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

FORM 10-K

(Mark One)                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OFX                                        THE SECURITIES EXCHANGE ACT OF 1934
                                                                                          For the fiscal year ended: May 31, 2004
                                                                                                                       OR
                                                  _                      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                                                                                              THE SECURITIES EXCHANGE ACT OF 1934
                                                                                                       for the transition period      to

Commission File Number: 0-14820IMMUCOR, INC.
(Exact name of registrant as specified in its charter)

                      Georgia                                                                                        22-2408354
                  (State or other jurisdiction of incorporation or organization)                                 (I.R.S. Employer Identification No.)

3130 Gateway Drive       P.O. Box 5625       Norcross, Georgia 30091-5625
                                        (Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code, is (770) 441-2051

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

COMMON STOCK, $.10 PAR VALUE(Title of Class)

COMMON STOCK PURCHASE RIGHTS(Title of Class)

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

Yes X   No

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. [  ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes X   No

As of July 30, 2004, the aggregate market value of the voting stock held by non-affiliates of the registrant
was $595,474,464.

As of July 30, 2004, there were 30,207,488 shares of common stock outstanding

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement for its 2004 Annual Meeting of Shareholders to be
filed subsequently, are incorporated by reference in Part III, Items 10-13.

---

# PART I

# Item 1.  Business

| | Founded
in 1982, Immucor, Inc., a Georgia corporation (Immucor or the Company),
develops, manufactures and sells a complete line of reagents and automated systems used
primarily by hospitals, clinical laboratories and blood banks in a number of tests
performed to detect and identify certain properties of the cell and serum components of
human blood prior to blood transfusion. The Company continues to place increasing
emphasis on the development and sale of instruments and instrument systems that use the
Companys proprietary reagents, while promoting increased sales of its traditional
reagent product line.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Background and
Developments during the Fiscal Year 2004

| | o | Galileo FDA
clearance to market. On April 26, 2004, the Company announced that the U.S. Food and
Drug Administration had cleared its Galileo instrument for marketing in the United
States. Galileo is the Companys second generation, bidirectional, fully
automated walk-away instrument for the hospital blood bank transfusion laboratory, donor
centers and reference laboratories. The instrument provides continuous operator access
while performing all the routine blood bank tests including blood grouping, antibody
screening, crossmatch and antibody identification. A high throughput instrument, Galileo can
process up to 224 different samples at once. Tests are automatically scheduled to
optimize instrument usage. The Company believes there may be an opportunity to install
approximately 400  500 Galileo instruments in the United States over the next
several years. The Company expects to install approximately 50 instruments in North
America during fiscal 2005 through direct sales and reagent rental agreements under which
the Company recovers the cost of the instrument through increased reagent pricing.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Galileo market
expansion.During the year the Company submitted a device license application to
Health Canada for a clearance to market the Galileo in Canada. Health Canada
cleared the Galileo for market in Canada on July 9, 2004. The Company believes
there are approximately 50 Galileo placement opportunities in Canada over the next
several years. During the year the Company submitted a request to register the Galileo for
marketing within Japan with the Japanese Ministry of Health. On July 1, 2004 the Company
received the registration from the Ministry of Health. The Company believes there are
approximately 400  500 opportunities for Galileo placements in Japan over the
next several years. The Company expects to install 10 Galileo instruments in Japan
during fiscal 2005. In fiscal 2004, the Company placed one Galileo each in
Australia, Japan and Israel.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Galileo European
market penetration. Fiscal 2004 was a successful year for penetration of the Galileo instrument
into the European market. The Company placed 73 instruments during fiscal 2004 bringing
the total Galileo installed base to 133. The Company expects to place approximately
70 Galileo instruments in Europe during fiscal 2005.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Stock
splits. Immucor implemented two three-for-two stock splits in fiscal 2004, increasing
the number of shares of common stock by 16,611,915 shares during the year. The stock
splits were the fifth and sixth for the Company since its initial public offering in
December 1985. All share and per share amounts disclosed in this
document have been restated to reflect the impact of the above stock splits.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Share
repurchase. The Company instituted a repurchase program in fiscal 1999 for up to
2,700,000 shares of its common stock, of which 2,416,500 shares had been purchased prior
to fiscal 2004, leaving 283,500 shares available for repurchase. In June 2004, the Company expanded the program to cover an additional
300,000 shares and expanded the program again in August 2004 to cover an additional
500,000 shares. Since the beginning of fiscal 2005, the Company has repurchased an
additional 285,800 shares, bringing the aggregate number of shares to 2,702,300
repurchased under the program, and an aggregate of 797,700 shares remaining available for
repurchase.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Human
Collagen Development Agreement.In June 2003, Immucor, Inc. finalized a
development agreement for the production of human collagen mesh with Inamed Corporation
(NASDAQ: IMDC), a global healthcare company and the market leader in the dermal filler
market. Under terms of the agreement, Gamma Biologicals, Inc., Houston, Texas, a wholly
owned subsidiary of Immucor, will optimize the manufacturing process for the production
of a human collagen raw material for Inamed. Gamma has proven expertise in the growth of
human cell lines for the production of monoclonal antibodies. During the fourth quarter
of fiscal 2004, the Company shipped its first human collagen material to Inamed. The
Company expects to sell between $3.0 million and $4.0 million of human collagen to Inamed
during fiscal 2005.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | o | Third
Generation Instrument. The Company has identified the need for a fast, lightweight,
fully automated instrument to serve the small to medium accounts, the largest segment of
the Companys customers, which number approximately 7,500 worldwide. The Company has
entered into an agreement with Bio-Tek Instruments, Inc. to develop a third generation
instrument. The instrument, as designed, will be over two times faster and provide more
efficiency than the ABS2000 and is expected to appeal to customers throughout the world.
The cost of development totaled $0.8 million in fiscal 2004 and is expected to reach $2.8
million in fiscal 2005 before dropping to $1.5 million in fiscal 2006. European launch is
currently projected for fiscal 2006. The instrument is designed for service utilizing a
depot approach (i.e., the customer delivers an instrument to a Company depot
for servicing and receives a loaner instrument to use until servicing is complete) that
should significantly reduce service costs.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | New
Senior Credit Facility. On December 19, 2003, the Company announced it had completed
a new $27.0 million secured credit facility with SunTrust Bank. The new credit facility
matures in December 2006 and is comprised of a $15.0 million revolver and a $12.0 million
term loan, both at terms more favorable to the Company than its former credit facility.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | CE
Marking. During the year the directive for CE marking all products destined for sale
within the European Union became effective. This CE marking symbolizes that the product
conforms to all applicable European Community provisions and that the appropriate
conformity assessment procedures have been completed. The Company successfully completed
certifications for CE marking for approximately 290 products manufactured for the
European market.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Industry

|Immucor is
part of the immunohematology industry, which generally seeks to prevent or cure certain
diseases or conditions through the transfusion of blood and blood components. In the
U.S., the FDA regulates human blood as a drug and as a biological product, and it
regulates the transfusion of blood as the administration of a drug and of a biological
product. The FDA regulates all phases of the immunohematology industry, including donor
selection and the collection, classification, storage, handling and transfusion of blood
and blood components. The FDA requires all facilities that manufacture products used for
any of those purposes, and the products themselves, to be registered or licensed by the
FDA. See Regulation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The
principal components of blood are plasma (the fluid portion) and red cells. Blood also
contains antibodies and antigens. Antibodies are proteins that are naturally produced by
the human body in response to the introduction of foreign substances (antigens). Antigens
are substances that stimulate the production of antibodies. Red blood cells, which
transport oxygen from the lungs to other parts of the body and return carbon dioxide to
the lungs, are categorized by four blood groups (A, B, AB and O) and two blood types (Rh
positive and Rh negative), based on the presence or absence of certain antigens on the
surface of the cells. It is crucial that the health care provider correctly identify the
antibodies and antigens present in patient and donor blood. For example, if a donors
red blood cells contain antigens that could react with the corresponding antibody in the
patients plasma, the transfusion of the red blood cells may result in the
potentially life-threatening destruction of the transfused red blood cells.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Because
of the critical importance of matching patient and donor blood, procedures for testing
compatibility are generally performed by highly educated technologists in hospitals,
blood banks and laboratories. At present, with few exceptions, these tests are performed
manually using procedures which the Company believes can be significantly improved using
its instrumentation and solid phase system to automate the testing procedures. See Instruments
and Instrument Systems.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The
Company believes that the worldwide market for traditional blood bank reagents is
approximately $400 million, and that this market is relatively mature given current
technology. The industry is labor-intensive and the Company estimates worldwide industry
labor costs approach $1.0 billion. Therefore, the introduction of labor saving products
will provide additional growth in the market. The Company believes that its blood bank
automation and solid phase testing systems improve test results and reduce the time
necessary to perform certain test procedures, thereby offering a cost-effective
alternative for its customers. The Company anticipates that automation will increase the
available market for traditional and automated reagents to approximately $575 million
while decreasing the overall cost of blood testing by reducing the labor component by
approximately $500 million.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# Strategy

|Immucor
is focused on increasing worldwide market share in the next three years with a focus on
the United States, Western Europe and Japan. The Companys strategy is to further
strengthen its competitive position in the blood bank testing market by restructuring the
market through automation of the transfusion laboratory and to firmly establish Immucor
as the world leader in blood bank automation. In order to implement this strategy, the
Company intends to:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Maximize
Instrument Placements. The Companys strategy is to strengthen its leadership
position in the automation of blood bank testing by establishing a large base of
installed instruments that future market entrants must overcome. To facilitate instrument
placements, the Company offers customers a selection of automated analyzers, which
address the various needs of low, medium, and high-volume testing facilities. The Company
has successfully introduced and commercialized the ABS2000, the ROSYS Plato, the DIAS
PLUS and the second-generation Galileo automated analyzers, all of which operate
exclusively with Immucors proprietary solid phase Capture® assays. The Company
utilizes a razor/razorblade business model. When the customer procures an
instrument from the Company, they must also purchase proprietary reagents from the
Company. In order to satisfy the broad spectrum of customers operational and
financial criteria, the Company intends to continue to offer several instrument
procurement options, including third-party financing leases, direct sales and reagent
rentals and to expand the range and price points of its instrument offerings.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Align
Prices with Costs. In the past, reagent manufacturers were faced with increased costs
of manufacturing while, during the same period, market prices for blood bank products
decreased. The Company has utilized its market leadership position in the United States
to increase its prices to align them with its costs. The Company expects these
adjustments will continue to have significant favorable impact on the Companys
financial performance while adding only slightly to the cost of a patient transfusion.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Maximize
Revenue Stream Per Instrument Placement. Each instrument placed typically provides
the Company with a recurring revenue stream through the sale of reagents and supplies.
Immucors family of blood bank testing systems operates exclusively with the Companys
proprietary reagent lines and Capture® technology. Because these reagents
have been developed for automated technology, they command a premium price over
traditional products. The average annual revenue per instrument placement is $20,000 to
$100,000, depending on facility testing volume. The Company also continues to develop new
reagent applications and upgrade system software and hardware in order to expand
instrument test menus, thereby increasing reagent usage per placement.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Develop
New and Enhanced Products. Immucor continually seeks to improve existing reagent
products and develop new reagent products to enhance its market share and improve gross
margins. The Company has successfully introduced and commercialized the ABS2000, the
ROSYS Plato, the DIAS PLUS and the second-generation Galileo automated analyzers,
all of which operate exclusively with Immucors proprietary solid phase Capture® assays.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Proprietary Technology
Platform

|Under
traditional agglutination blood testing techniques, the technologist mixes serum with red
blood cells in a test tube, performs several additional procedures, and then examines the
mixture to determine whether there has been an agglutination reaction. A positive
reaction will occur if the cells are drawn together in clumps by the presence of
corresponding antibodies and antigens. However, when the mixture remains in a fluid
state, it is sometimes difficult for the technologist to determine whether a positive
reaction has occurred.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Due
to the critical importance of matching patient and donor blood, testing procedures, using
agglutination techniques, are usually performed manually by highly educated
technologists. Depending on the technical proficiency of the person performing the test,
the process can take from 30 minutes to one hour, and if the test results are ambiguous
the entire process may need to be repeated. Thus, a significant amount of expensive labor
is involved in manual agglutination testing. Based on industry sources, the Company
believes that labor costs are the largest component of the total cost of operating a
hospital blood bank. The Company believes that its solid phase blood testing system
improves test results and reduces the time necessary to perform certain blood testing
procedures related to the transfusion of blood and blood components.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Solid
Phase Technology. In the Companys proprietary solid phase blood test system,
one of the reactants (either an antigen or an antibody) is applied or bound to a solid
support, such as a well in a microtitration plate. During testing, the bound reactant
captures other reactants in a fluid state and binds those fluid reactants to the solid
phase (the bound reactant). The binding of the fluid reactants into the solid phase
occurs rapidly and results in clearly defined test reactions that are often easier to
interpret than the subjective results sometimes obtained from existing agglutination
technology. Based on results obtained with Capture-P®, Capture-R®,
Capture-CMV®, Capture-S and the Companys ongoing research, the
Company believes that solid phase test results, in batch test mode, can generally be
obtained in substantially less time than by existing techniques.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Immucor
has obtained FDA clearance for sale of five test systems using its solid phase
technology: a Platelet Antibody Detection System, Capture-P®; a Red Cell
Antibody Detection System, Capture-R®; Capture-R® Select,
used for antibody screening, identification, phenotyping, crossmatching and in the weak D
test, and two Infectious Disease Tests, Capture-CMV® and Capture-S. In
these four test systems, antigens are applied and bound to the surface of a small well in
a plastic microtitration plate, and patient or donor serum or plasma is placed in the
well. After the addition of special proprietary indicator cells manufactured by Immucor,
positive reactions indicating the presence of blood group antibodies adhere to the well
as a thin layer and negative reactions do not adhere but settle to the bottom as a small
cell button.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Reagents

|Most
of Immucors current reagent products are used in tests performed prior to blood
transfusions to determine the blood group and type of patient and donor blood, in the
detection and identification of blood group antibodies, in platelet antibody detection
and in prenatal care. The FDA requires the accurate testing of blood and blood components
prior to transfusions using only FDA licensed reagents such as those manufactured and
sold by the Company.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The
following table sets forth the products sold by or exclusively for the Company, most of
which are manufactured by or exclusively for the Company.
|-----------------------------------------------------------------------------------------------------------------------------------------------------

|Product Group                               | Principal Use
|------------------------------------------- | -------------
|ABO Blood Grouping                          |              
|                                           
|Rh Blood Typing                             |              
|                                           
|Anti-human Globulin  Serums (Coombs Serums) |              
|                                           
|Reagent Red Blood Cells                     |              
|                                           
|Rare Serums                                 |              
|                                           
|Antibody Potentiators                       |              
|                                           
|Quality Control Systems                     |              
|                                           
|Monoclonal (Hybridoma)                      |              
|Antibody-based Reagents                     |              
|                                           
|Technical Proficiency Systems               |              
|                                           
|Fetal Bleed Screen Kit                      |              
|                                           
|Capture-P®                                  |              
|                                           
|Capture-R®                                  |              
|                                           
|Capture-CMV®                                |              
|                                           

---

|Product Group                | Principal Use
|---------------------------- | -------------
|Capture-S                    |              
|                            
|Capture-R®Select             |              
|                            
|HLA Serums                   |              
|                            
|Infectious Diseases          |              
|                            
|Clinical Chemistry           |              
|                            
|Immunofluorescent Monoclonal |              
|Antibodies                   |              

# Instruments and
Instrument Systems

|The
Company believes that the blood banking industry today is labor-intensive, and that a
market exists for further automation of blood compatibility tests currently being
performed manually by hospital and donor center blood bank technologists. Based on the
results of independent workflow studies, the Company believes that its instruments and
instrument systems significantly reduce the amount of blood bank technologist time
required to perform routine blood compatibility tests.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ABS2000:
Fully Automated Blood Bank System. This automated, walk-away blood
bank analyzer uses Immucors proprietary Capture® reagent product
technology to perform blood bank patient testing and is manufactured exclusively for
Immucor by Bio-Tek Instruments, Inc., a wholly-owned subsidiary of Lionheart
Technologies, Inc.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ROSYS
Plato: Microplate Liquid Handler and Sample Processor. The system provides medium
sized donor centers, clinical reference laboratories and large hospital transfusion
laboratories with automated liquid and sample handling for processing of microtitration
plates and also uses Immucors proprietary solid phase Capture®assays.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|DIAS
PLUS: High Volume Microplate Processor. The instrument provides large blood donor
centers and clinical reference laboratories with automated batch processing and positive
sample identification of routine blood donor tests, and uses the Companys Capture-R®,
Capture-CMV® and Capture-S products.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|GALILEO:
High Volume Microplate Processor. The system provides hospitals, clinical reference
laboratories and blood donor centers a fully automated solution to perform all the
routine blood bank tests including blood grouping, antibody screening, crossmatch and
antibody identification. A high throughput instrument, Galileo can process up to
224 different samples at once. The Galileo uses Immucors proprietary Capture® reagent
product technology and is manufactured exclusively for Immucor by Stratec.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Multireader
Plus: Microplate Reader.This semi-automated spectra photometric microtitration plate
reader reads and interprets test results of Immucors proprietary Capture® products.
Together with the ROSYS Plato or the DIAS PLUS,the Multireader Plus completes a
semi-automated blood bank system ideally suited for blood donor centers, large hospital
transfusion laboratories and large reference laboratories.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Laboratory
Equipment. Immucor also distributes laboratory equipment designed to automate certain
blood testing procedures and used in conjunction with the Companys Capture® product.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# Products Under
Development

