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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


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

For the fiscal year ended June 2, 2001
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OR

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

For the transition period from to
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Commission file number 1-11479
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E-Z-EM, Inc.
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(Exact name of registrant as specified in its charter)

Delaware 11-1999504
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)


717 Main Street, Westbury, New York 11590
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(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (516) 333-8230
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered

Class A Common Stock, par value $.10 American Stock Exchange
Class B Common Stock, par value $.10 American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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

Yes _X_ No ___

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


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The aggregate market value of the registrant's voting Class A and non-voting
Class B Common Stock held by non-affiliates on August 3, 2001 was $35,572,000.

As of August 3, 2001, there were 4,011,140 shares of the registrant's Class A
Common Stock outstanding and 5,842,114 shares of the registrant's Class B Common
Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for registrants 2001 Annual Meeting of
Stockholders to be held October 30, 2001 are incorporated by reference in Part
III of this Form 10-K Report.


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E-Z-EM, Inc. and Subsidiaries

INDEX

Page
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Part I:
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Item l. Business 4

Item 2. Properties 15

Item 3. Legal Proceedings 15

Item 4. Submission of Matters to a Vote of Security Holders 15


Part II:
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Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 16

Item 6. Selected Financial Data 17

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 18

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk 23

Item 8. Financial Statements and Supplementary Data 24

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 24


Part III:
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Item 10. Directors and Executive Officers of the Registrant 25

Item 11. Executive Compensation 28

Item 12. Security Ownership of Certain Beneficial Owners
and Management 32

Item 13. Certain Relationships and Related Transactions 35


Part IV:
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Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 36


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Part I
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Item 1. Business
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(a) General Development of Business
-------------------------------

E-Z-EM, Inc. (the "Company" or "E-Z-EM"), organized in Delaware in 1983,
together with its predecessors, has been in business for over 39 years, and has
its corporate offices located at 717 Main Street, Westbury, N.Y. 11590. The
Company is primarily engaged in developing, manufacturing and marketing
diagnostic products used by radiologists and other physicians during
image-assisted procedures to detect anatomic abnormalities and diseases. The
Company also designs, develops, manufactures and markets, through its
wholly-owned subsidiary, AngioDynamics, Inc. ("AngioDynamics"), a variety of
therapeutic and diagnostic products, for use principally in the diagnosis and
treatment of peripheral vascular disease. Interventional radiologists primarily
use these products during minimally invasive diagnostic and therapeutic surgical
procedures.

E-Z-EM's products consist of specially developed powdered and liquid barium
sulfate formulations and consumable medical devices, which function together as
a system ("contrast systems"), for examination of the various parts of the
gastrointestinal ("G.I.") tract. Contrast systems are used in X-ray, CT-scanning
and other imaging examinations. The G.I. tract is commonly referred to as the
digestive system and consists of the pharynx, esophagus, stomach, small
intestine (or small bowel) and colon. E-Z-EM manufactures a broad spectrum of
barium sulfate products for different uses in G.I. tract examinations. Each
E-Z-EM barium sulfate formulation is tailored to that portion of the G.I. tract
to be marked or examined, and to the procedures employed by radiologists in each
examination. Based upon sales, the Company believes that it is the leading
worldwide producer of barium sulfate contrast systems for use in G.I. tract
examinations.

The Company also competes in areas related and complementary to its basic
contrast systems business, categorized as non-contrast systems. Non-contrast
systems include: the electromechanical injector line, radiological medical
devices, custom contract pharmaceuticals, gastrointestinal cleansing laxatives,
and immunoassay tests. See "Narrative Description of Business".

The Company's sales of contrast and non-contrast systems, collectively the
diagnostic ("Diagnostic") products industry segment, net of intersegment
eliminations, decreased 3% during 2001 as compared to 2000 due to lower sales of
contrast systems, partially offset by increased sales of non-contrast systems.
The lower sales of contrast systems were due, in part, to the strength of the
U.S. dollar and foreign currency exchange rate fluctuations, which adversely
affected the translation of European, Canadian and Japanese sales to U.S.
dollars for financial reporting purposes.

The Company manufactures and markets, through AngioDynamics, six
differentiated product groups for use during interventional radiology
procedures: angiographic products, image-guided vascular access products,
thrombolytic products, angioplasty products, stents, and drainage products.
Collectively these products are classified as the AngioDynamics products
industry segment. See "Narrative Description of Business".

During 2001, AngioDynamics product sales, net of intersegment eliminations,
increased 10% due, in large part, to: increased sales of several products
introduced in 2000, namely Workhorse(TM) PTA balloon catheters, Abscession(TM)
fluid drainage catheters, and VISTAFLEX(TM) platinum biliary stents; and sales
of OMNIFLEX(TM)


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stents, introduced in the third quarter of 2001. International sales increased
1% despite the Company's exit from the cardiovascular market.

On July 27, 2000, AngioDynamics sold all the capital stock of AngioDynamics
Ltd., a wholly-owned subsidiary, and certain other assets to AngioDynamics
Ltd.'s management. AngioDynamics Ltd., located in Ireland, manufactured
cardiovascular and interventional radiology products. The aggregate
consideration paid was $3,250,000 in cash. The sale was the culmination of the
Company's strategic decision to exit the cardiovascular market and to focus
entirely on the interventional radiology marketplace. As a result of this sale,
the Company recognized a pre-tax loss of approximately $872,000 during the first
quarter of 2001. The aforementioned pre-tax loss includes the effect of
previously unrealized losses on foreign currency translation of approximately
$994,000 and the write-off of approximately $673,000 in inventory and
intangibles related to the cardiovascular product line, both of which were
non-cash charges. Further, AngioDynamics entered into a manufacturing agreement,
a distribution agreement and a royalty agreement with the buyer. Under the
two-year manufacturing agreement, the buyer will be manufacturing certain
interventional radiology products sold by AngioDynamics.

Unless the context requires otherwise, all references herein to a
particular year are references to the Company's fiscal year.

(b) Financial Information About Industry Segments
---------------------------------------------

The Company is engaged in the manufacture and distribution of a wide
variety of products that are classified into two industry segments: Diagnostic
products and AngioDynamics products. Diagnostic products encompass both contrast
systems, consisting of barium sulfate formulations and related medical devices
used in X-ray, CT-scanning, ultrasound and Magnetic Resonance Imaging ("MRI")
imaging examinations, and non-contrast systems, including the electromechanical
injector line, radiological medical devices, custom contract pharmaceuticals,
gastrointestinal cleansing laxatives, and immunoassay tests. AngioDynamics
products include angiographic, image-guided vascular access, thrombolytic,
angioplasty, stents, and drainage medical devices used in the interventional
radiology marketplace.

Certain financial information, including net sales, depreciation and
amortization, net earnings (loss), assets and capital expenditures attributable
to each operating segment are set forth in Note O to the Consolidated Financial
Statements included herein.

(c) Narrative Description of Business
---------------------------------

Diagnostic Products
-------------------

Diagnostic products include both contrast systems, consisting of barium
sulfate formulations and related medical devices used in X-ray, CT-scanning and
other imaging examinations, and non-contrast systems, including the
electromechanical injector line, radiological medical devices, custom contract
pharmaceuticals, gastrointestinal cleansing laxatives, and immunoassay tests.

Contrast Systems

Contrast systems, using barium sulfate formulations as contrast media
together with consumable medical devices, have been E-Z-EM's principal business
since the Company's organization over 39 years ago. For over 85 years, barium
sulfate has been the contrast medium of choice for virtually all G.I. tract
X-ray examinations. It has the longest history of use among all contrast media.
Barium sulfate is preferred among G.I. tract contrast media because it has a
high


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absorption coefficient for X-rays. In addition, it is biologically inert,
insoluble in water and chemically stable. Barium sulfate for suspension is
listed in the U.S. Pharmacopeia. The use of properly formulated barium sulfate
suspensions permits the visualization of the entire G.I. tract.

The Company's contrast systems are designed for a variety of radiologic
procedures. In single contrast procedures, a portion of the G.I. tract is filled
with barium sulfate to produce a diagnostic image of the tract's contours. In
double contrast procedures, CO2 or air is used to distend the G.I. tract after
coating with a high-density barium sulfate suspension. This produces a
significantly clearer diagnostic image of the tract's surface than that
obtainable through the use of single contrast procedures. In computed tomography
procedures, known as "CT-scanning", a specially formulated low-density barium
sulfate product is used to fill and thus identify the G.I. tract.

Contrast systems provide radiologists with a range of effective and
convenient powdered and liquid product formulations tailored to single contrast,
double contrast or CT-scanning procedures. Many of the Company's products are
functionally packaged in disposable dispensing containers. The Company believes
that it currently has the broadest barium sulfate product line of any worldwide
manufacturer and is continuing to develop additional formulations for modern
X-ray techniques. E-Z-EM also sells accessory medical devices for use in
contrast system procedures, including empty enema administration kits and
components. Sales of contrast systems decreased 7% during 2001 as compared to
2000.

During 2001, the Company introduced the first family of contrast
formulations designed specifically for fluoroscopic examination of the
swallowing process. These products, trade named Varibar(TM), provide consistent,
repeatable radiographic results in modified swallowing studies. The Varibar
system provides a range of low-, medium- and high-viscosity barium suspensions
needed to evaluate the patient's ability to swallow liquid and solid materials
of differing viscosities and volumes. Disorders of the swallowing mechanism can
range from minimal difficulty swallowing food and liquids to inability to
swallow without a great risk of aspiration. It is estimated that over 10 million
Americans have some degree of swallowing disorder and this number is expected to
increase substantially with the aging of the U.S. population.

Non-Contrast Systems

The Company also competes in areas related and complementary to its basic
contrast systems business, categorized as non-contrast systems. Non-contrast
systems include: the electromechanical injector line, radiological medical
devices, custom contract pharmaceuticals, gastrointestinal cleansing laxatives,
and immunoassay tests. Sales of non-contrast systems increased 7% during 2001 as
compared to 2000.

The electromechanical injector line includes the PercuPump Touchscreen(TM)
with EDA(TM) injector ("PP with EDA"), which is designed to inject contrast
media into the vascular system for visualization purposes during CT procedures.
The PP with EDA, introduced in 1998, is the first CT injector designed to aid in
the detection of extravasation, an accidental infiltration of contrast media
into surrounding tissue. The PP with EDA is comprised of an electromechanical
injector, a consumable syringe, and a disposable EDA detector patch.

The Company's line of radiological medical devices include entry and biopsy
needles, trays and ancillary devices used during a variety of radiologic and
ultrasound procedures, such as mammography, amniocentesis and other specialty
procedures.


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Custom contract pharmaceutical and cosmetic products are manufactured on a
contract basis by E-Z-EM Canada Inc. ("E-Z-EM Canada"), the Company's wholly-
owned Canadian subsidiary. Pharmaceuticals include products for dermatology,
cough and cold medicines, liquid vitamins, antacids and sun screen lotions and
creams. Cosmetic products include skin care products, namely anti-aging and
moisturizers.

During 2001, E-Z-EM Canada entered into two new long-term agreements, one
with Bracco Diagnostics Inc. ("Bracco"), of Princeton, New Jersey, and one with
Vivier Pharma ("Vivier"), of Vaudreuil, Quebec. The Bracco agreement is for the
manufacturing of an oral contrast agent, which Bracco sells throughout North
America. Initial sales were made in the fourth quarter of 2001. Vivier has
appointed E-Z-EM Canada as its exclusive manufacturer of products owned and sold
by Vivier, worldwide, either directly or through its agents. E-Z-EM Canada also
has a right of first refusal for the manufacture of all future products, either
currently in development or to be developed or acquired by Vivier. Vivier holds
a leading position, with exclusive know-how, related to high potency liquid
vitamin C products, used in anti-aging cosmeceuticals. Initial sales have been
made to Vivier's International and North American customer base during the
fourth quarter of 2001.

E-Z-EM Canada has a long-term agreement with O'Dell Engineering Ltd.
("O'Dell") of Cambridge, Ontario, Canada, to commercialize a decontamination
lotion for chemical warfare agents. The product line, known as Reactive Skin
Decontaminant Lotion ("RSDL"), is currently marketed to the defense sector.
Under the terms of the agreement, E-Z-EM Canada is the exclusive manufacturer of
the product and is responsible for all phases of product development, including
future generation decontaminants.

RSDL is a decontamination lotion that neutralizes and destroys chemical
warfare agents. It has been shown to be effective against the G and V families
of nerve agents, which include Sarin (used in the Tokyo subway terrorist attack)
and VX, and the H and L families of vesicants (blister agents), which include
Mustard and Lewisite. Developed by the Defense Research Establishment of the
Canadian Department of National Defense, the product patent is held by the
Canadian government, which has entered into an exclusive licensing agreement
with O'Dell until the year 2010. To date, patents have been issued for RSDL in
the U.S., Canada and over a dozen European countries.

The Company offers laxative products specially formulated to cleanse the
G.I. tract prior to X-ray and colonoscopic examinations. These products are sold
through the same distribution network as the Company's contrast systems.

The Company, through its wholly-owned subsidiary, Enteric Products, Inc.
("EPI"), markets immunoassay tests for use in the detection of Helicobacter
pylori ("H. pylori"). The tests analyze a patient's serum or whole blood sample
using a patented antigen licensed from Baylor College of Medicine. These tests
are available for both laboratory use and for use in a physician's office.

H. pylori infection has been identified as the leading cause of duodenal
and gastric ulcers and has also been linked to gastritis and gastric cancer. The
World Health Organization has categorized H. pylori as a Class 1 carcinogen, a
definite cancer causing agent in humans. Gastric cancer is a leading cause of
death in Asia, Africa and Eastern Europe.

The Primary Care Diagnostics Division of Beckman Coulter, Inc. ("Beckman"),
with whom EPI co-developed the serum and whole blood tests, also markets its
version of the product under the name FlexSure(TM) HP in the U.S. and other
selected territories. EPI receives revenue from royalties on the sale of product
by Beckman to its distributors and end-users, and from the sale of EPI's
patented antigen to Beckman for use in both tests. In addition, EPI derives
revenue from


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the sale of HM-CAP(TM), the laboratory version of the blood serum test. The
Company markets the HM-CAP test direct and through distributors in the U.S. and
abroad.

The Company, through its EndoDynamics division, also sells products to the
gastroenterology and cardiology markets. These products include the patented
Suction Polyp Trap(TM) that is used during colonoscopy and the patented
E-Z-Guard(TM) Mouthpiece that is used during esophageal echocardiography
procedures. EndoDynamics markets its products direct and through distributors in
the U.S. and through specialty distributors outside the U.S.

Significant Customers

Sales to Marconi Medical Systems, Inc. and Diagnostic Imaging Inc., which
are distributors of the Company's Diagnostic products, were 17% and 12%,
respectively, of total net sales during 2001.

AngioDynamics Products
----------------------

The Company, through its wholly-owned subsidiary, AngioDynamics, designs,
develops, manufactures and markets a variety of differentiated products and
systems for the worldwide interventional radiology marketplace, which is the
practice of medicine using both traditional and new imaging procedures to
perform minimally invasive diagnostic and therapeutic surgical procedures.

The Company believes that the interventional radiology market is growing
dramatically. This is due, in large part, to the less invasive aspects of
interventional radiology procedures, as compared to open surgical procedures,
which result in a reduction in the overall cost of medical care while providing
important patient benefits. Interventional radiology procedures are often
performed on an out-patient basis, thereby requiring fewer hospital support
services. These procedures, even when performed on an in-patient basis,
generally require a shorter hospital stay than do more traditional surgical
procedures. Interventional radiology procedures also typically can have reduced
risk and trauma, are less complex, have fewer and less serious complications,
can often be performed earlier in the stage of a disease, and frequently result
in less costly and more definitive therapy than do more traditional surgical
procedures. The Company expects the number of interventional radiology
procedures performed to increase as these procedures gain wider acceptance, as
more physicians become trained in less invasive medical specialties, and as
these procedures become more widely performed in community hospitals as well as
in major medical centers. Improvements in imaging and device technology should
further expand the application of interventional radiology procedures.

Angiographic Products

Angiographic products include diagnostic catheters, fluid management
products and CO2Ject(TM), a proprietary angiographic system that uses carbon
dioxide ("CO2") instead of standard iodinated contrast media. These products are
used during procedures known as "angiograms" and "venograms", which provide
images of the human peripheral vasculature and blood flow.

The Company manufactures three lines of angiographic catheters,
Soft-Vu(TM), Memory-Vu(TM), and ANGIOPTIC(TM), suitable for diagnosing the
peripheral human vascular system. These catheters are available in over 500 tip
configurations and lengths, either as standard catalogue items or made to order
through the Company's customization program. The Company's lines of angiographic
catheters are cleared for sale in the U.S., the European community, Japan and
elsewhere throughout the world.


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The market leading, proprietary Soft-Vu/Memory-Vu catheter technology
incorporates a soft, atraumatic tip that is attached to a more rigid shaft. In
addition to being soft, the catheter tips are also easily visualized under
fluoroscopy. The Company believes this soft tipped catheter technology offers
the physician a safe diagnostic catheter with less propensity to perforate or
lacerate an artery or vein.

The Company's ANGIOPTIC catheter line is distinguished from other catheters
because the entire catheter is highly visible under fluoroscopy. The catheter is
constructed using a proprietary triple-layer extrusion technology.

The Company manufactures several lines of products used to administer
fluids and contain the blood and other biological wastes produced during an
interventional radiology procedure. These products are designed to meet the
concern about HIV and hepatitis. The AngioFill(TM) product line controls
airborne blood borne pathogens by aspirating a catheter and injecting the blood
into an appropriate receptacle. The AngioFill systems also have fluid lines that
connect to saline and contrast media bottles. In use, physicians aspirate the
catheter with a syringe and release the contents in the AngioFill bag. While the
syringe is still connected to the AngioFill, the physician draws fresh saline or
contrast media to flush the catheter. The patented Pulse-Vu Needle(TM) controls
airborne blood borne pathogens and the spurting blood flow normally encountered
in a femoral arterial puncture. The needle has a thin diaphragm to divert the
pressurized column of blood into a clear, flexible side arm tube, thus
preventing the blood from entering the clinical environment. The special
diaphragm has a slit that allows easy passage of a guidewire through the needle
hub and needle lumen and into the lumen of the artery. The Company has secured
patents on its bloodless needle technology. All of the Company's fluid
management products are cleared for sale in the U.S., the European community,
Japan and elsewhere throughout the world.

