  24             -              1,367


For the Six Months Ended
September 30, 1999 ($ in 000's)
-------------------------------

Revenues                                     $51,675       $21,743             $15,752      $(20,365)           $68,805
Depreciation and amortization                     63           792                  68         1,096              2,019
Income before income taxes                    22,782           344               2,295       (13,120)            12,301
Total assets                                  26,435        49,472              13,062        41,663            130,632
Capital expenditures                             202         5,699                  72             -              5,973


For the Six Months Ended
September 30, 1998  ($ in 000's)
--------------------------------

Revenues                                     $42,947       $12,870              $7,223      $(10,965)           $52,075
Depreciation and amortization                     36           712                  41            83                872
Income before income taxes                    17,389          (702)              1,308        (8,889)             9,106
Total assets                                  14,645        47,704               7,471         5,123             74,943
Capital expenditures                              28         1,859                  24             -              1,911

</TABLE>

<PAGE>


         Any forward-looking statements set forth in this Report are necessarily
subject to significant  uncertainties and risks.  When used in this Report,  the
words "believes,"  "anticipates,"  "intends," "expects," and similar expressions
are intended to identify  forward-looking  statements.  Actual  results could be
materially different as a result of various possibilities. Readers are cautioned
not to place undue reliance on forward-looking  statements,  which speak only as
of the date hereof. The Company undertakes no obligation to publicly release the
results of any revisions to these  forward-looking  statements which may be made
to reflect  events or  circumstances  after the date  hereof or to  reflect  the
occurrence of unanticipated events.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS, AND
          LIQUIDITY AND CAPITAL RESOURCES

          (A)    RESULTS OF OPERATIONS

         REVENUES.  Consolidated  net revenues for the second  quarter of fiscal
2000 ended  September 30, 1999 increased $9.6 million,  or 36.4%, to $36 million
from $26.4 million for the same period last year. Year-to-date  consolidated net
revenues were $68.8 million,  an increase of $16.7 million,  or 32.1%,  over the
same  period  last  year.   The  increases  in  revenues  for  the  quarter  and
year-to-date  were due primarily to higher sales of new brand-name  products and
specialty generics.

         Brand  product  sales   through  the  Company's   Ther-Rx   Corporation
subsidiary were $4.6 million for the quarter and $7.2 million  year-to-date  all
of which are incremental to the prior year given the start-up of Ther-Rx late in
the fourth quarter of last fiscal year.  Sales benefited from the acquisition in
August 1999 of the PreCare(R) line of prenatal  vitamins from UCB Pharma and the
subsequent  introductions of Pre-Care(R)  Chewables and PremesisRx(TM) under the
PreCare(R) line of women's health care pharmaceuticals.  PreCare(R) Chewables is
the world's first  prescription  chewable prenatal vitamin.  PremesisRx(TM) is a
prescription  product designed to reduce  pregnancy-related  nausea when used in
conjunction with a physician-prescribed  regimen to minimize nausea. The Company
plans to introduce additional products in the coming months.

         Specialty   generic  sales  through  the  Company's  ETHEX  Corporation
subsidiary  increased  $4  million,  or 17.9%,  for the quarter and were up $8.7
million,  or 20.3%,  year-to-date  over the same periods of the prior year.  The
increases in both periods were due to new products introduced this year and last
year ($3.9 million for the quarter  and $6.3 million year-to-date) and selective
price increases ($2.7 million for the quarter and $3.9 million year-to-date).

         COSTS  AND  EXPENSES.  Manufacturing  costs  as a  percent  of  revenue
declined  for the  quarter  and  year-to-date  due to the  effects of  favorable
pricing and product mix. The improvement in product mix reflects the increase in
the relative contribution of higher margin branded sales to total sales. For the
quarter,  manufacturing costs declined to 43.6% from 55.5% in the prior year and
for the year-to-date to 46.8% from 57.2% last year. The components of the change
are shown in the following table:

                                                      % Revenue
                                              ---------------------------
                                              Quarter        Year-to-Date
                                              -------        ------------
         FY 99 Manufacturing Costs              55.5             57.2
         Change due to:
         Product Mix/Volume                    (11.7)           (10.4)
         Selling Pricing                        (3.5)            (2.8)
         Manufacturing Costs                     3.3              2.8
                                              ------            ------
         FY 00 Manufacturing Costs              43.6             46.8
                                              ======            ======

         Research and development expense increased $.4 million, or 25%, for the
quarter  and $.6  million,  or 18%,  for the  year-to-date  compared to the same
periods of the prior  year.  The  increase  in  expense  in both  periods is due
primarily  to higher  research  costs to support  clinical  testing  programs in
support of the Company's new products.

         Selling and administrative expenses increased $5.1 million, or 95%, for
the quarter and $8.3 million, or 81%, for the year-to-date  compared to the same
periods of the prior year.  The increase in both periods is due primarily to the
Company's  continued  investment  in  expanding  the sales force for its Ther-Rx
brand-name marketing division. Selling expenses associated with this effort were
$3.3  million for the quarter and $5.1 million for the  year-to-date.  Marketing
expenses to support the  continued  growth of the  specialty  generics  business
increased  $.6  million  and $1.1  million  for the  quarter  and  year-to-date,
respectively.