|Immucor
continually seeks to improve its existing products and to develop new ones in order to
enhance its market share. Prior to their sale, any new products will require licensing or
pre-market approval by the FDA. The Company employs several persons in the U.S. whose
specific duties are improving existing products and developing new products for the
Companys existing and potential customers. The Company also has established
relationships with other individuals and institutions that provide similar services and
the Company expects that it will continue to form and maintain such relationships. The
Company intends to continue focusing its product development efforts primarily in the
areas of blood bank automation and solid phase technology and in several other areas that
may also be useful in connection with the development of these products. For the fiscal
years ended May 31, 2004, 2003 and 2002, the Company spent approximately $3.7 million,
$2.1 million and $2.0 million, respectively, for research and development. The Company
may in the future acquire related technologies and product lines, or the companies that
own them, to improve the Companys ability to meet the needs of its customers.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Blood
Bank Automation. The Company believes that the blood banking industry today is
labor-intensive, and that a market exists for further automation of blood compatibility
tests currently being performed manually by hospital and donor center blood bank
technologists.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|On
January 19, 2004, the Company entered into an instrument purchase agreement with Bio-Tek
Instruments, Inc. for the development of a third generation automated assay instrument.
The Company has identified the need for a fast, lightweight, fully automated instrument.
This instrument will serve the small to medium accounts, the largest segment of our
customers, which number approximately 7,500 worldwide. The instrument as designed will
utilize the Companys proprietary Capture® technology and will be
over two times faster than the ABS2000. The cost of development totaled $0.8 million in
fiscal 2004 and is expected to reach $2.8 million in fiscal 2005 before dropping to $1.5
million in fiscal 2006. European launch is expected in mid 2006. The instrument will be
serviced utilizing a depot approach that should significantly reduce service costs. Upon
acceptance of the engineering model, the Company will have been deemed to issue a
purchase order for 100 units. There is no minimum purchase requirement to maintain
exclusivity.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Additional
Solid Phase Applications. The Company plans to continue to develop and refine its
patented solid phase technology. Recently, the Company has developed a screening test for
the detection of weak D antigens on donor red cells, that is available to Galileocustomers
in Europe, and became available to the U.S. market when the Galileo was approved by
the FDA. The Company has also developed a new Capture® product, Capture-R® Select.
Capture-R® Select uses an anti-human RBC specific monoclonal to
immobilize unwashed human red blood cells. It has been developed for use on the Galileo for
antibody screening, antibody identification, phenotyping, crossmatching and in the weak D
test. The anti-human RBC specific monoclonal is grown at the Companys Houston
facility. Capture-R® Select became available to the U.S. market when the
Galileo was cleared for market by the FDA.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Monoclonal
Antibodies. Monoclonal antibodies are derived by fusing an antibody-producing cell
with a tumor cell, resulting in a hybridoma cell that manufactures the original antibody.
The Company is actively engaged in the development of additional monoclonal antibodies
for a variety of uses, including the detection of blood group and infectious disease
antigens and for use in its solid phase test systems. Monoclonal antibodies are highly
specific, a trait which allows them to detect and identify antigens with greater
efficiency than other reagents. Product quality and consistency is maintained from
production lot to production lot. The Company continues to pursue the development of such
antibodies principally through its Gamma and Dominion subsidiaries.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|University
of Vermont Platelet Marker Test Agreement. In April 2003, Immucor, Inc. and Bio-Tek
Instruments Inc., the manufacturer of Immucors ABS2000 fully automated blood bank
instrument, announced the signing of an agreement with the University of Vermont to
commercialize an in-vitro diagnostic test to measure platelet markers useful in
anti-platelet pharmacological drug development and potentially to improve real-time
treatment of cardiovascular disease. The assay will be useful in determining the risk
associated with increased platelet activity (thrombotic occlusion of vessels, which can
lead to a myocardial infarct) and decreased function (excess bleeding). The need for an
assay that can quantitatively differentiate patients at low, as opposed to high, risk of
a detrimental heart event is critical in the pharmacological treatment of these patients.
In addition, the method offers promise for the prediction of coronary artery and
cerebrovascular disease in patients without a previous disease history. The Company spent
approximately $0.1 million in fiscal 2004 to facilitate this project and expects to spend
$50,000 in fiscal 2005.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Marketing and
Distribution

|Immucors
potential U.S. customers are approximately 6,000 blood banks, hospitals and clinical
laboratories. The Company maintains an active client base of over 5,500 customers
worldwide, and no single customer purchases in excess of 2% of the Companys current
annual sales volume. The Company believes there is a slight amount of seasonality to its
sales activity as fewer donations and elective surgical procedures are performed in its
first quarter (June-August) and third quarter (December-February). There is no material
backlog of reagent revenues. At May 31, 2004, the Company had a backlog of installed but
unrecorded instrument sales of approximately $1,200,000.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|During
fiscal 1999, the Company implemented its strategic plans to consolidate the U.S. blood
bank market, leaving Immucor and Ortho-Clinical Diagnostics as the only two companies
offering a complete line of blood banking reagents in the U.S. The Company executed its
plans through a series of acquisitions. The Company believes it is now the market leader
in North America. In addition, the Company seeks to continue to increase its worldwide
market share through the use of its experienced direct sales force and through the
expansion of its product line to offer customers a full range of products for their
reagent needs. The Company believes it can increase its market share by marketing
products based on its blood bank automation strategy and solid phase technology.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The
Company markets and sells its products to its customers directly through 114 sales,
marketing and support personnel employed by the Company in the U.S., Canada, Germany,
Portugal, Italy, Spain and Belgium. In addition, the Company utilizes 10 sales agents in
Italy. The Company has hired personnel whom the Company considers to be highly
experienced and respected for their knowledge of the blood bank diagnostic business
and/or individuals with previous success in laboratory instrument reagent sales. In
operating as a systems-oriented organization, the Company conducts extensive capital
sales training of its sales force and specialized capital sales representatives. Immucor
also sponsors workshops in the U.S., Europe, Latin America and Asia to which customers
are invited to hear the latest developments in the field.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The
Company also markets its products internationally through distributors located throughout
the world. For the fiscal years ended May 31, 2004, 2003 and 2002, the Company had
foreign net sales, including net domestic export sales to unaffiliated customers, of
approximately $44.9 million, $38.4 million and $31.8 million, respectively. These sales
accounted for approximately 39.9%, 38.9% and 37.7% of the Companys total net sales
for the respective fiscal years. During the years ended May 31, 2004, 2003 and 2002, the
Companys U.S. operations made net export sales to unaffiliated customers of
approximately $4.9 million, $4.8 million and $5.3 million, respectively. Most of the
Companys foreign sales occurred in Europe and Canada where the Company maintains
subsidiaries. The Companys German operations made net export sales to unaffiliated
customers of approximately $4.9 million, $3.1 million and $2.3 million for the years
ended May 31, 2004, 2003 and 2002, respectively. The Companys Canadian operations
made net export sales to unaffiliated customers of approximately $2.2 million, $2.2
million and $2.1 million for the years ending May 31, 2004, 2003 and 2002, respectively.
The Companys Italian operations made sales in Italy of $9.6 million, $7.6 million,
and $6.0 million for the years ending May 31, 2004, 2003 and 2002, respectively. Please
refer to Note 14 to our consolidated financial statements for revenue and profit
information for each of our last three fiscal years attributable to the different
geographic areas in which the Company does business. Revenue is allocated by geographic
area based on the subsidiary from which the sale originates. Fluctuations in foreign
exchange rates, principally with the U.S. dollar versus the Euro, could impact operating
results when translations of the Companys subsidiaries financial statements
are made in accordance with current accounting guidelines. For the year ended May 31,
2004, foreign net sales increased $4.3 million due to the exchange
fluctuation of the Euro. Since the end of the fiscal year, the Euro has remained
relatively constant against the dollar for the two months ended July 30, 2004 and
exchange fluctuations had little effect on foreign net sales.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Suppliers

|The
Company obtains raw materials from numerous outside suppliers. The Company is not
dependent on any single supplier, except for certain manufacturers of instrumentation,
including Lionheart Technologies, Inc. for the ABS2000 and our third-generation automated
assay instrument when available, Stratec Biomedical AG for the Galileo, (see Note
11 of the consolidated financial statements) and Serologicals, Inc., the joint
manufacturer of some of the Companys monoclonal antibody-based products (see Note 8
of the consolidated financial statements). The Company believes that its business
relationship with its suppliers is excellent. Management believes that if the supply of
instrumentation were interrupted, alternate suppliers could be found, but the
commencement of supply could take one to two years.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Certain
of the Companys products are derived from blood having particular or rare
combinations of antibodies or antigens, which are found in a limited number of
individuals. The Company to date has not experienced any major difficulty in obtaining
sufficient quantities of such blood for use in manufacturing its products, but there can
be no assurance that a sufficient supply of such blood will always be available to the
Company.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Regulation

|The
manufacture and sale of blood banking products is a highly regulated business and is
subject to continuing compliance with multiple U.S., Canadian, European and other
country-specific statutes, regulations and standards that generally include licensing,
product testing, facilities compliance, product labeling, post-market vigilance and
consumer disclosure.  See Industry.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|An
FDA facility license is issued for an indefinite period of time, subject to the FDAs
right to revoke the license. As part of its overview responsibility, the FDA
makes plant and facility inspections on an unannounced basis. Further, a sample of
each production lot of many of the Companys products must be submitted to and
approved by the FDA prior to its sale or distribution. The Company operates under
U.S. Government Establishment License No. 886 granted by the FDA in December 1982 to
Immucor, Inc. for the Norcross facility and U.S. Government Establishment License No.
435, granted by the National Institutes of Health in 1971 to Gamma Biologicals, Inc. for
the Houston facility.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
June 2003, the FDA inspected the Immucor, Inc. facility in Norcross, Georgia and reported
three minor observations.  The Company responded to the observations in late July
2003.  In December 2002, the FDA inspected the Gamma Biologicals, Inc. facility in
Houston, Texas and reported three minor observations. The Company responded to
these observations on January 31, 2003.The FDA acknowledged receipt of the Companys
responses and indicated that the Companys responses would be verified during the
next inspections.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
addition, each product manufactured by the Company is subject to formal product
submissions and review processes by the FDA and other regulatory bodies, such as Health
Canada, a European recognized Notified Body and the Japanese Ministry of Health prior to
authorization to market.  Significant changes to the Companys products or
facilities can require additional submission and review prior to implementation.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|For
example, the Company holds several FDA product licenses to manufacture blood-grouping
reagents, anti-human globulin reagents and reagent red blood cells.  The Company
must prepare biological product license applications or 510(k) pre-market notifications
to the FDA to obtain product licenses or market clearance for a new product or instrument. To
accomplish this, the Company must submit detailed product information to the FDA, perform
a clinical trial of the product, and demonstrate to the satisfaction of the FDA that the
product meets certain efficacy and safety standards.  There can be no assurance that
any future product licenses or instrument clearances will be obtained by the Company.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
2003, all Immucor manufacturing facilities worldwide were issued certification or
certification renewal to the ISO 13485: 1996 standard for its quality management systems.  This
is an internationally recognized standard and certification is required in order to
continue product distribution in key markets such as Europe and Canada.  In
addition, to continue marketing its products to the European Union, the Company is
required to maintain certification under the EC Full Quality Assurance System Assessment
in accordance with the requirements of Annex IV of the IVD Medical Devices Directive
98/79/EC.  This certification authorizes the use of the CE mark on Company products
that allows products free access to all countries within the European Union.  The
Company successfully completed certifications for CE marking all products manufactured
for the European market.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
addition to the U.S., Europe and Canada, there are multiple countries worldwide that also
impose regulatory barriers to market entry.  The Company continues to maintain
product registrations and approvals necessary to maintain access to foreign markets.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
North America, the Company has hired and retained several employees who are highly
experienced in FDA and other regulatory authority compliance, and the Company believes
that its manufacturing and on-going quality control procedures conform to the required
statutes, regulations and standards.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Patents, Trademarks and
Royalties

|Since
1986, the U.S. Patent Office has issued to Immucor six patents pertaining to its solid
phase technology.
|--------------------------------------------------------------------------------------------------------------

|Immucors
solid phase technology, including patent rights, was acquired from five researchers at
the Community Blood Center of Greater Kansas City (Blood Center) pursuant to
an agreement entered into on March 11, 1983, and amended in 1985 and 1987. In 1987, one
of the researchers joined the Company as Director of Research and Development to continue
to develop new products using the solid phase technology. The agreement terminates on
August 26, 2006; the date on which the first patent issued on the technology expires. The
Company has agreed to pay the Blood Center royalties equal to 4% of the net sales from
products utilizing the solid phase technology. For the fiscal years ended May 31, 2004,
2003 and 2002 the Company paid royalties of approximately $451,000, $463,000 and
$473,000 under this agreement. See Note 10 of the consolidated financial statements.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The
Company has registered the trademark Immucor and several product names, such
as ABS2000", ImmuAdd, Capture, Capture-P,
MCP, Capture-R, Ready-Screen, Ready-ID,
and Capture-CMV. Dominion Biologicals, Limited has registered the trademark
NOVACLONE. Gamma Biologicals, Inc. has registered the trademark Gamma.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Through
the acquisition of the BCA blood bank division of Biopool International, Inc., the
Company acquired several registered trademarks but produces only one of the products with
the registered trademark RESt. The Company continues to distribute four
products manufactured by Biopool, Inc.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Competition

|Competition
is based on quality of product, price, and talent of sales forces, ability to furnish a
range of existing and new products, customer services and continuity of product supply.
In the past several years, the industry experienced aggressive price competition,
particularly among manufacturers that targeted large hospitals and institutions as key
customers. In spite of this competitive environment, the Company has maintained its
worldwide sales and increased its domestic reagent market share. Management believes that
this is due to the Companys emphasis on product quality, the introduction of new
products, specialty products, customer service and training. The Company believes that
Ortho Clinical Diagnostics, a Johnson & Johnson company, is its sole competitor with
licenses to manufacture a complete line of blood banking reagents in the United States.
The Company believes that it became the North American market leader in terms of sales
during fiscal 1999 and remains the North American market leader.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The
Galileo instrument was introduced to the major European countries starting in June
2002. Throughput for the routine battery of tests is 70 per hour. This is very important
to the European market, since in most cases the laboratories are open for one shift only
and the testing is condensed into an eight-hour period versus a 24-hour period in the
United States. The Company believes that none of the instruments marketed by its
competitors can approach the speed of the Galileo. The Company believes that the
instrument speed will give Galileo the advantage in the U.S. market as well. The
Company received FDA clearance to market the Galileo in the United States in April
2004.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
June 2003, Ortho-Clinical Diagnostics announced that its Micro Typing Systems subsidiary
received FDA clearance to begin marketing the Ortho ProVue. Throughput for ABO/Rh
and antibody screening is eight to ten tests per hour and is to be used in conjunction
with the proprietary ID-Micro Typing Gel Test for both ABO/Rh type and
antibody screen. The only Immucor instrument with which the ProVue competes
directly is the ABS2000. Immucor's management believes the ABS2000s use of
traditional reagents for ABO and Rh type combined with its proprietary technologies for
antibody screen offers the customer significant price savings over the ID-Micro Typing Gel
Testrequired for the ProVue.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Olympus
America Inc. has developed an automated analyzer for the blood donor market. The
instrument, known as the PK7200, has been on the market for a number of years. The
instrument performs only ABO/Rh testing and does not perform antibody screening. The
Olympus instrument users currently must dilute ABO and Rh reagents for the machines
use. Gamma has developed diluted ready-for-use reagents for Olympus and has received
clearance from the FDA for the last of these reagents in late fiscal 2003. Olympus has
begun the conversion of their customers to the diluted ready-for-use reagents. Management
does not believe the Olympus diluted reagents or Olympus instrument will have an adverse
effect on the Companys revenue or instrument strategy in North America.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|European
competitors for blood bank products include Diamed, a Swiss company, and Biotest AG. Both
of these companies have been established longer than the Company and may have greater
financial and other resources than the Company. In Europe Diamed markets the Walk Away
Diana instrument that is manufactured by Grifols, a Spanish company. This system utilizes
Diameds proprietary gel cards and is the same instrument that is marketed as the
ProVue by Ortho-Clinical Diagnostics in the United States.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Diamed
has a larger global market share than the Company. However, the Company believes that it
is well positioned to compete favorably in the business principally because of the
completeness of its product line, quality and price of its products, the sale of
innovative products such as blood bank automation, the Companys Capture®products
(see Reagents, and Instruments and Instrument Systems), continuing research efforts in
the area of blood bank automation (see Products Under Development), the experience and
expertise of its sales personnel (see Marketing and Distribution) and the expertise of
its technical and customer support staff.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Biotest
AG, a German pharmaceutical and diagnostic company, presently has FDA licenses for six
reagent products. Since the product line is incomplete there is no evidence that
Biotest will be in a position, in the near term, to market a complete viable commercial
product line.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Ortho-Clinical
Diagnostics also competes in the European instrument market with the AutoVue instrument.
Throughput for ABO/Rh and antibody screening is approximately 25 tests per hour. The
system utilizes Ortho gel cards. Immucor management believes the ABS2000s use of
traditional reagents for ABO and Rh type combined with its proprietary technologies for
antibody screen will offer the customer significant price savings over the use of gel
cards.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Employees

|At
July 30, 2004, the Company and its subsidiaries had a total of 531 employees. The Company
had 366 full time employees in the U.S., of whom 41 were in sales and marketing, 283 were
in manufacturing, research and distribution, and 42 were in administration. In Germany,
Portugal, Italy, Spain, Canada and Belgium, the Company had 165 full-time employees, of
whom 73 were in sales and marketing, 60 were in research, distribution and administration
and 32 were in manufacturing.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The
Company has experienced a low turnover rate among its technical and sales staff. There
are no Company employees that are represented by a union. The Company considers its
employee relations to be good.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Available Information

|Immucor
files reports, proxy statements and other information under the Securities Exchange Act
of 1934, as amended (the 1934 Act) with the Securities and Exchange
Commission (the Commission). The public may read and copy any Company filings
at the Commissions Public Reference Room at 450 Fifth Street N.W., Washington, D.C.
20549. Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-800-SEC-0330. Because the Company makes filings to the
Commission electronically, information may also be accessed at the Commissions
Internet site (http://www.sec.gov). This site contains reports, proxies and information
statements and other information regarding issuers that file electronically with the
Commission. Electronic versions of the Companys annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these
reports filed or furnished with the SEC may also be accessed through the Company website
at www.immucor.com under About Us/Investor Information/SEC Filings.
All such reports are available through the Companys website free of charge.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Item 2. 
Properties.

|The
Company leases approximately 120,000 square feet in Norcross, Georgia, a suburb of
Atlanta, as its executive offices, laboratories and manufacturing facilities. Rent
charges for the fiscal year ended May 31, 2004 were approximately $806,000.The
term of the lease is for a six-year period ending August 2007 with a right to renew for
an additional five years. The Company owns a 41,000 square foot building on a three-acre
tract of land in northwest Houston, which is used primarily for manufacturing.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
Germany, the Company leases 2,300 square meters near Frankfurt. Rent expense for the
fiscal year ended May 31, 2004 totaled approximately $244,000. The term of the lease in
Germany is through April 2009. In Italy, rent expense for the fiscal year ended May 31,
2004 totaled approximately $117,000 for 850 square meters. The Company has five separate
lease agreements for the facility in Italy with terms expiring between September 2004 and
November 2007. In Portugal, the Company leases 110 square meters of office space and rent
expense for the fiscal year ended May 31, 2004 was approximately $14,600. In Spain, the
Company leases 330 square meters of office space and rent expense for the fiscal year
ended May 31, 2004 was approximately $56,000. In Belgium, the Company owns land and a
1,400 square meter building subject to a first lien mortgage. In Canada, the Company owns
a 15,000 square foot building on approximately one acre of land.  The Company
believes all of its facilities and lease terms are adequate and suitable for the Companys
current and anticipated business for the foreseeable future.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Item 3.  Legal
Proceedings.

|No
material proceedings are pending against the Company, and no similar proceedings are
known by the Company to be contemplated by governmental authorities.
|------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|Not
applicable.
|---------------

---

# PART II

# Item 5.  Market
for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.

|Immucors
common stock trades on The NASDAQ National Market System of The NASDAQ Stock Market under
the symbol: BLUD. The following table sets forth the quarterly high and low prices of the
common stock for the fiscal periods indicated as reported by NASDAQ. These prices
represent inter-dealer quotations without retail markups, markdowns or commissions and
may not represent actual transactions.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                    | High | Low         
|----------------------------------- | ---- | ------------
|Period June 1 through July 31, 2004 |      | $     22.23 
|                                    |      |             
|Fiscal Year Ended May 31, 2004      |     
|First Quarter                       |      | $     11.36 
|Second Quarter                      |      | 15.50       
|Third Quarter                       |      | 16.17       
|Fourth Quarter                      |      | 20.96       
|                                    |      |             
|Fiscal Year Ended May 31, 2003      |     
|First Quarter                       |      | $       8.56
|Second Quarter                      |      | 10.76       
|Third Quarter                       |      | 11.52       
|Fourth Quarter                      |      | 10.36       
|                                    |     

|As
of July 30, 2004, there were 290 holders of record of the Companys common
stock. The last reported sales price of the common stock on such date was $20.26.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|Immucor
has not declared any cash dividends with respect to its common stock. The Company
presently intends to continue to retain all earnings in connection with its business. The
Companys agreement with its principal lender contains certain financial and other
covenants that, among other things, limit annual capital expenditures, limit payment of
cash dividends and the repurchase of stock, limit the incurrence of additional debt, and
require the maintenance of certain financial ratios. See Note 3 of the consolidated
financial statements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Immucor
distributed a three-for-two stock split, effected in the form of a 50% stock dividend on
September 13, 2002 to shareholders of record on August 26, 2002, which resulted in the
issuance of 4,128,630 shares of common stock. Immucor distributed a three-for-two stock
split, effected in the form of a 50% stock dividend on November 14, 2003 to the
shareholders of record on October 24, 2003, which resulted in the issuance of 6,542,601
shares of common stock, net of 2,048 fractional shares for which cash dividends were
paid. On June 1, 2004, the Board of Directors approved a three-for-two stock split,
effected in the form of a 50% stock dividend, to shareholders of record as of the close
of business on June 30, 2004. The stock split was distributed on July 16, 2004 and
increased the number of shares outstanding by 10,066,940, net of 326 fractional shares
for which cash dividends were paid. The stock splits were the fourth, fifth and sixth for
the Company since its initial public offering in December 1985. Previously, the Company
implemented a three-for-two split in 1991, a five-for-four split in 1990, and a
five-for-four split in 1987. All share and per share amounts disclosed in this document
have been restated to reflect the impact of the above stock splits.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# Equity Compensation Plan
Information

|The
following table provides information as of May 31, 2004 with respect to the shares of our
common stock that may be issued under our existing equity compensation plans:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Plan category                                                | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance
|------------------------------------------------------------ | ------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | ------------------------------------------------------------
|Equity compensation plans approved by security holders *     | 1,900,684                                                                                   | $6.44                                                                       | 225,115                                                     
|Equity compensation plans notapproved by security holders ** | 1,480,773                                                                                   | $2.36                                                                       | 12,210                                                      
|Total                                                        | 3,381,457                                                                                   | $4.66                                                                       | 237,325                                                     

*   Includes the Companys 1998
Stock Option Plan and 2003 Stock Option Plan. For a description of the material features
of these plans, see Note 6 of the consolidated financial statements.