The CO2Ject is comprised of CO2 contrast, an automated injector, a CO2
connection set, a diagnostic catheter and an angioplasty balloon catheter. Since
a normal function of the human vasculature and blood flow system is the transfer
and expulsion of CO2 through the respiratory system, the Company believes that
CO2 provides a higher degree of safety than iodinated contrast media, which can
cause severe allergic reactions in certain patients. The Company also believes
that CO2 is more cost effective and provides better images than iodinated
contrast media. Currently, the CO2Ject is being sold in Europe, South America,
Australia and Asia. To date, there is no automated CO2 system that has received
U.S. Food and Drug Administration ("FDA") clearance for sale in the U.S. The
Company does not intend to apply for FDA clearance for the CO2Ject.

Image-Guided Vascular Access Products

The Company's image-guided vascular access ("IGVA") products are marketed
under the AVA(TM) trade name and include the Schon catheter, the Schon XL
catheter, peripherally inserted central catheters ("PICC's"), implanted
medication ports ("Port's") and central venous catheters.

The AVA(TM) trade name stands for "AngioDynamics Vascular Access" and is
the Company's banner for an initiative into the market for IGVA. Precise
placement of vascular access devices has become a significant part of the
practice of interventional radiology primarily due to the mastery of high
quality imaging equipment including fluoroscopy and ultrasound. These devices
are used to provide a dialysis conduit, and to deliver nutrition, antibiotics
and chemotherapy drugs. Mixing these fluids in a high blood flow near the heart
reduces damage to the venous system and more rapidly distributes these drugs
through the body. The Company believes IGVA is the most rapidly growing
procedure that is performed by interventional radiologists.


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Thrombolytic Products

The Company's proprietary thrombolytic product line is marketed under the
names Pulse*Spray(R) and UNI*FUSE(TM) which are used to dissolve blood clots in
hemodialysis access grafts, arteries and veins. Pulse*Spray and UNI*FUSE Sets
include PRO(TM) Infusion Catheters, occluding wires, check valves, and syringes.
The Pulse*Spray and UNI*FUSE Sets optimize the delivery of lytic agent (the drug
that actually dissolves the clot) by providing a controlled, forceful, uniform
dispersion. This improvement has been clinically shown to reduce the amount of
lytic agent and the time necessary for the procedure by a factor of three. This
represents significant cost savings for the hospital, the patient, and the
healthcare system, while reducing the complications associated with the use of
larger volumes of lytic agent. The Pulse*Spray and UNI*FUSE Sets are cleared for
sale in the U.S., the European community, Japan and elsewhere throughout the
world.

The Pulse*Spray Injector is designed to be used in conjunction with
AngioDynamics' other thrombolytic products. This automated injector replaces
hand pressure as an injection mechanism and improves the consistency and
efficiency of the delivery of lytic agents through various Pulse*Spray and
UNI*FUSE Sets, as well as PRO Infusion Catheters. It allows the user to deliver
a wide range of infusion volumes and times and utilizes state-of-the-art
computer technology with a touch screen program to store up to 20
customer-specified programs.

The Pulse*Spray Injector is cleared for sale in the U.S., the European
community and elsewhere throughout the world. The Company believes that the
Pulse*Spray Injector provides the first viable treatment for dissolving deep
vein clots ("DVT's") in a wide patient population. Clinical experience with the
Pulse*Spray Injector indicates a significant reduction in the amount of
thrombolytic drugs and time required to resolve thrombosed deep veins in the
legs.

Angioplasty Products

In 2000, the Company introduced a new percutaneous transluminal angioplasty
("PTA") balloon catheter, the Workhorse(TM). This high-pressure balloon is
positioned to perform nearly 80% of all PTA procedures at a very economical
price. The product is offered in 54 configurations. The product is cleared for
sale in the U.S., the European community and elsewhere throughout the world. The
Company continues to pursue sales and marketing efforts.

Stents

Stents are used to hold open passageways in the body that may have closed
or become obstructed as a result of aging, disease, or trauma. Stents are
increasingly being used as an alternative to or adjunct to surgical and
minimally invasive procedures and drug therapies, which reduce procedure time,
patient trauma, hospitalization and recovery time.

The Company's patented stents for biliary and peripheral vascular use, the
VISTAFLEX(TM) and OMNIFLEX(TM), incorporate a platinum linked-looped design. The
VISTAFLEX and OMNIFLEX stents are constructed from a single strand of platinum
alloy wire that is precision formed. The Company believes that this design
provides more consistent vessel support and radial force than other stent
designs, as well as more visibility, flexibility, and easier delivery than
competitive stents. The Company believes that its use of platinum imparts better
hemocompatibility and long-term biocompatibility than stainless steel stent
designs. The stent is also unique in that it can be easily imaged using MRI,
thus permitting the use of non-


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invasive MRI to follow patients progress with the stents in place of the more
invasive fluoroscopic imaging that other stents require.

The VISTAFLEX and OMNIFLEX stents for the treatment of biliary stricture
are cleared for sale in the U.S. Biliary stricture, a condition common among
hepatic and pancreatic cancer patients, is a narrowing of the bile duct as a
result of tumor ingrowth. The VISTAFLEX and OMNIFLEX are marketed
internationally for peripheral vascular and biliary stricture applications. The
VISTAFLEX and OMNIFLEX for peripheral vascular applications have not yet been
cleared for sale in the U.S. The Company intends to submit a premarket approval
("PMA") application to obtain marketing clearance from the FDA for peripheral
vascular applications, but there can be no assurance that such clearance will be
obtained.

Drainage Products

The Company markets a line of fluid drainage catheters, trade named
Abscession(TM). These catheters are intended to drain abscesses, chest fluid,
pancreatitis fluid, and urine percutaneously from the body. This product line
features a soft catheter material that is intended to be more comfortable for
the patient. The catheter material also recovers its shape if bent or severely
deformed; these events are common as patients roll over and kink the catheters
during sleep. Drainage procedures are routinely performed by interventional
radiologists using fluoroscopy, CT or ultrasound guidance.

Coronary Products

The Company made a strategic decision to exit the market for coronary
products in order to focus entirely on the interventional radiology marketplace.
This decision culminated in the sale, on July 27, 2000, of AngioDynamics Ltd.,
the Irish subsidiary that manufactured the Company's coronary products.

Marketing
---------

The Company believes that the success of its barium sulfate products is
primarily due to its ability to create contrast systems with specific,
sophisticated barium formulations for varying radiologic needs. E-Z-EM continues
to develop new barium sulfate products, including products for CT-scanning and
MRI procedures.

E-Z-EM's contrast systems, laxatives, syringes and radiological medical
devices, such as biopsy needles and trays, are marketed to radiologists and
hospitals in the U.S. through approximately 150 distributors, supported by 38
E-Z-EM sales people, many of whom have had technical training as X-ray
technicians. The Company also advertises in medical journals and displays at
most national and international radiology conventions.

Outside the U.S., the Company's Diagnostic products are also marketed
through 152 distributors, including wholly-owned subsidiaries in Canada, the
United Kingdom, Japan and Holland. Significant sales are made in Canada, the
United Kingdom, Japan, Italy, Holland, Sweden, Germany, Australia and Austria.
Foreign distributors are generally granted exclusive distribution rights and
some hold governmental product registrations in their names. New registrations
are currently being filed in the Company's name where permissible by applicable
law.

The Company's AngioDynamics products are marketed to interventional
radiologists. Domestic sales are supported by 27 direct sales employees, while
the international marketing effort is conducted through 51 distributors,
including three wholly-owned subsidiaries. Foreign distributors are generally
granted exclusive distribution rights on a country-by-country basis.


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Competition
-----------

Based upon sales, E-Z-EM contrast systems are the most widely used
diagnostic imaging products of their kind in the U.S., Canada and certain
European countries. The Company faces competition domestically from Mallinckrodt
Inc., a wholly-owned subsidiary of Tyco International Ltd., as well as from
small U.S. competitors, and it also faces competition outside of the U.S. The
Company competes primarily on the basis of product quality, customer service,
the availability of a full line of barium sulfate formulations tailored to user
needs, and price.

Radiologic procedures for which the Company supplies products complement,
as well as compete with, endoscopic procedures such as colonoscopy and
endoscopy. Such examinations involve visual inspection of the G.I. tract through
the use of a flexible fiber optic instrument inserted into the patient by a
gastroenterologist. The use of gastroenterology procedures has been growing in
both upper and lower G.I. examinations as patients have been increasingly
referred to gastroenterologists rather than radiologists. Also, the availability
of drugs which successfully treat ulcers and other gastrointestinal disorders
has tended to reduce the need for upper G.I. tract examinations. In January
1998, Medicare began reimbursing for colorectal cancer screening utilizing G.I.
examinations, as well as other procedures.

The major non-contrast systems market that the Company competes in is the
medical device radiology market, which is highly competitive. No single company,
domestic or foreign, competes with the Company across all of its non-contrast
system product lines. In electromechanical injectors and syringes, the Company's
main competitors are Schering AG and Mallinckrodt Inc. In needles and trays, the
Company competes with C.R. Bard, Inc., Baxter Healthcare Corporation, Sherwood
Medical Co. and various other competitors. The Company also encounters
competition in the marketing of its other non-contrast systems products.

The Company competes in the AngioDynamics products segment on the basis of
product quality, product innovation, sales, marketing and service effectiveness,
and price. There are many large companies, with significantly greater financial,
manufacturing, marketing, distribution and technical resources than the Company,
focusing on these markets. Those Company products that the FDA has already
cleared and those Company products that in the future receive FDA clearance will
have to compete vigorously for market acceptance and market share.

Cook, Inc., Boston Scientific Corporation, Johnson & Johnson Interventional
System, Co., C.R. Bard, Inc., Medtronic, Inc. and Guidant Corporation, among
others, currently compete against the Company in the development, production and
marketing of stents and stent technology.

The Company's stent technology also competes against more traditional
treatments. For example, the medical indications that can be treated by stents
can also be treated by surgery, drugs, or other medical devices, many of which
are widely accepted in the medical community.

Within the contrast media market, the Company's CO2Ject system competes
with a product offered by Daum GmbH. The Company also competes with companies
marketing iodinated contrast agents. These companies include Nycomed Inc.,
Bracco s.p.a., Schering AG and Mallinckrodt Inc.

In the market for angiographic catheters, the Company's major competitors
are Cook, Inc. and Johnson & Johnson Interventional System, Co.

The competitive situation in the market for thrombolytic products is
complex. The first level of competition is the medical profession, where each
physician can decide if an artery or graft will be cleared surgically or by


-12-



thrombolysis. If thrombolysis is used, the second level of competition is for
the specific type of catheter or wire that will be used. The Company's primary
competitors in this market are Boston Scientific Corporation, Micro
Therapeutics, Inc., Cook, Inc. and Arrow International.

The Company believes that it is perceived as a market leader in the market
for blood containment products, where its primary competition comes from Arrow
International and Becton-Dickinson. The market for fluid management systems is
extremely competitive, with the Company's products being similar to products
from Boston Scientific Corporation, Merit, Burron Medical, DeRoyal, Biocore,
Advanced Medical Design, and Furon, Inc. These products are non-patient contact
and, therefore, the barriers to entry, such as regulatory clearance, potential
liability, and the need for technical sophistication, are not significant.

Research and Development
------------------------

In addition to its technical staff, which consists of a Medical Director
and 40 employees, the Company has consulting arrangements with various
physicians who assist through their independent research and product
development. Research and development expenditures totaled $5,391,000, or 5% of
net sales, in 2001, as compared to $4,880,000, or 4% of net sales, in 2000 and
$4,847,000, or 4% of net sales, in 1999. The Company is committed to expansion
of its product lines through research and development.

Raw Materials and Supplies
--------------------------

Most of the barium sulfate for contrast systems is supplied by a number of
European and U.S. manufacturers, with a minor portion being supplied by E-Z-EM
Canada, which operates a barium sulfate mine and processing facility in Nova
Scotia and whose reserves are anticipated to last a minimum of five years at
current usage rates. The Company believes that these sources should be adequate
for its foreseeable needs.

The Company has generally been able to obtain adequate supplies of all
components for its AngioDynamics business in a timely manner from existing
sources. However, the inability to develop alternative sources, if required, or
a reduction or interruption in supply, or a significant increase in the price of
components, could adversely affect operations.

Patents and Trademarks
----------------------

Although several products and processes are patented and the Company
considers its trademarks to be a valuable marketing tool, the Company does not
consider any single patent, group of patents, or trademarks to be materially
important to its Diagnostic business segment. E-Z-EM and AngioDynamics are
examples of the Company's registered trademarks in the U.S.

The Company believes that success in the AngioDynamics products segment is
dependent, to a large extent, on patent protection and the proprietary nature of
its technology. The Company intends to file and prosecute patent applications
for technology for which it believes patent protection is effective and
advisable. The Company believes that issued patents covering Soft-Vu
angiographic catheters, thrombolytic products and VISTAFLEX are significant to
its AngioDynamics business.

Because patent applications, in general, are secret until eighteen months
after filing in the U.S. or corresponding applications are published in foreign
countries, and because publication of discoveries in the scientific or patent
literature often lags behind actual discoveries, the Company cannot be certain
that it was the first to make the inventions covered by each of its pending
patent applications, or that it was the first to file patent applications for


-13-



such inventions. The Company also relies on trade secret protection and
confidentiality agreements for certain unpatented aspects of its proprietary
technology.

Regulation
----------

The Company's products are registered with the FDA and with similar
regulatory agencies in foreign countries where they are sold. The Company
believes it is in compliance, in all material respects, with applicable
regulations of these agencies.

Certain of the Company's products are subject to FDA regulation as medical
devices and certain other products, such as various contrast systems products
and CO2Ject, are regulated as pharmaceuticals. Outside of the U.S., the
regulatory process and categorization of products vary on a country-by-country
basis.

The Company's products are covered by Medicare, Medicaid and private
healthcare insurers, subject to patient eligibility. Changes in the
reimbursement policies and procedures of such insurers may affect the frequency
with which such procedures are performed.

The Company operates several facilities within a broad industrial area
located in Nassau County, New York, which has been designated by New York State
as a Superfund site. This industrial area has been listed as an inactive
hazardous waste site, due to ground water investigations conducted on Long
Island during the 1980's. Due to the broad area of the designated site, the
potential number of responsible parties, and the lack of information concerning
the degree of contamination and potential clean-up costs, it is not possible to
estimate what, if any, liability exists with respect to the Company. Further, it
has not been alleged that the Company contributed to the contamination, and it
is the Company's belief that it has not done so.

Employees
---------

The Company employs 896 persons, 190 of whom are covered by various
collective bargaining agreements. Collective bargaining agreements covering 80
and 106 employees expire in December 2002 and December 2004, respectively. The
Company considers employee relations to be satisfactory.

(d) Financial Information Regarding Foreign and Domestic Operations and Export
---------------------------------------------------------------------------
Sales
-----

The Company derived about 31% of its sales from customers outside the U.S.
during 2001. Operating profit margins on export sales are somewhat lower than
domestic sales margins. The Company's domestic operations bill third party
export sales in U.S. dollars and, therefore, do not incur foreign currency
transaction gains or losses. Third party sales to Canadian customers, which are
made by E-Z-EM Canada, are billed in local currency. Third party sales to
Japanese customers, which are made by the Company's Japanese subsidiary, are
also billed in local currency.

The Company employs 318 persons involved in the developing, manufacturing
and marketing of products internationally. The Company's product lines are
marketed through approximately 184 foreign distributors to 82 countries outside
of the U.S.

The net sales of each geographic area and the long-lived assets
attributable to each geographic area are set forth in Note O to the Consolidated
Financial Statements included herein.


-14-



Item 2. Properties
----------

The Company's principal manufacturing facilities and executive offices are
located in Westbury, New York. They consist of three buildings, one of which is
owned by the Company, containing an aggregate of 183,800 square feet used for
manufacturing Diagnostic products, warehousing and administration. One of the
Westbury facilities is leased to the Company by various lessors, including
certain related parties. See "Certain Relationships and Related Transactions".
AngioDynamics occupies manufacturing and warehousing facilities located in
Queensbury, New York consisting of two buildings, one of which is owned by the
Company, containing an aggregate of 29,312 square feet. E-Z-EM Caribe owns a
38,600 square-foot plant in San Lorenzo, Puerto Rico which fabricates enema tips
and heat-sealed products. E-Z-EM Canada occupies manufacturing and warehousing
facilities located in Montreal, Canada consisting of two buildings, one of which
is owned by the Company, containing an aggregate of 109,950 square feet. E-Z-EM
Canada also leases a 29,120 square-foot building in Debert, Nova Scotia and both
owns and leases land encompassing its barium sulfate mining operation.


Item 3. Legal Proceedings
-----------------

The Company is presently involved in various claims, legal actions and
complaints arising in the ordinary course of business. The Company believes such
matters are either without merit, or involve such amounts that unfavorable
disposition would not have a material adverse effect on the Company's financial
position and results of operations.


Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------

None.


-15-



Part II
-------


Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
---------------------------------------------------------------------

E-Z-EM, Inc. Class A and Class B Common Stock is traded on the American
Stock Exchange ("AMEX") under the symbols "EZM.A" and "EZM.B", respectively. The
following table sets forth, for the periods indicated, the high and low sale
prices for the Class A and Class B Common Stock as reported by the AMEX.

Class A Class B
------------- -------------
High Low High Low
------ ----- ------ -----

Fifty-two weeks ended June 2, 2001
----------------------------------

First Quarter..................... $8.00 $6.00 $7.38 $5.75
Second Quarter.................... 8.13 6.13 7.88 6.25
Third Quarter..................... 6.25 5.25 6.25 4.75
Fourth Quarter.................... 5.69 5.10 5.70 4.00

Fifty-three weeks ended June 3, 2000
------------------------------------

First Quarter..................... $ 6.13 $5.19 $ 6.25 $4.88
Second Quarter.................... 5.75 4.13 5.50 4.38
Third Quarter..................... 10.63 5.75 10.88 5.50
Fourth Quarter.................... 10.13 6.63 10.00 6.50

As of August 3, 2001 there were 166 and 304 record holders of the Company's
Class A and Class B Common Stock, respectively.

During fiscal 2001, 2000 and 1999, no dividends were declared. The Company
will continue to evaluate its dividend policy on an ongoing basis. Any future
dividends are subject to the Board of Directors' review of operations and
financial and other conditions then prevailing.

