1
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 30, 1995

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

Commission file number 0-9042

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

OHIO 31-4441680
(State of Incorporation) (I.R.S. Employer Identification No.)

3637 LACON ROAD, HILLIARD, OHIO 43026
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (614) 876-2413

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

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

Common Stock, Par Value $.01 per share
(Title of class)

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
---

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, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---

As of September 20, 1995, 6,164,485 common shares were outstanding. The
aggregate market value of such common shares held by non-affiliates of the
Registrant (based upon actual last transaction price as reported by the NASDAQ
National Market System) was $ 60,284,100.

DOCUMENTS INCORPORATED BY REFERENCE

(1) Portions of the 1995 Annual Report to Shareholders are incorporated by
reference in Parts II and IV of this Annual Report. The 1995 Annual
Report to Shareholders shall be deemed to have been "filed" only to the
extent portions thereof are expressly incorporated by reference.

(2) Portions of the Proxy Statement for the Annual Meeting of Shareholders
November 15, 1995, are incorporated in Part III.

PART I

ITEM 1. BUSINESS

GENERAL

Medex, Inc. and its subsidiaries, (the Company), designs, manufactures,
assembles, and markets a broad range of health care products for the diagnosis
and treatment of patients receiving care in hospitals, alternative health care
facilities and the home health care environment. The Company operates in one
principal industry segment providing critical care accessories and infusion
systems for medical and surgical applications.

Medex, Inc. was formed as an Ohio corporation in 1959 under the name W & J,
Inc., and adopted its present name in 1961. Medex, Inc. and its subsidiaries
carry on the Company's business in the United States and throughout the world.
The Company's domestic operations are located in the Columbus, Ohio and Atlanta,
Georgia metropolitan areas. During fiscal 1995 the Company closed its Denver,
Colorado facility and integrated its functions and product lines into its
Columbus and Atlanta operations. Medex Medical, Inc., carries on the Company's
manufacturing, sales and distribution business in the United Kingdom and certain
other European countries. Ashfield Medical Systems Limited, acquired in fiscal
1995, and also located in the United Kingdom, manufactures surgical drapes for
the European market. Medex Medical, GmbH, a German corporation, carries on sales
and distribution operations in Germany and other parts of continental Europe.
Medex Medical France, SARL, is a French subsidiary which carries on sales and
distribution operations in France and certain other European countries. In
addition, the Company maintains a Foreign Sales Corporation, Medex Exports,
Inc., situated in the United States Virgin Islands.

PRODUCTS

The Company's products are used to diagnose and treat patients in all age
groups. Treatment areas for these procedures include intensive care units,
operating rooms, anesthesia suites, post-anesthesia recovery rooms, outpatient
surgical centers, cardiac catheterization laboratories, labor and delivery
facilities and emergency rooms. Home infusion therapy products are also utilized
in hospital outpatient care facilities, oncology clinics, pain management
clinics and in the home where patients are managed by professional home health
care agencies.

The Company's products are categorized into two classes of similar products:
critical care accessories and infusion systems.

The Company's critical care accessories product line offers a wide range of
precision products utilized in intravenous therapies such as fluid and drug
administration. Other products include blood pressure transducers used by
clinicians monitoring the cardiovascular system, specialty devices used in
cardiac catheterization procedures and intrauterine monitoring products used
during high risk labor and delivery situations. Many of these products can be
used alone or as components assembled into kits. By offering standard and custom
configurations, the Company's critical care products can address the specific
needs of a customer.

The Company's infusion systems include a broad line of infusion pumps designed
to deliver prescribed doses of drugs and fluids to patients. These include
syringe pumps and large volume infusion pumps for bedside administration and
ambulatory pumps for patients who are more mobile. A full range of disposable
product sets, providing the interface between pump and patient, complete the
system.

Included below is a representative sample of the products included in each of
these categories:

CRITICAL CARE ACCESSORIES

- - STOPCOCKS

Stopcocks are specialized valves used as a component in the administration of
parenteral fluids or blood and provide a convenient means to administer drugs or
liquid anesthetics in conjunction with such fluids. Stopcocks provide multiple
flow paths for the selection and direction of fluids, drugs and anesthetics
depending upon the particular procedural requirements and the preference of the
user. The Company has been manufacturing stopcocks of various types since 1961,
and these items are sold both separately and as components in the Company's
assembled products. The Company manufactures one-way, three-way and four-way
stopcocks, which it markets under the name Guide-Flo(R). In addition to fluid
and drug administration, the growth of invasive pressure monitoring and cardiac
catheterization diagnostic procedures have resulted in a significant increase in
demand for stopcocks of various configurations and performance characteristics.
The Company manufactures a line of stopcocks and other related components which
are composed of chemically resistant plastic materials to minimize cracking and
reactions with potent agents used in certain therapies.

- - ADMINISTRATION SETS

An administration set is the apparatus by which fluid is delivered from a
container or a pump to the patient. In delivery from a container, these sets
consist of an entry spike, drip chamber, a length of tubing with a flow control
device and a catheter adapter. The entry spike is used to enter the fluid bottle
or bag, and the drip chamber, which is made of a clear plastic, provides a
reservoir of fluid. Fluid flows into the system one drop at a

time, which can be seen and counted, permitting calculation of the volume of
fluid being administered. This flow rate can be manually adjusted by external
clamps when gravity is used to create fluid flow.

Disposable administration sets are manufactured in standard and customized
configurations and may incorporate numerous additional components such as
stopcocks, continuous flush devices, or injection sites for intravenous drug
administration. The administration sets are designed to ensure clinical
flexibility, volumetric accuracy and sterility.

- - NUSITE

NuSite, introduced in fiscal 1995, is a needle-less injection system designed to
help prevent needlestick injuries to healthcare providers, and thereby reduce
associated risks of infectious disease. NuSite is adaptable to a large variety
of administration sets and accessories and is resistent to long-term exposure to
lipids and certain other plastic-interactive fluids.