         Amortization  expense  increased  $.5  million  for the  quarter and $1
million for the  year-to-date due to the amortization of product rights acquired
in March 1999 and August 1999.

<PAGE>

         Interest expense, net of interest income,  increased $.7 million in the
quarter  and is up  $1.3  million  for the  year-to-date  on  higher  borrowings
incurred to finance product acquisitions and facilities expansion.

         NET INCOME.  As a result of the  factors  described  above,  net income
improved $1.2 million, or 38.7% to $4.2 million for the quarter ending September
30,  1999  compared  to the same  period  last year.  For the six  months  ended
September  30, 1999 net income  improved $2  million,  or 35.4% to $7.6  million
compared to the same period of the prior year.

         (B) LIQUIDITY AND CAPITAL RESOURCES

         CASHFLOW.  Cash provided by operations  was $10.3 million for the first
six months of fiscal 2000, an increase of $2.2  million,  or 27%, over the first
six months of fiscal 1999.  The increase in operating  cash flow  compared  with
last year was due to higher net  income,  depreciation,  amortization  and other
non-cash charges ($3 million) and the collection of an arbitration  award ($13.3
million).  These  increases were largely offset by a $14. 1 million  increase in
the net use of working capital over the same period last year. This net increase
in  the  use of  working  capital  consisted  of  increases  in  trade  accounts
receivable ($7.7 million),  inventories  ($2.4 million) and other current assets
($.6 million) to support business growth,  and decreases in accounts payable and
accrued  expenses  ($3.4  million).  The increase in trade  accounts  receivable
reflects the $16.7  million  growth in net sales over the same period last year,
and  includes  the impact of the new  products  launched  by Ther-Rx  and ETHEX.
Inventories  increased  in  anticipation  of customer  needs during the upcoming
cough  cold  season and in support  of the  recent  new  product  launches.  The
decreases in accounts  payable and accrued  liabilities  were due primarily to a
decrease in accrued  income  taxes paid during the first  quarter in  connection
with the arbitration award recorded in fiscal 1999.

         Investing  activities  for the first six months of fiscal 2000 included
cash outlays for capital  expenditures of $6 million and product acquisitions of
$3 million,  partially  offset by cash  provided by the sale of $5.5  million of
marketable  securities.  Capital  expenditures  were  primarily  for  production
equipment,  laboratory  improvements  and the upgrade of the Company's  business
software and network  systems.  During the second quarter,  the Company acquired
the worldwide rights to PreCare(R) for approximately $8.5 million, consisting of
$3 million  cash,  $4.5  million  Class A Common  Stock and a $1  million  note.
Marketable securities were sold to pay down long-term debt.

         The Company paid down  long-term  debt  totaling $9 million  during the
first six months of fiscal 2000.

         The  Company  believes  that  existing  cash and  securities  balances,
together with cash generated from operating activities and funds available under
its credit  facility,  will be adequate  to fund  operating  activities  for the
presently foreseeable future,  including the payment of short-term and long-term
obligations,  capital  improvements,  product  development  activities  and  the
expansion of marketing capabilities for the brand pharmaceutical business.

         BALANCE  SHEET AND  RATIOS.  The  following  table sets forth  selected
balance  sheet data and financial  ratios as of September 30 and year-end  March
31, 1999:

--------------------------------------------------------------------------------
($ in 000's)
                                                 September 99     March 99
                                                 ------------    ----------

Working capital................................   $ 34,740       $ 43,112
Long-term debt.................................     22,297         31,490
Shareholders' equity...........................     81,128         67,548

Working capital ratio..........................        2.4            2.6
Long-term debt to equity.......................       0.27           0.47
--------------------------------------------------------------------------------

<PAGE>

         Working  capital  decreased $8.4 million during the first six months of
fiscal 2000 compared with the balance at the end of fiscal 1999.  Current assets
decreased  $10.3  million,  or 15%,  while current  liabilities  decreased  $1.9
million,  or 7%.  The  decrease  in  current  assets  was due  primarily  to the
collection of the $13.3 million  arbitration  award  included in  receivables at
year-end,  the  proceeds  of which were used to pay income  taxes ($6  million),
capital  expenditures ($2.2 million) and long-term debt ($9.2 million).  Current
liabilities  decreased due to a $5.3 million  reduction in accrued income taxes,
partially  offset by a $.9 million  increase in  short-term  debt related to the
PreCare(R)  acquisition,  a $.9 million increase in accounts payable from higher
inventory  levels,  and a $1.6  million  increase in marketing  and  promotional
accruals in  connection  with new product  launches.  The working  capital ratio
dipped slightly to 2.4 to 1 from 2.6 to 1 at year-end as current assets declined
at a faster rate than current liabilities.