On November 1, 2000, the Company issued 1,000 shares of non-voting Class B
Common Stock to each of the following directors of the Company in consideration
for services rendered as directors: Michael A. Davis, Paul S. Echenberg, James
L. Katz, Donald A. Meyer, David P. Meyers and Robert M. Topol. All such shares
were issued pursuant to Section 4(2) of the Securities Act of 1933. The basis
upon which the exemption is claimed is that the issued shares were made only to
directors of the Company.


-16-



Item 6. Selected Financial Data
-----------------------





Fifty-two Fifty-three Fifty-two weeks ended
weeks ended weeks ended ---------------------------------
June 2, June 3, May 29, May 30, May 31,
2001 2000 1999 1998# 1997
------ ------ ------ ------ ------
(in thousands, except per share data)


Income statement data:
Net sales (1)........... $113,286 $113,868 $109,054 $104,652 $98,770
Gross profit (1)........ 45,692 47,805 42,677 35,042 34,257
Operating profit (loss). 3,525 8,599 7,242 (5,351) (4,911)
Earnings (loss) before
income taxes.......... 3,637 9,234 6,671 (5,534) (4,530)
Net earnings (loss)..... 3,286 5,965 4,797 (5,967) (3,208)
Earnings (loss) per
common share
Basic (2)........... .33 .60 .48 (.60) (.33)
Diluted (2)......... .32 .58 .47 (.60) (.33)
Weighted average common
shares
Basic (2)........... 9,881 10,013 10,077 9,952 9,871
Diluted (2)......... 10,145 10,314 10,314 9,952 9,871



June 2, June 3, May 29, May 30, May 31,
2001 2000 1999 1998 1997
------ ------ ------ ------ ------
(in thousands)


Balance sheet data:
Working capital......... $56,184 $51,434 $48,430 $41,597 $43,115
Cash, certificates of
deposit and short-
term debt and equity
securities............ 18,139 13,634 13,289 8,129 15,475
Total assets............ 97,455 99,085 96,059 90,706 100,720
Long-term debt, less
current maturities.... 408 453 477 606 842
Stockholders' equity.... 81,004 80,034 75,291 71,223 77,244


- ----------------

# Includes the impairment charge of $4,121,000 relating to certain long-lived
assets pertaining to the acquisition of Leocor, Inc., a wholly-owned
subsidiary of AngioDynamics, Inc.

(1) Retroactively restated to reflect the reclassifications of freight billed
to customers and related freight costs described in Note A.

(2) Retroactively restated to reflect the total shares issued after the 3%
stock dividends declared in 1998 and 1997.


-17-



Item 7. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------

The Company's fiscal year ended June 2, 2001 represents fifty-two weeks,
the fiscal year ended June 3, 2000 represents fifty-three weeks and the fiscal
year ended May 29, 1999 represents fifty-two weeks.

Results of Operations
- ---------------------

Segment Overview
----------------

The Company operates in two industry segments: Diagnostic products and
AngioDynamics products. The Diagnostic products operating segment encompasses
both contrast systems, consisting of barium sulfate formulations and related
medical devices used in X-ray, CT-scanning, ultrasound and MRI imaging
examinations, and non-contrast systems, including the electromechanical injector
line, radiological medical devices, custom contract pharmaceuticals,
gastrointestinal cleansing laxatives, and immunoassay tests. Contrast systems,
which constitute the Company's core business and the majority of the Diagnostic
products segment, accounted for 54% of net sales for 2001, as compared to 58%
for 2000 and 56% for 1999. Non-contrast system sales accounted for 26% of net
sales for 2001, as compared to 24% for 2000 and 25% for 1999. The AngioDynamics
products operating segment, which includes angiographic products, image-guided
vascular access products, thrombolytic products, angioplasty products, stents,
and drainage products used in the interventional radiology marketplace,
accounted for 20% of net sales for 2001, as compared to 18% for 2000 and 19% for
1999.



Diagnostic AngioDynamics Eliminations Total
---------- ------------- ------------ -----
(in thousands)


Fifty-two weeks ended June 2, 2001
- ----------------------------------

Unaffiliated customer sales $90,610 $22,676 - $113,286
Intersegment sales 1 714 ($715) -
Gross profit (loss) 34,770 10,972 (50) 45,692
Operating profit (loss) 3,865 (290) (50) 3,525

Fifty-three weeks ended June 3, 2000
- ------------------------------------

Unaffiliated customer sales $93,162 $20,706 - $113,868
Intersegment sales 2 1,063 ($1,065) -
Gross profit 37,896 9,858 51 47,805
Operating profit (loss) 9,285 (739) 53 8,599

Fifty-two weeks ended May 29, 1999
- ----------------------------------

Unaffiliated customer sales $88,086 $20,968 - $109,054
Intersegment sales 36 503 ($539) -
Gross profit (loss) 33,656 9,046 (25) 42,677
Operating profit (loss) 8,237 (990) (5) 7,242


Diagnostic Products
-------------------

Diagnostic segment operating results for 2001 declined by $5,420,000 due to
decreased sales and gross profit and increased operating expenses. Net sales
decreased 3%, or $2,552,000, due to lower sales of contrast systems of
$4,543,000, partially offset by increased sales of non-contrast systems of
$1,991,000. The lower sales of contrast systems were due, in part, to the
strength of the U.S. dollar and foreign currency exchange rate fluctuations,
which adversely affected the translation of European, Canadian and Japanese
sales to U.S. dollars for financial reporting purposes. Price increases
accounted for approximately 1% of net sales for 2001. Gross profit expressed as
a percentage of net sales declined to 38% for 2001, from 41% for 2000 due
primarily to


-18-



decreased production throughput and severance costs of $332,000, resulting from
operational reorganizations. Increased operating expenses of $2,294,000 were
attributable to: i) the reorganization of operations which resulted in severance
and facility relocation expenses of $554,000; ii) an impairment charge of
$450,000 relating to acquired patent rights to an oral magnetic resonance
imaging contrast agent; iii) the expansion of the domestic sales force; and iv)
increased administrative and research & development ("R&D") expenses.

Diagnostic segment operating results for 2000 improved by $1,048,000 due to
increased sales and improved gross profit, partially offset by increased
operating expenses. Net sales increased 6%, or $5,076,000, due to price
increases and increased demand for contrast systems. Price increases accounted
for approximately 4% of net sales for 2000. Gross profit expressed as a
percentage of net sales improved to 41% for 2000, from 38% for 1999 due
primarily to sales price increases. Increased operating expenses of $3,192,000
can be attributed to increased S&A expenses, resulting, in part, from investment
in new product introductions and selling and marketing initiatives.

AngioDynamics Products
----------------------

AngioDynamics segment operating results for 2001, which improved by
$449,000, were adversely affected by the sale of AngioDynamics Ltd., a wholly-
owned subsidiary, and certain other assets. AngioDynamics Ltd., located in
Ireland, manufactured cardiovascular and interventional radiology products. The
sale was the culmination of the Company's strategic decision to exit the
cardiovascular market and to focus entirely on the interventional radiology
marketplace. As a result of this sale, the Company recognized a pre-tax loss of
approximately $872,000 during 2001. The aforementioned pre-tax loss includes the
effect of previously unrealized losses on foreign currency translation of
approximately $994,000 and the write-off of approximately $673,000 in inventory
and intangibles related to the cardiovascular product line, both of which were
non-cash charges.

Excluding the loss on sale, AngioDynamics segment operating results
improved by $1,321,000 due to increased sales and improved gross profit. Net
sales increased 10%, or $1,970,000, due, in large part, to: increased sales of
several products introduced in 2000, namely Workhorse(TM) PTA balloon catheters,
Abscession(TM) fluid drainage catheters, and VISTAFLEX(TM) platinum biliary
stents; and sales of OMNIFLEX(TM) stents, introduced in the third quarter of
2001. International sales increased 1% despite the Company's exit from the
cardiovascular market. Gross profit expressed as a percentage of net sales
improved to 47% for 2001, as compared to 45% for 2000 due primarily to reduced
unabsorbed overhead costs, resulting from the sale of the Irish facility, and
increased production throughput at the Queensbury facility.

AngioDynamics segment operating results for 2000 improved by $251,000 due
to improved gross profit, partially offset by increased operating expenses. Net
sales decreased 1%, or $262,000, due primarily to reduced international sales of
$1,225,000, partially offset by increased domestic sales of $963,000. The
international sales decline resulted, in large part, from a decline in stent
sales. The domestic sales improvement resulted from sales of several new
products, namely Abscession fluid drainage catheters, VISTAFLEX platinum biliary
stents, and Workhorse PTA balloon catheters, introduced in the second quarter of
2000. Gross profit expressed as a percentage of net sales improved to 45% for
2000, as compared to 42% for 1999 due primarily to decreased provision for
inventory reserves of $727,000. Increased operating expenses of $561,000 were
primarily due to an expansion of the domestic sales force.

Certain financial information, including net sales, depreciation and
amortization, net earnings (loss), assets and capital expenditures attributable


-19-



to each operating segment are set forth in Note O to the Consolidated Financial
Statements included herein.

Consolidated Results of Operations
----------------------------------

The Company reported net earnings of $3,286,000, or $.33 and $.32 per
common share on a basic and diluted basis, respectively, for 2001, as compared
to net earnings of $5,965,000, or $.60 and $.58 per common share on a basic and
diluted basis, respectively, for 2000, and net earnings of $4,797,000, or $.48
and $.47 per common share on a basic and diluted basis, respectively, for 1999.
Results for 2001 were adversely affected by decreased sales and gross profit in
the Diagnostic segment and several events, totaling pre-tax charges aggregating
$2,774,000. These events consisted of: i) the reorganization of operations which
resulted in severance and facility relocation expenses of $886,000; ii) the loss
on sale of AngioDynamics Ltd. and related assets of $872,000; iii) an impairment
charge of $566,000 relating to the Company's investment in Cedara Software
Corporation; and iv) the Diagnostic asset impairment charge of $450,000. Results
for 2001 were favorably affected by the Company's reversal of a portion of its
income tax valuation allowance against certain domestic tax benefits totaling
$1,344,000, since it is now more likely than not that such benefits will be
realized.

Results for 2000 were favorably affected by increased Diagnostic sales and
improved gross profit in both operating segments, partially offset by increased
operating expenses in both operating segments.

Net sales decreased 1%, or $582,000, to $113,286,000 for 2001, and
increased 4%, or $4,814,000, to $113,868,000 for 2000. Net sales for 2001 were
adversely affected by lower sales of contrast systems of $4,543,000, partially
offset by increased sales of non-contrast systems of $1,991,000 and
AngioDynamics products of $1,970,000. The lower sales of contrast systems were
due, in part, to the strength of the U.S. dollar and foreign currency exchange
rate fluctuations, which adversely affected the translation of European,
Canadian and Japanese sales to U.S. dollars for financial reporting purposes.
Price increases accounted for approximately 1% of net sales for 2001. Net sales
for 2000 were favorably affected by increased sales of contrast systems of
$4,535,000, resulting from price increases and increased demand. Price increases
accounted for approximately 3% of net sales for 2000.

Net sales in international markets, including direct exports from the U.S.,
decreased 5%, or $1,866,000, to $35,619,000 for 2001 and increased less than 1%,
or $56,000, to $37,485,000 for 2000. The decline for 2001 was due to decreased
sales of contrast systems of $2,778,000, partially offset by increased sales of
non-contrast systems of $872,000 and AngioDynamics products of $40,000. Sales of
contrast systems were adversely impacted by: the strength of the U.S. dollar;
foreign currency exchange rate fluctuations, which adversely affected the
translation of European, Canadian and Japanese sales to U.S. dollars for
financial reporting purposes; and increased competitive pressures in Japan. The
improvement for 2000 was due to increased sales of contrast systems of
$1,638,000, mostly offset by decreased sales of AngioDynamics products of
$1,225,000 and non-contrast systems of $357,000. The decrease in sales of
AngioDynamics products was due to a decline in stent sales. The decline in sales
of non-contrast systems was attributable to decreased custom contract sales.

Gross profit expressed as a percentage of net sales was 40% for 2001, as
compared to 42% for 2000 and 39% for 1999. The decline in gross profit,
expressed as a percentage of net sales, for 2001 was due to reduced gross profit
in the Diagnostic segment, partially offset by improved gross profit in the
AngioDynamics segment. The decline in Diagnostic gross profit was due primarily
to decreased production throughput and severance costs of $332,000, resulting
from operational reorganizations. The improved AngioDynamics gross profit was


-20-



due primarily to reduced unabsorbed overhead costs, resulting from the sale of
the Irish facility, and increased production throughput at the Queensbury
facility. The improvement in gross profit, expressed as a percentage of net
sales, for 2000 was due to increased gross profit in the Diagnostic segment,
resulting from sales price increases, and increased gross profit in the
AngioDynamics segment, resulting from decreased provision for inventory reserves
of $727,000.

Selling and administrative ("S&A") expenses were $35,904,000 for 2001,
$34,326,000 for 2000 and $30,588,000 for 1999. The increase for 2001 compared to
2000 of $1,578,000, or 5%, was due to increased Diagnostic S&A expenses,
resulting from: i) the reorganization of operations which resulted in severance
and facility relocation expenses of $459,000; ii) the asset impairment charge of
$450,000; iii) the expansion of the domestic sales force; and iv) increased
administrative expenses. The increase for 2000 compared to 1999 of $3,738,000,
or 12%, was due to increased Diagnostic S&A expenses of $3,194,000, resulting,
in part, from investment in new product introductions and selling and marketing
initiatives, and increased AngioDynamics S&A expenses of $544,000, resulting
from an expansion of its domestic sales force.

R&D expenditures for 2001 totaled $5,391,000, or 5% of net sales, as
compared to $4,880,000, or 4% of net sales, for 2000 and $4,847,000, or 4% of
net sales, for 1999. The increase for 2001 compared to 2000 of $511,000 was due
primarily to redeployment of staff from other departments within the Company,
increased spending relating to contrast systems of $351,000, and severance costs
of $95,000, resulting from operational reorganizations. There were no materially
significant factors affecting the comparison of R&D expenditures between 2000
and 1999. Of the R&D expenditures for 2001, approximately 46% relate to contrast
systems, 26% to AngioDynamics projects, 18% to general regulatory costs, 4% to
immunological projects, and 6% to other projects. R&D expenditures are expected
to continue at or exceed current levels. In addition to its in-house technical
staff, the Company is presently sponsoring various independent R&D projects and
is committed to continued expansion of its product lines through R&D.

Other income, net of other expenses, totaled $112,000 of income for 2001,
compared to $635,000 of income for 2000 and $571,000 of expense for 1999. The
decline in other income for 2001 compared to 2000 was primarily due to an
impairment charge of $566,000, relating to the Company's investment in Cedara
Software Corporation, and increased foreign currency exchange losses of
$128,000, partially offset by increased interest income of $189,000, resulting
from the investment of AngioDynamics Ltd. sale proceeds. The improvement for
2000 compared to 1999 was primarily due to the write-down of the Company's
investment in ITI Medical Technologies, Inc. of $1,121,000 in 1999.

Note H to the Consolidated Financial Statements included herein details the
major elements affecting income taxes for 2001, 2000 and 1999. For 2001, the
Company's effective tax rate of 10% differed from the Federal statutory tax rate
of 34% due primarily to the fact that the Company reversed a portion of its
valuation allowance against certain domestic tax benefits, since it is more
likely than not that such benefits will be realized, partially offset by the
fact that the Company did not provide for the tax benefit on losses incurred in
certain foreign jurisdictions, since it is more likely than not that such
benefits will not be realized. For 2000, the Company's effective tax rate was
35% as compared to the Federal statutory tax rate of 34%. Losses incurred in a
foreign jurisdiction subject to lower tax rates and the fact that the Company
did not provide for the tax benefit on losses incurred in certain foreign
jurisdictions, since, at that time, it was more likely than not that such
benefits would not be realized, were virtually offset by earnings of the Puerto
Rican subsidiary, which are subject to favorable U.S. tax treatment. For 1999,
the Company's effective tax rate of 28% differed from the Federal statutory tax
rate of 34% due primarily to the fact that the Company reversed a portion of its


-21-



valuation allowance against certain domestic tax benefits since, at that time,
it was more likely than not that such benefits would be realized. The
utilization of previously unrecorded carryforward benefits and earnings of the
Puerto Rican subsidiary, which are subject to favorable U.S. tax treatment, also
favorably affected the Company's effective tax rate for 1999, but were offset by
the fact that the Company did not provide for the tax benefit on losses incurred
in certain foreign jurisdictions, since, at that time, it was more likely than
not that such benefits would not be realized.

Liquidity and Capital Resources
- -------------------------------

For 2001, capital expenditures and the purchase of treasury stock were
funded by cash provided by operations. For 2000, capital expenditures, the
purchase of treasury stock and debt repayments were funded by cash provided by
operations. For 1999, capital expenditures and debt repayments were funded by
cash provided by operations. The Company's policy has been to fund capital
requirements without incurring significant debt. At June 2, 2001, debt (notes
payable, current maturities of long-term debt and long-term debt) was $1,418,000
as compared to $1,636,000 at June 3, 2000. The Company has available $1,303,000
under a bank line of credit of which no amounts were outstanding at June 2,
2001.

At June 2, 2001, approximately 65% of the Company's assets consist of
accounts receivable, inventories, short-term debt and equity securities, and
cash and cash equivalents. The current ratio was 5.24 to 1, with net working
capital of $56,184,000, at June 2, 2001, compared to the current ratio of 4.25
to 1, with net working capital of $51,434,000, at June 3, 2000.

Net capital expenditures, primarily for machinery and equipment, were
$2,743,000 for 2001, compared to $3,206,000 for 2000 and $2,207,000 for 1999. Of
the 2001 and 2000 expenditures, approximately $833,000 and $703,000,
respectively, relates to the upgrading of the Company's information systems at
its Canadian subsidiary. No material increase in the aggregate level of capital
expenditures is currently contemplated for 2002.

In January 1999, the Board of Directors authorized the repurchase of up to
500,000 shares of the Company's Class B Common Stock at an aggregate purchase
price of up to $2,000,000. In October 1999, the Board modified the program to
include the Company's Class A Common Stock. In February 2000, the Board further
modified the program to increase the aggregate purchase price of Class A and
Class B Common Stock by an additional $2,000,000. As of June 2, 2001, the
Company had repurchased 41,860 shares of Class A Common Stock and 395,251 shares
of Class B Common Stock for approximately $3,057,000.