- - TRANSTAR(TM)

TranStar is a redesigned disposable pressure transducer first released in fiscal
1994 for sale in Europe and other foreign markets and subsequently released in
the United States during fiscal 1995. A pressure transducer is a device that
senses hydraulic pressure and converts it to an electrical signal that is
transmitted to a patient monitor. The monitor then processes and graphically
displays this data.

- - NOVATRANS II(R)

NOVATRANS II is a reusable pressure transducer that provides the cost efficiency
of a reusable unit while providing electrical safety and accuracy.

- - SIMULCATH(TM) AND IUP KITS

SimulCath is an intrauterine pressure monitoring system that accommodates the
implementation of amnioinfusion, a procedure designed to increase the efficiency
of labor as well as provide direct support to a fetus exhibiting signs of
distress. In this procedure, sterile saline is infused into the uterus to
directly relieve fetal distress by providing hydraulic support of the umbilical
cord and to increase the effect of labor contractions until delivery is
accomplished. In addition, the Company manufactures and markets intrauterine
pressure monitoring kits. These completely preassembled kits are designed to
monitor the intensity of contractions during child birth and are used in
conjunction with SimulCath.

- - SECURE(TM) SYSTEM

The Secure System is an arterial pressure monitoring kit for closed system
pressure monitoring whereby blood samples can be withdrawn through a special
access port that mitigates the risk of accidental line contamination and patient
infection. Another feature of the Secure System is the shrouded needle which is
mounted on a hypodermic syringe, thereby reducing the clinician's risk of
accidental needlestick injury. The shrouded needle and syringe are used to
access the arterial line for the aseptic sampling of blood. The system design
also allows the reinfusing of blood/saline mixture to preserve the red blood
cell mass of a critically ill patient.

- - KIDS KIT

Kids Kit is a pediatric version of the SECURE pressure monitoring system for
adults. The Kids Kit provides a closed system which minimizes contamination and
infant blood loss as well as helping to prevent accidental needlestick injuries
to clinicians.

- - CONTINUOUS FLUSH DEVICES

The continuous flush device is a component used in invasive cardiovascular
pressure monitoring systems. This device allows a small amount of saline
(typically 3-6 cc(s) per hour) to be infused through the catheter in order to
reduce the tendency of blood to clot in the catheter, which could distort or
eliminate the ability of the system to monitor pressure. The continuous flush
device also incorporates a valve that, when activated, will allow a large volume
of fluid to enter the system for purposes such as priming the initial set up or
for clearing the system of accumulated blood. The continuous flush devices
manufactured by the Company are used primarily as components in standard and
custom pressure monitoring kits assembled and marketed by the Company.

- - PRESSURE INFUSOR CUFFS

Pressure infusor cuffs are designed to be placed around bags of fluid and
manually inflated with air to create and maintain a specific fluid pressure.
This pressure, in conjunction with the action of the continuous flush device,
permits controlled flow rates and fast flushing of the invasive pressure
monitoring systems. In addition, pressure infusor cuffs are used for rapid
infusion of blood and other fluids. The Company manufactures and markets two
infusor cuffs, C-Fusor(R) and Clear Cuff(R).

C-Fusor is made of clear polyurethane, which permits immediate assessment of the
fluid level in the bag from any angle. This material's stain resistance and
durability extends the useful life of the product. The closure system used in
the C-Fusor provides secure closure and significantly simplifies fluid bag setup
and replacement.

The Clear Cuff pressure infusor complements the Company's C-Fusor reusable
pressure infusor. The Clear Cuff offers the flexibility

of being disposable or reusable as dictated by clinical considerations.

- - ANGIOGRAPHY AND CORONARY ANGIOPLASTY PRODUCTS

Angiography is a diagnostic procedure used to evaluate the condition of major
blood vessels within a patient's vascular system. Coronary angioplasty is a
therapeutic procedure that involves the utilization of a balloon catheter to
expand the inner diameter of a patient's coronary arteries to improve blood
flow.

The Company manufactures and markets a series of Hemostatic Y Connectors used to
facilitate the placement of specialty catheters for angiographic and angioplasty
procedures in the cardiac catheterization laboratory. In addition, the Company
markets the Matrix 250(TM) and the Matrix 550(TM) series of one-piece, hand-held
manifolds, the Encore II(TM) control syringe, high pressure injection tubing and
high pressure rotators which are used during angiography and angioplasty
procedures. During fiscal 1995, the Company introduced Medflator II to the
European market. This product, a new analog version of the original digital
product, is an inflation device used to inflate balloon catheters during
therapeutic or interventional procedures such as angioplasty.

- - KITS AND PROCEDURE PACKS

The Company assembles many of the disposable products described above into
integrated systems (kits). These kits are available in standard configurations
or they may be custom designed to meet the specific requirements of an
individual customer. Standard and custom kits may include one or more of the
following products: intravenous administration sets; stopcocks; pressure tubing;
continuous flush devices; and other products.

In Europe, the Company purchases various components from other manufacturers and
packages them with the Company's products to

produce kits specifically for sophisticated hospital procedures. Procedure
packing lowers costs, increases hospital throughput, and saves labor by
eliminating the need for healthcare providers to purchase parts individually and
assemble them on site. Procedure packing is a growing market in Europe and the
Company has expanded its United Kingdom facilities to access this growing
market.

INFUSION SYSTEMS

- - MEDFUSION 2001 SYRINGE PUMP

The Company's leading pump product is the Medfusion Model 2001 syringe pump.
This product is capable of accepting all conventional hypodermic syringes which
range from 1 through 60 cc in volume. This capability makes the pump very useful
for the intravenous and regional infusion of anesthetic agents in the operating
room as well as in neonatal intensive care units where low volume drug infusions
are required for premature infants.