         The long-term debt to equity ratio improved during the first six months
of fiscal 2000 due to the  repayment of $9.2  million in long-term  debt and the
increase in  shareholders'  equity  attributable to the Company's net income for
the period.

         INFLATION.  Although  at  reduced  levels  in recent  years,  inflation
continues to apply upward pressure on the cost of goods and services used by the
Company.  However,  the Company believes that the net effect of inflation on its
operations  was  minimal  during the first six months of fiscal  2000 and fiscal
1999.  In  addition,  changes  in the mix of  products  sold and the  effect  of
competition  have made a comparison of changes in selling prices less meaningful
relative to changes in the overall rate of inflation during the first six months
of fiscal 2000 and fiscal 1999.

         YEAR  2000  PROJECT.   The  Company  utilizes   computer   technologies
throughout  its business to  effectively  carry out its  day-to-day  operations.
Computer  technologies  include  both  information  technology  in the  form  of
hardware  and  software,  as  well  as  embedded  technology  in  the  Company's
facilities and equipment. Similar to other companies, the Company must determine
whether its systems are capable of  recognizing  and  processing  date-sensitive
information  properly as the year 2000  approaches.  The Company is  utilizing a
multi-phased  concurrent  approach to address this issue. The phases included in
the Company's approach are the awareness,  assessment,  validation,  remediation
and implementation  phases. The Company has completed the awareness,  assessment
and  validation  phases and has a few  remaining  tasks in the  remediation  and
implementation phases.

         The  costs  associated  with the  project  are not  expected  to exceed
$766,000 (of which approximately  $699,000 had been incurred as of September 30,
1999),  and are not  deemed to  materially  impact  the  Company's  consolidated
financial position,  results of operations or cash flows in future periods.  The
Company has scheduled the remediation  and testing of the remaining  software or
machinery  tasks which are not Year 2000 ready in order to ensure the  Company's
ability to continue to meet its internal  needs and those of its  customers  and
suppliers.

         The  Company  is  finalizing  formal  communications  with  all  of its
significant  suppliers  and critical  business  partners to determine  year 2000
compliance of its  dependents  and has developed  contingency  plans to minimize
interruptions  in business  in the event a third party is unable to perform.  An
interruption of the Company's ability to conduct its business due to a Year 2000
readiness  problem  could have a material  adverse  effect on the  Company.  The
Company is not presently aware of any such significant exposure,  however, there
can be no  guarantee  that the  systems of third  parties  on which the  Company
relies  will be  converted  in a timely  manner  or that a failure  to  properly
convert  by another  company  would not have a  material  adverse  effect on the
Company.

         The  Company  presently   believes  that  the  most  reasonably  likely
worst-case  scenarios  that the Company might confront with respect to Year 2000
issues have to do with third parties not being Year 2000 compliant.  The Company
is  presently  evaluating  vendor  and  customer  compliance  and has  developed
contingency plans after obtaining compliance evaluations.

         Based upon the planning  completed to date, the Company  believes that,
with  modifications  to existing  software,  conversions  to new  software,  and
appropriate  remediation of embedded chip equipment,  the Year 2000 issue is not
reasonably  likely to pose  significant  operational  problems for the Company's
information  technology  systems and embedded chip  equipment as so modified and
converted.

         The  Company  expects  to  complete  the  few  remaining  tasks  in the
remediation and implementation phases of its Year 2000 compliance program by the
end of the calendar year.  However,  the costs and results of the Company's Year
2000 program and the extent of any impact on the Company's operations could vary
materially from those stated herein.


<PAGE>

                           PART II. OTHER INFORMATION


ITEM 2:   CHANGE IN SECURITIES

          On August 2, 1999, the Company issued 259,110 shares of Class A Common
          Stock to UCB PHIP,  Inc.  ("UCB")  in  connection  with the  Company's
          acquisition  of the  Precare(R)  product line from UCB and UCB Pharma,
          Inc. The shares were issued under the exemption from  registration  in
          Section 4(2) of the Securities Act of 1933, as amended.

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

          At the annual  meeting of  Shareholders  of the  Company  held July 1,
          1999,  the  Shareholders  re-elected  Marc  S.  Hermelin  to  serve  a
          three-year  term as a Class A  Director.  The vote  tabulation  was as
          follows:

                      Votes in Favor         5,072,921

                      Votes Withheld               995

                      Abstentions              101,550


ITEM 5:    OTHER INFORMATION

           None.



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

           None.


<PAGE>

                                   SIGNATURES
                                   ----------

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



Date:  November 15, 1999               /s/ Marc S. Hermelin
       -----------------------        ------------------------------------------
                                      Marc S. Hermelin
                                      Vice Chairman of the Board and
                                      Chief Executive Officer



Date:  November 15, 1999               /s/ Gerald R. Mitchell
       -----------------------        ------------------------------------------
                                      Gerald R. Mitchell
                                      Vice President-Finance
                                      Chief Financial Officer