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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

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

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

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

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  o

Number of shares outstanding of the Registrant's Common Stock at July 31, 2002:
8,906,290 shares of Common Stock, par value $.01 per share

PART I
FINANCIAL INFORMATION

Item 1.    Financial Statements.

YOUNG INNOVATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

The accompanying notes are an integral part of these statements.

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

The accompanying notes are an integral part of these statements.

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YOUNG INNOVATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)

The accompanying notes are an integral part of these statements.

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YOUNG INNOVATIONS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2002
(In thousands, except per share data)

GENERAL:

        This report includes information in a condensed format and should be read in conjunction with the audited consolidated financial statements and the footnotes included in the Company's 2001 Annual Report on Form 10-K. The results of operations for the six months ended June 30, 2002 are not necessarily indicative of the results expected for the full year or any other interim period.

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

        The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

1.    ORGANIZATION:

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

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

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

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

3.    ACQUISITIONS:

        On June 12, 2001 the Company acquired substantially all of the assets and assumed a portion of the liabilities of the Biotrol and Challenge subsidiaries of Pro-Dex, Inc. (collectively "Biotrol"). The Company originally paid $9.3 million in cash, with money set aside in escrow pending the settlement of any indemnification claims. Upon final settlement, the purchase price was $8.9 million. The balance sheet at June 30, 2002 includes a receivable from the escrow account of $431, which was received in July, 2002. The acquisition was financed with borrowings on the Company's credit facility and cash

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generated from operations. The acquisition was accounted for as a purchase transaction. During the second quarter of 2002, the final purchase price allocation was determined based upon estimates of fair value of assets and liabilities. This excess of purchase price over the estimated fair value of net assets acquired (goodwill) was $6,160. In accordance with SFAS 142, $2,060 of separately identifiable intangible assets, including trademarks, product formulations, and supplier relationships, were also recorded. The trademarks have been determined to have indefinite lives. The remaining intangible assets are being amortized over a period between 5 years and 40 years. The results of operations for Biotrol are included in the consolidated financial statements since June 12, 2001.

4.    SEGMENT INFORMATION:

        Segment information has been prepared in accordance with Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an Enterprise and Related Information." In 2000, with the acquisition of Plak Smacker, the Company has two operating segments according to SFAS No. 131: professional and retail. The professional segment sells products to dentists, dental hygienists and dental assistants. The retail segment sells products to consumers through mass merchandisers. There are no significant determinable assets or interest costs for the retail segment.

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

5.    INVENTORIES:

        Inventories consist of the following:

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6.    PROPERTY, PLANT AND EQUIPMENT:

        Property, plant and equipment consist of the following:

7.    CREDIT ARRANGEMENTS AND NOTES PAYABLE:

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

        Long-term debt was as follows:

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8.    EARNINGS PER SHARE:

        Basic earnings per share (Basic EPS) is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share (Diluted EPS) includes the dilutive effect of stock options and restricted stock, if any, using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share:

9.    COMMITMENTS AND CONTINGENCIES:

        On May 24, 2001, Sultan Dental Products, Ltd. ("Sultan") filed a complaint in the United States District Court for the Southern District of New York (which was subsequently dismissed by the plaintiff and refiled in the United States District Court for the District of New Jersey on October 16, 2001) asserting that the Young disposable prophy angle infringes a patent that is exclusively licensed to Sultan. The complaint seeks a permanent injunction and unspecified damages. The Company believes it has meritorious defenses to the claims and intends to vigorously defend this matter. In addition, on January 25, 2002, the Company filed a complaint in the United States District Court for the Eastern District of Missouri asserting that the manufacture of the Sultan disposable prophy angle infringes the Company's U.S. Patent No. 5,749,728. The complaint seeks a permanent injunction and damages. This case has been transferred to the District of New Jersey and consolidated for pretrial matters with Sultan's case. Both cases are stayed pending the completion of court-ordered mediation.

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

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

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

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

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

RESULTS OF OPERATIONS

Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001

Net Sales

        Net sales increased $2.9 million, or 19.4%, to $17.9 million in the second quarter of 2002 from $15.0 million in the second quarter of 2001. The increase was primarily a result of the addition of Biotrol sales for the full period, as well as increased sales of products in the base business. Biotrol was acquired on June 12, 2001.

Gross Profit

        Gross profit increased $1.7 million or 21.5%, to $9.6 million in the second quarter of 2002 from $7.9 million in the second quarter of 2001. Gross profit benefited from the acquisition of Biotrol and from strong sales in the base business. Gross margin increased to 53.7% of net sales in the second quarter of 2002 from 52.8% in the second quarter of 2001. The increase was primarily a result of the acquisition of Biotrol in addition to manufacturing productivity improvements and cost savings associated with the consolidation of our Sacramento, CA facility into our Earth City, MO operations.