Additionally, a syringe offers the lowest cost intravenous fluid container
available to the hospital pharmacist. The pharmacist can prefill a syringe with
the exact amount of drug required by the patient, label the syringe, and deliver
it to the patient's bedside for loading into the syringe pump. The operational
programming of the pump is software prompted and easily taught to clinical
personnel.

The 2001 syringe pump is microprocessor based and capable of automatically
recognizing the size and manufacturer of the syringe attached to it. The pumps
occlusion alarm is automatically varied in accordance with the syringe size in
use. If the drug infusion line or catheter becomes kinked or obstructed, the
pump will automatically switch off and sound an alarm.

- - MEDFUSION 2010 AND 2010i SYRINGE PUMPS

The Medfusion Model 2010 and 2010i syringe pumps are designed specifically for
use by anesthesiologists in the operating room. These syringe pumps build upon
the electromechanical success of the 2001 syringe pump through utilization of
expandable system architecture.

Anesthesiologists frequently administer drugs according to mass units (i.e., the
number of milligrams or micrograms of drug per kilogram of patient body weight
per unit of time required for the anesthetic.) The 2010 syringe pump is capable
of making drug concentration calculations in mass units as well as tracking the
total mass units of drugs infused over a period of time.

Additionally, anesthesiologists frequently manually infuse preselected volumes
of drugs intravenously into patients over short intervals ("bolus infusions") to
achieve rapid sequential effects. The 2010 syringe pump is capable of
automatically delivering programmed boluses of drugs to patients over a
specified time interval and then reverting to a continuous infusion mode for the
duration of the procedure.

The 2010i syringe pump, which was introduced in fiscal 1994, is an enhanced
version of the 2010 syringe pump. The 2010i syringe pump stores hospital managed
drug protocols in an on board computer library, thereby greatly extending the
utility and ease of use of the 2010 version anesthesia syringe pump.

- - EZ-1(TM)

The EZ-1 is a large volume infusion pump used for administrating large fluid
volumes ranging from 0.1 ml per hour to 999.9 ml per hour. The EZ-1 pump uses a
specially calibrated pumping cassette as part of the disposable infusion set.
The EZ-1, unlike syringe

pumps, utilizes a broad range of dedicated disposable infusion sets for
different protocols.

- - KIDS(TM) PUMP

The Company's KIDS Pump, unlike syringe pumps, can be used for the
administration of large, as well as small, fluid volumes. However, syringe pumps
are routinely connected to the infusion set of the KIDS Pump via "piggyback"
administration sets for the administration of drug mixtures to the patient. The
KIDS Pump, in tandem with the 2001 syringe pump, is capable of delivering most
pediatric fluid and drug administration protocols.

The KIDS Pump, like the EZ-1 large volume pump, utilizes a broad range of
dedicated disposable infusion sets for different clinical protocols. A special
calibrated pumping cassette is inserted into the KIDS Pump as an integral part
of the disposable infusion set. The calibration of the cassette delivers flow
rates ranging from 0.1 ml per hour to 999.9 ml per hour. The combined accuracies
and safety features of the 2001 syringe pump and the KIDS Pump address concerns
of neonatal and pediatric intensive care physicians and nurses. The KIDS Pump is
among the easiest pumps of its kind to operate and can be programmed to prevent
tampering.

- - TRILOGY(TM)

Trilogy, a three-channel large volume pediatric infusion pump, which was
introduced in fiscal 1994, provides the capabilities of three KIDS pumps in one
housing of substantially less size and weight; thus allowing the clinician more
efficient use of bedside space.

- - WALKMED(R) INFUSION PUMPS

The Company designs and manufactures a line of battery powered, single channel
ambulatory infusion pumps for the administration of

chemotherapeutic agents, anticancer drugs, and analgesics to manage intractable
pain. Ambulatory drug therapy is typically administered by indwelling vascular
access catheters or implanted ports of various types. Alternatively, ambulatory
pumps may be used for subcutaneous and/or epidural drug infusions when
clinically indicated.

The WalkMed series of peristaltic pumps weigh approximately 12 ounces and are
capable of delivering drugs from 0.01 to 30.0 cc per hour. The microprocessor in
the WalkMed series is capable of indicating different functional conditions by
audible signal, visible light, and written information on the liquid crystal
display.

The following table sets forth the percentage of consolidated net sales
contributed by each class of similar products for the last three fiscal years:

YEAR ENDED JUNE 30 1995 1994 1993
- ------------------ ---- ---- ----

Critical Care Accessories 69% 70% 67%
Infusion Systems 31% 30% 33%

The Company's backlog orders believed to be firm, at June 30, 1995, were
approximately $11,163,000 as compared to approximately $7,696,000 as of the
end of the preceding fiscal year. It is expected that approximately 90% of
these orders will be filled during the current fiscal year.

RESEARCH AND DEVELOPMENT

The Company's research and development activities concentrate on the
investigation and development of new and improved products in the area of
critical care medicine. The Company's research and development expenditures for
the years ended June 30, 1995, 1994, and 1993 were approximately $3,147,000,
$3,299,000 and $4,254,000 respectively.

As a result of this activity, the Company has introduced invasive pressure
monitoring transducers, hospital and ambulatory infusion pumps, balloon
inflation devices, various products for fluid and drug delivery and special
pressure monitoring systems for critically ill patients. The majority of the
research and development activities are performed by the Company's personnel.

The Company maintains separate research and development groups at its Ohio and
Georgia facilities whose scientific and engineering disciplines are specific to
the products manufactured at those locations.

SALES AND MARKETING

The Company currently markets more than 600 standard products as well as
additional custom products in the United States, Canada and internationally.
Single patient use (disposable) products currently account for approximately 75%
of net sales.