Forward-Looking Statements
--------------------------

This Form 10-K contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which are intended to be covered by the safe
harbors created thereby. Words such as "expects", "intends", "anticipates",
"plans", "believes", "seeks", "estimates", or variations of such words and
similar expressions are intended to identify such forward-looking statements.
Investors are cautioned that all forward-looking statements involve risks and
uncertainty, including without limitation, the ability of the Company to develop
its products, future actions by the FDA or other regulatory agencies, results of
pending or future clinical trials, as well as general market conditions,
competition and pricing. Although the Company believes that the assumptions
underlying the forward-looking statements contained herein are reasonable, any
of the assumptions could be inaccurate, and therefore, there can be no assurance
that the forward-looking statements included in this Form 10-K will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included


-22-



herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.

Effects of Recently Issued Accounting Pronouncements
----------------------------------------------------

During the fourth quarter of 2001, the Company adopted SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," and SFAS No.
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities", which amended SFAS No. 133. These standards require entities to
recognize all derivatives in their financial statements as either assets or
liabilities measured at fair value. These standards also specify new methods of
accounting for hedging transactions, prescribes the items and transactions that
may be hedged and specifies detailed criteria to be met to qualify for hedge
accounting. Since the Company does not use derivative instruments as defined by
SFAS No. 133, the adoption of this pronouncement had no effect on the Company's
results of operations or financial position.

In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible
Assets". The new standards require that all business combinations initiated
after June 30, 2001 must be accounted for under the purchase method. In
addition, all intangible assets acquired that are obtained through contractual
or legal right, or are capable of being separately sold, transferred, licensed,
rented or exchanged shall be recognized as an asset apart from goodwill.
Goodwill and intangibles with indefinite lives will no longer be subject to
amortization, but will be subject to at least an annual assessment for
impairment by applying a fair value based test. The Company will continue to
amortize goodwill and any intangibles with indefinite lives existing at June 2,
2001 under its current method until June 2, 2002, the first day of the SFAS No.
142 implementation year, or will discontinue amortization in the first quarter
of fiscal 2002, if early adopted. Once adopted, annual and quarterly goodwill
and affected intangible amortization will no longer be recognized. The adoption
of these statements is not expected to have a material impact on the Company's
results of operations or financial position.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------

The Company is exposed to market risk from changes in foreign currency
exchange rates and, to a much lesser extent, interest rates on investments and
financing, which could impact results of operations and financial position. The
Company does not currently engage in hedging or other market risk management
tools. There have been no material changes with respect to market risk
previously disclosed in the 2000 Annual Report on Form 10-K.

Foreign Currency Exchange Rate Risk
-----------------------------------

The Company's international subsidiaries are denominated in currencies
other than the U.S. dollar. Since the functional currency of the Company's
international subsidiaries is the local currency, foreign currency translation
adjustments are accumulated as a component of accumulated other comprehensive
income (loss) in stockholders' equity. Assuming a hypothetical aggregate change
in the foreign currencies versus the U.S. dollar exchange rates of 10% at June
2, 2001, the Company's assets and liabilities would increase or decrease by
$2,097,000 and $548,000, respectively, and the Company's net sales and net
earnings would increase or decrease by $2,234,000 and $274,000, respectively, on
an annual basis.

The Company also maintains intercompany balances and loans receivable with
subsidiaries with different local currencies. These amounts are at risk of


-23-



foreign exchange losses if exchange rates fluctuate. Assuming a hypothetical
aggregate change in the foreign currencies versus the U.S. dollar exchange rates
of 10% at June 2, 2001, results of operations would be favorably or unfavorably
impacted by approximately $515,000 on an annual basis.

Interest Rate Risk
------------------

The Company is exposed to interest rate change market risk with respect to
its investments in tax-free municipal bonds in the amount of $13,700,000. The
bonds bear interest at a floating rate established weekly. For 2001, the after-
tax interest rate on the bonds approximated 4.1%. Each 100 basis point (1%)
fluctuation in interest rates will increase or decrease interest income on the
bonds by approximately $137,000 on an annual basis.

As the Company's principal amount of fixed interest rate financing
approximated $1,418,000 at June 2, 2001, a change in interest rates would not
materially impact results of operations or financial position. At June 2, 2001,
the Company did not maintain any variable interest rate financing.


Item 8. Financial Statements and Supplementary Data
-------------------------------------------

Financial statements and supplementary data required by Part II, Item 8 are
included in Part IV of this form as indexed at Item 14 (a) 1.


Item 9. Changes in and Disagreements with Accountants on Accounting and
-----------------------------------------------------------------------
Financial Disclosure
--------------------

None.



-24-



Part III
--------


Certain information required by Part III is omitted from this Annual Report
on Form 10-K because the Company will file a definitive proxy statement within
120 days after the end of its fiscal year pursuant to Regulation 14A (the "Proxy
Statement") for its Annual Meeting of Stockholders, currently scheduled for
October 30, 2001. The information included in the Proxy Statement under the
respective headings noted below is incorporated herein by reference.


Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------

The following table sets forth certain information with respect to the
Company's officers and directors.

Name Age Positions
---- --- ---------

Howard S. Stern (1)(3)... 70 Chairman of the Board, Director
Anthony A. Lombardo (3).. 54 President, Chief Executive Officer,
Director
Dennis J. Curtin......... 54 Senior Vice President - Chief Financial
Officer
Joseph J. Palma.......... 59 Senior Vice President - Sales and
Marketing
Arthur L. Zimmet......... 65 Senior Vice President - Special Projects
Sandra D. Baron.......... 49 Vice President - Human Resources
Robert M. Bloomfield..... 60 Vice President - Market Research
Craig A. Burk............ 48 Vice President - Manufacturing
Joseph A. Cacchioli...... 45 Vice President - Controller
Agustin V. Gago.......... 42 Vice President - International
Eamonn P. Hobbs.......... 48 Vice President - AngioDynamics Division
Judith K. Meritz......... 49 Vice President - Regulatory Affairs
Jeffrey S. Peacock....... 44 Vice President - Scientific and Technical
Operations
Archie B. Williams....... 50 Vice President - Clinical Affairs and
Medical Community Liaison
Michael A. Davis, M.D.... 60 Medical Director, Director
Paul S. Echenberg (1)(2). 57 Chairman of the Board of E-Z-EM Canada,
Director
James L. Katz CPA, JD.... 65 Director
(1)(2)(4)(5)
Donald A. Meyer (3)(4)... 67 Director
David P. Meyers (3)(5)... 37 Director
Robert M. Topol (1)(2)(5) 76 Director

- ----------

(1) Member of Executive Committee
(2) Member of Audit Committee
(3) Member of Nominating Committee
(4) Member of Compensation Committee
(5) Member of Finance Committee

Directors are elected for a three year term and each holds office until his
successor is elected and qualified. Officers are elected annually and serve at
the pleasure of the Board of Directors.

Mr. Stern is a co-founder of the Company and has served as Chairman of the
Board and Director of the Company since its formation in 1962. Mr. Stern has
also served as President and Chief Executive Officer of the Company from 1997 to
2000. From 1990 to 1994, Mr. Stern served as Chief Executive Officer, and from


-25-



the formation of the Company until 1990, he served as President and Chief
Executive Officer. Mr. Stern is also a director of ITI Medical Technologies,
Inc. The Company has an investment in ITI Medical Technologies, Inc.

Mr. Lombardo has served as President, Chief Executive Officer and Director
of the Company since 2000. Prior to joining the Company, he served as President
of ALI Imaging Systems, Inc. (radiology information management) from 1998 to
2000. From 1996 to 1998, Mr. Lombardo served as Global Manager of the Integrated
Imaging Systems business of General Electric Medical Systems. Mr. Lombardo is
also a director of PointDx, Inc. The Company has an investment in PointDx, Inc.

Mr. Curtin has served as Senior Vice President - Chief Financial Officer
since 1999, and previously served as Vice President - Chief Financial Officer
from 1985 to 1999. Mr. Curtin has been an employee of the Company since 1983.

Mr. Palma has served as Senior Vice President - Sales and Marketing since
1999, and previously served as Vice President - Sales and Marketing from 1996 to
1999, and Vice President - Sales from 1995 to 1996. Mr. Palma has been an
employee of the Company since 1994.

Mr. Zimmet has served as Senior Vice President - Special Projects since
1988, and has been an employee of the Company since 1982.

Ms. Baron has served as Vice President - Human Resources since 1995, and
has been an employee of the Company since 1985.

Mr. Bloomfield has served as Vice President - Market Research since August
2000, and has been an employee of the Company since 1985.

Mr. Burk has served as Vice President - Manufacturing since 1987.

Mr. Cacchioli has served as Vice President - Controller since 1988, and has
been an employee of the Company since 1984.

Mr. Gago has served as Vice President - International since 1997, and has
been an employee of the Company since 1979.

Mr. Hobbs has served as Vice President - AngioDynamics Division since 1991,
and has been an employee of the Company since 1988.

Ms. Meritz has served as Vice President - Regulatory Affairs since March
2001. Prior to joining the Company, she served as Director of Regulatory Affairs
and Regulatory Counsel for Henry Schein, Inc. (distributor of healthcare
supplies to office-based practitioners) from 1993 until March 2001.

Mr. Peacock has served as Vice President - Scientific and Technical
Operations since August 2000, and has been an employee of the Company since
1986.

Mr. Williams has served as Vice President - Clinical Affairs and Medical
Community Liaison since August 2000, and previously served as Vice President -
Imaging Products Management from 1993 to August 2000. Mr. Williams has been an
employee of the Company since 1980.

Dr. Davis has served as Medical Director and Director of the Company since
August 2000. Previously, he served as Medical Director/Technical Director and
Director of the Company from 1997 to August 2000, as Medical Director and
Director of the Company from 1995 to 1996, and as Medical Director from 1994 to
1995. He has been Professor of Radiology and Nuclear Medicine and Director of
the Division of Radiologic Research, University of Massachusetts Medical Center
since 1980. He also served as the President and Chief Executive Officer of
Amerimmune Pharmaceuticals, Inc. and its wholly-owned subsidiary, Amerimmune,


-26-



Inc., from February 1999 to November 1999. He is also a director of MacroChem
Corp. and Amerimmune Pharmaceuticals, Inc.

Mr. Echenberg has been a director of the Company since 1987 and has served
as Chairman of the Board of E-Z-EM Canada since 1994. He has been the President,
Chief Executive Officer and Director of Schroders & Associates Canada Inc.
(investment buy-out advisory services) and Director of Schroders Ventures Ltd.
since 1997. He is also a founder and has been a general partner and director of
Eckvest Equity Inc. (personal investment and consulting services) since 1989. He
is also a director of Lallemand Inc., Cedara Software Corp., Benvest Capital
Inc., Colliers MacAuley Nicholl, Huntington Mills (Canada) Ltd., ITI Medical
Technologies, Inc., Flexia Corp., Fib-Pak Industries Inc., Shirmax Fashions
Ltd., Med-Eng Systems Inc., MacroChem Corp., Matra Plast Industries Inc. and
A.P. Plasman Corp. The Company has investments in Cedara Software Corp. and ITI
Medical Technologies, Inc.

Mr. Katz has been a director of the Company since 1983. He is a founder of
Lakeshore Medical Fitness, LLC (owns and manages medical fitness facilities),
and has served as its Chief Executive Officer since 2000. Previously, he had
been a founder and managing director from its organization in 1995 until 2000 of
Chapman Partners LLC (investment banking). From its acquisition in 1985 until
its sale in 1994, he was the co-owner and President of Ever Ready Thermometer
Co., Inc. From 1971 until 1980 and from 1983 until 1985, he held various
executive positions with Baxter International and subsidiaries of Baxter
International, principally that of Chief Financial Officer of Baxter
International. He is also a director of Intec, Inc., Lakeshore Management Group,
LLC and Lifestart Wellness Network, LLC, as well as a member of the Board of
Advisors of Jerusalem Global and The Patterson Group.

Mr. Meyer has been a director of the Company since 1968. Since 1995, he has
acted as an independent consultant in legal matters to arts and business
organizations, specializing in technical assistance. He had been the Executive
Director of the Western States Arts Federation, Santa Fe, New Mexico, which
provides and develops regional arts programs, from 1990 to 1995. From 1958
through 1990, he was an attorney practicing in New Orleans, Louisiana.

Mr. Meyers has been a director of the Company since 1996. He is a founder
of SmartScan, LLC, an Atlanta, Georgia based provider of CT screening services
offered directly to the public, and has served as its Chief Operating Officer
since August 2001. He is also the founder of MedTest Express, Inc., an Atlanta,
Georgia based provider of contracted laboratory services for home health
agencies, and has served as its President, Chief Executive Officer and Director
since 1994.

Mr. Topol has been a director of the Company since 1982. Prior to his
retirement in 1994, he served as an Executive Vice President of Smith Barney,
Inc. (financial services). He is also a director of Fund for the Aging, City
Meals on Wheels, American Health Foundation, State University of New York -
Purchase and Redstone Resources Inc.


-27-



Item 11. Executive Compensation
----------------------

Summary Compensation Table

The following table sets forth information concerning the compensation for
services, in all capacities for 2001, 2000 and 1999, of (i) those persons who
were, during 2001, Chief Executive Officer ("CEO") (Anthony A. Lombardo), (ii)
those persons who were, at the end of 2001, each of the four most highly
compensated executive officers of the Company other than the CEO, and (iii) the
President of E-Z-EM Canada, who is not an executive officer of the Company, but
who is included in this table due to the level of his annual compensation during
2001 (collectively, the "Named Executive Officers"):



Annual Compensation Long Term Compensation
------------------------- -------------------------------------
Awards Payouts
------------------------- -------
Other Securities
Annual Restricted Underlying All Other
Name and Compensa- Stock Options LTIP Compensa-
Principal Fiscal Salary Bonus tion (1) Awards ---------------- Payouts tion (4)
Position Year ($) ($) ($) ($) # (2) # (3) ($) ($)
--------- ------ ------ ----- --------- ---------- ------- ------ ------- ---------

Howard S. Stern,........ 2001 $262,500 $11,813 None None None .2273 None $115,376
Chairman of the Board 2000 261,458 89,105 None None None .2273 None 114,754
1999 250,000 83,250 None None None .2273 None 123,363

Anthony A. Lombardo,.... 2001 $261,667 $38,125 None None None None None $ 25,467
President and Chief 2000 41,667 None None None 300,000 None None 23,459
Executive Officer
(effective April 2000)

Eamonn P. Hobbs,........ 2001 $210,000 $23,625 None None None .2273 None $ 22,384
Vice President 2000 209,166 None None None None .2273 None 21,973
1999 200,000 17,481 None None None .2273 None 8,696

Dennis J. Curtin,....... 2001 $170,917 $11,424 None None None None None $ 25,167
Senior Vice President 2000 167,333 42,308 None None None None None 24,147
1999 160,000 39,996 None None None None None 9,447

Arthur L. Zimmet,....... 2001 $173,250 $ 7,796 None None None None None $ 30,860
Senior Vice President 2000 172,563 58,809 None None None None None 29,938
1999 165,000 54,945 None None None None None 9,780

Pierre A. Ouimet,....... 2001 $175,550 $39,624 None None None None None $ 24,512
President of E-Z-EM 2000 223,844 45,344 None None None None None 22,295
Canada 1999 181,441 47,963 None None 10,000 None None 6,653
- ----------------


(1) The Company has concluded that the aggregate amount of perquisites and
other personal benefits paid to each of the Named Executive Officers for
2001, 2000 and 1999 did not exceed the lesser of 10% of such officer's
total annual salary and bonus for 2001, 2000 or 1999 or $50,000; such
amounts are, therefore, not reflected in the table.

(2) Options are exercisable in Class B Common Stock of the Company.

(3) Options are exercisable in Class B Common Stock of AngioDynamics, Inc., a
wholly-owned subsidiary of the Company.

(4) For each of the Named Executive Officers other than Mr. Ouimet, the amounts
reported include amounts contributed by the Company under its
Profit-Sharing Plan and, as matching contributions, under the companion
401(k) Plan. For 2001, 2000 and 1999, such amounts contributed were:
$7,460, $6,975 and $9,404, respectively, for Mr. Stern; $1,333, $0 and $0,
respectively, for Mr. Lombardo; $8,479, $8,208 and $8,083, respectively,
for Mr. Hobbs; $8,015, $7,107 and $8,956, respectively, for Mr. Curtin; and
$7,643, $6,838 and $9,264, respectively, for Mr. Zimmet. For Mr. Ouimet,
the amounts reported include amounts contributed by E-Z-EM Canada under a
defined contribution plan. For 2001, 2000 and 1999, such amounts
contributed were $8,778, $6,554 and $6,395, respectively.


-28-


For each of the Named Executive Officers, the amounts reported include term
life insurance premiums paid by the Company. For 2001, 2000 and 1999, such
amounts paid were: $780, $643 and $823, respectively, for Mr. Stern; $780,
$105 and $0, respectively, for Mr. Lombardo; $655, $515 and $613,
respectively, for Mr. Hobbs; $524, $412 and $491, respectively, for Mr.
Curtin; $541, $424 and $516, respectively, for Mr. Zimmet; and $247, $254
and $258, respectively, for Mr. Ouimet.

For each of the Named Executive Officers, the amounts reported include
premiums paid by the Company under split dollar life insurance arrangements
("arrangements"). With respect to one such arrangement with Mr. Stern, such
amounts paid were $100,000 for each of 2001, 2000 and 1999. Under a
collateral assignment agreement, the proceeds from this policy will first
be used to repay all advances made by the Company. If the policy is
terminated prior to the death of Mr. Stern, the Company will be entitled to
the cash surrender value of the policy at that time, and any shortfall
between that amount and the amount of the advances made by the Company will
be repaid to the Company by Mr. Stern. With respect to a second such
arrangement with Mr. Stern, such amounts paid were $7,136 for each of 2001,
2000 and 1999. Under a collateral assignment agreement, the proceeds from
this policy will first be used to repay all advances made by the Company.
With respect to arrangements with each of the Named Executive Officers
other than Mr. Stern, such amounts paid for each of 2001 and 2000 were:
$23,354 for Mr. Lombardo; $13,250 for Mr. Hobbs; $16,628 for Mr. Curtin;
$22,676 for Mr. Zimmet; and $15,487 for Mr. Ouimet. Under collateral
assignment agreements, the Company will be entitled to the lesser of the
cash surrender value of the policies or the advances it made, upon
termination of these policies.

For Mr. Stern, the amounts reported include fees of $6,000 relating to
attendance at AngioDynamics directors' meetings for 1999.