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Selling, General, and Administrative Expenses

        SG&A expenses increased $674,000 or 15.9% to $4.9 million in the second quarter of 2002 from $4.2 million in the second quarter of 2001. The increase was primarily the result of the inclusion of a full quarter of Biotrol expenses as well as additional operating expenses, which was partially offset by the elimination of the amortization of goodwill ($293,000 in the second quarter of 2001) starting in 2002 in accordance with the adoption of SFAS 142. As a percent of net sales, SG&A expenses decreased to 27.4% in 2002 from 28.2% in 2001.

Income from Operations

        Income from operations increased $1.0 million or 27.9%, to $4.7 million in the second quarter of 2002 from $3.7 million in the second quarter of 2001. The increase was a result of the items explained above.

Other Expense (Income), net

        Other expense (income), net increased $34,000 to $43,000 in the second quarter of 2002 from $9,000 in the second quarter of 2001. The increase was primarily attributable to additional interest expense resulting from borrowings on the Company's credit facility.

Provision for Income Taxes

        Provision for income taxes increased $407,000 for the second quarter of 2002 to $1.8 million from $1.4 million in the second quarter of 2001. The effective tax rate in 2002 of 39.0% compares to 38.5% for 2001, reflecting the phase-in of the 35% federal tax rate.

Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

Net Sales

        Net sales increased $5.4 million, or 19.0%, to $34.4 million for the first six months of 2002 from $29.0 million for the first six months of 2001. The increase was primarily a result of the addition of Biotrol sales for the full period as well as growth in the base business. Biotrol was acquired on June 12, 2001.

Gross Profit

        Gross profit increased $3.6 million or 23.7%, to $18.6 million for the first six months of 2002 from $15.0 million for the first six months of 2001. Gross profit benefited from the acquisition of Biotrol and from strong sales in the base business. Gross margin increased to 54.0% of net sales for the first six months of 2002 from 52.0% of net sales for the comparable period in 2001. The increase was primarily a result of the acquisition of Biotrol in addition to manufacturing productivity improvements and cost savings associated with the consolidation of our Sacramento, CA facility into our Earth City, MO operations.

Selling, General, and Administrative Expenses

        SG&A expenses increased $1.5 million, or 18.3%, to $9.7 million for the first six months of 2002 from $8.2 million for the first six months of 2001. The increase in SG&A expenses is primarily attributable to the inclusion of Biotrol expenses for the full period as well as additional operating expenses, which was partially offset by the elimination of the amortization of goodwill ($571,000 for the first six months of 2001) starting in 2002 in accordance with the adoption of SFAS 142. As a percent of net sales, SG&A expenses decreased to 28.1% in 2002 from 28.3% in 2001.

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Income from Operations

        Income from operations increased $2.1 million or 30.2%, to $8.9 million for the first six months of 2002 from $6.9 million for the first six months of 2001. The increase is a result of the items explained above.

Other Expense (Income), net

        Other expense (income), net increased $288,000 to $256,000 for the first six months of 2002 from ($32,000) for the comparable period in 2001. The increase was primarily attributable to additional interest expense resulting from borrowings on the Company's credit facility as well as increased expense associated with the Company's one-third interest in International Assembly, Inc.

Provision for Income Taxes

        Provision for income taxes increased $730,000 in 2002 to $3.4 million from $2.7 million in 2001. The effective tax rate in 2002 of 39.0% compares to 38.5% for 2001, reflecting the phase-in of the 35% federal tax rate.

Liquidity and Capital Resources

        Historically, the Company has financed its operations primarily through cash flow from operating activities and, to a lesser extent, through borrowings under its credit facility. Net cash flow from operating activities was $7.5 million and $5.7 million for the first six months of 2002 and 2001, respectively. Capital expenditures for property, plant and equipment were $1.6 million and $5.9 million for the first six months of 2002 and 2001, respectively. During the first six months of 2001, the Company spent $3.2 million for additional land and buildings at its Earth City, MO and its Ft. Wayne, IN locations as well as approximately $2.0 million of machinery and equipment to update various manufacturing operations. Consistent with the Company's historical capital expenditures, future capital expenditures are expected to include facility improvements, panoramic X-ray machines for the Company's rental program, production machinery and information systems.

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

        On June 12, 2001, the Company acquired substantially all of the assets of Biotrol/Challenge. The Company originally paid $9.3 million in cash, with money set aside in escrow pending the settlement of any indemnification claims. Upon final settlement, the purchase price was $8.9 million. The balance sheet at June 30, 2002 includes a receivable from the escrow account of $431,000, which was received in July, 2002. The purchase price was financed with borrowings on the Company's credit facility and with cash flows from operations.