The Company's domestic sales and marketing effort is accomplished primarily by a
network of direct sales representatives and is supplemented in select geographic
areas by independent sales agents. These representatives work with independent
hospital supply dealers to whom the Company sells many of its products. In
addition, these representatives work with the dealers' sales force at the
hospital level to promote sales of the Company's products. The Company also
sells directly to hospitals, home health care companies, other alternate site
health care facilities, as well as other medical device manufacturers on an
original equipment basis.

Sales in the United Kingdom, continental Europe, and the Middle East are
conducted mainly by direct sales representatives of Medex Medical, Inc., Medex
Medical GmbH, Ashfield Medical Systems Limited and Medex Medical France SARL.
Sales to other international markets are conducted through dealers located in
the various

countries. See Note 7 of Notes to Consolidated Financial Statements.

During fiscal 1995, the Company completed the reorganization of its domestic
sales force to centralize sales, customer service and marketing efforts between
Medex and its former subsidiaries, Medfusion, Inc. and Ivion Corporation, with
the goal of creating a single sales force to focus on the Company's entire line
of hospital products.

Increasingly, hospitals and other customers are relying upon third parties to
purchase supplies, manage inventories and distribute goods. The Company
recognizes the influence of these hospital group purchasing organizations, as
well as "stockless" and "just in time" programs with major distributors, and
continues to establish and pursue on-going relationships with these types of
organizations. In addition, the Company has invested significant resources to
improve customer ordering efficiency through the implementation of a centralized
order entry and billing system utilizing an electronic data interface system
that allows customers to directly place domestic product orders to a single
location, thereby reducing human error and speeding order turn around.

MAJOR CUSTOMERS

During fiscal 1995, 1994 and 1993, Medex had sales to Owens & Minor, a domestic
distributor of its products, totaling approximately 12%, 11% and 11% of total
net sales, respectively.

MANUFACTURING OPERATIONS

The Company's manufacturing operations are undertaken at its facilities located
in Hilliard and Dublin, Ohio; Duluth, Georgia; Rossendale, England; and in
Cumbernauld, Scotland.

The Company utilizes sixty automated molding machines and an array of automated
assembly machines located at the Dublin facility to fabricate over 400 million
components annually for its operating entities. This produces manufacturing
efficiencies by avoiding duplication of technical manpower, support facilities,
and capital equipment at its other manufacturing operations. The disposable
components manufactured at the Dublin facility are transferred directly to the
Company's various assembly facilities where the final assembly of products is
undertaken according to Good Manufacturing Practice (GMP) standards set forth by
the United States Food and Drug Administration. The quality control, packaging,
and labeling of disposable products are completed at those locations. The Ohio
facilities utilize the Company's own sterilization operations located at the
Hilliard facility, while the other assembly facilities primarily rely upon
contracted sterilization services.

The design, manufacture, and servicing of infusion pumps and certain disposable
products are undertaken at the Company's Duluth facility.

The Company assembles and packages products including procedure packs for
distribution to Europe, Africa and the Middle East from Medex Medical's
facilities in Rossendale, England. Surgical drapes are manufactured at Ashfield
Medical Systems Limited's facility in Cumbernauld, Scotland for inclusion in the
Company's procedure packs and for sale to other manufacturers.

Quality control procedures include rigid specifications for the examination of
components, packaging materials and labels, and sterilization procedures.
Quality control tests performed at different stages in the manufacturing and
assembly processes are designed to assure that exacting standards for finished
goods and their component parts are met. Periodically, these efforts are audited
by a group of qualified employees and outside consultants

to confirm that the Company's actions fulfill regulatory requirements.

Certain components, such as extruded tubing, silicon chips, and
electromechanical subassemblies for infusion pumps are purchased from outside
suppliers. Outside suppliers of medical components must adhere to the Company's
specifications and GMP's.

RAW MATERIALS

Purchased raw materials used in the Company's production process are generally
available from a number of suppliers. The primary raw materials used include
thermoplastic resins, plastic tubing, electronic componentry, paper and plastic
packaging materials.

Due to increased worldwide demand, some users of polycarbonate resins have
experienced periodic shortages in supply and delays in delivery of such resins.
The Company uses polycarbonate in the manufacture of certain plastic components.
To date, the Company has been minimally impacted by such shortages and delays.
While the Company believes that an adequate supply will be available in the near
term, the cost of such material will likely continue to increase.

PATENTS AND TRADEMARKS

The Company possesses rights under a number of domestic and foreign patents and
trademarks relating to its products and business. While the Company considers
its trademarks important in the operation of its business and, in particular,
the name Medex, Inc.(R), the business of the Company is not dependent on any
trademark or on any single patent or group of patents.

As a condition of employment, many of the Company's employees involved in
research and development activities are required to sign an agreement to
maintain the confidentiality of Company

secrets and to assign to the Company his or her interest in any inventions
conceived during the course of his or her employment. The Company recognizes
that such agreements are sometimes difficult to enforce.

COMPETITION

There are a significant number of manufacturers that compete with the Company.
The principal methods of competition are price, service, scope of product line
and product quality. The Company is not presently a dominant factor in the
markets served by its critical care accessories and most of its competitors have
greater financial and other resources. Although the infusion pump market is
extremely competitive, the Company believes that it is a major factor among
those manufacturers who supply the children's hospital, neonatal and pediatric
marketplace.

GOVERNMENT REGULATIONS

The Company is subject, in the manufacture, clinical testing and marketing of
its products, to mandatory procedures and safety standards which are
administered by the United States Food and Drug Administration (FDA) and similar
agencies in foreign countries. The FDA regulates the Company as to the quality
and safety of its products and the practices by which they are manufactured and
sold. The FDA also regulates the introduction of new products, makes periodic
inspections of manufacturing processes to confirm that such processes meet FDA
standards, and receives, investigates and resolves any complaints against the
Company. The Company believes that it is in compliance with the FDA's Good
Manufacturing Practice (GMP) standards.