**  Includes the Companys 1990
Stock Option Plan and 1995 Stock Option Plan. For a description of the material features
of these plans, see Note 6 of the consolidated financial statements.

# Stock Repurchase Program

|The
Company instituted a repurchase program in June of 1998 for up to 2,700,000 shares. On
June 1, 2004, the Board of Directors authorized the Company to repurchase up to an
additional 300,000 shares of its common stock. The Board of Directors, on August 2,
2004, authorized the Company to repurchase up to an additional 500,000 shares of its
common stock. The Companys repurchase program does not have an expiration date.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

# Item 6.-- Consolidated
Selected Financial Data.

(All amounts are in
thousands, except per share amounts)

|                                     | Year Ended May 31,
|------------------------------------ | ------------------
|
|Statement of Operations Data:        |                   
|Net sales                            |                   
|Cost of sales                        |                   
|                                     |                   
|Gross profit                         |                   
|                                     |                   
|Operating expenses:                  |                   
|Research and development             |                   
|Selling, general and administrative  |                   
|Loss on impairment of goodwill       |                   
|                                     |                   
|Total operating expenses             |                   
|                                     |                   
|Income (loss) from operations        |                   
|                                     |                   
|Other:                               |                   
|Interest income                      |                   
|Interest expense                     |                   
|Other (expense) income - net         |                   
|                                     |                   
|Total other                          |                   
|                                     |                   
|Income (loss) before income taxes    |                   
|Income taxes                         |                   
|                                     |                   
|Net income (loss)                    |                   
|                                     |                   
|Income (loss) per share:             |                   
|Per common share                     |                   
|                                     |                   
|Per common share - assuming dilution |                   
|                                     |                   
|Weighted average shares outstanding  |                   
|Common shares                        |                   
|                                     |                   
|Common shares - assuming dilution    |                   
|                                     |                   

|                                            | May 31,
|------------------------------------------- | -------
|
|Balance Sheet Data:                         |        
|Working capital                             |        
|Total assets                                |        
|Long-term obligations, less current portion |        
|Retained earnings                           |        
|Shareholders' equity                        |        
|                                            |        

|(1) |  | All share and per share amounts have been restated to reflect the July 2004,
               November 2003 and September 2002 three-for-two stock splits.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

---

Item 7.  Managements
Discussion and Analysis of Financial Condition and Results of Operations.

|Certain
statements that Immucor may make from time to time, including statements contained in
this report, constitute forward-looking statements under the federal
securities laws. Forward-looking statements may be identified by words such as plans,expects, believes, anticipates, estimates,projects, will,
should and other words of similar meaning used in conjunction with, among
other things, discussions of future operations, financial performance, product
development and new product launches, FDA and other regulatory applications and
approvals, market position and expenditures. Factors that could cause actual results to
differ materially from those expressed in any forward-looking statement made by, or on
behalf of, Immucor include the following, some of which are described in greater detail
below: the decision of customers to defer capital spending, increased competition in the
sale of instruments and reagents, product development or regulatory obstacles, changes in
interest rates, changes in demand for the Companys human collagen product and
general economic conditions. In addition, the strengthening of the dollar versus the Euro
would adversely impact reported European results. Investors are cautioned not to place
undue reliance on any forward-looking statements. Immucor cautions that historical
results should not be relied upon as indications of future performance. Immucor assumes
no obligation to update any forward-looking statements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Critical Accounting
Policies

General

|We
have identified the policies below as critical to our business operations and the
understanding of our results of operations. The impact and any associated risks related
to these policies on our business operations is discussed throughout Managements
Discussion and Analysis of Financial Condition and Results of Operations where such
policies affect our reported and expected financial results. For a detailed discussion on
the application of these and other accounting policies, see Note 1 of the consolidated
financial statements in Item 8 of this Annual Report on Form 10-K. Note that our
preparation of this Annual Report on Form 10-K requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of our financial statements, and the
reported amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates, and certain assumptions could prove to be incorrect.
Senior management has discussed the development and selection of critical accounting
estimates and related Managements Discussion and Analysis of Financial Condition
and Results of Operations disclosure with the Audit Committee of the Board of Directors.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenue Recognition

|The
Company recognizes revenue when the following four basic criteria have been met: (1)
persuasive evidence of an arrangement exists; (2) delivery has occurred or services
rendered; (3) the fee is fixed and determinable; and (4) collectibility is reasonably
assured. Should changes in conditions cause management to determine these criteria are
not met for certain future transactions, revenue recognized for any reporting period
could be adversely affected. Revenue from the sale of the Companys reagents in the
U.S. market is recognized upon shipment when both title and risk of loss transfers to the
customer upon shipment. Revenue from the sale of the Companys reagents in the
export market is recognized FOB customs clearance when both title and risk of loss
transfers to the customer. Revenue from the sale of the Companys medical
instruments is recognized upon shipment and completion of contractual obligations
relating to training and/or installation based on terms of the related agreements.
Revenue from rentals of the Companys medical instruments is recognized over the
life of the rental agreement. Instrument service contract revenue is recognized over the
life of the contract.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
some situations, the Company sells an instrument to a third-party leasing company without
recourse, and receives full cash payment for the instrument upon receipt of the ultimate
customers signed delivery and acceptance. In certain limited situations involving
third party lease arrangements, the Company enters into a repurchase agreement whereby if
the ultimate customer terminates the lease, the Company agrees to repurchase the
instrument for an amount equal to the remaining unpaid lease payments owed to the third
party leasing company. In these limited situations, the Company defers the revenue
related to the sale, along with the corresponding cost of sales, and subsequently
recognizes the revenue over the lease term as the lease payments are made to the third
party leasing company and it is clear that the ultimate customer has not terminated the
related lease.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|The
Company adopted Emerging Issues Task Force (EITF) Issue No. 00-21, Accounting
for Revenue Arrangements with Multiple Deliverables, for agreements entered into
beginning in the second quarter of fiscal year 2004. The Companys medical
instrument sales contracts involve multiple deliverables, including the sale or rental of
an instrument (including training and installation), the subsequent servicing of the
instrument during the first year, and reagent products provided to the customer during
the validation period. The portion of the instrument sales price applicable to the
instrument itself (including training and installation), which is determined based on
fair value, is recognized upon shipment and completion of contractual obligations
relating to training and/or installation based on the terms of the related agreement. The
portion of the sales price applicable to reagent products provided to the customer during
the validation period, based on fair value, are recognized when the instrument itself is
recognized as generally such recognition occurs when the validation period is completed.
The portion of the sales price applicable to servicing the instrument during the first
year, based on fair value, is deferred and recognized over the first year of the
contract. The allocation of the total consideration received based on the estimated fair
value of the units of accounting requires judgment by management.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Allowance for Doubtful
Accounts

|Immucor
maintains an allowance for doubtful accounts for estimated losses resulting from the
inability of its customers to make required payments. Current policy is to provide a
minimum allowance of 4% of third-party gross receivables which is based on historical
collection experience. Any specific third-party invoices over three years old is provided
for in addition to the minimum allowance. Any third-party invoices over eighteen months
old and under $50 is provided for in addition to the minimum allowance. At May 31, 2004,
the allowance is approximately 4.8% of the gross accounts receivable balance. The Company
continually monitors the collectibility of its customer accounts and when indications
arise that an amount is not likely to be collected, the amount is charged to the
allowance for doubtful accounts. If the financial condition of any of Immucors
customers was to deteriorate, resulting in an impairment of their ability to make
payments, additional allowances could be required.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Inventory

|Inventories
are stated at the lower of first-in, first-out cost or market. Cost includes material,
labor and manufacturing overhead. The Company uses a standard cost system as a tool to
monitor production efficiency. The standard cost system applies estimated labor and
manufacturing overhead factors to inventory based on budgeted production and efficiency
levels, staffing levels and costs of operation, based on the experience and judgment of
management. Actual costs and production levels may vary from the standard established and
are charged to the consolidated statement of operations as a component of cost of sales.
Since U.S. generally accepted accounting principles require that the standard cost
approximate actual cost, periodic adjustments are necessary. The provision for obsolete
inventory is reviewed on a quarterly basis. All finished good reagent products with less
than six months dating are written down to zero. Any raw, intermediate, or finished
product that has been quarantined because it has failed quality control, needs to be
reworked, or is past its expiration date is written down to zero. Should the product be
successfully reworked and pass final quality control checks, it is then valued at its
standard cost. Obsolete and quarantined inventory is physically segregated from useable
and saleable inventory and destroyed according to regulatory and fiscal guidelines. No
material changes have been made to the inventory policy during fiscal 2004.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Goodwill and Other
Long-lived Assets

|In
assessing the recoverability of the Companys goodwill and other long-lived assets,
the Company must make assumptions regarding estimated future cash flows and other factors
to determine the fair value of the respective assets. If these estimates or their related
assumptions change in the future, the Company may be required to record impairment
charges for these assets not previously recorded. On June 1, 2002 the Company adopted
Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and
Other Intangible Assets, and is required to analyze its goodwill and intangible
assets for impairment on an annual basis or more frequently if impairment indicators
arise. In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-LivedAssets. The Statement supercedes SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of,however
it retains the fundamental provisions of that statement related to the recognition and
measurement of the impairment of long-lived assets to be held and used. The
Company adopted SFAS No. 144 effective June 1, 2002 without impact on its financial
position or results of operations. See Note 1 and 16 of the consolidated financial
statements.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Income Taxes

|The
Companys income tax policy records the estimated future tax effects of temporary
differences between the tax bases of assets and liabilities and amounts reported in the
accompanying consolidated balance sheets, as well as operating loss and tax credit
carry-forwards. The Company follows specific guidelines regarding the recoverability of
any tax assets recorded on the balance sheet and provides allowances as required. The
valuation of the Companys deferred tax assets assumes that the Company will be able
to generate sufficient future taxable income in certain tax jurisdictions, based on
estimates and assumptions. If these estimates and related assumptions change in the
future, the Company may be required to record additional valuation allowances against its
deferred tax assets resulting in additional income tax expense in the Companys
consolidated statements of operations. In assessing the realizability of deferred tax
assets, management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income, carry-back
opportunities, and tax-planning strategies in making this assessment. Management
evaluates the realizability of the deferred tax assets and assesses the need for
additional valuation allowances quarterly. No material changes have been made to the
income tax policy during fiscal 2004. See Note 9 of the consolidated financial
statements.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Stock-based Employee
Compensation

|The
Company grants stock options for a fixed number of shares to employees with an exercise
price equal to the fair value of the shares at the date of the grant. The Company
accounts for stock option grants in accordance with APB Opinion No. 25, Accounting for
Stock Issued to Employees, and accordingly does not recognize compensation expense
for the stock option grants. In December 2002, the FASB issued SFAS No. 148, Accounting
for Stock-Based Compensation  Transition and Disclosure  an amendment of FASB
Statement No. 123.This Statement provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of Statement
123 to require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the effect of
the method used on reported results. In determining the pro forma compensation expense,
management must make estimates of volatility of the underlying common stock and expected
option life, which impacts the option fair value. The Company adopted the interim
disclosure requirements in the period ended May 31, 2003. See Note 1 of the consolidated
financial statements.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Overview

|For
fiscal 2005, the Companys strategy is focused primarily on improving gross margin
and on developing its third generation automated assay instrument. While the Companys
net sales for the year ended May 31, 2004 increased to $112.6 million from $98.6 million
for the year ended May 31, 2003, gross margin (gross profit as a percentage of sales)
decreased to 55.2% for the year ended May 31, 2004 from 56.6% for the year ended May 31,
2003.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|As
discussed below under Results of Operations, the deterioration in gross
margin was due to several factors, including:
|--------------------------------------------------------------------------------------------------------------------------

| | o | Increased
production, quality and regulatory costs,
| | - | ---------------------------------------------------

| | o | Increased
reagent sales to European distributors at relatively lower margins than direct sales to
end users,
| | - | ------------------------------------------------------------------------------------------------------------

| | o | Increased
instrument service burden, and
| | - | ----------------------------------------

| | o | Costs
incurred to consolidate red cell manufacturing facilities.
| | - | ----------------------------------------------------------------

|While
the Company plans to continue European sales through distributors, as the Company
believes that utilizing distributors established in key European markets is far more
advantageous to the Company than developing its own sales and distribution network in
these markets, it has implemented steps to stabilize and improve gross margin, including:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | The
elimination of a number of redundant products currently manufactured at the Companys
three manufacturing facilities, partially completed during the fourth quarter of fiscal
2004 and continuing through the first quarter of fiscal 2005;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | The
consolidation of the Companys red cell product manufacturing, previously produced
at both the Norcross and Houston facilities, to the Companys Norcross facility,
completed at the end of the fourth quarter of fiscal 2004;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Obtaining
FDA clearance of the Galileo(TM)for marketing in the United States, and
| | - | ---------------------------------------------------------------------------------

| | o | The
development of a third generation automated assay instrument from which the Company
expects to produce higher margins and lower service costs when it is introduced
(currently projected for fiscal year 2006).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|On
April 25, 2004, the Company obtained FDA clearance to market its high-volume Galileoinstrument
in the U.S., designed for the large-sized hospital market. The instrument revenue and the
related reagent revenue stream are expected to improve gross margins, because the
instrument requires proprietary reagents developed for automated technology, thus
commanding a premium price over traditional products. As of July 21, 2004, the Company
has placed 133 Galileo instruments with international customers since introducing
the Galileo to the European market during the first quarter of 2002.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The
Company recently announced it is developing a third generation instrument, currently
referred to as the G3 and planned for release in 2006. The G3 is targeted at
the small- to medium-sized hospital market, the largest segment of the Companys
customers, which number approximately 7,500 worldwide, to which the Companys
ABS2000 instrument is currently marketed. The G3 is expected to be significantly smaller
and faster than the ABS2000, but have substantially all of the features of the Companys
larger Galileo product, apart from lower throughput. The G3s smaller size is
designed to allow depot service where a customer delivers an instrument to a
Company depot for servicing and receives a loaner instrument to use until servicing is
complete. The Company expects this depot method to be more cost effective than sending
repair personnel to the customers site, and accordingly expects instrument service
costs will eventually decline as the G3 replaces the ABS2000.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Liquidity and Capital
Resources

|Net
cash provided by operating activities totaled approximately $22.7 million, $20.3 million,
and $13.1 million for the fiscal years 2004, 2003 and 2002, respectively. As of May 31,
2004, the Companys cash and cash equivalents balance totaled $15.7 million, an
increase of $4.5 million over fiscal 2003 and $11.7 million over fiscal 2002.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|As
outlined in the chart below, management worked diligently to reduce the days sales in
accounts receivable. Some of the Companys foreign subsidiaries have historically
slower collection rates due to their respective economic environments. The Company has
been successful with the factoring of Italian accounts receivable that continues to
improve the Italian subsidiarys financial position. The Company has made an 18%
improvement in days sales in receivables over the past two years. The Company has also
experienced an 11% improvement in days sales in inventory over the last two years.
Improvements in inventory management through product consolidation and production
planning have been offset by the $1.6 million increase in instruments in inventory from
the addition of the Galileo to the product line.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2004                      | 2003 | 2002 | 
| | ------------------------- | ---- | ---- | 
| | Days Sales in Receivables |      | 84   | 
| | Days Sales in Inventory   |      | 133  | 

|For
the year ended May 31, 2004, $7.1 million of cash was used in investing activities
primarily for capital expenditures of $3.0 million for Galileo and other
instruments used for demonstration purposes by the sales force or placed at customer
sites on reagent rental agreements to be depreciated over the life of the respective
agreements, $2.7 million for manufacturing consolidation and quality system improvements
at its Norcross and Houston facilities, $0.8 million for computer hardware and software
enhancements of the enterprise software system, approximately $0.5 million for the human
collagen mesh manufacturing suite at the Houston facility and $0.1 million to refurbish
the German facility. Planned capital expenditures for fiscal 2005 total approximately
$7.3 million, including approximately $3.7 million for planned upgrades at its Norcross
facility for its manufacturing, quality and support systems, approximately $2.8 million
for offsite placements of the Galileo instruments by the foreign affiliates, and
approximately $0.5 million for upgrades at the Canadian facility.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|On
December 18, 2003, the Company obtained a new $27.0 million secured credit facility with
SunTrust Bank. Proceeds of these borrowings were primarily used to repay the Companys
previous arrangement with Wachovia Bank (which was cancelled upon repayment). The new
credit facility matures in December 2006 and is comprised of a $15.0 million revolver and
a $12.0 million term loan. The term loan is payable in quarterly installments of $1.0
million. The term loan and the revolver bear interest of LIBOR plus additional percentage
points ranging from 1.0% to 1.75%, or SunTrust Bank prime rate plus additional percentage
points ranging from (0.5%) to 1.0% based on certain calculations as defined in the Loan
Agreement. The loans are collateralized by the capital stock of all of the Companys
subsidiaries. The Company recorded a non-cash, pre-tax charge of $924,000 in the third
quarter to write off unamortized deferred financing charges related to its previous
credit facility. As of May 31, 2004, there was $11.0 million outstanding on the term loan
and none outstanding on the revolver.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Net
cash used in financing activities totaled approximately $11.3 million. Approximately
$26.5 million in payments of long-term debt, primarily to repay obligations to Wachovia
Bank, line of credit and capital lease obligations, were made during the period. Proceeds
under the new secured credit facility with SunTrust Bank totaled $12.0 million during the
period. The receipt of $3.3 million in cash from the exercise of stock options partially
offset the net cash used in financing activities. These options were granted in prior
fiscal years at exercise prices equal to the market value of the Companys stock on
the date granted. See Note 6 and Item 5 Market for Registrants Common
Equity and Related Stockholder MattersEquity Compensation Plan Information.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|The
Company instituted a repurchase program in June of 1998 for up to 2,700,000 shares, of
which 2,416,500 shares had been purchased prior to fiscal 2004, leaving 283,500 shares available for repurchase. On June 1, 2004, the
Board of Directors authorized the Company to repurchase up to an additional 300,000
shares of its common stock.  In the subsequent two-month period following the
implementation of the June 2004 repurchase program, the Company repurchased an additional
285,800 shares at an average price of $19.63, bringing the aggregate number of shares to
2,702,300 repurchased to date since implementation of the 1998 repurchase program. On
August 2, 2004, the Board of Directors authorized the Company to repurchase up to an
additional 500,000 shares of its common stock. With the August 2004 authorization, and
taking into account all repurchases through July 2004, the Company is authorized to
repurchase up to 797,700 shares, the aggregate amount remaining available for repurchase
under the program.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|At
May 31, 2004 and May 31, 2003, the Company had an interest rate swap agreement in the
Companys functional currency, maturing in 2005 with an initial notional principal
amount of $15.0 million, which amortizes over the life of the instrument. The fair value
of the interest rate swap agreement represents the estimated receipts or payments that
would be made to terminate the agreement and is included with other long-term liabilities
on the balance sheet. At May 31, 2004 and May 31, 2003, the Company would have paid
$156,965 and $422,677, respectively, to terminate the agreement in the Companys
functional currency. The interest rate swap agreement, with SunTrust Bank, is guaranteed
by the Company. See Item 7AQuantitative and Qualitative Disclosures About Market
RiskInterest Rates.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Management
continues to focus on reducing the leverage on the Companys balance sheet and does
not anticipate that there will be a need for additional borrowings. Management expects
that cash and cash equivalents and cash flows from operations will be sufficient to
support operations, scheduled debt repayments and planned capital expenditures for the
next 12 months, as well as fund future long-term debt payments. There are no restrictions
on the Companys foreign subsidiaries in the matter of sending dividends, or making
loans or advances to the parent Company. Contractual obligations and commercial
commitments, primarily for the next five years, are detailed in the table below. Other
long-term obligations represent outstanding unrecorded purchase commitments as of May 31,
2004.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Contractual Obligations
and Commercial Commitments

|Contractual Obligations            | Payments Due by Periodin thousands
|---------------------------------- | ----------------------------------
|
|Long-Term Debt and Lines of Credit | $11,458                           
|Capital Lease Obligations          | 1,600                             
|Operating Leases                   | 6,034                             
|Other Long-Term Obligations        | 16,513                            
|Total Contractual Cash Obligations | $35,605                           