        During March 2001, the Company entered into a one-year $20.0 million credit agreement. The agreement was amended in April and September 2001, to extend the term to three-years and increase the borrowing capacity to $40.0 million. Borrowings under the agreement bear interest at rates ranging from LIBOR + 1% to LIBOR + 2.25% or Prime to Prime + .5%. Administrative fees for this agreement range from .15% to .25% of the unused balance. The agreement is unsecured and contains various financial and other covenants and limitations on indebtedness. As of June 30, 2002 and December 31, 2001, the Company was in compliance with all of these covenants. As of June 30, 2002, the Company had $10.0 million in outstanding borrowings under this agreement and $30.0 million available for borrowing taking into account the financial covenants. Management believes through its operating cash flows as well as borrowing capabilities, the Company has adequate liquidity and capital resources to meet its needs on a short and long-term basis.

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New Accounting Standards

        In June 2001, the Financial Accounting Standards Board adopted SFAS No. 142, "Goodwill and Intangible Assets." Under SFAS No. 142, goodwill is no longer subject to amortization over its useful life; rather, it is subject to at least annual assessments of impairment. Also, under SFAS No. 142, an intangible asset should be recognized if the benefit of the intangible is obtained through contractual or other legal rights or if the intangible asset can be sold, transferred, licensed, rented or exchanged. The Company stopped amortizing goodwill effective January 1, 2002 in accordance with provisions above. Other intangible assets will continue to be amortized over their estimated useful lives. The Company has completed Phase I of goodwill impairment testing and has determined that there is no impairment of goodwill.

        In June 2001, the Financial Accounting Standards Board issued SFAS No. 143, "Accounting for Asset Retirement Obligations." Under SFAS No. 143, the fair value of a liability for an asset retirement obligation is required to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. SFAS No. 143 is required to be implemented by the Company by January 1, 2003. Adoption of SFAS No. 143 is not expected to have a material impact on the consolidated financial statements of the Company.

Forward-Looking Statements

        Investors are cautioned that this report as well as other reports and oral statements by Company officials may contain certain forward-looking statements as defined in the Private Securities Litigation and Reform Act of 1995. Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions and which include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" or similar expressions. These statements are not guaranties of future performance and the Company makes no commitment to update or disclose any revisions to forward-looking statements, or any facts, events or circumstances after the date hereof that may bear upon forward-looking statements. Because such statements involve risks and uncertainties, actual actions and strategies and the timing and expected results thereof may differ materially from those expressed or implied by such forward-looking statements. These risk and uncertainties include, but are not limited to, those disclosed in the Company's Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

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

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PART II
OTHER INFORMATION

Item 1.    Legal Proceedings

        On May 24, 2001, Sultan Dental Products, Ltd. ("Sultan") filed a complaint in the United States District Court for the Southern District of New York (which was subsequently dismissed by the plaintiff and refiled in the United States District Court for the District of New Jersey on October 16, 2001) asserting that the Young disposable prophy angle infringes a patent that is exclusively licensed to Sultan. The complaint seeks a permanent injunction and unspecified damages. The Company believes it has meritorious defenses to the claims and intends to vigorously defend this matter. In addition, on January 25, 2002, the Company filed a complaint in the United States District Court for the Eastern District of Missouri asserting that the manufacture of the Sultan disposable prophy angle infringes the Company's U.S. Patent No. 5,749,728. The complaint seeks a permanent injunction and damages. This case has been transferred to the District of New Jersey and consolidated for pretrial matters with Sultan's case. Both cases are stayed pending the completion of court-ordered mediation.

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

(a)

A regular Annual Meeting of Shareholders was held on May 14, 2002.



(b)

The following directors were elected at the Annual Meeting.

George E. Richmond, Alfred E. Brennan, Arthur L. Herbst, Jr., Richard G. Richmond, Richard P. Conerly, Craig E. LaBarge, Connie H. Drisko, DDS, James R. O'Brien and Brian F. Bremer.

(c)

The voting at the Annual Meeting of Shareholders for the election of directors was as follows:

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Item 6.    Exhibits and Reports on Form 8-K

(a)

Exhibits.

(b)

Reports on Form 8-K.

On June 17, 2002 the Company filed a Form 8-K. Under item 4, the Company reported that its Board of Directors had appointed KPMG LLP to replace Arthur Andersen LLP as independent public accountants.

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SIGNATURE

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

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QuickLinks

Item 1. Financial Statements.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 1. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K