FDA regulations require clearance by the agency, prior to marketing a new
product. The two principal processes for obtaining this clearance are known as
"510(k)" premarket notification and premarket approval ("PMA"). Historically,
the process of obtaining

a 510(k) clearance typically has taken several months and involves the
submission of limited clinical data and supporting information. However, in
recent years this time period has been extended. The PMA process typically will
last more than a year and requires the submission of significant quantities of
clinical data and manufacturing information. Historically, the Company's new
products have fallen into the FDA's class of products which are subject to the
510(k) process. The Company presently expects that any new products it is
contemplating will be subject to the 510(k) process.

The Company is subject to various federal, state and local regulations relating
to the maintenance of safe working conditions, manufacturing practices, and the
use and discharge of harmful or potentially harmful substances. The Company
believes that it is in compliance with all such regulations applicable to its
operations.

The Company is currently operating three gas sterilizers at its Hilliard, Ohio
plant which use a sterilant gas mixture of ethylene oxide and HCFC 124. These
sterilizers are operational with the Company's sterilant recovery system.

ENVIRONMENTAL

During the fiscal year ended June 30, 1995, the amounts incurred in compliance
with federal, state and local environmental laws and regulations did not have a
material effect upon the capital expenditures or earnings of the Company and the
Company does not anticipate that such compliance will have a material effect on
future capital expenditures or earnings.

The Comprehensive Environmental Response Compensation and Liability Act (CERCLA)
provides governmental agencies with authority to require clean up of hazardous
waste sites and release of hazardous substances into the environment. Liability
under this act is joint

and several and can be applied retroactively. During fiscal 1994 the Company,
along with over one hundred other companies, was identified by the United States
Environmental Protection Agency (EPA) as a potentially responsible party (PRP)
for the clean up of a contaminated waste disposal site near Granville, Ohio. The
Company along with approximately 80 other PRP's formed a PRP Group in order to
develop responsive actions in connection with the site. The Company, along with
the majority of the PRP group members, has entered into an Administrative Order
on Consent with the U.S. EPA and a clean up plan is currently being implemented
at the site. Current clean up estimates provided to the PRP Group are
approximately $7 million. However, because the Company's share allocation within
the PRP Group is de minimis, the Company, at this time, believes that its
liability for this matter will not have a materially adverse affect on its
results of operations or financial condition.

EMPLOYEES

The Company and its subsidiaries employ approximately 1,100 employees worldwide.
None of the Company's employees are currently employed under a union contract.
The Company believes it has a good relationship with its employees.

ITEM 2. PROPERTIES

The Company owns a complex of facilities totaling approximately 150,000 square
feet situated on approximately 11 acres of land located in Hilliard, Ohio. These
facilities contain the Company's executive offices, management information
systems, assembly and sterilization facilities, sterile goods quarantine,
quality control laboratories, and general warehouse space. During fiscal 1995,
the Company completely renovated an approximately 71,000 square feet building
(included in the square footage above) situated on the site to provide
additional space for assembly and warehousing operations.

The Company owns an approximately 100,000 square feet facility located on
approximately 23 acres of land in Dublin, Ohio. The facility is being used for
research and development, production, automation, tooling, quality control
laboratories, warehousing and administrative offices.

The Company owns an approximately 52,000 square feet production, research,
warehouse, and office facility situated on an 8.2 acre parcel of land in Duluth,
Georgia.

The Company continues to lease an approximately 82,000 square feet facility in
Broomfield, Colorado which previously housed the Company's Denver operations.
The facility was closed during fiscal 1995 and its operations were consolidated
into the Ohio and Georgia facilities. The lease expires in September 1998 and
the Company is currently attempting to sublease this space.

Medex Medical, Inc. owns and occupies an approximately 24,000 square feet
building located in Rossendale, England. The facility houses office, warehouse
and production facilities for international manufacturing and distribution
operations. Additionally, the Company owns a 994 year leasehold interest in an
approximately 3.3 acre parcel of land and a 65,000 square feet building situated
adjacent to the above facility. This facility is being utilized for additional
manufacturing, warehousing and office space principally in connection with the
Company's European procedure packing operations. The leasehold provides an
option to purchase the fee interest in the property at any time for the sum of
116,000 pounds sterling.

Ashfield Medical Systems Limited leases approximately 15,600 square feet of
production, warehousing and office space located in Cumbernauld, Scotland. The
Company is currently renovating a portion of this facility to provide a new
"clean room" production area. The current term of the lease extends until May
2017.

Medex Medical GmbH leases a facility located in Ratingen, Germany containing
approximately 26,000 square feet of office, sales, marketing and warehouse
space. The lease on this facility expires in September 1997.

Medex Medical France, SARL leases a facility in Nantes, France containing
approximately 3,000 square feet of office, sales and warehousing space. The
lease term extends until January 1997.

The Company believes that its current facilities and ongoing expansions will be
suitable and adequate for its operations for the immediate future.

ITEM 3. LEGAL PROCEEDINGS

The Company is not presently a party to any material pending legal
proceedings.