Repurchase Obligations
(Instruments)

|In
some situations, the Company sells an instrument to a third-party leasing company without
recourse, and receives full cash payment for the instrument upon receipt of the ultimate
customers signed delivery and acceptance. In certain limited situations, currently
a total of four involving third party lease arrangements, the Company enters into a
repurchase agreement whereby if the ultimate customer terminates the lease, the Company
agrees to repurchase the instrument for an amount equal to the remaining unpaid lease
payments owed to the third party leasing company. In these limited situations, the
Company defers the revenue related to the sale, along with corresponding direct and
incremental cost of sales, and subsequently recognizes the revenue over the lease term as
the lease payments are made to the third party leasing company and it is clear that the
ultimate customer has not terminated the related lease.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Off-Balance Sheet
Arrangements

|The
Company has no off-balance sheet financial arrangements as of May 31, 2004.
|-------------------------------------------------------------------------------

# Results of Operations

|For
the fiscal year ended May 31, 2004, net sales totaled $112.6 million, a $13.9 million
(14.1%) increase over the prior year. Net income was $12.5 million, a $1.8 million
(12.7%) decrease over the prior year. Diluted earnings per share totaled $0.40 on 31.3
million weighted average shares outstanding for fiscal 2004, as compared to diluted
earnings per share of $0.47 on 30.3 million weighted average shares outstanding for the
prior year.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Comparison of Years Ended
May 31, 2004 and May 31, 2003

Net Sales

|Sales
of traditional reagent products, i.e., products not utilizing the Companys patented
Capture® technology, increased $8.6 million, or 12.0%, from $71.9 million in fiscal
2003 to $80.5 million in fiscal 2004. Sales of Capture® products increased
approximately $3.1 million to $21.9 million, a 16.5% increase over the prior year. The
Company believes growth in reagent revenue, including both traditional reagent products
and Capture® products, occurred as a result of approximately $4.3 million in price
increases in North America, approximately $4.1 million in changes in the Euro exchange
rate, and approximately $3.3 million in increased reagent volumes from instrument
placements worldwide. Instrument sales for fiscal 2004 increased by approximately $1.7
million to $9.7 million, an increase of 22.1% over the prior year. Instrument revenue
grew primarily as a result of increased sales of the Galileo instrument to
distributors in Europe and to a $0.2 million change in the Euro exchange rate. The first
shipment under the human collagen development agreement with Inamed occurred in May 2004
and contributed $0.4 million to the revenue increase.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross Profit

|Gross
profit as a percentage of net sales was 55.2% versus 56.6% for the years ended May 31,
2004 and 2003, respectively. Manufacturing expenses for the United States increased $3.0
million, or 12.6% for the year ended May 31, 2004, as compared to the year ended May 31,
2003 and unfavorable manufacturing variances had a corresponding increase of $0.7
million, or 13.5%, for the year ended May 31, 2004, as compared to the year ended May 31,
2003. Manufacturing expenses increased due to additional personnel and expenditures to
support domestic and international efforts to expand Company presence, and assure
compliance with the FDA. The increase in manufacturing expenses also included
approximately $0.4 million in worldwide expenses related to CE marking and European Union
quality regulation compliance for products intended for sale within the European Union.
Management had recognized the need for margin improvement early in the fiscal year and
developed a detailed plan to consolidate the manufacture of the complex red cell products
into the Norcross facility. The project was completed in May 2004, at a cost of
approximately $0.3 million. Consolidation of redundant red cell panels and the
accompanying supplemental products will allow the Company to produce a panel that gives
the customer a better selection of antibodies and increase the Companys efficiency.
A plan to eliminate a number of redundant products, which were manufactured at the Companys
three manufacturing facilities, was partially completed during the fourth quarter of
fiscal 2004 and will continue through the first quarter of fiscal 2005. Better inventory
management and production planning resulted in manufacturing efficiency improvement of
$1.6 million, or 43.1%, for the year ended May 31, 2004, as compared to the year ended
May 31, 2003.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Gross
margin on traditional reagents fell to 59.0% for the fiscal year ended May 31, 2004,
compared with 59.7% in the prior fiscal year, in spite of the $4.5 million in price
increases, due primarily to the increased manufacturing expenses adding approximately
$2.5 million in additional costs. Gross margin on Capture® products was 64.8%,
compared with 68.1% in the prior year period. The increased sales volume of the Capture®products
mentioned above was principally generated through sales to the distributor network in
Europe at margins approximately 6% lower, or $1.9 million, than achieved through direct
sales in the U.S. Increased manufacturing expenses translated to approximately $0.6
million of the decline in Capture® gross profit. The gross margin on instruments,
including the impact of the cost of providing service was 4.3% for fiscal 2004 versus
1.3% for fiscal 2003. Instrument sales in Europe were made at a 32.5% gross margin for
fiscal 2004 versus at a 23.0% gross margin for fiscal 2003, adding an additional $0.6
million to gross profit for fiscal 2004. Instrument revenue in the United States, which
includes the cost of providing service, was made at a (30.7%) gross margin for fiscal
2004 versus at a (32.8%) gross margin for fiscal 2003. Instrument service continues to be
provided at a loss for the year as overall instrument placements have not reached the
level required for service operations to break-even and the older model ABS2000
instruments in the field advance in age. The instrument service burden of $1.0 million
reduced the gross margin by 0.9%. The change in the Euro exchange rate increased gross
profit by approximately $1.8 million.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Operating expenses

|When
compared to the prior year, research and development costs for fiscal 2004 increased $1.7
million, or 82.6%. During the year, $1.0 million was incurred for contract research fees
related to the G3, platelet and Galileo U.S. software development projects. Key
personnel and resources were reallocated from manufacturing and administrative functions
to research and development functions for these projects, amounting to approximately $0.4
million. Preproduction collagen costs amounted to approximately $0.3 million for the
year.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Selling
and marketing expenses increased $2.4 million for the year ended May 31, 2004, as
compared to the prior year, of which $1.0 million was a result of the change in the Euro
to dollar exchange rate. Travel, personnel and marketing expense increases in association
with the sales efforts to further market the Galileo in Europe and the ABS2000 in
the United States, to launch the Galileo in the United States, and to develop
worldwide product branding, accounted for the remaining $1.4 million increase for the
year.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Distribution
expenses for fiscal 2004 increased by $1.5 million compared to the prior year primarily
due to additional personnel and expenses of $0.4 million incurred by the German
subsidiary to establish a European distribution hub and $0.4 million in higher freight
and supplies related to the shipping package reconfiguration for the Houston facility.
The exchange rate effect of the Euro versus the dollar increased distribution expense
$0.3 million.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|General
and administrative expenses for the year ended May 31, 2004, rose approximately $1.3
million over the prior year. The change in the Euro exchange rate accounted for
approximately $0.7 million. Approximately $0.2 million of the increase was due to higher
legal, debt recovery and staffing costs for the Companys Italian subsidiary. The
remainder of the increase was due to additional personnel and expenditures worldwide to
support domestic and international efforts to expand Company presence and assure
compliance with European Union quality regulations and accounting and regulatory mandates
in the United States.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Interest expense

|When
compared to the prior year, interest expense decreased $1.5 million in fiscal 2004. The
decrease is the result of reduced levels of long-term debt at more favorable interest
rates amounting to savings of $1.0 million and a swing in the mark-to-market adjustment
of the interest rate swap agreement amounting to $0.3 million. Lower amortization of debt
issue costs due to reduced debt issue costs, subsequent to the extinguishment of the
Companys previous credit facility, reduced interest expense by $0.2 million for the
current period. See Deferred Costs in Note 1 and Primary Obligations in
Note 3 of the consolidated financial statements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other income (expense)

|Other
income (expense), net, for the year ending May 31, 2004 includes a $0.9 million pre-tax,
non-cash charge to write off unamortized deferred financing charges related to the Companys
previous credit facility. Fiscal 2003 amounts primarily reflected foreign currency
transaction gains that exceeded foreign currency transaction losses and a $0.2 million
impairment of assets. See Note 1 of the consolidated financial statements.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Income taxes

|The
effective tax rate for the year ended May 31, 2004 was 38.1% versus 28.8% for the year
ended May 31, 2003. Fiscal 2004 includes a true up of the estimated tax benefit of the
2003 European restructure and adjustments for misapplication of Texas franchise tax rules
for fiscal years 2002 and 2003, that added $0.1 million and $0.3 million to income tax
expense, respectively. In addition, a reserve of $0.2 million was established to
recognize the increasingly conservative positions taken by the various taxing
authorities. In the fiscal year ended May 31, 2003, the income tax provision for current
year earnings was offset by a $1.4 million tax benefit generated through a restructuring
of certain European operations that allowed for the utilization of tax losses generated
in prior years.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Comparison of Years Ended
May 31, 2003 and May 31, 2002

Net Sales

|Sales
of traditional reagent products, i.e., products not utilizing the Companys patented
Capture® technology, increased nearly $10.1 million, or 16.3%, from $61.8 million in
fiscal 2002 to $71.9 million in fiscal 2003. Sales of Capture® products increased
approximately $2.1 million to $18.8 million, a 12.6% increase over the prior year. The
Company believes growth in reagent revenue occurred as a result of price increases in
North America of approximately $10.4 million, partially offset by declines in
international sales of approximately $1.2 million, primarily in South American countries
that were experiencing financial difficulties, and the planned exit from the distribution
of certain low-margin third-party products of approximately $1.0 million. Instrument
sales for fiscal 2003 increased by approximately $2.5 million to $8.0 million, an
increase of 45% over the prior year. Instrument revenue grew primarily as a result of
increased sales of the Galileo instrument to distributors in Europe of
approximately $3.4 million, offset by a decrease in United States instrument sales of
$0.9 million. The effect on revenues of the change in the Euro exchange rate was an
increase of $4.2 million for the fiscal year ended May 31, 2003.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross Profit

|Gross
margin was 56.6% versus 55.6% for the years ended May 31, 2003 and 2002, respectively.
Gross margin on traditional reagents was 59.4% for the current fiscal year, compared with
56.2% in the prior year period. Gross profit increased primarily due to the $10.4 million
in price increases mentioned above. Gross margin on Capture® products was 68.6%,
compared with 70.7% in the prior year period. The increased sales volume of the Capture® products
mentioned above were principally generated through sales to the distributor network in
Europe at margins to the Company approximately 6% lower than achieved through direct
sales in the U.S, having a negative effect on Capture® gross profit of $0.1 million.
The Galileo sales in Europe, primarily to distributors, were also at margins lower
than would be achieved through direct sales, which negatively affected gross profit by
$0.5 million. Instrument service was provided at a loss for the year, as overall
instrument placements had not reached the level required for service operations to
break-even. The instrument service burden reduced the gross margin by 0.5%. The change in
the Euro exchange rate increased gross profit by approximately $1.9 million.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Operating expenses

|When
compared to the prior year, research and development costs for fiscal 2003 increased
2.7%. Increases related to preparation for domestic field trials of the Galileo instrument
were partially offset by a reduction of instrument development initiatives for the launch
of the Galileo in the European market from the prior year.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Selling
and marketing expenses increased $1.4 million for the year ended May 31, 2003, as
compared to the prior year, of which $1.0 million was a result of the change in the Euro
to dollar exchange rate. Travel and marketing expense increases associated with the sales
efforts to market the Galileo in Europe and the ABS2000 in the United States
accounted for $0.4 million of the increase for the year.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Distribution
expenses for fiscal 2003 increased by $0.3 million compared to the prior year primarily
due to the exchange rate effect of the Euro versus the dollar of $0.25 million and
additional shipping expenses related to new customers and the implementation of a new
shipping package configuration designed to maintain acceptable environmental temperatures
and preserve product quality during shipment.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|General
and administrative expenses for the year ended May 31, 2003, rose approximately $1.1
million over the prior year. The change in the Euro exchange rate accounted for
approximately $0.5 million. The remaining increase of $0.6 million was due to additional
personnel and expenditures to support domestic and international efforts to expand
Company presence and assure compliance with European Union quality regulations and
accounting and regulatory mandates in the United States.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Amortization
expense declined $1.3 million for the year ended May 31, 2003, as compared with the prior
year due to the adoption of SFAS No.142, Goodwill and Other Intangible Assets,
which requires goodwill and indefinite lived intangible assets to be reviewed annually
for impairment, or more frequently if impairment factors arise, instead of amortized. The
Company tested goodwill for impairment as of March 1, 2003, as required by SFAS No. 142,
utilizing a combination of valuation techniques, including the expected present value of
future cash flows and a market multiple approach, and found no impairment.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Interest expense

|When
compared to the prior year, interest expense decreased $2.0 million in fiscal 2003. The
decrease was primarily the result of reduced borrowings on long-term debt and a more
favorable interest rate that became effective in May 2002 under the original loan
agreement and continued with the July 2002 amendment to the loan agreement. Also, lower
amortization of debt issue costs due to the reset of long-term debt maturity dates
further reduced interest expense.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other income (expense)

|Other
income (expense), net, for the year ended May 31, 2003, primarily reflects foreign
currency transaction gains that exceeded foreign currency transaction losses and a $0.2
million impairment of assets. See Note 1 of the consolidated financial statements. Other
income for the prior twelve-month period was favorably affected by the disgorgement of
short-swing trading profits by the Kairos Group in the amount of $0.4 million and by $1.0
million from the settlement of a contractual dispute with Becton, Dickinson.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Income taxes

|In
spite of significantly higher income levels, income tax expense increased only $2.6
million for the fiscal year ended May 31, 2003, as compared to the prior year. The income
tax provision for current year earnings was offset by a $1.4 million tax benefit
generated through restructuring of certain European operations that allowed for the
utilization of tax losses generated in prior years. Fiscal 2002 had benefited from the
utilization of U.S. net operating loss carry-forwards of $2.3 million.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Impact of Recently
Issued Accounting Standards

|In
June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations(SFAS No. 143). Statement 143 applies to legal obligations associated
with the retirement of long-lived assets that result from the acquisition, construction,
development and/or the normal operation of a long-lived asset. For the purposes of
Statement 143, a legal obligation is an obligation that a party is required to settle as
a result of an existing or enacted law, statute, ordinance, or written or oral contract
or that is based on a promise and an expectation of performance. Statement 143 is
effective for financial statements for fiscal years beginning after June 15, 2002. The
Company adopted SFAS No. 143 effective June 1, 2003, without impact on its financial
position or results of operations.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or
Disposal Activities(SFAS No. 146), which addresses financial accounting
and reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including
certain costs incurred in a restructuring). The provisions of SFAS No. 146 are
effective for exit or disposal activities that are initiated after December 31, 2002. At
adoption on January 1, 2003, SFAS No. 146 did not have a significant impact on the Companys
consolidated statements of operations or financial position. The Company does not have
any in-process or planned exit or disposal activities as of May 31, 2004.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
November 2002, the FASB issued Interpretation No. 45, Guarantors Accounting and
Disclosure Requirements for Guarantees (FIN No. 45). FIN No. 45 requires
a guarantor to recognize, at the inception of a guarantee, a liability for the fair value
of the obligation it has undertaken in issuing the guarantee. The Company must apply FIN
No. 45 to guarantees, if any, issued or modified after December 31, 2002. FIN No. 45 also
requires guarantors to disclose certain information for guarantees, including product
warranties, outstanding at the end of interim periods ending after December 15, 2002. At
adoption, FIN No. 45 did not have a significant impact on the Companys consolidated
statements of operations or financial position. The Company does not have any material
warranty obligations or other guarantees as of May 31, 2004.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
November 2002, the Emerging Issues Task Force reached a consensus on Issue No. 00-21 (EITF
00-21), Revenue Arrangements with Multiple Deliverables. The Issue addresses
certain aspects of the accounting for arrangements under which a vendor will perform
multiple revenue-generating activities. EITF 00-21 addresses when a revenue arrangement
with multiple deliverables should be divided into separate units of accounting and, if
separation is appropriate, how the arrangement consideration should be allocated to the
identified accounting units. The Company adopted the provisions of EITF 00-21 effective
September 1, 2003, without a material impact on its financial statements.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|See
Note 1 of the consolidated financial statements for a discussion of SFAS No. 148, Accounting
for Stock-Based Compensation  Transition and Disclosure  an amendment of FASB
Statement No. 123.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities, an Interpretation of Accounting Research Bulletin (ARB) No. 51 (FIN
No. 46). FIN No. 46 requires certain variable interest entities, or VIEs, to be
consolidated by the primary beneficiary of the entity if the equity investors in the
entity do not have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN No. 46 is effective for all VIEs
created or acquired after January 31, 2003. For VIEs created or acquired prior to
February 1, 2003, the provisions of FIN No. 46 must be applied for the first interim or
annual period beginning after March 15, 2004. The Company does not expect that the
adoption of FIN No. 46 will have a material impact on its consolidated statements of operations or financial position.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
April 2003, the FASB issued SFAS No. 149 (SFAS No. 149),Amendments
of Statement 133 on Derivative Instruments and Hedging Activities. SFAS No. 149
amends and clarifies financial accounting and reporting for derivative instruments,
including certain instruments embedded in other contracts and for hedging activities
under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities. This statement requires that contracts with comparable characteristics be
accounted for similarly. In particular, this statement clarifies under what circumstances
a contract with an initial net investment meets the characteristic of a derivative,
clarifies when a derivative contains a financing component, amends the definition of an
underlying hedged risk to conform to language used in FIN No. 45 and amends certain other
existing pronouncements. This statement, the provisions of which are to be applied
prospectively, is effective for contracts entered into or modified after June 30, 2003.
The adoption of SFAS No. 149, on July 1, 2003, did not have a material impact on the
Companys consolidated statements of operations or financial position.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In
May 2003, the FASB issued SFAS No. 150 (SFAS No. 150), Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and Equity.
SFAS No. 150 establishes standards for how an issuer classifies and measures in its
statement of financial position certain financial instruments with characteristics of
both liabilities and equity. SFAS No. 150 requires that an issuer classify a financial
instrument that is within SFAS No. 150s scope as a liability (or an asset in some
circumstances) because that financial instrument embodies an obligation of the issuer.
Many of those instruments were previously classified as equity. SFAS No. 150 requires an
issuer to classify the following instruments as liabilities (or assets in some
circumstances): mandatorily redeemable financial instruments; obligations to repurchase
the issuers equity shares by transferring assets; and certain obligations to issue
a variable number of its equity shares. SFAS No. 150 is effective for all financial
instruments entered into or modified after May 31, 2003, and otherwise shall be effective
at the beginning of the first interim period beginning after June 15, 2003. The adoption
of SFAS No. 150, on September 1, 2003, did not have a material effect on the Companys
consolidated statements of operations or financial position.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Item 7A. 
Quantitative and Qualitative Disclosures About Market Risk