-29-


Option/SAR Grants Table

The following table sets forth certain information concerning stock
option grants made during 2001 to the Named Executive Officers. These grants are
also reflected in the Summary Compensation Table. In accordance with SEC
disclosure rules, the hypothetical gains or "option spreads" for each option
grant are shown based on compound annual rates of stock price appreciation of 5%
and 10% from the grant date to the expiration date. The assumed rates of growth
are prescribed by the SEC and are for illustrative purposes only; they are not
intended to predict future stock prices, which will depend upon market
conditions and the Company's future performance. The Company did not grant any
stock appreciation rights during 2001.



Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
- ------------------------------------------------------------------------ ---------------------------------------
Number of % of Total
Securities Options 5% 10%
Underlying Granted to Exercise ------------------ -----------------
Options Employees in or Base Stock Potential Stock Potential
Granted Fiscal Year Price Expiration Price Value Price Value
Name (#) 2001 ($/Sh) Date ($/Sh) $ ($/Sh) $
---- ---------- ----------- -------- ---------- ------ --------- ------ ---------

Howard S. Stern....... .2273 (1) 44.44 (2) $40,000(3) 6/01/11 $65,156 $5,717 $103,750 $14,489

Anthony A. Lombardo... None

Eamonn P. Hobbs....... .2273 (1) 44.44 (2) $40,000(3) 6/01/11 $65,156 $5,717 $103,750 $14,489

Dennis J. Curtin...... None

Arthur L. Zimmet...... None

Pierre A. Ouimet...... None
- ----------------


(1) Options are exercisable in Class B Common Stock of AngioDynamics, Inc., a
wholly-owned subsidiary of the Company. Options are exercisable 20% per
year over five years from the date of grant, provided a threshold event
occurs or 100% on the ninth anniversary of the grant, if no threshold event
occurs. A threshold event is the earlier of (i) fourteen months after
either an initial public offering ("IPO") or the spin off of all
AngioDynamics stock to the Company's shareholders, or (ii) two months after
the occurrence of both an IPO and the spin off of all AngioDynamics stock
to the Company's shareholders.

(2) Represents the percentage of total options granted to employees during 2001
and exercisable in Class B Common Stock of AngioDynamics, Inc.

(3) The options granted during 2001 have an exercise price not less than the
fair market value of the Class B Common Stock of AngioDynamics, Inc. on the
date of grant, and expire in ten years. A total of 136.36 shares of
AngioDynamics Class B Common Stock may be issued under this plan.


-30-


Aggregated Option Exercises and Fiscal Year-End Option Value Table

The following table sets forth certain information concerning all exercises
of stock options during 2001 by the Named Executive Officers and the fiscal
year-end value of unexercised stock options on an aggregated basis:



Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
June 2, 2001 June 2, 2001
(#) ($) (1)
------------- -------------
Shares Value Exercisable/ Exercisable/
Acquired on Realized Unexercisable Unexercisable
Name Exercise (#) ($) (2) (2)
---- ------------ --------- ------------- -------------

Howard S. Stern..... None None 78,786/ $77,185/
None None

Anthony A. Lombardo. None None 75,000/ None/
225,000 None

Eamonn P. Hobbs..... None None 39,595/ $31,977/
None None

Dennis J. Curtin.... None None 50,556/ $47,696/
None None

Arthur L. Zimmet.... None None 50,884/ $41,901/
None None

Pierre A. Ouimet.... None None 38,240 $24,214/
None None
- ----------------


(1) Options are "in-the-money" if on June 2, 2001, the market price of the
stock exceeded the exercise price of such options. At June 2, 2001, the
closing price of the Company's Class A and Class B Common Stock was $5.30
and $5.20, respectively. The value of such options is calculated by
determining the difference between the aggregate market price of the stock
covered by the options on June 2, 2001 and the aggregate exercise price of
such options.

(2) Options granted prior to the Company's recapitalization on October 26, 1992
are exercisable one-half in Class A Common Stock and one-half in Class B
Common Stock. Options granted after the recapitalization are exercisable in
Class B Common Stock.

Compensation of Directors

On an annual basis, directors, who are not employees of the Company, are
entitled to the following compensation: a retainer of $15,000; a fee of $1,000
for each board meeting attended; a fee of $250 for each telephonic board meeting
attended; 1,000 shares of the Company's Class B Common Stock; and stock options
for 1,000 shares of Class B Common Stock, which vest one year from date of
grant. Directors, who serve on committees of the Company and who are not
employees of the Company, are entitled to a fee of $500 for each committee
meeting attended,


-31-


except that the chairman of a committee is entitled to a fee of $1,000 for each
committee meeting attended.

Employment Contracts

During 1994, the Company entered into an employment contract with Howard S.
Stern in his capacity as Chairman of the Board. This employment contract is for
a term of eight years at an annual compensation currently of $262,500.

During 2000, the Company entered into an employment contract with Anthony
A. Lombardo in his capacity as President and Chief Executive Officer. This
employment contract provides for annual base salary currently at $275,000. The
contract is cancellable at any time by either the Company or Mr. Lombardo, but
provides for severance pay of one years base salary in the event of termination
by the Company without cause, as defined in the contract.

Severance Arrangements

The information required by this caption is incorporated by reference to
the Company's Proxy Statement under the heading "Severance Arrangements."

Compensation and Stock Option Committee Report on Executive Compensation

The information required by this caption is incorporated by reference to
the Company's Proxy Statement under the heading "Compensation and Stock Option
Committee Report on Executive Compensation."

Common Stock Performance

The information required by this caption is incorporated by reference to
the Company's Proxy Statement under the heading "Common Stock Performance."

Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------

The following table sets forth information, as of August 3, 2001, as to
the beneficial ownership of the Company's voting Class A Common Stock by each
person known by the Company to own beneficially more than 5% of the Company's
voting Class A Common Stock:

Name and Address of Shares Percent of
Beneficial Owner Beneficially Owned Class
---------------- ------------------ -----

Howard S. Stern,.................. 956,412 23.8
Chairman of the Board,
Director
717 Main Street
Westbury, NY 11590

Betty S. Meyers,.................. 820,806 20.5
401 Emerald Street
New Orleans, LA 70124

David P. Meyers,.................. 311,551 (1) 7.8
Director
813 Springdale Road
Atlanta, GA 30306


-32-


Name and Address of Shares Percent of
Beneficial Owner Beneficially Owned Class
---------------- ------------------ -----

Jonas I. Meyers,.................. 311,551 (2) 7.8
904 Oakland Avenue
Ann Arbor, MI 48104

Stuart J. Meyers,................. 311,551 (3) 7.8
434 Bellaire Drive
New Orleans, LA 70124

Dimensional Fund Advisors, Inc.,.. 232,075 (4) 5.8
1299 Ocean Avenue
Santa Monica, CA 90401

Wellington Management Company,.... 219,258 (4) 5.5
75 State Street
Boston, MA 02109

- ----------
(1) Includes 154,801 shares in which David P. Meyers has only a remainder
interest. Betty S. Meyers holds a life estate in such shares.

(2) Includes 154,801 shares in which Jonas I. Meyers has only a remainder
interest. Betty S. Meyers holds a life estate in such shares.

(3) Includes 154,801 shares in which Stuart J. Meyers has only a remainder
interest. Betty S. Meyers holds a life estate in such shares.

(4) Information was derived from a Schedule 13G dated December 31, 2000.

The following table sets forth information, as of August 3, 2001, as to the
beneficial ownership of the Company's voting Class A and non-voting Class B
Common Stock, by (i) each of the Company's directors, (ii) each of the Company's
Named Executive Officers, and (iii) all directors and executive officers of the
Company as a group:



Class A Class B
------------------------------ -------------------------------
Shares Percent Shares Percent
Name of Beneficially of Beneficially of
Beneficial Owner Owned (1) Class Owned (2) Class
---------------- ------------ ------- ------------ -------

Howard S. Stern,........... 956,412 23.8 1,187,468 20.1
Chairman of the Board,
Director

David P. Meyers,........... 311,551(3) 7.8 606,442(4) 10.4
Director

Arthur L. Zimmet,.......... 28,750 * 90,784 1.5
Senior Vice President

Robert M. Topol,........... 24,097 * 69,739 1.2
Director

Paul S. Echenberg,......... 1,097 * 89,303 1.5
Chairman of the Board of
E-Z-EM Canada, Director



-33-




Class A Class B
------------------------------ -------------------------------
Shares Percent Shares Percent
Name of Beneficially of Beneficially of
Beneficial Owner Owned (1) Class Owned (2) Class
---------------- ------------ ------- ------------ -------

Anthony A. Lombardo,....... None * 75,000 1.3
President, Chief Executive
Officer, Director

Donald A. Meyer,........... 18,276 * 45,267 *
Director

James L. Katz,............. 1,122 * 58,569 1.0
Director

Dennis J. Curtin,.......... 1,944 * 53,236 *
Senior Vice President

Michael A. Davis, M.D.,.... None * 41,786 *
Medical Director, Director

Eamonn P. Hobbs,........... 50 * 39,604 *
Vice President

Pierre A. Ouimet,.......... 500 * 38,270 *
President of E-Z-EM Canada

All directors and executive
officers as a group (20
persons).................. 1,343,299(3) 33.5 2,586,091(4) 39.2


- ----------
* Does not exceed 1%.

(1) Includes Class A Common Stock shares issuable upon exercise of options
currently exercisable or exercisable within 60 days from August 3, 2001 as
follows: Robert M. Topol (597), Paul S. Echenberg (597), Donald A. Meyer
(597), James L. Katz (597) and all directors and executive officers as a
group (2,388).

(2) Includes Class B Common Stock shares issuable upon exercise of options
currently exercisable or exercisable within 60 days from August 3, 2001 as
follows: Howard S. Stern (78,786), David P. Meyers (3,000), Arthur L.
Zimmet (50,884), Robert M. Topol (31,847), Paul S. Echenberg (75,613),
Anthony A. Lombardo (75,000), Donald A. Meyer (19,674), James L. Katz
(53,758), Dennis J. Curtin (50,556), Michael A. Davis, M.D. (40,091),
Eamonn P. Hobbs (39,595), Pierre A. Ouimet (38,240) and all directors and
executive officers as a group (747,697).

(3) Includes 154,801 shares in which Mr. Meyers has only a remainder interest.
Betty S. Meyers, a principal shareholder, holds a life estate in such
shares.

(4) Includes 201,014 shares in which Mr. Meyers has only a remainder interest.
Betty S. Meyers, a principal shareholder, holds a life estate in such
shares. Also includes 190,035 shares owned by a partnership in which Mr.
Meyers has an interest.


-34-


Item 13. Certain Relationships and Related Transactions
----------------------------------------------

A facility of the Company located in Westbury, New York is owned 33% by
Howard S. Stern, 31% by Betty S. Meyers, a principal shareholder, 2% by other
employees of the Company and 34% by unrelated parties, which includes a 31%
owner who manages the property. Aggregate rentals, including real estate tax
payments, were $163,000 during 2001. The lease term expires in 2004.

The Company has split dollar life insurance arrangements ("arrangements")
with Howard S. Stern (including his spouse) and Betty S. Meyers (the
"insureds"). On an annual basis, the Company makes advances of approximately
$100,000 per insured toward the cost of such life insurance policies. Through
August 2000, such advances were interest bearing and payable to the Company
annually by the insureds. In August 2000, the arrangements were modified, to
conform to the Company's other split dollar life insurance arrangements, making
future advances non-interest bearing. Under collateral assignment agreements,
the proceeds from the policies will first be used to repay all advances made by
the Company. If the policies are terminated prior to the death of the insured,
the Company will be entitled to the cash surrender value of the policies at that
time, and any shortfall between that amount and the amount of the advances made
by the Company will be repaid to the Company by the insureds. At June 2, 2001,
the cash surrender value of such policies aggregated $741,000, and the aggregate
amount of advances made by the Company totaled $800,000.

The Company had an unsecured, two-year interest bearing note receivable
from Eamonn P. Hobbs, an executive officer of the Company, in the principal
amount of $320,000. Approximately $297,000 of this note receivable was satisfied
in October 1999, while the remaining portion was satisfied during June 2000.

The Company has engaged Michael A. Davis, M.D., a director of the Company,
for consulting services. Fees for such services, including fees relating to
attendance at directors' meetings, were approximately $161,000 during 2001.


-35-


Part IV
-------


Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------

Page
----

(a) l. Financial Statements
--------------------
The following consolidated financial statements and supplementary
data of Registrant and its subsidiaries required by Part II, Item 8,
are included in Part IV of this report:

Report of Independent Certified Public Accountants 39

Consolidated balance sheets - June 2, 2001 and June 3, 2000 40

Consolidated statements of earnings - fifty-two weeks
ended June 2, 2001, fifty-three weeks ended
June 3, 2000 and fifty-two weeks ended May 29, 1999 42

Consolidated statement of stockholders' equity and comprehensive
income - fifty-two weeks ended June 2, 2001,
fifty-three weeks ended June 3, 2000 and fifty-two weeks
ended May 29, 1999 43

Consolidated statements of cash flows - fifty-two weeks
ended June 2, 2001, fifty-three weeks ended June 3, 2000 and
fifty-two weeks ended May 29, 1999 44

Notes to consolidated financial statements 46

(a) 2. Financial Statement Schedules
-----------------------------

The following consolidated financial statement schedule is included in Part
IV of this report:

Schedule II - Valuation and qualifying accounts 71

All other schedules are omitted because they are not applicable, or not
required, or because the required information is included in the consolidated
financial statements or notes thereto.

(a) 3. Exhibits
--------

3(i) Certificate of Incorporation (a)

3(ii) Amended Bylaws (b)

10.1 1983 Stock Option Plan (c)

10.2 1984 Directors and Consultants Stock Option Plan (d)

10.3 Employment Agreement dated April 3, 2000 between E-Z-EM,
Inc. and Anthony A. Lombardo (e)

10.4 Income Deferral Program (f)

13 Annual report to security holders (g)


-36-


Page
----

(a) 3. Exhibits (continued)
--------------------

21 Subsidiaries of the Registrant 72

22 Proxy statement to security holders (h)

23 Consent of Independent Certified Public Accountants 73

99 Report of Independent Certified Public Accountants
Other than Principal Accountants 74
- ----------

(a) Incorporated by reference to Exhibit 3(i) of the Company's
Annual Report on Form 10-K for the fiscal year ended May 31,
1997

(b) Incorporated by reference to Exhibit 3(ii) of the Company's
Annual Report on Form 10-K for the fiscal year ended May 28,
1994 (file No. 1-11479)

(c) Incorporated by reference to Exhibit 10 of the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
February 26, 2000

(d) Incorporated by reference to Exhibit 10(b) of the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
December 2, 1995 (file No. 1-11479)

(e) Incorporated by reference to Exhibit 10(e) of the Company's
Annual Report on Form 10-K for the fiscal year ended June 3,
2000

(f) Incorporated by reference to Exhibit 10(c) of the Company's
Annual Report on Form 10-K for the fiscal year ended May 29,
1993 (file No. 1-11479)

(g) The Company intends to mail a copy of its Annual Report on
Form 10-K to its security holders. The Company's
shareholders letter will be filed on a subsequent date
together with its proxy statement to security holders.

(h) To be filed on a subsequent date

(b) 1. Reports on Form 8-K
-------------------

No reports on Form 8-K were filed for the quarter ended June 2, 2001.

Schedules other than those shown above are not submitted as the subject
matter thereof is either not required or is not present in amounts sufficient to
require submission in accordance with the instructions in Regulation S-X or the
information required is included in the Notes to Consolidated Financial
Statements.


-37-


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.


E-Z-EM, Inc.
------------------------------------
(Registrant)


Date August 31, 2001 /s/ Howard S. Stern
------------------- ------------------------------------
Howard S. Stern, Chairman of the
Board, Director

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.


Date August 31, 2001 /s/ Howard S. Stern
------------------- ------------------------------------
Howard S. Stern, Chairman of the
Board, Director


Date August 31, 2001 /s/ Anthony A. Lombardo
------------------- ------------------------------------
Anthony A. Lombardo, President,
Chief Executive Officer, Director


Date August 31, 2001 /s/ Dennis J. Curtin
------------------- ------------------------------------
Dennis J. Curtin, Senior Vice
President - Chief Financial Officer
(Principal Financial and Chief
Accounting Officer)


Date August 31, 2001 /s/ Michael A. Davis
------------------- ------------------------------------
Michael A. Davis, Director


Date August 31, 2001 /s/ Paul S. Echenberg
------------------- ------------------------------------
Paul S. Echenberg, Director


Date August 31, 2001 /s/ James L. Katz
------------------- ------------------------------------
James L. Katz, Director


Date August 31, 2001 /s/ Donald A. Meyer
------------------- ------------------------------------
Donald A. Meyer, Director


Date August 31, 2001 /s/ David P. Meyers
------------------- ------------------------------------
David P. Meyers, Director


Date August 31, 2001 /s/ Robert M. Topol
------------------- ------------------------------------
Robert M. Topol, Director


-38-


REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
E-Z-EM, Inc.

We have audited the accompanying consolidated balance sheets of E-Z-EM, Inc. and
Subsidiaries as of June 2, 2001 and June 3, 2000, and the related consolidated
statements of earnings, stockholders' equity and comprehensive income, and cash
flows for the fifty-two weeks ended June 2, 2001, fifty-three weeks ended June
3, 2000 and the fifty-two weeks ended May 29, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements of a certain subsidiary, which statements reflect
total assets constituting approximately 17% in 2001 and 2000 and net sales
constituting approximately 12% in 2001, 12% in 2000 and 11% in 1999 of the
related consolidated totals. Those statements were audited by other auditors,
whose report thereon has been furnished to us, and our opinion, insofar as it
relates to the amounts included for this subsidiary, is based solely upon the
report of the other auditors.

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

In our opinion, based on our audits and the report of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of E-Z-EM, Inc. and Subsidiaries as of June
2, 2001 and June 3, 2000, and the consolidated results of their operations and
their consolidated cash flows for the fifty-two weeks ended June 2, 2001, fifty-
three weeks ended June 3, 2000 and the fifty-two weeks ended May 29, 1999 in
conformity with accounting principles generally accepted in the United States of
America.

We have also audited the financial statement schedule listed in the Index at
Item 14(a)(2). In our opinion, this schedule presents fairly, in all material
respects, the information required to be set forth therein.