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

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information concerning officers of the
Company:

NAME POSITION WITH THE COMPANY AGE
- ---- ------------------------- ---

C. Craig Waldbillig Chairman of the Board 69
and Director

Phillip D. Messinger President, Chief Executive 59
Officer and Director

Terry L. Sanborn Senior Vice President, 52
Manufacturing and
Chief Operating Officer

Donald H. Barry Vice President, Treasurer and 57
Chief Financial Officer

Robert E. Boyd, Jr. Secretary, General Counsel 69
and Director

Bradley P. Gould Senior Vice President, 41
European Operations

William J. Post Senior Vice President, 45
Sales and Marketing

Michael J. Barilla Vice President, 44
Internal Auditing

Kevin L. Barnett Vice President and Corporate 33
Controller

William N. Bartleson Vice President, Human Resources 58

Roger A. Davis Vice President and General 49
Manager, Atlanta Operations

Georg W. Landsberg Vice President, European 41
Operations

Clint R. Lawson Vice President, Corporate Quality 46
Assurance and Regulatory Affairs

John L. Miclot Vice President, Marketing 36

David G. Musgrove Vice President, International/ 51
O.E.M. Development

Thomas O. Napper Vice President and General 56
Manager, Columbus Operations

C. Craig Waldbillig, a co-founder of the Company in 1959, was elected Chairman
of the Board in 1982. Mr. Waldbillig retired as Chief Executive Officer of the
Company during 1993. Mr. Waldbillig is also a director and Chairman of Medex
Medical, Inc. and a director of Medex Exports, Inc. Mr. Waldbillig serves as a
director of Danninger Medical Technology, Inc.

Phillip D. Messinger was elected Chief Executive Officer in March of 1993 and
has been President since 1982. Mr. Messinger has been a director since 1976 and
previously served as Chief Operating Officer from 1982 until 1993. Mr. Messinger
is also a director and Vice Chairman of Medex Medical, Inc., a director and
President of Medex Exports, Inc. and a managing director of Medex Medical GmbH.

Terry L. Sanborn was elected Chief Operating Officer in May of 1993. Mr. Sanborn
has served as Senior Vice President of Manufacturing since May, 1995. Mr.
Sanborn also served as Executive Vice President from May 1993 to 1995; Senior
Vice President, Corporate Operations from 1991 to 1993; and as a Vice President
since 1979.

Donald H. Barry was elected Vice President, Treasurer and Chief Financial
Officer in 1993. Prior to joining Medex, Inc. in October 1993, Mr. Barry was
Financial Controller and Treasurer for Chesebrough Ponds U.S.A., a business unit
of Unilever N.V. and Unilever PLC. Mr. Barry is also Assistant Treasurer for
Medex Medical, Inc. and Treasurer for Medex Exports, Inc.

Robert E. Boyd, Jr., was elected Secretary and General Counsel in 1960 and has
been a director since 1964. Mr. Boyd has been a practicing attorney for more
than 43 years. Mr. Boyd is also a director and Secretary of Medex Medical, Inc.
and Medex Exports, Inc.

Bradley P. Gould was elected Senior Vice President of European Operations in
1993. Mr. Gould is also a director and President of Medex Medical, Inc., a
director of Ashfield Medical Systems Limited, and a managing director of Medex
Medical GmbH and Medex Medical France SARL. Mr. Gould was first elected Vice
President in 1992. From 1991 until May of 1992, Mr. Gould was Director of
Sales/Marketing European Operations. Prior to 1991, Mr. Gould was General
Manager of Cardionova GmbH.

William J. Post was elected Senior Vice President, Sales and Marketing in 1993.
Prior to joining Medex, Inc. in October 1993, Mr. Post was Vice President, Field
Operations for Spectramed, Inc., The BOC Group, Windlesham, England.

Michael J. Barilla became Vice President, Internal Auditing in fiscal 1995. From
1993 to 1995 he served as Senior Vice President, Corporate Operations and
Administration. Mr. Barilla was first elected as Vice President in 1990 and
previously served as Corporate Controller.

Kevin L. Barnett was elected Vice President and Corporate Controller in 1994.
From April of 1992 until May of 1994 he was Assistant Treasurer of the Company.
Prior to April of 1992, Mr.

Barnett was employed by Deloitte & Touche as Manager, Auditing Services. Mr.
Barnett is also Assistant Treasurer for Medex Medical, Inc. and Medex Exports,
Inc.

William N. Bartleson was elected Vice President, Human Resources in 1993. Prior
to November 1993, Mr. Bartleson served the Company as Manager of Development and
Training from August 1989 to February 1990; Manager of Human Resources from
February 1990 to January 1991; and Director, Human Resources from January 1991
to November 1993.

Roger A. Davis was elected Vice President and General Manager, Atlanta
Operations in 1993. From July 1993 to December 1993 he was Vice President,
General Manager, Medfusion, Inc. From March 1992 to June 1993 he was Vice
President of Operations for Medfusion, Inc. Prior to 1992 he served as a plant
manager for 3-M Corporation.

Georg W. Landsberg was elected Vice President of European Operations in 1994.
From May 1992 to November of 1994, he was Director, Sales & Marketing, European
Operations. Mr. Landsberg is also a managing director of Medex GmbH and Ashfield
Medical Systems Limited. Prior to May 1992 he served as Sales and Marketing
Manager, Cardionova GmbH.

Clint R. Lawson was elected Vice President in 1990 and is responsible for
quality assurance and regulatory affairs. Prior to 1990, he was Director of
Corporate Quality Control and Regulatory Affairs for the Company.

John L. Miclot was elected Vice President of Marketing in 1994. Prior to joining
the Company in January of 1994, Mr. Miclot was employed as Vice President of
International Marketing from October 1993 to January 1994, for Ohmeda Division
of BOC Healthcare; Director of International Marketing for Ohmeda Medical
Systems, Division of BOC Healthcare from November 1992 to October 1993; and
Director of Marketing, Viggo-Spectramed Division of BOC Healthcare from November
1989 to November 1992.

David G. Musgrove was elected Vice President in 1982 and is currently
responsible for international, OEM, and bulk sales development.

Thomas O. Napper became Vice President and General Manager, Columbus Operations
during fiscal 1995. From December 1993 to February 1995, Mr. Napper was Vice
President and General Manager, Denver Operations. From June 1992 to December
1993 he was President of Ivion Corporation; from August 1991 to June 1992 Senior
Director of Manufacturing, Medex, Inc. Prior to joining the Company, Mr. Napper
was Vice President of Engineering for Sherwood Medical Company.