|Market
Risk.The Company is exposed to various market risks, including changes in foreign
currency exchange rates and interest rates that could adversely impact its results of
operations and financial condition. To manage the volatility relating to these typical
business exposures, the Company may enter into various derivative transactions when
appropriate. The Company does not hold or issue derivative instruments for trading or
other speculative purposes.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Interest
Rate Risk.Interest rate swap agreements are entered into with the objective of
managing exposure to interest rate changes. The Company has entered into interest rate
swaps to effectively convert a portion of variable rate bank debt into fixed rates. At
May 31, 2004 and May 31, 2003, the Company had an interest rate swap agreement in the
Companys functional currency, maturing in 2005, with an initial notional principal
amount of $15.0 million that amortizes over the life of the instrument. The fair value of
the interest rate swap agreement represents the estimated receipts or payments that would
be made to terminate the agreement and is included with other long-term liabilities on
the balance sheet. At May 31, 2004 and May 31, 2003, the Company would have paid $156,965
and $422,677, respectively, to terminate the agreement in the Companys functional
currency. See Note 3 of the consolidated financial statements. The Company had $11.5
million in outstanding debt at May 31, 2004. A 100 basis point increase or decrease in
interest rates could decrease or increase annual net income by $0.1 million.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Foreign
Currency. Operating income generated outside the United States as a percentage of
total operating income was 5% in 2004, 9% in 2003 and 7% in 2002. Fluctuations in foreign
exchange rates, principally with the U.S. dollar versus the Euro, could impact operating
results when translations of the Companys subsidiaries financial statements
are made in accordance with current accounting guidelines. It has not been the Companys
practice to actively hedge its foreign subsidiaries assets or liabilities
denominated in local currency. Most of the foreign currency exposures are managed locally
by the Companys foreign subsidiaries through the hedging of purchase commitments
with the advance purchase of the required non-functional currencies. However, the Company
believes that over time weaknesses in one particular currency are offset by strengths in
others. In 2004, 2003, and 2002 the Company recorded foreign currency transaction gains
(losses) of approximately $491,000, $697,000, and $(445,000), respectively. For fiscal
2004, the fluctuation of the Euro weighted average exchange rate increased net sales by
approximately $4.3 million. A ten percent change in the year-to-date weighted average
Euro exchange rate would have had the effect of increasing or decreasing net sales by
approximately $3.0 million.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|Effective
January 1, 2001, the Company adopted SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 requires the Company to recognize
all derivatives on the balance sheet at fair value. For derivatives designated as hedges,
the change in the fair value of the derivative will either be offset against the change
in the fair value of the hedged asset, liability, or firm commitment through earnings or
recognized in other comprehensive income until the hedged item is recognized in earnings.
The ineffective portion of a derivatives change in fair value will be immediately
recognized in earnings. The cumulative effect of the adoption of SFAS No. 133 on June 1,
2001 resulted in a comprehensive loss for fiscal 2002 (a component of ShareholdersEquity
on the balance sheet) of approximately $103,000, net of $26,000 in income taxes, relating
to the interest rate swap agreements. Since the swap agreement related to the Canadian
line of credit matured in December 2001, an adjustment of approximately $15,000 was made
to comprehensive loss and reclassified to earnings as interest expense in fiscal 2002.
Due to the ineffectiveness of the swap related to the U.S. loan, approximately $20,500
and $20,500 was reclassified from comprehensive loss to earnings as interest expense for
the years ended May 31, 2004 and 2003, respectively. The remaining balance of
approximately $31,000 will be amortized through December 2005. Approximately $266,000 and
$53,000 were charged directly to interest expense for the years ended May 31, 2004 and
2003, respectively. See Note 3 of the consolidated financial statements.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Item 8.  Financial
Statements and Supplementary Data.

|The
following consolidated financial statements of the Company are included under this item:
|--------------------------------------------------------------------------------------------

|-Report
of Independent Registered Public Accounting Firm
|--------------------------------------------------------

|-Consolidated
Balance Sheets, May 31, 2004 and 2003
|---------------------------------------------------

|-Consolidated
Statements of Operations for the Years Ended May 31, 2004, 2003 and 2002
|--------------------------------------------------------------------------------------

|-Consolidated
Statements of Shareholders Equity for the Years Ended May 31, 2004, 2003 and 2002
|------------------------------------------------------------------------------------------------

|-Consolidated
Statements of Cash Flows for the Years Ended May 31, 2004, 2003 and 2002
|--------------------------------------------------------------------------------------

|-Notes
to Consolidated Financial Statements
|-------------------------------------------

|-Consolidated
Financial Statement Schedule
|------------------------------------------

---

# REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To Board of Directors and
ShareholdersImmucor, Inc.

We have audited the accompanying
consolidated balance sheets of Immucor, Inc. (the Company) as of May 31, 2004
and 2003 and the related consolidated statements of operations, shareholders equity, and
cash flows for each of the three years in the period ended May 31, 2004. Our audits also
included the financial statement schedule listed in the Index at Item 15(a). These
financial statements and schedule are the responsibility of the Companys management.
Our responsibility is to express an opinion on these financial statements and schedule
based on our audits.

We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits 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 provide a reasonable basis for our
opinion.

In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Immucor, Inc. as of May 31, 2004 and 2003, and the
consolidated results of its operations and its cash flows for each of the three years in
the period ended May 31, 2004, in conformity with U.S. generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.

As discussed in Note 1 of the Notes
to the Consolidated Financial Statements, the Company adopted Statement of Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities in 2002 and Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets in 2003.

/s/ Ernst &Young LLP

Atlanta, GeorgiaJuly 30,
2004

---

# IMMUCOR, INC. AND
SUBSIDIARIES

# CONSOLIDATED BALANCE
SHEETS

---

|                                                                    | May 31,
|------------------------------------------------------------------- | -------
|
|ASSETS                                                              |        
|CURRENT ASSETS:                                                     |        
|Cash and cash equivalents                                           |        
|Accounts receivable, trade (less allowance for doubtful accounts of |        
|$1,330,305 in 2004 and $1,678,361in 2003)                           |        
|Other receivables                                                   |        
|Inventories                                                         |        
|Income taxes receivable                                             |        
|Deferred income taxes                                               |        
|Prepaid expenses and other                                          |        
|                                                                    |        
|Total current assets                                                |        
|                                                                    |        
|LONG-TERM INVESTMENT                                                |        
|                                                                    |        
|PROPERTY, PLANT AND EQUIPMENT - Net                                 |        
|                                                                    |        
|DEFERRED INCOME TAXES                                               |        
|                                                                    |        
|OTHER ASSETS - Net                                                  |        
|                                                                    |        
|DEFERRED LICENSING COSTS - Net                                      |        
|                                                                    |        
|CUSTOMER LIST - Net                                                 |        
|                                                                    |        
|EXCESS OF COST OVER NET TANGIBLE ASSETS ACQUIRED - Net              |        
|                                                                    |        
|                                                                    |        
|                                                                    |        

See notes to consolidated financial
statements.

---

# IMMUCOR, INC. AND
SUBSIDIARIES

# CONSOLIDATED BALANCE
SHEETS (continued)

---

|                                                                         | May 31,
|------------------------------------------------------------------------ | -------
|
|LIABILITIES AND SHAREHOLDERS' EQUITY                                     |        
|CURRENT LIABILITIES:                                                     |        
|
|Current portion of borrowings under bank line of credit agreements       |        
|Current portion of long-term debt                                        |        
|Current portion of capital lease obligations                             |        
|Accounts payable                                                         |        
|Income taxes payable                                                     |        
|Accrued salaries and wages                                               |        
|Deferred income taxes                                                    |        
|Other accrued liabilities                                                |        
|                                                                         |        
|Total current liabilities                                                |        
|                                                                         |        
|BORROWINGS UNDER BANK LINE OF CREDIT AGREEMENTS - Net                    |        
|of current portion                                                       |        
|                                                                         |        
|LONG-TERM DEBT - Net of current portion                                  |        
|                                                                         |        
|CAPITAL LEASE OBLIGATIONS - Net of current portion                       |        
|                                                                         |        
|DEFERRED INCOME TAXES                                                    |        
|                                                                         |        
|OTHER LIABILITIES                                                        |        
|                                                                         |        
|COMMITMENTS AND CONTINGENCIES                                            |        
|                                                                         |        
|SHAREHOLDERS' EQUITY:                                                    |        
|Common stock - authorized 45,000,000 shares, $0.10 par value; issued and |        
|outstanding 30,176,345 at May 31, 2004 and 28,947,251 at May 31, 2003    |        
|Additional paid-in capital                                               |        
|Retained earnings                                                        |        
|Accumulated other comprehensive loss                                     |        
|                                                                         |        
|Total shareholders' equity                                               |        
|                                                                         |        
|                                                                         |        
|                                                                         |        

See notes to consolidated financial
statements.

---

# IMMUCOR, INC. AND
SUBSIDIARIES

# CONSOLIDATED STATEMENTS
OF OPERATIONS

---

|                                     | Year Ended May 31,
|------------------------------------ | ------------------
|
|                                     |                   
|NET SALES                            |                   
|                                     |                   
|COST OF SALES                        |                   
|                                     |                   
|                                     |                   
|GROSS PROFIT                         |                   
|                                     |                   
|OPERATING EXPENSES:                  |                   
|Research and development             |                   
|Selling and marketing                |                   
|Distribution                         |                   
|General and administrative           |                   
|Amortization expense                 |                   
|                                     |                   
|                                     |                   
|                                     |                   
|                                     |                   
|INCOME FROM OPERATIONS               |                   
|                                     |                   
|OTHER:                               |                   
|Interest income                      |                   
|Interest expense                     |                   
|Other (expense) income, net          |                   
|                                     |                   
|                                     |                   
|                                     |                   
|INCOME BEFORE INCOME TAXES           |                   
|                                     |                   
|INCOME TAXES                         |                   
|                                     |                   
|                                     |                   
|NET INCOME                           |                   
|                                     |                   
|                                     |                   
|INCOME PER SHARE                     |                   
|                                     |                   
|Per common share                     |                   
|                                     |                   
|                                     |                   
|Per common share - assuming dilution |                   
|                                     |                   

See notes to consolidated financial
statements.

---

# IMMUCOR, INC. AND
SUBSIDIARIES

# CONSOLIDATED STATEMENTS
OF SHAREHOLDERS EQUITY

---

| |                                                  |  |            |   | Accumulated |  
| | ------------------------------------------------ |  | ---------- | - | ----------- | -
|
|
|
|
| |                                                  |  |           
| | BALANCE, MAY 31, 2001                            |  | 24,561,957 |   | $ 2,456,197 |  
| |                                                  |  |            |  
| | Exercise of stock options and warrants           |  | 1,438,223  |   | 143,822     |  
| | Tax benefits related to stock options and other  |  | --         |   | --          |  
| | Comprehensive income:                            | 
| | Foreign currency translation adjustment          |  | --         |   | --          |  
| | Cumulative effect of the adoption of             | 
| | SFAS 133 on June 1, 2001, net of taxes           |  | --         |   | --          |  
| | Hedge loss reclassified into earnings            |  | --         |   | --          |  
| | Net income                                       |  | --         |   | --          |  
| | Total comprehensive income                       |  |            |   |             |  
|
| | BALANCE, MAY 31, 2002                            |  | 26,000,180 |   | 2,600,019   |  
| |                                                  |  |            |  
| | Exercise of stock options and warrants           |  | 2,947,071  |   | 294,706     |  
| | Tax benefits related to stock options and other  |  | --         |   | --          |  
| | Comprehensive income:                            | 
| | Foreign currency translation adjustment          |  | --         |   | --          |  
| | Hedge loss reclassified into earnings            |  | --         |   | --          |  
| | Net income                                       |  | --         |   | --          |  
| | Total comprehensive income                       |  |            |   |             |  
|
| | BALANCE, MAY 31, 2003                            |  | 28,947,251 |   | 2,894,725   |  
| |                                                  |  |            |  
| | Exercise of stock options and warrants           |  | 1,231,142  |   | 123,114     |  
| | Tax benefits related to stock options and other  |  | --         |   | --          |  
| | Cash paid for fractional shares from stock split |  | (2,048     | ) | (205        | )
| | Comprehensive income:                            | 
| | Foreign currency translation adjustment          |  | --         |   | --          |  
| | Hedge loss reclassified into earnings            |  | --         |   | --          |  
| | Net income                                       |  | --         |   | --          |  
| | Total comprehensive income                       |  |            |   |             |  
|
| | BALANCE, MAY 31, 2004                            |  | 30,176,345 |   | $ 3,017,634 |  
|

See notes to consolidated financial
statements

---

# IMMUCOR, INC. AND
SUBSIDIARIES

# CONSOLIDATED STATEMENTS
OF CASH FLOWS

---

|                                                         | Year Ended May 31,
|-------------------------------------------------------- | ------------------
|
|                                                         |                   
|
|OPERATING ACTIVITIES:                                    |                   
|Net income                                               |                   
|Adjustments to reconcile net income to net cash provided |                   
|by operating activities:                                 |                   
|Depreciation and amortization of property and equipment  |                   
|Amortization of other assets and excess of cost over net |                   
|tangible assets acquired                                 |                   
|Amortization of debt issue costs                         |                   
|Loss on debt retirements                                 |                   
|Disposal of assets in settlement                         |                   
|Impairment of fixed assets                               |                   
|Impairment of long term investment                       |                   
|Deferred tax provision                                   |                   
|Provision for doubtful accounts                          |                   
|Changes in operating assets and liabilities:             |                   
|Accounts receivable, trade                               |                   
|Loan to officer                                          |                   
|Income taxes                                             |                   
|Inventories                                              |                   
|Other receivables                                        |                   
|Other current assets                                     |                   
|Other long-term assets                                   |                   
|Accounts payable                                         |                   
|Other current liabilities                                |                   
|Other long-term liabilities                              |                   
|                                                         |                   
|Total adjustments                                        |                   
|                                                         |                   
|Cash provided by operating activities                    |                   
|                                                         |                   
|INVESTING ACTIVITIES:                                    |                   
|Purchases of / deposits on property and equipment        |                   
|                                                         |                   
|Cash used in investing activities                        |                   

See notes to consolidated financial
statements.

---

# IMMUCOR, INC. AND
SUBSIDIARIES

# CONSOLIDATED STATEMENTS
OF CASH FLOWS (continued)

---

|                                                                 | Year Ended May 31,
|---------------------------------------------------------------- | ------------------
|
|                                                                 |                   
|
|
|FINANCING ACTIVITIES:                                            |                   
|Borrowings, net of repayments under line of credit agreements    |                   
|Borrowings of long-term debt                                     |                   
|Repayments of long-term debt and capital leases                  |                   
|Borrowings, net of repayments of long-term debt to related party |                   
|Proceeds from exercise of stock options and warrants             |                   
|Payment of cash dividends                                        |                   
|Payment of debt issue costs                                      |                   
|                                                                 |                   
|Cash used in financing activities                                |                   
|                                                                 |                   
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                          |                   
|                                                                 |                   
|                                                                 |                   
|INCREASE IN CASH                                                 |                   
|AND CASH EQUIVALENTS                                             |                   
|                                                                 |                   
|CASH AND CASH EQUIVALENTS                                        |                   
|AT BEGINNING OF YEAR                                             |                   
|                                                                 |                   
|                                                                 |                   
|CASH AND CASH EQUIVALENTS                                        |                   
|AT END OF YEAR                                                   |                   
|                                                                 |                   
|                                                                 |                   
|Non-cash investing and financing activities:                     |                   
|Capital lease obligations                                        |                   
|                                                                 |                   
|                                                                 |                   
|CASH PAID DURING THE YEAR FOR:                                   |                   
|Interest                                                         |                   
|Income taxes                                                     |                   
|                                                                 |                   

See notes to consolidated financial
statements.