GRANT THORNTON LLP
Certified Public Accountants


Melville, New York
July 27, 2001


-39-


E-Z-EM, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
(in thousands)

June 2, June 3,
ASSETS 2001 2000
------ ------

CURRENT ASSETS
Cash and cash equivalents $ 4,391 $ 5,583
Debt and equity securities 13,748 8,051
Accounts receivable, principally
trade, net of allowance for
doubtful accounts of $661 in
2001 and $853 in 2000 23,371 22,256
Inventories 22,021 26,856
Other current assets 5,901 4,530
------- -------

Total current assets 69,432 67,276

PROPERTY, PLANT AND EQUIPMENT - AT COST,
less accumulated depreciation and
amortization 19,750 21,721

COST IN EXCESS OF FAIR VALUE OF NET ASSETS
ACQUIRED, less accumulated amortization
of $257 in 2001 and $251 in 2000 376 407

INTANGIBLE ASSETS, less accumulated
amortization of $546 in 2001 and
$959 in 2000 1,329 2,151

DEBT AND EQUITY SECURITIES 846 4,067

OTHER ASSETS 5,722 3,463
------- -------

$97,455 $99,085
======= =======

The accompanying notes are an integral part of these statements.


-40-


E-Z-EM, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)



June 2, June 3,
LIABILITIES AND STOCKHOLDERS' EQUITY 2001 2000
-------- --------

CURRENT LIABILITIES
Notes payable $ 854 $ 1,080
Current maturities of long-term debt 156 103
Accounts payable 4,798 6,384
Accrued liabilities 7,329 7,798
Accrued income taxes 111 477
-------- --------

Total current liabilities 13,248 15,842

LONG-TERM DEBT, less current maturities 408 453

OTHER NONCURRENT LIABILITIES 2,795 2,756
-------- --------

Total liabilities 16,451 19,051
-------- --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Preferred stock, par value $.10 per share -
authorized, 1,000,000 shares; issued, none
Common stock
Class A (voting), par value $.10 per share -
authorized, 6,000,000 shares; issued and
outstanding 4,011,396 shares in 2001 and 4,015,111
shares in 2000 (excluding 41,860 and 38,145 shares
held in treasury in 2001 and 2000, respectively) 401 401
Class B (non-voting), par value $.10 per
share - authorized, 10,000,000 shares;
issued and outstanding 5,843,426 shares
in 2001 and 5,909,277 shares in 2000
(excluding 395,251 and 313,748 shares held
in treasury in 2001 and 2000, respectively) 584 591
Additional paid-in capital 20,066 20,521
Retained earnings 63,138 59,852
Accumulated other comprehensive income (loss) (3,185) (1,331)
-------- --------

Total stockholders' equity 81,004 80,034
-------- --------

$ 97,455 $ 99,085
======== ========


The accompanying notes are an integral part of these statements.


-41-


E-Z-EM, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share data)



Fifty-two Fifty-three Fifty-two
weeks ended weeks ended weeks ended
June 2, June 3, May 29,
2001 2000 1999
--------- --------- ---------

Net sales $ 113,286 $ 113,868 $ 109,054

Cost of goods sold 67,594 66,063 66,377
--------- --------- ---------

Gross profit 45,692 47,805 42,677
--------- --------- ---------

Operating expenses
Selling and administrative 35,904 34,326 30,588
Loss on sale of subsidiary
and related assets 872
Research and development 5,391 4,880 4,847
--------- --------- ---------

Total operating expenses 42,167 39,206 35,435
--------- --------- ---------

Operating profit 3,525 8,599 7,242

Other income (expense)
Interest income 905 716 505
Interest expense (290) (253) (263)
Write-down of investment in affiliate (1,121)
Other, net (503) 172 308
--------- --------- ---------

Earnings before income taxes 3,637 9,234 6,671

Income tax provision 351 3,269 1,874
--------- --------- ---------

NET EARNINGS $ 3,286 $ 5,965 $ 4,797
========= ========= =========

Earnings per common share
Basic $ .33 $ .60 $ .48
========= ========= =========

Diluted $ .32 $ .58 $ .47
========= ========= =========


The accompanying notes are an integral part of these statements.


-42-


E-Z-EM, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME

Fifty-two weeks ended June 2, 2001, fifty-three weeks ended
June 3, 2000 and fifty-two weeks ended May 29, 1999
(in thousands, except share data)



Class A Class B Accumulated
common stock common stock Additional other Compre-
----------------- ----------------- paid-in Retained comprehensive hensive
Shares Amount Shares Amount capital earnings income (loss) Total income
--------- ------ --------- ------ ---------- -------- ------------- ------- ------


Balance at May 30, 1998 4,035,346 $403 5,999,073 $600 $21,643 $49,090 $ (513) $71,223
Exercise of stock options 64,704 6 267 273
Income tax benefits on
stock options exercised 38 38
Compensation related to
stock option plans 5 5
Issuance of stock 6,600 1 31 32
Purchase of treasury stock (12,100) (1) (67) (68)
Net earnings 4,797 4,797 $4,797
Unrealized holding loss on
debt and equity securities (151) (151) (151)
Foreign currency translation
adjustments (858) (858) (858)
--------- --- --------- --- ------ ------ ----- ----- -----

Comprehensive income $3,788
======

Balance at May 29, 1999 4,035,346 403 6,058,277 606 21,917 53,887 (1,522) 75,291
Exercise of stock options 17,910 2 137,373 13 807 822
Income tax benefits on
stock options exercised 119 119
Compensation related to
stock option plans 5 5
Issuance of stock 15,275 2 74 76
Purchase of treasury stock (38,145) (4) (301,648) (30) (2,401) (2,435)
Net earnings 5,965 5,965 $5,965
Unrealized holding gain on
debt and equity securities 871 871 871
Foreign currency translation
adjustments (680) (680) (680)
--------- --- --------- --- ------ ------ ----- ------ -----

Comprehensive income $6,156
======

Balance at June 3, 2000 4,015,111 401 5,909,277 591 20,521 59,852 (1,331) 80,034
Exercise of stock options 8,711 1 38 39
Income tax benefits on
stock options exercised 3 3
Compensation related to
stock option plans 5 5
Issuance of stock 6,941 1 45 46
Purchase of treasury stock (3,715) (81,503) (9) (546) (555)
Net earnings 3,286 3,286 $3,286
Unrealized holding losses on
debt and equity securities:
Arising during the year (2,215) (2,215) (2,215)
Reclassification adjustment
for losses included in
net earnings 349 349 349
Foreign currency translation
adjustments
Arising during the year (982) (982) (982)
Reclassification adjustment
for sale of investment
in a foreign entity 994 994 994
--------- --- --------- --- ------ ------ ----- ----- -----

Comprehensive income $1,432
======

Balance at June 2, 2001 4,011,396 $401 5,843,426 $584 $20,066 $63,138 $(3,185) $81,004
========= ==== ========= ==== ======= ======= ======= =======


The accompanying notes are an integral part of this statement.


-43-


E-Z-EM, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)


Fifty-two Fifty-three Fifty-two
weeks ended weeks ended weeks ended
June 2, June 3, May 29,
2001 2000 1999
-------- -------- --------


Cash flows from operating activities:
Net earnings $ 3,286 $ 5,965 $ 4,797
Adjustments to reconcile net earnings
to net cash provided by operating
activities
Depreciation and amortization 2,797 2,803 2,829
Impairment of long-lived assets 450
Impairment of equity securities 566
Provision for doubtful accounts 88 37 250
Loss on sale of subsidiary and
related assets 872
Write-down of investment in
affiliate 1,121
Loss on sale of assets 5 39
Deferred tax benefit (1,269) (40) (735)
Other non-cash items 46 75 30
Changes in operating assets and
liabilities, net of sale
Accounts receivable (1,428) (389) (806)
Inventories 3,555 118 (210)
Other current assets (1,422) (334) (251)
Other assets (701) (814) (35)
Accounts payable (1,227) (936) 1,055
Accrued liabilities (421) 62 778
Accrued income taxes (377) (360) 183
Other noncurrent liabilities 155 162 146
-------- -------- --------

Net cash provided by
operating activities 4,975 6,349 9,191
-------- -------- --------

Cash flows from investing activities:
Additions to property, plant and
equipment (2,743) (3,206) (2,207)
Proceeds from sale of subsidiary and
related assets 3,250
Proceeds from sale of assets 7 33 8
Available-for-sale securities
Purchases (97,415) (36,845) (34,061)
Proceeds from sale 91,718 34,010 32,320
-------- -------- --------

Net cash used in investing
activities (5,183) (6,008) (3,940)
-------- -------- --------

The accompanying notes are an integral part of these statements.


-44-


E-Z-EM, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)


Fifty-two Fifty-three Fifty-two
weeks ended weeks ended weeks ended
June 2, June 3, May 29,
2001 2000 1999
------- ------- -------


Cash flows from financing activities:
Repayments of debt $(3,878) $(1,100) $(2,670)
Proceeds from issuance of debt 3,807 26 1,072
Proceeds from exercise of stock
options, including related income
tax benefits 42 941 311
Purchase of treasury stock (555) (2,435) (68)
Proceeds from issuance of stock in
connection with the stock purchase
plan 5 6 7
------- ------- -------

Net cash used in financing
activities (579) (2,562) (1,348)
------- ------- -------

Effect of exchange rate changes on
cash and cash equivalents (405) (269) (484)
------- ------- -------

(DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (1,192) (2,490) 3,419

Cash and cash equivalents
Beginning of year 5,583 8,073 4,654
------- ------- -------

End of year $ 4,391 $ 5,583 $ 8,073
======= ======= =======

Supplemental disclosures of cash flow
information:
Cash paid during the year for:
Interest $ 184 $ 95 $ 154
======= ======= =======

Income taxes (net of $7, $16
and $218 in refunds in 2001,
2000 and 1999, respectively) $ 2,618 $ 3,577 $ 2,153
======= ======= =======

The accompanying notes are an integral part of these statements.


-45-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The summary of significant accounting policies is presented to assist the
reader in understanding and evaluating the consolidated financial
statements. These policies are in conformity with accounting principles
generally accepted in the United States of America, and have been applied
consistently in all material respects.

Nature of Business
------------------

The Company is primarily engaged in developing, manufacturing and marketing
diagnostic products used by radiologists and other physicians during
image-assisted procedures to detect anatomic abnormalities and diseases. The
Company also designs, develops, manufactures and markets, through its
wholly-owned subsidiary, AngioDynamics, Inc. ("AngioDynamics"), a variety of
therapeutic and diagnostic products, for use principally in the diagnosis
and treatment of peripheral vascular disease (see Note O).

Basis of Consolidation
----------------------

The consolidated financial statements include the accounts of E-Z-EM, Inc.
and all 100%-owned subsidiaries (the "Company"). All significant
intercompany balances and transactions have been eliminated. Through 1999,
the Company's approximate 23% interest in an affiliate was accounted for by
the equity method. Pursuant to this method, such investment was recorded at
cost and adjusted by the Company's share of undistributed earnings (or
losses) (see Note D).

Operations outside the U.S. are included in the consolidated financial
statements and consist of: a subsidiary operating a mining and chemical
processing operation in Nova Scotia, Canada and a manufacturing and
marketing facility in Montreal, Canada; a subsidiary manufacturing products
located in Puerto Rico; a subsidiary manufacturing and marketing products
located in Japan; a subsidiary promoting and distributing products located
in Holland; a subsidiary promoting and distributing products located in the
United Kingdom.

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

The Company reports on a fiscal year which concludes on the Saturday nearest
to May 31. Fiscal year 2001 ended on June 2, 2001 for a reporting period of
fifty-two weeks, fiscal year 2000 ended on June 3, 2000 for a reporting
period of fifty-three weeks and fiscal year 1999 ended on May 29, 1999 for a
reporting period of fifty-two weeks.


-46-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash and Cash Equivalents
-------------------------

The Company considers all unrestricted highly liquid investments purchased
with a maturity of less than three months to be cash equivalents. Included
in cash equivalents are Eurodollar investments and certificates of deposit
of $3,281,000 and $4,575,000 at June 2, 2001 and June 3, 2000, respectively.
The carrying amount of these financial instruments reasonably approximates
fair value because of their short maturity. Foreign-denominated cash and
cash equivalents aggregated $1,123,000 and $1,960,000 at June 2, 2001 and
June 3, 2000, respectively.

Debt and Equity Securities
--------------------------

Debt and equity securities are classified as "available-for-sale securities"
and reported at fair value, with unrealized gains and losses excluded from
operations and reported as a component of accumulated other comprehensive
income (loss), net of the related tax effects, in stockholders' equity. Cost
is determined using the specific identification method.

Inventories
-----------

Inventories are stated at the lower of cost (on the first-in, first-out
method) or market. Appropriate consideration is given to deterioration,
obsolescence and other factors in evaluating net realizable value.

Property, Plant and Equipment
-----------------------------

Property, plant and equipment are stated at cost, less accumulated
depreciation. Depreciation is computed principally using the straight-line
method over the estimated useful lives of the assets. Leasehold improvements
are amortized over the terms of the related leases or the useful life of the
improvements, whichever is shorter. Expenditures for repairs and maintenance
are charged to expense as incurred. Renewals and betterments are
capitalized. Depreciation expense was $2,653,000, $2,610,000 and $2,595,000
in 2001, 2000 and 1999, respectively.

Cost in Excess of Fair Value of Net Assets Acquired
---------------------------------------------------

The cost in excess of fair value of net assets acquired ("goodwill") is
being amortized on a straight-line basis over 40 years. Amortization of
goodwill was $16,000 in 2001, 2000 and 1999, respectively.


-47-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Intangible Assets
-----------------

Intangible assets are being amortized on a straight-line basis over the
estimated useful lives of the respective assets of approximately fifteen
years. Amortization of intangible assets was $128,000, $177,000 and $218,000
in 2001, 2000 and 1999, respectively.

On an ongoing basis, management reviews the valuation and amortization of
goodwill and intangible assets to determine possible impairment by
considering current operating results and comparing the carrying values to
the anticipated undiscounted future cash flows of the related assets (see
Note D).

Revenue Recognition
-------------------

The Company recognizes revenues as products are shipped to customers.

Advertising
-----------

All costs associated with advertising are expensed when incurred.
Advertising expense, included in selling and administrative expenses, was
$989,000, $1,103,000 and $1,074,000 in 2001, 2000 and 1999, respectively.

Income Taxes
------------

Deferred income taxes are recognized for temporary differences between
financial statement and income tax bases of assets and liabilities and loss
carryforwards and tax credit carryforwards for which income tax benefits are
expected to be realized in future years. A valuation allowance has been
established to reduce deferred tax assets as it is more likely than not that
all, or some portion, of such deferred tax assets will not be realized. The
effect on deferred taxes of a change in tax rates is recognized in income in
the period that includes the enactment date.

Foreign Currency Translation
----------------------------

In accordance with Statement of Financial Accounting Standards ("SFAS") No.
52, "Foreign Currency Translation," the Company has determined that the
functional currency for its foreign subsidiaries is the local currency. This
assessment considers that the day-to-day operations are not dependent upon
the economic environment of the parent's functional currency, financing is
effected through their own operations, and the foreign operations primarily
generate and expend foreign currency. Foreign currency translation
adjustments are accumulated as a component of accumulated other
comprehensive income (loss) in stockholders' equity.


-48-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings Per Common Share
-------------------------

Basic earnings per share are based on the weighted average number of common
shares outstanding without consideration of potential common stock. Diluted
earnings per share are based on the weighted average number of common and
potential common shares outstanding. The calculation takes into account the
shares that may be issued upon exercise of stock options, reduced by the
shares that may be repurchased with the funds received from the exercise,
based on the average price during the period.

The following table sets forth the reconciliation of the weighted average
number of common shares:

2001 2000 1999
------ ------ ------

Basic 9,881,299 10,012,973 10,077,445
Effect of dilutive securities
(stock options) 264,105 301,198 236,644
---------- ---------- ----------

Diluted 10,145,404 10,314,171 10,314,089
========== ========== ==========

Excluded from the calculation of earnings per common share, are options to
purchase 468,915, 507,557 and 323,301 shares of common stock at June 2,
2001, June 3, 2000 and May 29, 1999, respectively, as their inclusion would
be anti- dilutive.

Use of Estimates
----------------

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

Effects of Recently Issued Accounting Pronouncements
----------------------------------------------------

During the fourth quarter of 2001, the Company adopted SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," and SFAS No.
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities", which amended SFAS No. 133. These standards require entities to
recognize all derivatives in their financial statements as either assets or
liabilities measured at fair value. These standards also specify new methods
of accounting for hedging transactions, prescribes the items and
transactions that may be hedged and specifies detailed criteria to be met to
qualify for hedge accounting. Since the Company does not use derivative
instruments as defined by SFAS No. 133, the adoption of this pronouncement
had no effect on the Company's results of operations or financial position.


-49-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible
Assets". The new standards require that all business combinations initiated
after June 30, 2001 must be accounted for under the purchase method. In
addition, all intangible assets acquired that are obtained through
contractual or legal right, or are capable of being separately sold,
transferred, licensed, rented or exchanged shall be recognized as an asset
apart from goodwill. Goodwill and intangibles with indefinite lives will no
longer be subject to amortization, but will be subject to at least an annual
assessment for impairment by applying a fair value based test. The Company
will continue to amortize goodwill and any intangibles with indefinite lives
existing at June 2, 2001 under its current method until June 2, 2002, the
first day of the SFAS No. 142 implementation year, or will discontinue
amortization in the first quarter of fiscal 2002, if early adopted. Once
adopted, annual and quarterly goodwill and affected intangible amortization
will no longer be recognized. The adoption of these statements is not
expected to have a material impact on the Company's results of operations or
financial position.

Reclassifications
-----------------

Pursuant to the Financial Accounting Standards Board Emerging Issues Task
Force Issue No. 00-10, "Accounting for Shipping and Handling Fees and
Costs", which was adopted in fiscal 2001, the Company has reclassified
freight billed to customers from selling and administrative expenses to net
sales, and has reclassified related freight costs from selling and
administrative expenses to cost of goods sold. All prior periods have been
restated to conform to this presentation. This change had no effect on the
dollar amount of the Company's operating profit or net earnings.


-50-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE B - COMPREHENSIVE INCOME

During 1999, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 established new rules for the reporting and display
of comprehensive income and its components; however, the adoption of SFAS
No. 130 had no impact on the Company's net earnings or stockholders'
equity. SFAS No. 130 requires unrealized holding gains or losses on debt
and equity securities available-for-sale and cumulative translation
adjustments, which prior to adoption were reported separately in
stockholders' equity, to be included in accumulated other comprehensive
income (loss).