Officers are elected by the Board of Directors following the annual meeting and
serve until the next annual meeting or until their successors are named.

There are no family relationships between any director or executive officer and
any other director or executive officer of the Company.

There are no arrangements or understandings between any of the executive
officers of the Company and other persons relating to their selection as
officers.

There have been no events under any bankruptcy act, no original proceedings, and
no judgments or injunctions material to the evaluation of the ability and
integrity of any director or executive officer during the past five years.

PART II

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

The information required by this item is incorporated herein by reference to
"Market for the Registrant's Common Stock and Related Shareholder Matters"
appearing in Exhibit 13 of this Form 10-K Annual Report.

ITEM 6. SELECTED FINANCIAL DATA

The information required by this item is incorporated herein by reference to
"Selected Consolidated Financial Data" appearing in Exhibit 13 of this Form 10-K
Annual Report.

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

The information required by this item is incorporated herein by reference to
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" appearing in Exhibit 13 of this Form 10-K Annual Report.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is incorporated herein by reference to
the financial statements and supplementary financial information appearing in
Exhibit 13 of this Form 10-K Annual Report.

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

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is set forth under the captions
"Election of Directors" in the Company's Proxy Statement for its annual meeting
of shareholders on November 15, 1995, and is incorporated herein by reference.
The information with respect to "Executive Officers of the Company" is contained
at the end of Part I of this Form 10-K Annual Report.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is set forth under the caption
"Compensation of Directors and Executive Officers" in the Company's Proxy
Statement for its annual meeting of shareholders on November 15, 1995, and is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The information required by this item is set forth under the caption
"Beneficial Ownership of the Company's Common Stock" in the Company's Proxy
Statement for its annual meeting of shareholders on November 15, 1995, and is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is set forth under the caption
"Election of Directors" in the Company's Proxy Statement for its annual meeting
of shareholders on November 15, 1995, and is incorporated herein by reference.

PART IV

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

A. Documents filed as a part of this report.

1. FINANCIAL STATEMENTS

The consolidated financial statements as of June 30, 1995 and 1994 and
for each of the three years in the period ended June 30, 1995, together
with the report thereon of Deloitte & Touche LLP dated August 10, 1995,
appearing in Exhibit 13 of this Form 10-K Annual Report are
incorporated herein by reference.

INDEX TO FINANCIAL STATEMENTS

Consolidated Statements of Income for the years ended June 30, 1995,
1994 and 1993.

Consolidated Balance Sheets at June 30, 1995 and 1994.

Consolidated Statements of Cash Flows for the years ended June 30,
1995, 1994 and 1993.

Consolidated Statements of Shareholders' Equity for the years ended
June 30, 1995, 1994 and 1993.

Notes to Consolidated Financial Statements.

Independent Auditors' Report.

2. FINANCIAL STATEMENT SCHEDULES REQUIRED BY ITEMS 8 AND 14(d).

Included in Part IV of this report is the following additional
financial data which should be read in conjunction with the
consolidated financial statements in the 1995 Annual Report to
Shareholders.

Independent Auditors' Report

Supplemental Consolidated Schedules for each of the three years ended
June 30, 1995:

Schedule II - Valuation and Qualifying Accounts

Schedules not included above have been omitted because they are not
applicable or the required information is shown in the financial
statements or notes thereto.

3. Exhibits
See Index to Exhibits.

B. Reports on Form 8-K.

No reports on Form 8-K were filed during the three months ended June 30,
1995.

SIGNATURES

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

MEDEX, INC.

Date September 25, 1995 By: /s/ Phillip D. Messinger
---------------------------------- -------------------------
Phillip D. Messinger
President,
Chief Executive Officer

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

/s/Phillip D. Messinger President, Chief September 25, 1995
- ----------------------- Executive Officer -------------------
Phillip D. Messinger and Director Date

/s/Donald H. Barry Vice President, September 22, 1995
- ----------------------- Treasurer and Chief -------------------
Donald H. Barry Financial Officer Date

/s/Kevin L. Barnett Vice President and September 25, 1995
- ----------------------- Corporate Controller -------------------
Kevin L. Barnett (Principal Accounting Date
Officer)

/s/Robert E. Boyd, Jr. Secretary and Director September 26, 1995
- ----------------------- -------------------
Robert E. Boyd, Jr. Date

/s/ James L. Ginter Director September 26, 1995
- --------------------------- --------------------
James L. Ginter Date

/s/ Thomas A. Helmrath, M.D. Director September 26, 1995
- --------------------------- --------------------
Thomas A. Helmrath, M.D. Date

/s/ John N. Holscher Director September 26, 1995
- --------------------------- --------------------
John N. Holscher Date

/s/ Thomas M. Jordan, Jr. Director September 26, 1995
- --------------------------- --------------------
Thomas M. Jordan, Jr. Date

/s/ John B. Joyce, Jr. Director September 26, 1995
- --------------------------- --------------------
John B. Joyce, Jr. Date

/s/ J. David Martino, M.D. Director September 26, 1995
- --------------------------- --------------------
J. David Martino, M.D. Date

/s/ C. Craig Waldbillig Chairman of the September 26, 1995
- --------------------------- Board and Director --------------------
C. Craig Waldbillig Date

33
INDEPENDENT AUDITORS' REPORT

To the Shareholders and Directors of
Medex, Inc.:

We have audited the consolidated financial statements of Medex, Inc. and
subsidiaries as of June 30, 1995, and 1994, and for each of the three years in
period ended June 30, 1995, and have issued our report thereon dated August 10,
1995, which report includes an explanatory paragraph as to the change in the
method of accouting for income taxes; such financial statements and report are
included in your 1995 Annual Report to Shareholders and are incorporated herein
by reference. Our audits also included the consolidated financial statement
schedule of Medex, Inc. listed in Item 14. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such consolidated
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