---

# IMMUCOR, INC. AND
SUBSIDIARIES

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

|1. | NATURE
OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | -----------------------------------------------------------------

| | Nature
of Business  The Companys principal business activities are the
development, manufacture and marketing of immunological diagnostic medical products. The
Company operates facilities in North America and Europe.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Consolidation
Policy  The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries (see Note 14 of the consolidated financial
statements). All significant inter-company balances and transactions have been eliminated
in consolidation.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Use
of Estimates  The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Reclassifications Certain
prior year balances have been reclassified to conform to the current year presentation.
| | ------------------------------------------------------------------------------------------------------------------

| | Stock-Based
Compensation  The Company grants stock options for a fixed number of shares to
employees with an exercise price equal to the fair value of the shares at the date of the
grant. The Company accounts for stock option grants in accordance with APB Opinion No.
25, Accounting for Stock Issued to Employees, and accordingly does not recognize
compensation expense for the stock option grants.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation
 Transition andDisclosure  an amendment of FASB Statement No. 123.This Statement provides alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation. In
addition, this Statement amends the disclosure requirements of Statement 123 to require
prominent disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method used on
reported results. The following table illustrates the effect on net income and earnings
per share as if the Company had applied the fair value recognition provisions of SFAS No.
123 to stock-based employee compensation.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                  | For the year Ended May 31,
|----------------------------------------------------------------- | --------------------------
|
|                                                                  |                           
|Net income as reported                                            |                           
|Deduct total stock-based employee compensation expense determined |                           
|under fair value based methods for all awards, net of taxes       |                           
|                                                                  |                           
|Pro forma net income                                              |                           
|Earnings per share as reported:                                   |                           
|Per common share                                                  |                           
|Per common share-assuming dilution                                |                           
|Pro forma earnings per share:                                     |                           
|Per common share                                                  |                           
|Per common share-assuming dilution                                |                           

| | Concentration
of Credit Risk  At May 31, 2004 and 2003, the Companys entire cash
balance of $15,697,082 and $11,183,317, respectively, was on deposit with high quality
financial institutions, located primarily in the U.S. and Italy.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company obtains raw materials from numerous outside suppliers. The Company is not
dependent on any single supplier other than certain instrumentation manufacturers (see
Note 11 of the consolidated financial statements) and the joint manufacturer of some of
the Companys monoclonal antibody-based products. The Company believes that its
business relationships with its suppliers are excellent.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | Certain
of the Companys products are derived from blood having particular or rare
combinations of antibodies or antigens that are found in a limited number of individuals.
The Company to date has not experienced any major difficulty in obtaining sufficient
quantities of such blood for use in manufacturing its products, but there can be no
assurance that the Company will always have available to it a sufficient supply of such
blood.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
May 31, 2004 and 2003, the Companys accounts receivable balance of $26,533,796 and
$25,693,973, respectively, was 59% and 60% of foreign origin, predominantly European.
Some European countries require longer payment terms as a part of doing business. This
may subject the Company to a higher risk of uncollectiblity. Consideration of this risk
is made when the allowance for doubtful accounts is evaluated. The Company generally does
not require collateral from its customers. For certain customers who routinely take
longer than one year to pay, the Company discounts these receivables using a 4% effective
interest rate over the historical collection period. This discount reduces revenue and
accounts receivable. As collection occurs, the Company recognizes interest income.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Factoring
of accounts receivable is an additional method used by the Company to mitigate the risk
of uncollectibility. When an account is factored, the balance of the account is
classified as other receivable on the consolidated balance sheet and the factoring fee,
which in effect represents a discount on the related accounts receivable at an effective
interest rate of approximately 4%, is charged against revenues on the consolidated
statement of operations.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Cash
and Cash Equivalents  The Company considers all highly liquid investments with
an original maturity of three months or less when purchased to be cash and cash
equivalents.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Inventories Inventories
are stated at the lower of first-in, first-out cost or market. Cost includes material,
labor and manufacturing overhead. The Company uses a standard cost system as a tool to
monitor production efficiency. The standard cost system applies estimated labor and
manufacturing overhead factors to inventory based on budgeted production and efficiency
levels, staffing levels and costs of operation, based on the experience and judgment of
management. Actual costs and production levels may vary from the standard and are charged
to the consolidated statements of operations as a component of cost of sales. Since U.S.
generally accepted accounting principles require that the standard cost approximate
actual cost, periodic adjustments are necessary. The provision for obsolete inventory is
reviewed on a quarterly basis. All finished good reagent products with less than six
months dating are written down to zero. Any raw, intermediate, or finished product that
has been quarantined because it has failed quality control, needs to be reworked, or is
past its expiration date is written off. Should the product be successfully reworked and
pass final quality control checks it is then re-valued at its standard cost. Obsolete and
quarantined inventory is physically segregated from useable and saleable inventory and
destroyed according to regulatory and fiscal guidelines. No material changes have been
made to the inventory policy during fiscal 2004, 2003 or 2002.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Interest
Rate Swap The Company uses interest rate swaps to hedge interest rate risk
associated with the cash flows of some of its borrowings. Any differences paid or
received on interest rate swap agreements are recognized as adjustments to interest
expense as incurred, thereby adjusting the effective interest rate on the underlying
obligation. The Company has established strict counter-party credit guidelines and only
enters into transactions with financial institutions of investment grade or better. As a
result, the Company estimates the risk of counter-party default to be minimal. Effective
June 1, 2001, the Company adopted Statement of Financial Accounting Standards (SFAS)
No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No.
133 requires the Company to recognize all derivatives on the balance sheet at fair value,
based on dealer quotes. For derivatives designated as hedges, the change in the fair
value of the derivative will either be offset against the change in the fair value of the
hedged asset, liability, or firm commitment through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The ineffective
portion, as determined by comparing the terms of the interest rate swap agreements and
their designated debt instruments, of a derivatives change in fair value will be
immediately recognized in earnings. Prior to the adoption of SFAS No. 133, the fair
values of the interest rate swaps were not recognized in the financial statements. As of
May 31, 2004 and 2003, the Companys swap balance of $156,965 and $422,677,
respectively, was included in other liabilities. See Note 3 of the consolidated financial
statements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fair
Value of Financial Instruments The carrying amounts reported in the
consolidated balance sheets for cash and cash equivalents, accounts receivable, long-term
investment and accounts payable approximate their fair values. The fair values of the
Companys long-term debt approximate the reported amounts in the accompanying
consolidated balance sheets as their interest rates approximate the May 31, 2004 and 2003
market rates for similar debt instruments.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Property,
Plant and Equipment  Property, plant and equipment is stated at cost less
accumulated depreciation. Expenditures for replacements are capitalized, and the replaced
items are retired. Normal maintenance and repairs are charged to operations. Major
maintenance and repair activities that significantly enhance the useful life of the asset
are capitalized. Gains and losses from the sale of plant assets are included in income.
Depreciation is computed using the straight-line method over the estimated lives of the
related assets ranging from three to 30 years. Certain internal and external costs
incurred in the development of computer software for internal use are capitalized and
included in property, plant and equipment in accordance with Statement of Position 98-1,
Accounting for the Costs of Computer Software Developed or Obtained for InternalUse.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | Excess
of Cost Over Net Assets Acquired  Excess of cost over net assets acquired
comprises the cost of purchased businesses in excess of values assigned to net tangible
assets received, and was being amortized using the straight-line method over 20 to 30
years. Accumulated amortization at May 31, 2004 and 2003 was $7,255,000 and $7,463,000
respectively. Effective June 1, 2002, the Company adopted SFAS No. 142, Goodwill and
OtherIntangible Assets. Under Statement 142, goodwill and indefinite lived
intangible assets are no longer amortized but are reviewed annually for impairment, or
more frequently if impairment indicators arise. Intangible assets that have finite lives
are continuing to be amortized over their useful lives. The Company believes that the
carrying value of the recorded long-lived assets is not impaired.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Long-Term
Investment and Other Long-Lived Assets  The long-term investment, representing
an initial $1.0 million common stock investment in Lionheart Technologies, Inc. acquired
in April 1992, is accounted for using the cost method of accounting. Bio-Tek Instruments,
Inc. (see Note 11 of the consolidated financial statements) is a wholly owned subsidiary
of Lionheart Technologies, Inc.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company evaluates long-lived assets for impairment when events and circumstances indicate
that the assets might be impaired and records an impairment loss if the undiscounted cash
flows estimated to be generated by those assets are less than the carrying amount of
those assets. The impairment loss recognized is equal to the difference between the
undiscounted cash flows and the carrying amount of the assets. In fiscal 2003, the
Company evaluated the carrying value of the long-term investment in Lionheart
Technologies and estimated that the undiscounted cash flows indicated impairment. An
impairment loss of $230,000 was charged to other expense on the consolidated statement of
operations. In fiscal 2002, the Company evaluated the carrying value of the DIAS Plus
instruments included in property, plant and equipment and estimated that the undiscounted
cash flows indicated an other-than-temporary impairment. An impairment loss of
approximately $270,000 was charged to cost of sales on the consolidated statement of
operations. The settlement of a contractual dispute with Becton, Dickinson resulted in
impairment in asset value of approximately $0.8 million related to IMAGN and was netted
against the settlement from Becton, along with $51,000 in instrument financing settlement
fees, in other income on the consolidated statement of operations for fiscal 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deferred
Costs  Deferred licensing costs primarily consist of distribution rights for
the Companys complete line of reagents purchased from its Canadian distributor,
Immucor Canada, Inc., on September 1, 1998, and are being amortized using the
straight-line method over ten years. The remaining balance is attributed to license fees
for cell lines acquired in the purchase of Gamma Biologicals, Inc. (Gamma).
Once a product is developed from a cell line, the related license fee is amortized over
the term of the respective agreement, generally five years. Accumulated amortization
related to deferred licensing costs at May 31, 2004 and 2003 was $1.5 million and $1.2
million, respectively.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Costs
and fees associated with the Companys bank line of credit agreements and debt
obligations are included in other assets in the accompanying consolidated balance sheets
and are amortized over the term of the related debt agreements. During fiscal 2002, the
Company incurred $950,000 in deferred financing costs associated with obtaining a waiver
to certain loan covenant violations as of May 31, 2001. In the third quarter of fiscal
2004, the Company wrote off $924,000 in unamortized deferred financing costs as a result
of the repayment and cancellation of the associated debt. During the last half of fiscal
2004, an additional $132,000 in deferred financing costs were recorded, associated with
the Companys new credit facility with SunTrust Bank (see Note 3 of the consolidated
financial statements). Total net deferred loan costs as of May 31, 2004 and 2003 were
approximately $0.1 million and $1.2 million, respectively. Amortization of these deferred
financing costs is included in interest expense in the consolidated statements of
operations. Amortization related to deferred costs totaled approximately $246,000,
$450,000 and $621,000 for the years ended May 31, 2004, 2003 and 2002, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Foreign
Currency Translation  The financial statements of foreign subsidiaries have
been translated into U.S. dollars in accordance with SFAS No. 52,Foreign Currency
Translation. All balance sheet accounts have been translated using the exchange rates
in effect at the balance sheet dates. Income statement amounts have been translated using
the average exchange rates for each year. The gains and losses resulting from the changes
in exchange rates from year to year have been reported separately as a component of
comprehensive income. The effect of foreign currency transaction gains and losses has
been recorded in the accompanying statements of operations. In 2004, 2003, and 2002 the
Company recorded foreign currency transaction gains (losses) of approximately $491,000,
$697,000, and $(445,000), respectively. For fiscal 2004, the fluctuation of the Euro
weighted average exchange rate increased net sales by approximately $4.3 million. A ten
percent change in the year-to-date weighted average Euro exchange rate would have had the
effect of increasing or decreasing net sales by approximately $3.0 million.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | Revenue
Recognition  The Company recognizes revenue when the following four basic
criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery
has occurred or services rendered; (3) the fee is fixed and determinable; and (4)
collectibility is reasonably assured. Should changes in conditions cause management to
determine these criteria are not met for certain future transactions, revenue recognized
for any reporting period could be adversely affected. Revenue from the sale of the Companys
reagents in the U.S. market is recognized upon shipment when both title and risk of loss
transfers to the customer upon shipment. Revenue from the sale of the Companys
reagents in the export market is recognized FOB customs clearance when both title and
risk of loss transfers to the customer. Revenue from the sale of the Companys
medical instruments is recognized upon shipment and completion of contractual obligations
relating to training and/or installation based on terms of the related agreements.
Revenue from rentals of the Companys medical instruments is recognized over the
life of the rental agreement. Instrument service contract revenue is recognized over the
life of the contract.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
some situations, the Company sells an instrument to a third-party leasing company without
recourse, and receives full cash payment for the instrument upon receipt of the ultimate
customers signed delivery and acceptance. In certain limited situations involving
third party lease arrangements, the Company enters into a repurchase agreement whereby if
the ultimate customer terminates the lease, the Company agrees to repurchase the
instrument for an amount equal to the remaining unpaid lease payments owed to the third
party leasing company. In these limited situations, the Company defers the revenue
related to the sale, along with corresponding direct and incremental cost of sales, and
subsequently recognizes the revenue over the lease term as the lease payments are made to
the third party leasing company and it is clear that the ultimate customer has not
terminated the related lease.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company adopted Emerging Issues Task Force (EITF) Issue No. 00-21, Accounting
for Revenue Arrangementswith Multiple Deliverables, for agreements entered
into beginning in the second quarter of fiscal year 2004. The Companys medical
instrument sales contracts involve multiple deliverables, including the sale or rental of
an instrument (including training and installation), the subsequent servicing of the
instrument during the first year, and reagent products provided to the customer during
the validation period. The portion of the instrument sales price applicable to the
instrument itself (including training and installation), which is determined based on
fair value, is recognized upon shipment and completion of contractual obligations
relating to training and/or installation based on the terms of the related agreement. The
portion of the sales price applicable to reagent products provided to the customer during
the validation period, based on fair value, are recognized when the instrument itself is
recognized as generally such recognition occurs when the validation period is completed.
The portion of the sales price applicable to servicing the instrument during the first
year, based on fair value, is deferred and recognized over the first year of the
contract. The allocation of the total consideration received based on the estimated fair
value of the units of accounting requires judgment by management.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Shipping
and Handling Revenues and Costs  The amounts charged to customers for shipping
and handling of orders are classified as revenue and reported in the statement of
operations as net sales as invoiced. The cost of handling customer orders and the cost of
shipments are reported in the operating cost section of the statement of operations as
distribution expense as incurred. The cost of handling customer orders and the cost of
shipments were approximately $8.5 million, $7.0 million and $6.6 million for the years
ended May 31, 2004, 2003 and 2002, respectively.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Earnings
Per Share  All earnings per share amounts reflect the July 2004, November 2003
and September 2002 three-for-two stock splits. See Note 7 of the consolidated financial
statements.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Accounts
Receivable, Trade  Trade receivables at May 31, 2004, totaling $26.5 million,
and at May 31, 2003, totaling $25.7 million, are net of allowances for doubtful accounts
of $1.3 million and $1.7 million, respectively. The allowance for doubtful accounts
consists of a reserve based on historical collection experience of third-party
receivables, as well as a specific reserve principally calculated based on the
application of estimated loss percentages to delinquency aging totals based on how
recently payments have been received. The Company continually monitors the collectibility
of its customer accounts and when indications arise that an amount is not likely to be
collected, the amount is charged to the allowance for doubtful accounts.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Advertising
Costs The amounts for advertising are expensed as incurred and are classified
as selling and marketing operating expenses. Advertising expense was $0.7 million, $0.4
million, and $0.3 million for the years ended May 31, 2004, 2003 and 2002, respectively.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | Impact
of Recently Issued Accounting Standards  In June 2001, the FASB issued SFAS No.
143, Accounting forAsset Retirement Obligations(SFAS No. 143).
SFAS No. 143 applies to legal obligations associated with the retirement of long-lived
assets that result from the acquisition, construction, development and/or the normal
operation of a long-lived asset. For the purposes of Statement 143, a legal obligation is
an obligation that a party is required to settle as a result of an existing or enacted
law, statute, ordinance, or written or oral contract or that are based on a promise and
an expectation of performance. Statement 143 is effective for financial statements for
fiscal years beginning after June 15, 2002. The Company adopted SFAS No. 143 effective
June 1, 2003 without impact on its financial position or results of operations.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or
Disposal Activities (SFAS No. 146), which addresses financial accounting
and reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition
for CertainEmployee Termination Benefits and Other Costs to Exit an Activity
(including certain costs incurred in arestructuring). The provisions of SFAS
No. 146 are effective for exit or disposal activities that are initiated after December
31, 2002. At adoption on January 1, 2003, SFAS No. 146 did not have a significant impact
on the Companys consolidated statements of operations or financial position. The
Company does not have any in-process or planned exit or disposal activities as of May 31,
2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
November 2002, the FASB issued Interpretation No. 45, Guarantors Accounting and
Disclosure Requirements forGuarantees (FIN No. 45). FIN No. 45
requires a guarantor to recognize, at the inception of a guarantee, a liability for the
fair value of the obligation it has undertaken in issuing the guarantee. The Company
applies FIN No. 45 to guarantees, if any, issued or modified after December 31, 2002. FIN
No. 45 also requires guarantors to disclose certain information for guarantees, including
product warranties, outstanding at the end of interim periods ending after December 15,
2002. At adoption, FIN No. 45 did not have a significant impact on the Companys
consolidated statements of operations or financial position. The Company does not have
any material warranty obligations or other guarantees as of May 31, 2004.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
November 2002, the Emerging Issues Task Force reached a consensus on Issue No. 00-21, Revenue
Arrangementswith Multiple Deliverables (EITF 00-21). The Issue
addresses certain aspects of the accounting for arrangements under which a vendor will
perform multiple revenue-generating activities. EITF 00-21 addresses when a revenue
arrangement with multiple deliverables should be divided into separate units of
accounting and, if separation is appropriate, how the arrangement consideration should be
allocated to the identified accounting units. The Company adopted the provisions of EITF
00-21 effective September 1, 2003, without material impact on its consolidated statements
of operations or financial position.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | See
Stock-Based Compensation above for a discussion of SFAS No. 148, Accounting for
Stock-Based Compensation Transition and Disclosure  an amendment of
FASB Statement No. 123.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities, anInterpretation of Accounting Research Bulletin (ARB) No. 51(FIN
No. 46). FIN No. 46 requires certain variable interest entities, or VIEs, to be
consolidated by the primary beneficiary of the entity if the equity investors in the
entity do not have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN No. 46 is effective for all VIEs
created or acquired after January 31, 2003. For VIEs created or acquired prior to
February 1, 2003, the provisions of FIN No. 46 must be applied for the first interim or
annual period beginning after March 15, 2004. The Company does not expect that the
adoption of FIN No. 46 will have a material impact on its consolidated statements of
operations or financial position.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
April 2003, the FASB issued SFAS No. 149,Amendments of Statement 133 on
Derivative Instruments and HedgingActivities(SFAS No. 149). SFAS
No. 149 amends and clarifies financial accounting and reporting for derivative
instruments, including certain instruments embedded in other contracts and for hedging
activities under FASB Statement No. 133, Accounting for Derivative Instruments and
Hedging Activities. This statement requires that contracts with comparable
characteristics be accounted for similarly. In particular, this statement clarifies under
what circumstances a contract with an initial net investment meets the characteristic of
a derivative, clarifies when a derivative contains a financing component, amends the
definition of an underlying hedged risk to conform to language used in FIN No. 45 and
amends certain other existing pronouncements. This statement, the provisions of which are
to be applied prospectively, is effective for contracts entered into or modified after
June 30, 2003. The adoption of SFAS No. 149, on July 1, 2003, did not a material impact
on the Companys consolidated statements of operations or financial position.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | In
May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments
with Characteristics ofboth Liabilities and Equity (SFAS No. 150).
SFAS No. 150 establishes standards for how an issuer classifies and measures in its
statement of financial position certain financial instruments with characteristics of
both liabilities and equity. SFAS No. 150 requires that an issuer classify a financial
instrument that is within SFAS No. 150s scope as a liability (or an asset in some
circumstances) because that financial instrument embodies an obligation of the issuer.
Many of those instruments were previously classified as equity. SFAS No. 150 requires an
issuer to classify the following instruments as liabilities (or assets in some
circumstances): mandatorily redeemable financial instruments; obligations to repurchase
the issuers equity shares by transferring assets; and certain obligations to issue
a variable number of its equity shares. SFAS No. 150 is effective for all financial
instruments entered into or modified after May 31, 2003, and otherwise shall be effective
at the beginning of the first interim period beginning after June 15, 2003. The adoption
of SFAS No. 150 on September 1, 2003, did not have a material effect on the Companys
consolidated statements of operations or financial position.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | BALANCE
SHEET DETAIL
|-- | --------------------

| | May 31,                                      
| | ---------------------------------------------
|
| | Inventories:                                 
| | Raw materials and supplies                   
| | Work in process                              
| | Finished goods and goods purchased for resale
| |                                              
| |                                              
| |                                              
| | Property, plant and equipment:               
| | Land                                         
| | Buildings and improvements                   
| | Leasehold improvements                       
| | Furniture and fixtures                       
| | Machinery and equipment                      
| |                                              
| |                                              
| | Less accumulated depreciation                
| |                                              
| | Property, plant and equipment - net          
| |                                              
| | Assets under capital lease:                  
| | Furniture and fixtures                       
| | Machinery and equipment                      
| |                                              
| |                                              
| | Less accumulated depreciation                
| |                                              
| | Assets under capital lease - net             
| |                                              
| | Property, plant and equipment - net          
| |                                              