The components of comprehensive income, net of related tax, are as follows:

2001 2000 1999
------- ------- -------
(in thousands)

Net earnings $ 3,286 $ 5,965 $ 4,797
Unrealized holding (loss) gain on
debt and equity securities:
Arising during the year, net of
income tax (benefit) provision
of $(560), $183 and $1,118 in
2001, 2000 and 1999, (2,215) 871 (151)
respectively
Reclassification adjustment for
losses included in net
earnings, net of income tax
benefit of $217 in 2001 349
Foreign currency translation
adjustments:
Arising during the year (982) (680) (858)
Reclassification adjustment for
sale of investment in a
foreign entity 994
------- ------- -------

Comprehensive income $ 1,432 $ 6,156 $ 3,788
======= ======= =======

The components of accumulated other comprehensive income (loss), net of
related tax, are as follows:
June 2, June 3,
2001 2000
------- -------
(in thousands)

Unrealized holding gain on debt and equity
securities, net of income tax liability of
$43 and $387 at June 2, 2001 and June 3,
2000, respectively $ 198 $ 2,064
Cumulative translation adjustments (3,383) (3,395)
------- -------

Accumulated other comprehensive income
(loss) $(3,185) $(1,331)
======= =======


-51-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE C - SALE OF SUBSIDIARY AND RELATED ASSETS

On July 27, 2000, AngioDynamics sold all the capital stock of AngioDynamics
Ltd., a wholly-owned subsidiary, and certain other assets to AngioDynamics
Ltd.'s management. AngioDynamics Ltd., located in Ireland, manufactured
cardiovascular and interventional radiology products. The aggregate
consideration paid was $3,250,000 in cash. The sale was the culmination of
the Company's strategic decision to exit the cardiovascular market and to
focus entirely on the interventional radiology marketplace. As a result of
this sale, the Company recognized a pre-tax loss of approximately $872,000
during the first quarter of 2001. The aforementioned pre-tax loss includes
the effect of previously unrealized losses on foreign currency translation
of approximately $994,000 and the write-off of approximately $673,000 in
inventory and intangibles related to the cardiovascular product line, both
of which were non-cash charges. Further, AngioDynamics entered into a
manufacturing agreement, a distribution agreement and a royalty agreement
with the buyer. Under the two-year manufacturing agreement, the buyer will
be manufacturing certain interventional radiology products sold by
AngioDynamics.


NOTE D - ASSET IMPAIRMENT CHARGES

In accordance with SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," the
Company's Diagnostic operating segment recorded an impairment charge during
the first quarter of 2001 of $450,000 relating to certain acquired patent
rights to an oral magnetic resonance imaging contrast agent. The Company
determined that the revenue potential of this technology was impaired, since
it now believes that the market for this technology is significantly less
than previously projected. The impairment charge represents the difference
between the carrying value of the intangible asset and the fair market value
of this asset based on estimated future discounted cash flows. The charge
had no impact on the Company's cash flow or its ability to generate cash
flow in the future. For 2001, the impairment charge is included in the
consolidated statement of earnings under the caption "Selling and
administrative".

In accordance with SFAS No. 121, the Company recorded an impairment charge
in the fourth quarter of 1999, with no associated tax benefit, of $896,000,
relating to its investment in ITI Medical Technologies, Inc. ("ITI"), as it
was determined that the fair value of such investment was zero, with no
future cash flows anticipated due to ITI's inability to generate income from
operations or raise additional capital. ITI is a California corporation,
based in Livermore, California, which develops and manufactures MRI
diagnostic and therapeutic medical devices. The Company's investment in ITI
was accounted for by the equity method. Prior to the impairment charge, the
Company's investment in ITI had been reduced by its proportionate share of
losses in 1999 of approximately $225,000. For 1999, the impairment charge
and the Company's proportionate share of losses are included in the
consolidated statement of earnings under the caption "Write-down of
investment in affiliate".


-52-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE E - DEBT AND EQUITY SECURITIES

Debt and equity securities at June 2, 2001 and June 3, 2000 consist of the
following:

Unrealized
Amortized Fair holding
cost value gain
------- ------- -------
(in thousands)

At June 2, 2001
- ---------------
Current
-------
Available-for-sale securities
(carried on the balance sheet
at fair value)
Debt securities with maturities
Due in 1 through 10 years $ 2,645 $ 2,645
Due after 10 years and through
20 years 1,055 1,055
Due after 20 years 10,000 10,000
Other 48 48
------- -------

$13,748 $13,748
======= =======
Noncurrent
----------
Available-for-sale securities
(carried on the balance sheet
at fair value)
Equity securities $ 604 $ 845 $ 241
Other 1 1
------- ------- -------

$ 605 $ 846 $ 241
======= ======= =======

At June 3, 2000
- ---------------
Current
-------
Available-for-sale securities
(carried on the balance sheet
at fair value)
Debt securities with maturities
Due in 1 through 10 years $ 90 $ 90
Due after 10 years and through
20 years 3,875 3,875
Due after 20 years 4,015 4,015
Other 71 71
------- -------

$ 8,051 $ 8,051
======= =======
Noncurrent
----------
Available-for-sale securities
(carried on the balance sheet
at fair value)
Equity securities $ 1,615 $ 4,066 $ 2,451
Other 1 1
------- ------- -------

$ 1,616 $ 4,067 $ 2,451
======= ======= =======


-53-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE E - DEBT AND EQUITY SECURITIES (continued)

The Company recorded an impairment charge in the fourth quarter of 2001,
with no associated tax benefit, of $566,000, relating to its investment in
Cedara Software Corporation ("Cedara"), as it was determined that the
decline in market value of Cedara, which is classified as a noncurrent
"available for sale" equity security, was deemed to be other than temporary.
For 2001, the impairment charge is included in the consolidated statement of
earnings under the caption "Other, net".


NOTE F - INVENTORIES

Inventories consist of the following:

June 2, June 3,
2001 2000
------ ------
(in thousands)

Finished goods $11,093 $13,246
Work in process 1,826 2,813
Raw materials 9,102 10,797
------- -------

$22,021 $26,856
======= =======


NOTE G - PROPERTY, PLANT AND EQUIPMENT, AT COST

Property, plant and equipment are summarized as follows:

Estimated
useful June 2, June 3,
lives 2001 2000
--------- ------ ------
(in thousands)

Building and building
improvements 10 to 39 years $12,064 $13,613
Machinery and equipment 2 to 10 years 32,578 31,306
Leasehold improvements Term of lease 1,736 1,619
------ ------

46,378 46,538
Less accumulated depreciation
and amortization 30,050 28,309
------ ------

16,328 18,229
Land 3,422 3,492
------- -------

$19,750 $21,721
======= =======


-54-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE H - INCOME TAXES

Income tax expense analyzed by category and by income statement
classification is summarized as follows:



2001 2000 1999
------- ------- -------
(in thousands)

Current
Federal $ 952 $ 2,304 $ 1,592
State and local 123 199 204
Foreign 545 806 813
------- ------- -------

Subtotal 1,620 3,309 2,609

Deferred (1,269) (40) (735)
------- ------- -------

Total $ 351 $ 3,269 $ 1,874
======= ======= =======


Temporary differences which give rise to deferred tax assets and liabilities
are summarized as follows:
June 2, June 3,
2001 2000
------- -------
(in thousands)

Deferred tax assets
Capital loss carryforward $ 1,313
Tax operating loss carryforwards 1,297 $ 1,219
Difference between book and tax basis in
investment sold to Canadian subsidiary 1,137
Tax credit carryforwards 131 224
Alternative minimum tax ("AMT") credit
carryforward 4 4
Impairment of long-lived assets 2,603 1,256
Expenses incurred not currently deductible 1,133 1,184
Deferred compensation costs 693 663
Inventories 646 793
Write-down of investment in affiliate 496 496
Other 103 82
------- -------

Gross deferred tax asset 8,419 7,058
------- -------

Deferred tax liabilities
Excess tax over book depreciation 1,108 1,061
Unrealized investment gains 387
Tax on unremitted profits of Puerto
Rican subsidiary 72 124
Other 23 16
------- -------

Gross deferred tax liability 1,203 1,588

Valuation allowance (4,842) (4,791)
------- -------

Net deferred tax asset $ 2,374 $ 679
======= =======

-55-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE H - INCOME TAXES (continued)

In 1994, the Company sold to its Canadian subsidiary warrants to purchase
396,396 shares of stock in Cedara. This transaction generated a capital gain
for tax purposes of approximately $3,344,000, utilizing a portion of the
Company's capital loss carryforward and giving rise to a temporary
difference pertaining to the difference between the financial statement and
tax basis in this asset. In 2001, as a result of recording an impairment on
the aforementioned asset (see Note E), the temporary difference was
eliminated and a deferred tax asset, relating to the future tax benefit from
the impairment loss, with a full valuation allowance was recorded.

During the first quarter of 2001, the Company reduced its valuation
allowance primarily to recognize deferred tax assets of approximately
$1,344,000. Continued and projected future profitability of the Company's
U.S. operations, including those of AngioDynamics, made it more likely than
not that certain deferred tax assets would be realized through future
taxable earnings.

During the fourth quarter of 1999, the Company reduced its valuation
allowance primarily to recognize deferred tax assets of approximately
$832,000 that management believes is more likely than not to be realized
through future taxable earnings from U.S. operations.

If not utilized, the tax operating and capital loss carryforwards will
expire in various amounts over the years 2002 through 2006. The tax credit
carryforwards will expire in various amounts over the years 2002 through
2011.

Deferred income taxes are provided for the expected Tollgate tax on the
undistributed earnings of the Company's Puerto Rican subsidiary, which are
expected to be distributed at some time in the future.

At June 2, 2001, undistributed earnings of certain foreign subsidiaries
aggregated $14,840,000 which will not be subject to U.S. tax until
distributed as dividends. Any taxes paid to foreign governments on these
earnings may be used, in whole or in part, as credits against the U.S. tax
on any dividends distributed from such earnings. On remittance, certain
foreign countries impose withholding taxes that are then available for use
as credits against a U.S. tax liability, if any, subject to certain
limitations. The amount of withholding tax that would be payable on
remittance of the entire amount of undistributed earnings would approximate
$742,000.

Deferred tax assets and liabilities are included in the consolidated balance
sheets as follows:

June 2, June 3,
2001 2000
------ ------
(in thousands)

Current - Other current assets $1,446 $1,446
Current - Accrued income taxes (72) (124)
Noncurrent - Other assets 1,559
Noncurrent - Other noncurrent liabilities (559) (643)
------ ------

Net deferred tax asset $2,374 $ 679
====== ======


-56-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE H - INCOME TAXES (continued)

Earnings before income taxes for U.S. and international operations consist
of the following:

2001 2000 1999
------ ------ ------
(in thousands)

U.S. $2,395 $7,789 $5,371
International 1,242 1,445 1,300
------ ------ ------

$3,637 $9,234 $6,671
====== ====== ======


The Company's consolidated income tax provision has differed from the amount
which would be provided by applying the U.S. Federal statutory income tax
rate to the Company's earnings before income taxes for the following
reasons:

2001 2000 1999
------- ------- -------
(in thousands)

Income tax provision $ 351 $ 3,269 $ 1,874
Effect of:
State income taxes, net of Federal
tax benefit (94) (128) (108)
Research and development credit 52 22 27
Earnings of the Puerto Rican
subsidiary, net of Puerto Rico
Corporate tax and Tollgate tax 85 223 242
Earnings of the Foreign Sales
Corporation 11 22 22
Tax-exempt portion of investment
income 182 111 27
Change in valuation allowance 1,089 94 770
Losses of foreign entities
generating no current tax
benefit (353) (445) (553)
Nondeductible expenses (254) (187) (148)
Other 168 159 115
------- ------- -------

Income tax provision at statutory
tax rate of 34% $ 1,237 $ 3,140 $ 2,268
======= ======= =======

The Company has an agreement with the Commonwealth of Puerto Rico pursuant
to which its operations in Puerto Rico are subject to a partial tax
exemption which expires January 23, 2007. Commonwealth taxes are currently
being provided on earnings of the subsidiary.

The U.S. Federal income tax returns of the Company through May 31, 1997 have
been closed by the Internal Revenue Service.


-57-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE I - DEBT

Notes payable consist of the following:

June 2, June 3,
2001 2000
------ ------
(in thousands)

Japanese bank
2.875% note (1) $854
2.68% note (1) $1,080
---- ------

$854 $1,080
==== ======

Long-term debt consists of the following:

June 2, June 3,
2001 2000
------ ------
(in thousands)

Japanese bank loan, due November 2007,
2.875% (1) $233 $238
Japanese bank loan, due November 2004,
1.80% (1) 167 298
Japanese bank loan, due December 2003,
2.375% (1) 153
Other 11 20
---- ----

564 556
Less current maturities 156 103
---- ----

$408 $453
==== ====


(1) Guaranteed by the Company and collateralized by property, plant and
equipment having a net carrying value of $1,887,000 at June 2, 2001.

(2) The Company's Canadian subsidiary has available $1,303,000 (Canadian
$2,000,000) under this line of credit with a bank, which is
collateralized by accounts receivable and inventory and expires on
October 31, 2001.

The Company believes that the carrying amount of its debt approximates the
fair value as the interest rates approximate current prevailing interest
rates.

During 2001, 2000 and 1999, the weighted average interest rates on
short-term debt were 3.14%, 2.71% and 3.54%, respectively.


-58-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE J - ACCRUED LIABILITIES AND OTHER NONCURRENT LIABILITIES

Accrued liabilities consist of the following:

June 2, June 3,
2001 2000
------ ------
(in thousands)

Payroll and related expenses $3,922 $4,565
Accrued sales rebates 1,472 1,498
Other 1,935 1,735
------ ------

$7,329 $7,798
====== ======

Other noncurrent liabilities consist of the following:

June 2, June 3,
2001 2000
------ ------
(in thousands)

Deferred compensation $1,873 $1,792
Deferred taxes 559 643
Other 363 321
------ ------

$2,795 $2,756
====== ======



NOTE K - RETIREMENT PLANS

E-Z-EM, Inc. and its domestic subsidiaries ("E-Z-EM") provide pension
benefits through three Profit-Sharing Plans, under which E-Z-EM makes
discretionary contributions to eligible employees, and three companion
401(k) Plans, under which eligible employees can defer a portion of their
annual compensation, part of which is matched by E-Z-EM. These plans cover
all E-Z-EM employees not otherwise covered by collective bargaining
agreements. In 2001, 2000 and 1999, profit-sharing contributions were
$624,000, $589,000 and $581,000, respectively, and 401(k) matching
contributions were $377,000, $355,000 and $359,000, respectively.

E-Z-EM also contributed $36,000, $34,000 and $36,000 in 2001, 2000 and
1999, respectively, to a multiemployer pension plan for employees covered
by a collective bargaining agreement. This plan is not administered by
E-Z-EM and contributions are determined in accordance with provisions of
negotiated labor contracts.

E-Z-EM Canada Inc., a wholly-owned subsidiary of the Company, also provides
pension benefits to eligible employees through two Defined Contribution
Plans. In 2001, 2000 and 1999, contributions were $100,000, $85,000 and
$71,000, respectively.


-59-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE L - COMMITMENTS AND CONTINGENCIES

The Company is committed under non-cancellable operating leases for
facilities, automobiles and equipment, including certain facility leases
with related parties. During 2001, 2000 and 1999, aggregate rental costs
under all operating leases were approximately $1,896,000, $1,713,000 and
$1,743,000, respectively, of which approximately $209,000, $212,000 and
$196,000, respectively, were paid to related parties. Future annual
operating lease payments in the aggregate, which include escalation clauses
and real estate taxes, with initial remaining terms of more than one year at
June 2, 2001, are summarized as follows:

Related
Total party
leases leases
------ -------
(in thousands)

2002 $1,069 $189
2003 805 133
2004 697 102
2005 595
2006 616
Thereafter 1,253
------ ----

$5,035 $424
====== ====

The Company has employment contracts with two executive officers. One such
contract expires November 30, 2001 and one contract is cancellable at any
time, but provides for severance pay in the event such executive is
terminated by the Company without cause, as defined in the contract.
Aggregate minimum compensation commitments under these contracts at June 2,
2001, and relating to fiscal 2002, is $406.


-60-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE M - COMMON STOCK

In 1983, the Company adopted a Stock Option Plan (the "1983 Plan"). The
1983 Plan provides for the grant to key employees of both nonqualified
stock options and incentive stock options. A total of 2,617,974 shares of
the Company's Common Stock may be issued under the 1983 Plan pursuant to
the exercise of options. All stock options must have an exercise price of
not less than the market value of the shares on the date of grant. Options
will be exercisable over a period of time to be designated by the
administrators of the 1983 Plan (but not more than 10 years from the date
of grant) and will be subject to such other terms and conditions as the
administrators may determine. The 1983 Plan terminates in December 2005.

In 1984, the Company adopted a second Stock Option Plan (the "1984 Plan").
The 1984 Plan provides for the grant to members of the Board of Directors
and consultants of nonqualified stock options. A total of 459,490 shares of
the Company's Common Stock may be issued under the 1984 Plan pursuant to
the exercise of options. All stock options must have an exercise price of
not less than the market value of the shares on the date of grant. Options
will be exercisable over a period of time to be designated by the
administrators of the 1984 Plan (but not more than 10 years from the date
of grant) and will be subject to such other terms and conditions as the
administrators may determine. The 1984 Plan terminates in December 2005.

In 1997, the Company's AngioDynamics subsidiary adopted a Stock Option Plan
(the "1997 Plan"). The 1997 Plan provides for the grant to key employees of
both nonqualified stock options and incentive stock options and to members
of the Board of Directors and consultants of nonqualified stock options. A
total of 136.36 shares of AngioDynamics' Class B Common Stock may be issued
under the 1997 Plan pursuant to the exercise of options. All stock options
must have an exercise price of not less than the market value of the shares
on the date of grant. Options will be exercisable over a period of time to
be designated by the administrators of the 1997 Plan (but not more than 10
years from the date of grant) and will be subject to such other terms and
conditions as the administrators may determine. The 1997 Plan terminates in
March 2007. As a result of the 1997 Plan, the Company's equity interest in
AngioDynamics may become diluted by as much as 12%.

In accordance with SFAS No. 123, "Accounting for Stock-Based Compensation,"
the Company elected to continue to account for stock-based compensation
using the "intrinsic value" method under the guidelines of APB Opinion No.
25, "Accounting for Stock Issued to Employees" as opposed to the "fair
value" method contained in SFAS 123. Accordingly, no compensation expense
has been recognized under these plans concerning options granted to key
employees and to members of the Board of Directors, as such options were
granted to Board members in their capacity as Directors. Compensation
expense of $5,000 in each of 2001, 2000 and 1999 was recognized under these
plans for options granted to consultants.