DELOITTE & TOUCHE LLP

Columbus, Ohio
August 10, 1995

34
MEDEX, INC. AND SUBSIDIARIES SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED JUNE 30, 1995, 1994 AND 1993
- ---------------------------------------------------------------------------------------------------------------------------------
COLUMN C ADDITIONS
COLUMN B ----------------------------------
BALANCE AT (1) (2) COLUMN D COLUMN E
COLUMN A BEGINNING CHARGED TO CHARGED TO DEDUCTIONS BALANCE AT
DESCRIPTION OF YEAR COSTS AND EXPENSES OTHER ACCOUNTS (A) END OF YEAR

RESERVES DEDUCTED FROM ASSET TO WHICH IT APPLIES -
Allowance for doubtful accounts of trade receivables:

YEAR ENDED JUNE 30, 1995 $570,000 $367,000 $223,000 $714,000

YEAR ENDED JUNE 30, 1994 $548,000 $248,000 $226,000 $570,000

YEAR ENDED JUNE 30, 1993 $527,000 $184,000 $163,000 $548,000

(A) Amount represents uncollectible accounts written off and the effect of
changes in foreign currency exchange rates used to translate foreign
subsidiary amounts.
35

MEDEX, INC
FORM 10-K
JUNE 30, 1995
INDEX TO EXHIBITS

NUMBER DESCRIPTION OF EXHIBIT

3.1 Articles of Incorporation, incorporated herein by reference to Exhibit
3(a) of the Company's Quarterly Report on Form 10-Q for quarter ended
December 31, 1991.

3.2 Code of Regulations, incorporated herein by reference to Exhibit 3.2
of the Company's Annual Report on Form 10-K for fiscal year ended June
30, 1994.

3.3 Code of By-Laws

4. The Company agrees to furnish to the Commission upon request copies of
instruments defining the rights of holders of long-term debt which are
not being filed as part of this Report in reliance on Item
601(b)(4)(iii) because the total amount of securities authorized under
each such instrument does not exceed 10% of the total assets of the
Company and its subsidiaries on a consolidated basis.

10.1 Medex, Inc. Administrative Incentive Stock Option Plan II,
incorporated herein by reference to Exhibit 10.2 of the Company's
Annual Report on Form 10-K for fiscal year ended June 30, 1992.

10.2 Medex, Inc. Non-Employee Director Restricted Stock Option Plan,
incorporated herein by reference to Exhibit 10.3 of the Company's
Annual Report on Form 10-K for fiscal year ended June 30, 1994.

10.3 Medex, Inc. Non-Employee Director Restricted Stock Option Plan II.

10.4 Medex, Inc. Key Employee Nonstatutory Stock Option Plan, incorporated
herein by reference to Exhibit 10.5 of the Company's Annual Report on
Form 10-K for fiscal year ended June 30, 1992.

10.5 Split Dollar Life Insurance Agreement between the Company and Craig
Waldbillig Trust, incorporated herein by reference to Exhibit 10.5 of
the Company's Annual Report on Form 10-K for fiscal year ended June
30, 1994.
36

10.6 Settlement Agreement and Release between the Company and Robert F.
Durbin, dated September 28, 1993, incorporated herein by reference to
Exhibit 10.6 of the Company's Annual Report on Form 10-K for fiscal
year ended June 30, 1994.

10.7 Split Dollar Life Insurance Agreement between the Company and Phillip
D. Messinger, incorporated herein by reference to Exhibit 10.7 of the
Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1992.

10.8 Master Agreement and Joinder Agreements to Executive Split Dollar
Insurance Benefit Plan available to executive officers and certain
management employees of the Company, incorporated herein by reference
to Exhibit 10.7 of the Company's Annual Report on Form 10-K for fiscal
years ended June 30, 1990, June 30, 1991 and Exhibit 10.8 for fiscal
years ended June 30, 1992 and June 30, 1994.

10.9 Employment Agreement as executed by all executive officers of the
Company, except C. Craig Waldbillig, Robert E. Boyd, Jr. and Georg W.
Landsberg, incorporated herein by reference to Exhibit 10.8 of the
Company's Annual Report on Form 10-K for fiscal year ended June 30,
1990.

10.10 Directors Retirement Plan, see Exhibit 3.3 hereto.

10.11 Description of Medex, Inc. Annual Incentive Compensation Program for
executive officers of the Company.

10.12 Non-Competition Agreement and Consulting Contract between the Company
and Mr. Waldbillig dated June 1, 1993, incorporated herein by
reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K
for fiscal year ended June 30, 1993.

10.13 Medex, Inc. Non-Employee Director Restricted Stock Option Plan III,
incorporated herein by reference to Exhibit 10.1 of the Company's
Quarterly Report on Form 10-Q for the quarter ended December 31, 1993.

10.14 Employment Compensation Agreement with William J. Post, incorporated
herein by reference to Exhibit 10.14 of the Company's Annual Report on
Form 10-K for fiscal year ended June 30, 1994.

10.15 Medex, Inc. Executive Stock Option Plan, incorporated herein by
reference to Exhibit 10.1 of the Company's Quarterly Report on Form
10-Q for the quarter ended December 31, 1994.
37

11. Computation of earnings per share.

13. Annual Report to Shareholders.

21. Subsidiaries of Registrant.

23. Consent of Experts and Counsel. (1) The consent of Deloitte & Touche
LLP to the incorporation by reference in Registration Statements No.
33-23787, 33-36739, 33-44859, 33-79854 and 33- 89964 on Form S-8 of
their opinion dated August 10, 1995, appearing and incorporated by
reference in the Annual Report on Form 10-K of Medex, Inc. for the
year ended June 30, 1995.

27. Financial Data Schedule.