---

|3. | BANK
LINE OF CREDIT AGREEMENTS AND DEBT OBLIGATIONS
|-- | ---------------------------------------------------

| | May 31,                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | Primary Obligations                                                                                                                                                                         
| | Term Loan (interest rate ranging from LIBOR plus 1.0% to LIBOR plus      1.75% maturing December 2006)                                                                                      
| | Term Loan A (Acquisition term note) (interest rates ranging from     LIBOR plus 2.0% to LIBOR plus 2.75% repaid in December 2003)                                                           
| | Term Loan B (Additional term loan) (interest rate ranging from     LIBOR plus 2.5% to LIBOR plus 3.25% repaid in December 2003)                                                             
| | Revolving  line of  credit -  Canadian  subsidiary  (denominated  in     Canadian  dollars with  interest rate ranging from LIBOR plus 2.0%     to LIBOR plus 3.25% repaid by December 2003)
| | Secondary Obligations                                                                                                                                                                       
| | Line of  credit -  Spanish  subsidiary (denominated in Euros at an interest rate      of 4.5% maturing in March 2005)                                                                       
| | Line of credit - Spanish subsidiary (denominated in Euros at an interest rate      of EURIBOR plus 0.45% maturing in June 2005)                                                             
| | Mortgage note payable - Belgian  subsidiary  (denominated in Belgian Francs      at an interest rate of 6.25% maturing in November 2007)                                                    
| |                                                                                                                                                                                             
| |                                                                                                                                                                                             
| | Less current portion                                                                                                                                                                        
| |                                                                                                                                                                                             
| |                                                                                                                                                                                             
| |                                                                                                                                                                                             

---

| | Primary  Obligations
| | --------------------

| | On
December 18, 2003 the Company obtained a new $27.0 million secured credit facility with
SunTrust Bank. Proceeds of these borrowings were primarily used to repay the Companys
previous arrangement with Wachovia Bank (which was cancelled upon repayment). The new
credit facility matures in December 2006 and is comprised of a $15.0 million revolver and
a $12.0 million term loan. The term loan is payable in quarterly installments of $1.0
million. The term loan and the revolver bear interest of LIBOR plus additional percentage
points ranging from 1.0% to 1.75%, or SunTrust Bank prime rate plus (or minus) additional
percentage points ranging from (0.5%) to 1.0% based on certain calculations as defined in
the Loan Agreement. The loans are collateralized by the capital stock of all of the
Companys subsidiaries. The Company recorded a non-cash, pre-tax charge of $924,000
in the third quarter to write off unamortized deferred financing charges related to its
previous credit facility.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
May 31, 2004, there was $15.0 million in funds available under the U.S. line of credit.
The commitment fee on the unused borrowings is 0.125%.
| | -------------------------------------------------------------------------------------------------------------------------------------------------

| | During
fiscal 2004, the Company paid the $13.8 million balance on Term Loan A, the $6.0 million
balance on Term Loan B, and the $2.2 million balance on the Canadian revolving line of
credit, and retired the Spanish line of credit amounting to $1.9 million. The Company
also paid $1.0 million on the new credit facility with SunTrust Bank.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys agreement with its principal lender contains certain financial and other
covenants that, among other things, limit annual capital expenditure, limit payment of
cash dividends and the repurchase of stock, limit the incurrence of additional debt, and
require the maintenance of certain financial ratios.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
the inception of the original acquisition Term Loan A in October 1998, the Company
entered into an interest rate swap agreement with an effective date of December 1, 1998,
for a notional amount of $15.0 million, which amortizes over the life of the instrument,
also maturing December 2005. This transaction effectively converted Term Loan As
floating rate to a fixed rate of 5.33% on a portion of the principal balance of $15.0
million at inception. The fair value of the interest rate swap agreement was $157,000 at
May 31, 2004. The fair value of the interest rate swap agreement represents the estimated
receipts or payments that would be made to terminate the agreement and is included with
other long-term liabilities on the balance sheets. At the inception of the original
Canadian revolving line of credit in December 1996, the Company simultaneously entered
into an interest rate swap agreement with a notional amount of $2,338,166 ($3,500,000
CDN$). This transaction effectively converted the revolvers floating rate to a
fixed rate of 6.6375% on the principal balance of $2,338,166. The Canadian swap agreement
matured in December 2001. Effective June 1, 2001, the Company adopted SFAS No. 133. The
cumulative effect of the adoption of SFAS No. 133 resulted in a comprehensive loss for
fiscal 2002 (a component of Shareholders Equity on the balance sheet) of
approximately $103,000, net of $26,000 in income taxes, relating to the interest rate
swap agreements. Since the swap agreement related to the Canadian line of credit matured
in December 2001, an adjustment of approximately $15,000 was made to comprehensive loss
and reclassified to earnings as interest expense in fiscal 2002. Due to the
ineffectiveness of the swap related to the U.S. loan, approximately $20,500 and $20,500
was reclassified from comprehensive loss to earnings as interest expense for the years
ended May 31, 2004 and 2003, respectively, and approximately $266,000 and $53,000 was
charged directly to interest expense for the years ended May 31, 2004 and 2003,
respectively. The remaining balance of approximately $31,000 will be amortized over the
remaining term of the loan.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Secondary  Obligations
| | ----------------------

| | At
May 31, 2004, the Company had approximately $270,000 in funds available under the Spanish
line of credit agreements. At May 31, 2004, the Italian subsidiary had available
borrowing capacity of $1,321,809 under a line of credit.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Upon
the acquisition of Medichim, the Company assumed a mortgage note that is collateralized
by a first lien on Medichims land and building. The approximate carrying value of
the land and building is $645,000. Medichim also has $606,000 in line of credit
agreements denominated in Euro with one Belgian bank. At May 31, 2004, the Company had
$606,000 available under these line of credit agreements, which are guaranteed by the
Company.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | Aggregate
maturities of all long-term obligations and lines of credit for each of the next five
years are as follows:
| | ---------------------------------------------------------------------------------------------------------------------

| |                     | 
| | ------------------- | 
| | Year Ending May 31: | 
| | 2005                | 
| | 2006                | 
| | 2007                | 
| | 2008                | 
| |                     | 
| |                     | 
| |                     | 

|4. | CAPITAL
LEASE OBLIGATIONS
|-- | -------------------------

| | May 31,                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | Manufacturing equipment, bearing interest at rates ranging from 5.46% to 9.89%      and with maturities ranging from April 2003 to September 2005                                                                               
| | Office furniture and build-outs for facility expansion, bearing interest at rates      ranging from 5.6% to 7.63% and with maturities ranging from January 2003      to December 2004                                           
| | Machinery and equipment related to the telephone system bearing an interest rate       of 7.93% with maturities ranging from January 2004 to December 2008                                                                      
| | Instruments at customer sites - German subsidiary, bearing interest at 2.2% and      with maturity dates ranging from April 2005 to October 2005                                                                                
| | Instruments at customer sites - Spanish subsidiary, bearing interest at 5.18% and      with maturity dates ranging from June 2008 to April 2009                                                                                 
| | Instruments at customer sites - Italian subsidiary, bearing interest rates ranging     from 2.5% to 2.75% and with maturities ranging from July 2004 to April 2006                                                              
| | Enterprise resource planning (ERP) computer system and related equipment,      bearing interest at rates ranging from 2.21% to 8.23% and with maturities      ranging from January 2003 to December 2005.  Repaid in fiscal 2004
| | Office  equipment, bearing interest at rates ranging from 4.54% to 10.5% and with      maturities ranging from December 2003 to December 2005.  Repaid in fiscal 2004                                                           
| | Instruments and computer equipment - Belgian subsidiary, denominated in     Belgian  Francs  bearing  interest  at rates  ranging  from  5.03% to 10.29% and      with maturity dates ranging from November 2002 to April 2004  
| | Computer equipment and leasehold improvements--Spanish subsidiary, bearing      interest at 5.25% and maturing in November 2004                                                                                                 
| |                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                 
| | Less current portion                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                 

| | All
of the above capital lease obligations are collateralized by the indicated assets.
Amortization on related assets is included in depreciation expense.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | Aggregate
maturities of capital leases for each of the next five years are as follows:
| | --------------------------------------------------------------------------------------

| |                     | 
| | ------------------- | 
| | Year Ending May 31: | 
| | 2005                | 
| | 2006                | 
| | 2007                | 
| | 2008                | 
| | 2009                | 
| |                     | 
| |                     | 
| |                     | 

| | Total
imputed interest to be paid out under existing capital leases as of May 31, 2004 is
$66,109.
| | --------------------------------------------------------------------------------------------------

---

|5. | COMMON
STOCK
|-- | ------------

| | Immucor
distributed a three-for-two stock split, effected in the form of a 50% stock dividend on
September 13, 2002 to shareholders of record on August 26, 2002, which resulted in the
issuance of 4,128,630 shares of common stock. Immucor distributed a three-for-two stock
split, effected in the form of a 50% stock dividend on November 14, 2003 to the
shareholders of record on October 24, 2003, which resulted in the issuance of 6,542,601
shares of common stock, net of 2,048 fractional shares for which cash dividends were
paid. On June 1, 2004, the Board of Directors approved a three-for-two stock split,
effected in the form of a 50% stock dividend, to shareholders of record as of the close
of business on June 30, 2004. The stock split was distributed on July 16, 2004 and
increased the number of shares outstanding by 10,066,940, net of 326 fractional shares
for which cash dividends were paid. The stock splits were the fourth, fifth and sixth for
the Company since its initial public offering in December 1985. Previously, the Company
implemented a three-for-two split in 1991, a five-for-four split in 1990, and a
five-for-four split in 1987. All share and per share amounts disclosed in this document
have been restated to reflect the impact of the above stock splits.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
May 31, 2004, shares of common stock reserved for future issuance are 3,618,782.
| | -----------------------------------------------------------------------------------

| | In
connection with the acquisition of Medichim, S.A. and Immunochim, s.a.r.l., the Company
issued to the seller an option to acquire, in whole or in part, 337,500 shares of Immucor
stock at $2.65 per share in a transaction exempt under Section 4(2) of the Securities
Act. The 337,500 options became exercisable at the rate of 33% per year commencing March
2001, expire in fiscal year 2010, and were valued at $310,000 at the date of the
acquisition and included in goodwill. During June 2002, all 337,500 options were fully
exercised.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
part of the acquisition of Dominion Biologicals, Limited, in December 1996, the Company
issued to the sellers five- and ten-year warrants to acquire, in whole or in part,
1,614,656 and 506,250 shares of Immucor stock at $3.56 and $3.55 per share, respectively.
These warrants became exercisable one year after the issuance date, with the five-year
warrants expiring in December 2001 unexercised and the ten-year warrants expiring in
2006. Immucor filed a registration statement on Form S-3 in May 1999 with the Securities
and Exchange Commission covering the issuance of the shares to be issued upon exercise of
these warrants. As of May 31, 2004, all 506,250 of the ten-year warrants had been
exercised and none were outstanding.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has a Shareholders Rights Plan under which one common stock purchase right
is presently attached to and trades with each outstanding share of the Companys
common stock. The rights become exercisable and transferable apart from the common stock
ten days after a person or group, without the Companys consent, acquires beneficial
ownership of, or the right to obtain beneficial ownership of, 15% or more of the Companys
common stock or announces or commences a tender offer or exchange offer that could result
in at least 15% ownership. If a person or a group acquires at least 15% ownership, except
in a transaction approved by the Company under the rights plan, then each right not owned
by the acquirer or related parties will entitle its holder to purchase, at the rights
exercise price, common stock or common stock equivalents having a market value
immediately prior to the triggering of the right of twice that exercise price. In
addition, after an acquirer obtains at least 15% ownership, if the Company is involved in
certain mergers, business combinations, or asset sales, each right not owned by the
acquirer or related persons will entitle its holder to purchase, at the rights
exercise price, shares of common stock of the other party to the transaction having a
market value immediately prior to the triggering of the right of twice that exercise
price. Once exercisable, each right entitles the holder to purchase 3.4 shares of the
Companys common stock at an exercise price of $45, subject to adjustment to prevent
dilution. The rights have no voting power and, until exercised, no dilutive effect on net
income per common share. The rights expire on April 20, 2009, and in most cases are
redeemable at the discretion of the Board of Directors at $0.01 each. All reservations of
shares of common stock for purposes other than the rights plan shall take precedence and
be superior to any reservation of shares in connection with or under the rights plan.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company instituted a repurchase program in June of 1998 for up to 2,700,000 shares, of
which 2,416,500 shares had been purchased prior to fiscal 2004, leaving 283,500 shares available for repurchase. On June 1, 2004, the
Board of Directors authorized the Company to repurchase up to an additional 300,000
shares of its common stock.  The Companys repurchase program does not have an expiration date.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|6. | STOCK
OPTIONS
|-- | -------------

| | All
references to historical awards, outstanding awards and availability of shares for future
grants under Immucors stock plans, as described below, and related prices per share
have been restated, for comparability purposes, to reflect the three-for-two stock splits
distributed in July 2004, November 2003 and September 2002.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has various stock option plans that authorize the Companys Stock Option
Committee to grant employees, officers and directors options to purchase shares of the
Companys common stock. Exercise prices of stock options are determined by the Stock
Option Committee and have been the fair market value at the date of the grant.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys 1990 Stock Option Plan authorizes the grant of options to employees,
officers and directors for up to 2,531,250 shares of the Companys common stock. All
options have 10-year terms and vest and become fully exercisable 50% at the end of two
years, 25% at the end of three years, and 25% at the end of four years of continued
employment.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys 1995 Stock Option Plan authorizes the grant of options to employees,
officers and directors for up to 3,568,124 shares of the Companys common stock
including an amendment by the Board of Directors in fiscal 2003 to increase shares
allocated. All options have 10-year terms and vest and become fully exercisable 50% at
the end of two years, 25% at the end of three years, and 25% at the end of four years of
continued employment.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys 1998 Non-Incentive Stock Option Plan authorizes the grant of options to
employees, officers and directors for up to 3,375,000 shares of the Companys common
stock. All options have 10-year terms and vest and become fully exercisable 50% at the
end of two years, 25% at the end of three years, and 25% at the end of four years of
continued employment.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys 2003 Non-Incentive Stock Option Plan authorizes the grant of options to
employees, officers and directors for up to 600,000 shares of the Companys common
stock. All options have 10-year terms and vest and become fully exercisable 50% at the
end of two years, 25% at the end of three years, and 25% at the end of four years of
continued employment.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued toEmployees, (APB 25) and related
Interpretations in accounting for its employee stock options because the alternative fair
value accounting provided for under SFAS No. 123, Accounting for Stock-Based
Compensation, requires use of option valuation models that were not developed for use
in valuing employee stock options. Under APB 25, because the exercise price of the Companys
employee stock options equals the market price of the underlying stock on the date of
grant, no compensation expense is recognized.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Pro
forma information regarding net income and earnings per share is required by SFAS No.
123, which also requires that the information be determined as if the Company has
accounted for its employee stock options granted subsequent to June 1, 1995 under the
fair value method of that Statement. For purposes of pro forma disclosures, the estimated
fair value of the options is amortized to expense over the options vesting periods.
The fair value for these options was estimated at the date of grant using a Black-Scholes
option-pricing model with the following weighted average assumptions:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                         | 2004 | 2003 | 2002
| | ----------------------- | ---- | ---- | ----
| | Risk-free interest rate |      | 3    | .68%
| | Expected life (years)   |      | 8    | .0  
| | Expected volatility     |      | 68   | .6% 
| | Expected dividend yield |      | 0    | .0% 

| | The
Black-Scholes option valuation model was developed for use in estimating the fair value
of traded options that have no vesting restrictions and are fully transferable. In
addition, option valuation models require the input of highly subjective assumptions,
including the expected stock price volatility. Because Immucors employee stock
options have characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the fair value
estimates, in managements opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of its employee stock options. See Note 1 of
the consolidated financial statements for pro forma presentation.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company is authorized to issue up to 3,618,782 shares of its Common Stock under various
employee and director stock option arrangements. Options granted under these plans become
exercisable at various times and, unless exercised, expire at various dates through
fiscal 2014. Transactions involving these stock option arrangements are summarized as
follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| |                             | Range | Weighted Average | 
| | --------------------------- | ----- | ---------------- | 
|
|
| | Outstanding at May 31, 2001 |       | 5,170,079        | 
| | Granted                     |       | 2,423,250        | 
| | Exercised                   |       | (1,303,234)      | 
| | Forfeited                   |       | (184,322)        | 
| |                             |       |                  | 
| | Outstanding at May 31, 2002 |       | 6,105,773        | 
| | Granted                     |       | 179,438          | 
| | Exercised                   |       | (2,257,560)      | 
| | Forfeited                   |       | (61,335)         | 
| |                             |       |                  | 
| | Outstanding at May 31, 2003 |       | 3,966,316        | 
| | Granted                     |       | 687,435          | 
| | Exercised                   |       | (1,196,971)      | 
| | Forfeited                   |       | (75,323)         | 
| |                             |       |                  | 
| | Outstanding at May 31, 2004 |       | 3,381,457        | 
| |                             |       |                  | 

| | At
May 31, 2004, 2003 and 2002, options for 1,323,092, 1,235,745 and 2,858,710 shares of
common stock, respectively, were exercisable, at weighted average exercise prices of
$2.42, $2.67 and $2.42, respectively. At May 31, 2004, 237,325 shares of common stock
were available for future grants. The weighted average grant date fair value of options
granted during fiscal 2004, 2003 and 2002 were $9.69, $7.50 and $1.54, respectively.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following table as of May 31, 2004 sets forth by group of exercise price ranges, the
number of shares, weighted average exercise prices and weighted average remaining
contractual lives of options outstanding, and the number and weighted average exercise
prices of options currently exercisable.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Options Outstanding |     | Options Exercisable |    
| | ------------------- | --- | ------------------- | ---
|
|
|
|
| | $ 0                 | .00 | $ 2                 | .00
| | 2                   | .01 | 4                   | .00
| | 4                   | .01 | 11                  | .00
| | 11                  | .01 | 16                  | .00
| |                     |     |                     |    
| |                     |     |                     |    
| |                     |     |                     |    

|7. | EARNINGS
PER SHARE
|-- | ------------------

| | The
following table sets forth the computation of earnings per common share and common share
 assuming dilution in accordance with SFAS No. 128, Earnings per Share.
Immucor distributed a three-for-two stock split, effected in the form of a 50% stock
dividend on July 16, 2004 to shareholders of record on June 30, 2004. Immucor distributed
a three-for-two stock split, effected in the form of a 50% stock dividend on November 14,
2003 to the shareholders of record on October 24, 2003. The Company distributed a
three-for-two stock split on September 13, 2002 to shareholders of record on August 26,
2002. The split was effected in the form of a 50% stock dividend. All share and per share
amounts disclosed in this document have been restated to reflect these stock splits.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | For the year Ended May 31,                            
| | ------------------------------------------------------
|
| | Numerator for basic and diluted earnings per share:   
| | Net income                                            
| |                                                       
| | Denominator:                                          
| | For basic earnings per share - weighted average shares
| | Effect of dilutive stock options and warrants         
| |                                                       
| | Denominator for diluted earnings per share -          
| | Adjusted weighted-average shares                      
| |                                                       
| | Earnings per common share                             
| |                                                       
| | Earnings per common share - assuming dilution         
| |                                                       

| | The
effect of 580,335, 11,250 and 4,387,733 out-of-the-money options and warrants were
excluded from the above calculation, as inclusion of these securities would be
anti-dilutive, for the years ended May 31, 2004, 2003 and 2002, respectively.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | COMMITMENTS
AND CONTINGENCIES
|-- | -----------------------------