-61-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE M - COMMON STOCK (continued)

If the Company had elected to recognize compensation expense based upon the
fair value at the grant date for options granted under these plans to key
employees and to members of the Board of Directors, consistent with the
methodology prescribed by SFAS 123, the Company's pro forma net earnings
and earnings per common share would be as follows:

2001 2000 1999
------ ------ ------
(in thousands, except per share data)

Net earnings
As reported $3,286 $5,965 $4,797
Pro forma 2,336 5,317 4,345

Basic earnings per common share
As reported $.33 $.60 $.48
Pro forma .24 .53 .43

Diluted earnings per common share
As reported $.32 $.58 $.47
Pro forma .23 .52 .42

The fair value of options was estimated at the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions for 2001, 2000 and 1999, respectively: dividend yields of zero
for all years; expected volatility ranging from 43.87% to 48.47% in 2001,
from 44.59% to 48.65% in 2000 and from 41.32% to 48.90% in 1999; risk-free
interest rates ranging from 5.10% to 6.06% in 2001, from 5.99% to 6.89% in
2000 and from 4.78% to 5.98% in 1999; and expected terms ranging from 5 to
9 1/2 years for all years.


-62-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE M - COMMON STOCK (continued)

A summary of the status of the Company's stock option plans as of June 2,
2001, June 3, 2000 and May 29, 1999, and changes for the three years then
ended, is presented below:




2001 2000 1999
-------------------- --------------------- --------------------
Weighted Weighted Weighted
-Average -Average -Average
Shares Exercise Shares Exercise Shares Exercise
(000) Price (000) Price (000) Price
------ -------- ------ -------- ------ --------

1983 Plan
---------
Outstanding at
beginning of year 1,289 $ 5.84 973 $ 4.99 1,002 $ 4.94
Granted 25 $ 5.10 472 $ 7.45 33 $ 5.83
Exercised (9) $ 4.50 (144) $ 5.42 (56) $ 4.22
Forfeited (36) $ 5.82 (12) $ 4.75 (3) $ 6.23
Expired (3) $10.68
----- ----- -----
Outstanding at
end of year 1,269 $ 5.84 1,289 $ 5.84 973 $ 4.99
===== ===== =====

Options exercisable
at year-end 906 $ 5.22 796 $ 4.89 940 $ 4.96

Weighted-average
fair value of
options granted
during the year $ 2.32 $ 3.66 $ 2.59

1984 Plan
---------
Outstanding at
beginning of year 281 $ 5.44 301 $ 5.54 304 $ 5.51
Granted 6 $ 5.20 6 $ 6.50 6 $ 5.00
Exercised (12) $ 3.75 (9) $ 4.22
Forfeited (2) $ 8.58
Expired (6) $ 6.86 (12) $ 9.55
--- --- ---
Outstanding at
end of year 281 $ 5.41 281 $ 5.44 301 $ 5.54
=== === ===

Options exercisable
at year-end 269 $ 5.39 275 $ 5.42 289 $ 5.55

Weighted-average
fair value of
options granted
during the year $ 2.41 $ 3.24 $ 2.36



-63-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE M - COMMON STOCK (continued)




2001 2000 1999
-------------------- -------------------- ---------------------
Weighted Weighted Weighted
-Average -Average -Average
Shares Exercise Shares Exercise Shares Exercise
(000) Price (000) Price (000) Price
------ -------- ------ -------- ------ --------

1997 Plan
---------
Outstanding at
beginning of year 136.14 $40,000 129.15 $40,000 130.00 $40,000
Granted 1.65 $40,000 8.18 $40,000 1.93 $40,000
Forfeited (5.12) $40,000 (1.19) $40,000 (2.78) $40,000
------ ------ ------
Outstanding at
end of year 132.67 $40,000 136.14 $40,000 129.15 $40,000
====== ====== ======

Options exercisable
at year-end None None None

Weighted-average
fair value of
options granted
during the year $25,315 $26,427 $26,480


The following information applies to options outstanding and exercisable at
June 2, 2001:



Outstanding Exercisable
----------------------------------------- -----------------------
Weighted-
Number Average Weighted- Number Weighted-
Out- Remaining Average Exer- Average
Range of standing Life in Exercise cisable Exercise
Exercise Prices (000) Years Price (000) Price
--------------- -------- --------- --------- ------- ---------

1983 Plan
---------
$3.66 to $5.39 706 3.20 $4.43 681 $4.41
$5.63 to $6.00 186 7.99 $5.66 73 $5.69
$8.50 to $10.13 377 7.99 $8.56 152 $8.65
----- ---

1,269 906
===== ===

1984 Plan
---------
$3.66 to $5.49 205 3.72 $4.23 199 $4.19
$5.88 to $8.58 58 5.01 $7.83 52 $7.98
$9.58 to $12.49 18 5.12 $10.99 18 $10.99
--- ---

281 269
=== ===


On June 2, 2001, there remained 542,933, 115,355 and 3.69 shares available
for granting of options under the 1983, 1984 and 1997 Plans, respectively.

Options granted prior to the Company's recapitalization on October 26, 1992
are exercisable one-half in Class A Common Stock and one-half in Class B
Common Stock. Options granted after the recapitalization are exercisable in
Class B Common Stock.


-64-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE M - COMMON STOCK (continued)

In 1985, the Company adopted an Employee Stock Purchase Plan (the "Employee
Plan"). The Employee Plan provides for the purchase by employees of the
Company's Class B Common Stock at a discounted price of 85% of the market
value of the shares on the date of purchase. A total of 150,000 shares of
the Company's Class B Stock may be purchased under the Employee Plan which
terminates on September 30, 2002. During 2001, employees purchased 941
shares, at $5.31 per share. Total proceeds received by the Company
approximated $5,000.

In January 1999, the Board of Directors authorized the repurchase of up to
500,000 shares of the Company's Class B Common Stock at an aggregate
purchase price of up to $2,000,000. In October 1999, the Board modified the
program to include the Company's Class A Common Stock. In February 2000,
the Board further modified the program to increase the aggregate purchase
price of Class A and Class B Common Stock by an additional $2,000,000. As
of June 2, 2001, the Company had repurchased 41,860 shares of Class A
Common Stock and 395,251 shares of Class B Common Stock for approximately
$3,057,000.


NOTE N - RELATED PARTIES

During 1998, the Company entered into split dollar life insurance
arrangements with a key executive (including his spouse) and a principal
shareholder (the "insureds"). On an annual basis, the Company makes
advances of approximately $100,000 per insured toward the cost of such life
insurance policies. Through August 2000, such advances were interest
bearing and payable to the Company annually by the insureds. In August
2000, the arrangements were modified, to conform to the Company's other
split dollar life insurance arrangements, making future advances
non-interest bearing. Under collateral assignment agreements, the proceeds
from the policies will first be used to repay all advances made by the
Company. If the policies are terminated prior to the death of the insured,
the Company will be entitled to the cash surrender value of the policies at
that time, and any shortfall between that amount and the amount of the
advances made by the Company will be repaid to the Company by the insureds.
At June 2, 2001 and June 3, 2000, the cash surrender value of such policies
aggregated $741,000 and $474,000, respectively. At June 2, 2001 and June 3,
2000, advances of $800,000 and $600,000, respectively, are recorded in the
consolidated balance sheets under the caption "Other Assets".

The Company had an unsecured, two-year interest bearing note receivable
from an executive officer in the principal amount of $320,000.
Approximately $297,000 of this note receivable was satisfied in October
1999, while the remaining portion was satisfied during June 2000.

Several directors provided consulting services to the Company during 2001,
2000 and 1999. Fees for such services, including fees relating to
attendance at directors' meetings, were approximately $314,000, $446,000
and $258,000 during 2001, 2000 and 1999, respectively.


-65-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE O - OPERATING SEGMENT, GEOGRAPHIC AREA OPERATIONS AND CONCENTRATION OF
CREDIT RISK

In 1999, the Company adopted SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information". The statement redefines how
operating segments are determined and requires disclosure of certain
financial and descriptive information about a company's operating segments.

The Company is engaged in the manufacture and distribution of a wide
variety of products which are classified into two operating segments:
Diagnostic products and AngioDynamics products. Diagnostic products
encompass both contrast systems, consisting of barium sulfate formulations
and related medical devices used in X-ray, CT-scanning, ultrasound and MRI
imaging examinations, and non-contrast systems, including the
electromechanical injector line, radiological medical devices, custom
contract pharmaceuticals, gastrointestinal cleansing laxatives, and
immunoassay tests. AngioDynamics products include angiographic,
image-guided vascular access, thrombolytic, angioplasty, stents, and
drainage medical devices used in the interventional radiology marketplace.
The Company's primary business activity is conducted with radiologists and
hospitals, located throughout the U.S. and abroad, through numerous
distributors. The Company's exposure to credit risk is dependent, to a
certain extent, on the healthcare industry. The Company performs ongoing
credit evaluations of its customers and does not generally require
collateral; however, in certain circumstances, the Company may require
letters of credit from its customers.

In 2001, there were two customers to whom sales of Diagnostic products
represented 17% and 12% of total sales, respectively. In 2000, there were
two customers to whom sales of Diagnostic products represented 18% and 12%
of total sales, respectively. In 1999, there was one customer to whom sales
of Diagnostic products represented 17% of total sales. Approximately 19%
and 14% of accounts receivable pertained to these customers at June 2, 2001
and approximately 21% and 14% of accounts receivable pertained to these
customers at June 3, 2000.

The Company's chief operating decision maker utilizes operating segment net
earnings (loss) information in assessing performance and making overall
operating decisions and resource allocations. The accounting policies of
the operating segments are the same as those described in the summary of
significant accounting policies. Information about the Company's segments
is as follows:


-66-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE O - OPERATING SEGMENT, GEOGRAPHIC AREA OPERATIONS AND CONCENTRATION OF
CREDIT RISK (continued)

Operating Segments 2001 2000 1999
------------------ ------ ------ ------
(in thousands)

Net sales to external customers
Diagnostic products (1)
Contrast systems $ 61,438 $ 65,981 $ 61,446
Non-contrast systems 29,172 27,181 26,640
--------- --------- ---------

Total Diagnostic products 90,610 93,162 88,086
AngioDynamics products 22,676 20,706 20,968
--------- --------- ---------

Total net sales to external
customers $ 113,286 $ 113,868 $ 109,054
========= ========= =========

Intersegment net sales
Diagnostic products $ 1 $ 2 $ 36
AngioDynamics products 714 1,063 503
--------- --------- ---------

Total intersegment net sales $ 715 $ 1,065 $ 539
========= ========= =========

Interest income
Diagnostic products $ 1,787 $ 1,708 $ 1,475
AngioDynamics products 70 12 16
Eliminations (952) (1,004) (986)
--------- --------- ---------

Total interest income $ 905 $ 716 $ 505
========= ========= =========

Interest expense
Diagnostic products $ 290 $ 252 $ 263
AngioDynamics products 952 1,005 986
Eliminations (952) (1,004) (986)
--------- --------- ---------

Total interest expense $ 290 $ 253 $ 263
========= ========= =========

Depreciation and amortization
Diagnostic products $ 2,231 $ 2,124 $ 2,125
AngioDynamics products 566 679 704
--------- --------- ---------

Total depreciation and amortization $ 2,797 $ 2,803 $ 2,829
========= ========= =========

Equity in losses of affiliate
Diagnostic products $ -- $ -- $ 225
--------- --------- ---------

Total equity in losses of affiliate $ -- $ -- $ 225
========= ========= =========

Income tax provision (benefit)
Diagnostic products $ 1,864 $ 3,566 $ 2,419
AngioDynamics products (1,513) (297) (545)
--------- --------- ---------

Total income tax provision $ 351 $ 3,269 $ 1,874
========= ========= =========


-67-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE O - OPERATING SEGMENT, GEOGRAPHIC AREA OPERATIONS AND CONCENTRATION OF
CREDIT RISK (continued)

Operating Segments (continued) 2001 2000 1999
------------------------------ ------ ------ ------
(in thousands)

Operating profit (loss)
Diagnostic products $ 3,865 $ 9,285 $ 8,237
AngioDynamics products (290) (739) (990)
Eliminations (50) 53 (5)
--------- --------- ---------

Total operating profit $ 3,525 $ 8,599 $ 7,242
========= ========= =========

Net earnings (loss)
Diagnostic products $ 2,993 $ 7,328 $ 5,960
AngioDynamics products 343 (1,416) (1,158)
Eliminations (50) 53 (5)
--------- --------- ---------

Total net earnings $ 3,286 $ 5,965 $ 4,797
========= ========= =========

Other significant non-cash items
Diagnostic products
Impairment of long-lived assets $ 1,016 $ -- $ --
Impairment of investment in
affiliate -- -- 896
AngioDynamics products
Loss on sale of subsidiary and
related assets 872 -- --
--------- --------- ---------

Total other significant non-cash
items $ 1,888 $ -- $ 896
========= ========= =========

Assets
Diagnostic products $ 108,463 $ 111,046 $ 107,027
AngioDynamics products 16,782 17,573 17,922
Eliminations (27,790) (29,534) (28,890)
--------- --------- ---------

Total assets $ 97,455 $ 99,085 $ 96,059
========= ========= =========

Capital expenditures
Diagnostic products $ 2,277 $ 2,813 $ 1,831
AngioDynamics products 466 393 376
--------- --------- ---------

Total capital expenditures $ 2,743 $ 3,206 $ 2,207
========= ========= =========

(1) Net sales have been retroactively restated to reflect the reclassifications
of freight billed to customers and related freight costs described in Note
A.


-68-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE O - OPERATING SEGMENT, GEOGRAPHIC AREA OPERATIONS AND CONCENTRATION OF
CREDIT RISK (continued)

Geographic Areas
----------------

The following geographic area data includes net sales generated by and
long- lived assets employed in operations located in each area:

2001 2000 1999
------ ------ ------
(in thousands)

Net sales (1)
U.S. operations $ 96,284 $ 95,877 $ 90,763
International operations:
Canada 24,195 23,825 23,022
Other 9,907 12,712 12,251
Eliminations (17,100) (18,546) (16,982)
--------- --------- ---------

Total net sales $ 113,286 $ 113,868 $ 109,054
========= ========= =========

Long-lived assets
U.S. operations $ 12,580 $ 13,727 $ 14,154
International operations:
Canada 6,627 6,526 5,672
Other 2,248 4,026 4,251
--------- --------- ---------

Total long-lived assets $ 21,455 $ 24,279 $ 24,077
========= ========= =========

(1) Net sales have been retroactively restated to reflect the
reclassifications of freight billed to customers and related freight
costs described in Note A.


NOTE P - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Quarterly results of operations during 2001 and 2000 were as follows:

2001
-------------------------------------
First Second Third Fourth
quarter quarter quarter quarter
------- ------- ------- -------
(in thousands, except per share data)

Net sales (1) $27,733 $26,658 $27,809 $31,086
Gross profit (1) 11,469 11,314 10,095 12,814
Net earnings 1,842 861 106 477
Earnings per common share
Basic (2) .19 .09 .01 .05
Diluted .18 .08 .01 .05


-69-


E-Z-EM, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 2, 2001, June 3, 2000 and May 29, 1999


NOTE P - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (continued)

2000
-------------------------------------
First Second Third Fourth
quarter quarter quarter quarter
------- ------- ------- -------
(in thousands, except per share data)

Net sales (1) $27,619 $28,394 $26,209 $31,646
Gross profit (1) 11,503 12,543 10,482 13,277
Net earnings 1,798 1,817 516 1,834
Earnings per common share
Basic (2) .18 .18 .05 .18
Diluted (2) .18 .18 .05 .18

(1) Net sales and gross profit have been retroactively restated to reflect
the reclassifications of freight billed to customers and related
freight costs described in Note A.

(2) The sum of the quarters does not equal the fiscal year due to rounding
and changes in the calculation of weighted average shares.


-70-


E-Z-EM, Inc. and Subsidiaries

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(in thousands)




Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Additions
---------------------------
(1) (2)
Balance Charged to Balance
at Charged to other at end
beginning costs and accounts- Deductions- of
Description of period expenses describe describe period
----------- --------- ---------- ---------- ----------- -------

Fifty-two weeks
ended May 29, 1999

Allowance for
doubtful accounts.... $1,148 $250 $370 (a) $1,028
===== === === =====

Fifty-three weeks
ended June 3, 2000

Allowance for
doubtful accounts.... $1,028 $ 37 $212 (a) $ 853
===== === === =====

Fifty-two weeks
ended June 2, 2001

Allowance for
doubtful accounts.... $ 853 $ 88 $280 (a) $ 661
===== === === =====


(a) Amounts written off as uncollectible.


-71-


Exhibit 21


Subsidiaries of the Registrant
- ------------------------------

The Registrant, E-Z-EM, Inc., is a Delaware corporation. The subsidiaries
of the Registrant included in the consolidated financial statements are as
follows:

Incorporated
------------

AngioDynamics, Inc. Delaware

E-Z-EM Belgium B.V.B.A. Belgium

E-Z-EM Canada Inc. Canada

E-Z-EM Caribe, Inc. Delaware

E-Z-EM International, Inc. Barbados

E-Z-EM Ltd. England

E-Z-EM Nederland B.V. Holland

Enteric Products, Inc. Delaware

Leocor, Inc. Delaware

Toho Kagaku Kenkyusho Co., Ltd. Japan

All subsidiaries of the Registrant are wholly-owned.


-72-


Exhibit 23


CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


We consent to the incorporation by reference in Registration Statements No. 2-
9458, No. 33-00184, No. 33-43168, No. 33-85010, No. 333-11325 and No. 333-46600
of E-Z-EM, Inc. on Form S-8 of our report dated July 27, 2001, appearing in the
Annual Report on Form 10-K of E-Z-EM, Inc. and Subsidiaries for the fifty-two
weeks ended June 2, 2001.




GRANT THORNTON LLP

Melville, New York
August 27, 2001


-73-


Exhibit 99


AUDITORS' REPORT

To the shareholder of
E-Z-EM Canada Inc.

We have audited the consolidated balance sheets of E-Z-EM CANADA INC. as of May
31, 2001 and 2000 and the consolidated statements of income, retained earnings
and cash flows for the years ended May 31, 2001, 2000 and 1999. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the company as of May 31, 2001 and
2000 and the results of its operations and its cash flows for the years ended
May 31, 2001, 2000 and 1999 in accordance with generally accepted accounting
principles.


Jacques Davis Lefaivre
Chartered Accountants

Montreal, July 6, 2001


-74-