Lease
Commitments

| | The
Company leases domestic office and warehouse facilities under an operating lease
agreement expiring in 2008 with a right to renew for an additional five years. The
Company leases foreign office and warehouse facilities and automobiles under operating
lease agreements expiring at various dates through 2009. Total rental expense,
principally for office and warehouse space, was $1,896,000 in fiscal 2004, $1,156,000 in
fiscal 2003 and $1,154,000 in fiscal 2002.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
Germany, the office facility is leased from a company owned by the family of a former
officer. Rental payments under this lease were $244,000, $170,000 and $159,000 for fiscal
2004, 2003 and 2002, respectively, and are believed to be at fair market value.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following is a schedule of approximate future annual lease payments under all operating
leases that have initial or remaining non-cancelable lease terms in excess of one year as
of May 31, 2004:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                     | 
| | ------------------- | 
| | Year Ending May 31: | 
| | 2005                | 
| | 2006                | 
| | 2007                | 
| | 2008                | 
| | 2009                | 
| | Thereafter          | 
| |                     | 
| |                     | 
| |                     | 

| | The
Company may, at its option, extend its office and warehouse facilities lease terms
through various dates.
| | -------------------------------------------------------------------------------------------------------------

Other
Commitments

| | In
January 2004, the Company entered into an instrument purchase agreement with Bio-Tek
Instruments, Inc. for the development of a third generation automated assay instrument.
The cost of development under this agreement totaled $0.8 million in fiscal 2004 and is
expected to reach $2.8 million in fiscal 2005 before dropping to $1.5 million in fiscal
2006. Upon acceptance of the engineering model, the Company will have been deemed to
issue a purchase order for 100 units. There is no minimum purchase requirement to
maintain exclusivity. See Note 11 of the consolidated financials statements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | In
September 1999, the Company entered into a manufacturing and development agreement with
Stratec Biomedical AG (Stratec), headquartered in Germany. Under the
agreement, Stratec has developed and manufactures the fully automated analyzer known as
the Galileo. In order to maintain exclusive European distribution rights, the
Company must purchase 250 instruments by the end of fiscal 2007, the end of the five-year
period beginning with the first shipment of production instruments. If the Company
purchases less than 250 instruments over the period, it will be allowed to negotiate a
good faith extension. The Company believes it will purchase the required number of
instruments to maintain exclusivity.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has outstanding purchase commitments to Serologicals, Inc., totaling
approximately $8.4 million, for some of the Companys monoclonal antibody based
products to be purchased over the next four years ($2.7 million in fiscal 2005, $2.3
million in fiscal 2006, $2.2 million in fiscal 2007 and $1.2 million in fiscal 2008). The
Company purchased approximately $2.5 million in monoclonal antibody based products in
fiscal 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
April 2003, Immucor, Inc. and Bio-Tek Instruments Inc., the manufacturer of Immucors
ABS2000 fully automated blood bank instrument, announced the signing of an agreement with
the University of Vermont to commercialize an in-vitro diagnostic test to measure
platelet markers useful in anti-platelet pharmacological drug development and potentially
to improve real-time treatment of cardiovascular disease. The assay will be useful in
determining the risk associated with increased platelet activity (thrombotic occlusion of
vessels, which can lead to a myocardial infarct) and decreased reactivity (excess
bleeding) and for the prediction of coronary artery and cerebrovascular disease in
patients without a previous disease history. The Company spent approximately $0.1 million
in fiscal 2004 to facilitate this project and expects to spend an additional $ 50,000 in
fiscal 2005.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
order to satisfy the broad spectrum of customers operational and financial
criteria, the Company offers several instrument procurement options, including
third-party financing leases, direct sales and reagent rental agreements under which the
Company recovers the cost of the instrument through increased reagent pricing. In
connection with certain third-party financing leases of the Companys automated
systems, the third-party lessors customers are committed to purchasing reagent
products exclusively from the Company. If the Company is unable to supply such products,
this could represent a breach of the Companys agreement with the third-party
financing company. See additional commitments in Note 11 of the consolidated financial
statements.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Contingencies

| | From
time to time, the Company is involved in certain legal proceedings and claims which arise
in the normal course of business, none of which, in the opinion of management and its
counsel, are expected to have a material adverse effect on the Companys
consolidated results of operations or financial position.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|9. | INCOME
TAXES
|-- | ------------

| | Sources
of income before income taxes are summarized below:
| | -----------------------------------------------------------

| | For the year Ended May 31,
| | --------------------------
|
| | Domestic Operations       
| | Foreign Operations        
| |                           
| | Total                     
| |                           

| | The
provision for income taxes is summarized as follows:
| | --------------------------------------------------------

| | For the year Ended May 31, | 
| | -------------------------- | 
|
| | Current:                   | 
| | Federal                    | 
| | Foreign                    | 
| | State                      | 
| |                            | 
| |                            | 
| |                            | 
| | Deferred:                  | 
| | Federal                    | 
| | Foreign                    | 
| | State                      | 
| |                            | 
| |                            | 
| |                            | 
| | Income taxes               | 
| |                            | 

---

| | Deferred
income taxes reflect the net tax effects of: (a) temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and income
tax purposes; and (b) operating loss carry-forwards. Valuation allowances are established
when necessary to reduce deferred tax assets to the amounts expected to be realized. The
Companys Spanish subsidiary had net operating loss carry-forwards for income tax
purposes of approximately $193,000, which expire in 2014. The Companys German
subsidiary had net operating loss carry-forwards for income tax purposes of approximately
$768,000, which do not expire. The German subsidiary net operating loss carry-forwards
for income tax purposes of approximately $0.8 million were recognized in the current
fiscal year. Based on an assessment of all available evidence including, but not limited
to, the operating history and lack of profitability of certain subsidiaries, the Company
is uncertain as to the ability to realize the Spanish net operating loss carry-forward
and tax credit and, as a result, a deferred tax valuation allowance has been recorded
against this deferred tax asset. The tax effects of significant items comprising the
Companys net deferred tax liability at May 31, 2004 and 2003 are as follows:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | May 31,                           
| | ----------------------------------
|
| | Deferred tax liabilities:         
| | Amortization                      
| | Depreciation                      
| | Other                             
| | Deferred tax assets:              
| | Reserves not currently deductible 
| | Operating loss carry-forwards     
| | Uniform capitalization            
| |                                   
| |                                   
| | Valuation allowance               
| |                                   
| | Net deferred tax (liability) asset
| |                                   

| | The
Companys effective tax rate differs from the federal statutory rate as follows:
| | ------------------------------------------------------------------------------------

| | For the year Ended May 31,                                             
| | -----------------------------------------------------------------------
|
| | Federal statutory tax rate                                             
| | State income taxes, net of federal tax benefit                         
| | Extraterritorial income exclusion/foreign sales corporation commissions
| | Difference in effective income tax rates of other countries            
| | Excess of cost over tangible assets acquired - net                     
| | Change in deferred tax valuation allowance                             
| | Income from Spanish subsidiary                                         
| | Other                                                                  
| |                                                                        
| |                                                                        
| |                                                                        

| | As
a result of utilizing compensation cost deductions arising from the exercise of
nonqualified employee stock options for federal and state income tax purposes, the
Company realized income tax benefits of $3,581,809, $3,431,181 and $652,792 in fiscal
2004, 2003 and 2002, respectively. These income tax benefits are recognized in the
accompanying financial statements as additions to additional paid-in capital rather than
as reductions of the respective income tax provisions because the related compensation
deductions are not recognized as compensation expense for financial reporting purposes.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | A
true up of the estimated tax benefit of the 2003 European restructure and adjustments for
misapplication of Texas franchise tax rules for fiscal years 2002 and 2003 added $0.1 million
and $0.3 million to income tax expense, respectively. In addition, a reserve of $225,000 was
established to recognize that the Companys state and local tax planning has become
less effective due to increasingly conservative positions taken by the various taxing
authorities.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|10. | TECHNOLOGY
RIGHTS
|--- | -----------------

| | In
March 1983, the Company acquired rights to technology to be used in developing diagnostic
testing products. In connection with this acquisition, the Company has agreed to pay to
the Blood Center of Greater Kansas City royalties equal to 4% of the net sales through
August 26, 2006 from products utilizing the technology. Royalties under this agreement
amounted to approximately $451,000, $463,000 and $473,000 in fiscal 2004, 2003 and 2002,
respectively.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11. | INSTRUMENT
DEVELOPMENT AND MANUFACTURING AGREEMENTS
|--- | ---------------------------------------------------

| | In
January 2004, the Company entered into an instrument purchase agreement with Bio-Tek
Instruments, Inc. for the development of a third generation automated assay instrument.
The Company has identified the need for a fast, lightweight, fully automated instrument.
This instrument will serve the small to medium accounts, the largest segment of our
customers, which number approximately 7,500 worldwide. The instrument as designed will
utilize the Companys proprietary Capture® technology and will be
over two times faster than the ABS2000. European launch is expected in mid 2006. The
instrument will be serviced utilizing a depot approach that should significantly reduce
service costs. Upon acceptance of the engineering model, the Company will have been
deemed to issue a purchase order for 100 units. There is no minimum purchase requirement
to maintain exclusivity.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
September 1999, the Company entered into a manufacturing and development agreement with
Stratec Biomedical AG (Stratec), headquartered in Germany. Under the
agreement, Stratec has developed and is manufacturing a fully automated analyzer
utilizing the Companys Capture® technology known as the Galileo which
was initially targeted to the European community and has now begun to be marketed to
customers in the U.S. and Japan. The instrument is marketed exclusively to hospital
transfusion laboratories and blood donor centers, for patient and donor blood typing and
antibody screening and identification. In order to maintain exclusive European
distribution rights, the Company must purchase 250 instruments by the end of fiscal 2007,
the end of the five-year period beginning with the first shipment of production
instruments. If the Company purchases less than 250 instruments over the period it will
be allowed to negotiate a good faith extension. The Company believes it will purchase the
required number of instruments to maintain exclusivity.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company contracted with Bio-Tek Instruments, Inc. for the development of a fully
automated, walk-away, blood bank analyzer. Known as the ABS2000, the analyzer
utilizes the Companys patented Capture®technology and is being
marketed in Europe and the United States to hospital transfusion laboratories for patient
testing. Under the terms of the 15-year agreement, the Company reimburses Bio-Tek
Instruments, Inc. for its development costs, and the Company is granted worldwide
marketing rights to sell the instrument for use in the human clinical diagnostic market
for testing of human blood or blood components with centrifugation. Bio-Tek Instruments,
Inc. may sell the product in other markets paying the Company up to a 4% royalty of the
selling price. To date, Bio-Tek has not exercised this option. To maintain the exclusive
worldwide marketing rights the Company was required to purchase 250 instruments over a
six-year period beginning with the delivery of the first production instrument that
occurred in fiscal 1997. The Company did not meet this requirement but does not view the
loss of exclusivity as detrimental due to the fact that the ABS2000 is designed to work
solely with the Companys proprietary reagents. On July 31, 2002, the Company
entered into a $3.3 million instrument purchasing agreement with Bio-Tek for
developmental work and fifty ABS2000 instruments. As of May 31, 2004, all 50 of these
instruments have been purchased.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
fiscal 2004, 2003 and 2002, the Company incurred and expensed approximately $923,000,
$388,000 and $625,000, respectively, in instrument research and development costs.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12. | RETIREMENT
PLAN
|--- | ---------------

| | The
Company maintains a 401(k) retirement plan covering its domestic employees who meet
certain age and length of service requirements, as defined in the Plan document. The
Company matches a portion of employee contributions to the plan. During the years ended
May 31, 2004, 2003 and 2002, the Companys matching contributions to the plan were
approximately $269,000, $225,000 and $180,000, respectively. Vesting in the Companys
matching contributions is based on years of continuous service.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|13. | QUARTERLY
FINANCIAL DATA (UNAUDITED)
|--- | ------------------------------------

(In
thousands, except per share amounts)

| |                |  | Income    |  | Earnings | Earnings Per |         
| | -------------- |  | --------- |  | -------- | ------------ | --------
|
|
| | FISCAL 2004    |  |           |  |          |              |         
| | First Quarter  |  | $  27,262 |  | $ 15,310 |              | $  5,912
| | Second Quarter |  | 27,207    |  | 15,209   |              | 5,749   
| | Third Quarter  |  | 27,876    |  | 14,795   |              | 4,291   
| | Fourth Quarter |  | 30,213    |  | 16,875   |              | 5,750   
| |                |  |          
| |                |  | $ 112,558 |  | $62,189  |              | $21,702 
| |                |  |          
| | FISCAL 2003    | 
| | First Quarter  |  | $ 23,300  |  | $ 13,434 |              | $  5,626
| | Second Quarter |  | 23,760    |  | 13,734   |              | 5,611   
| | Third Quarter  |  | 25,170    |  | 14,487   |              | 5,921   
| | Fourth Quarter |  | 26,418    |  | 14,203   |              | 5,146   
| |                |  |          
| |                |  | $ 98,648  |  | $ 55,858 |              | $ 22,304
| |                |  |          

|14. | DOMESTIC
AND FOREIGN OPERATIONS
|--- | -------------------------------

| | Information
concerning the Companys domestic and foreign operations is summarized below (in
thousands):
| | --------------------------------------------------------------------------------------------------------

| | Year Ended May 31, 2004     
| | ----------------------------
| |                             
| | Net reagent sales:          
| | Unaffiliated customers      
| | Affiliates                  
| | Net instrument sales:       
| | Unaffiliated customers      
| | Affiliates                  
| |                             
| | Total                       
| |                             
| | Depreciation                
| | Amortization                
| |                             
| | Income(loss)from operations 
| |                             
| | Interest expense            
| | Interest income             
| |                             
| | Income tax (benefit) expense
| |                             
| | Capital expenditures        
| | Long-lived assets           
| | Identifiable assets         
| | Net assets                  

---

| | Year Ended May 31, 2003      
| | -----------------------------
| |                              
| | Net reagent sales:           
| | Unaffiliated customers       
| | Affiliates                   
| | Net instrument sales:        
| | Unaffiliated customers       
| | Affiliates                   
| |                              
| | Total                        
| |                              
| | Depreciation                 
| | Amortization                 
| |                              
| | Income (loss) from operations
| |                              
| | Interest expense             
| | Interest income              
| |                              
| | Income tax (benefit) expense 
| |                              
| | Capital expenditures         
| | Long-lived assets            
| | Identifiable assets          
| | Net assets                   
|

---

| | Year Ended May 31, 2002      
| | -----------------------------
| |                              
| | Net reagent sales:           
| | Unaffiliated customers       
| | Affiliates                   
| | Net instrument sales:        
| | Unaffiliated customers       
| | Affiliates                   
| |                              
| | Total                        
| |                              
| | Depreciation                 
| | Amortization                 
| |                              
| | Income (loss) from operations
| |                              
| | Interest expense             
| | Interest income              
| |                              
| | Income tax expense (benefit) 
| |                              
| | Capital expenditures         
| | Long-lived assets            
| | Identifiable assets          
| | Net assets                   
|

| | Note
1: Information relating to Spain, Portugal, France, and Belgium is included in Other.
Note 2: Revenue is allocated by geographic area based on the subsidiary with which the
sale originates.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
the years ended May 31, 2004, 2003 and 2002, the Companys U.S. operations made net
export sales to unaffiliated customers of approximately $4,874,000, $4,842,000, and
$5,289,000, respectively. The Companys German operations made net export sales to
unaffiliated customers of $4,859,000, $3,089,000 and $2,301,000 for the years ended May
31, 2004, 2003, and 2002, respectively. The Companys Canadian operations made net
export sales to unaffiliated customers of $2,152,000, $2,152,000 and $2,102,000 for the
years ending May 31, 2004, 2003, and 2002, respectively. Product sales to affiliates are
valued at market prices.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15. | COMPREHENSIVE
INCOME
|--- | --------------------

| | The
components of comprehensive income for the periods ended May 31, 2004, 2003 and 2002 are
as follows:
| | --------------------------------------------------------------------------------------------------------

| | Balance                                     | Activity | Activity     | Activity | Balance    
| | ------------------------------------------- | -------- | ------------ | -------- | -----------
|
| | Retained earnings/net income                |          | $ 20,261,628 |          | $ 8,794,910
| | Foreign currency translation adjustment     |          | (6,585,812   | )        | 1,263,026  
| | Cumulative  effect of the adoption of SFAS  |          |              |          |            
| | No.133 on June 1, 2001, net of taxes        |          | --           |          | (102,721   
| | Hedge loss reclassified to interest expense |          | --           |          | 30,809     
| |                                             |          |             
| | Comprehensive income                        |          | $ 13,675,816 |          | $ 9,986,024
| |                                             |          |             

| | As
a result of the adoption of SFAS No. 133 on June 1, 2001, the Company recorded an income
tax benefit of $26,220 in fiscal 2002. This income tax benefit was recognized, netted
against the cumulative effect, in the accompanying financial statements as a component of
comprehensive income. See Note 3 of the consolidated financial statements. The remaining
balance of cumulative unrecognized hedging losses as of May 31, 2004 was approximately
$31,000 and will be reclassified into earnings at approximately $20,500 per year until
December 2005.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|16. | EXCESS
OF COST OVER NET TANGIBLE ASSETS ACQUIRED AND CUSTOMER LISTS
|--- | -------------------------------------------------------------------

| | As
of May 31, 2004, the financial statements included acquisition-related goodwill of $35.4
million, net of previous amortization of $7.3 million. Goodwill, net of amortization,
totaled $17.8 million, $3.0 million, $1.0 million and $6.3 million in the U.S., Germany,
Italy and Canada, respectively.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
June 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS No. 142,
Goodwill and OtherIntangible Assets. Under the new rules, goodwill and
indefinite lived intangible assets are no longer amortized but are reviewed annually for
impairment, or more frequently if impairment indicators arise. The review process entails
assessing the fair value of the net assets underlying the Companys acquisition
related goodwill on a business-by- business basis. If the fair value is deemed less than
the related carrying value, the Company is required to reduce the amount of the goodwill.
Separable intangible assets that are not deemed to have indefinite lives continue to be
amortized over their useful lives.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has applied the new accounting rules to goodwill and intangible assets, all of
which were acquired prior to July 1, 2001. The Company tested goodwill for impairment as
of March 1, 2004, as required by SFAS No. 142, utilizing a combination of valuation
techniques including the expected present value of future cash flows and a market
multiple approach. This analysis did not result in impairment at May 31, 2004. The
Company no longer amortizes acquisition-related goodwill. The table below shows the
periods ended May 31, 2004, 2003 and 2002 on a comparative basis given the adoption of
SFAS No. 142.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For the year Ended May 31,                      
| | ------------------------------------------------
|
| |                                                 
| | Net income as reported                          
| | Add:  Goodwill amortization, net of taxes       
| |                                                 
| | Net income as adjusted for SFAS No. 142         
| |                                                 
| | Net income per common share:                    
| | As reported                                     
| | As adjusted                                     
| |                                                 
| | Net income per common share - assuming dilution:
| | As reported                                     
| | As adjusted                                     

| | The
gross carrying amount and accumulated amortization of the Companys Customer List is
as follows:
| | ----------------------------------------------------------------------------------------------------

| | Gross         | Accumulated | Net Book  
| | ------------- | ----------- | ----------
|
| | May 31, 2004: |             |           
| | Customer List |             | $1,700,000
| | May 31, 2003: |            
| | Customer List |             | $1,700,000

| | Amortization
expense recorded on the Customer List for the years ended May 31, 2004, 2003 and 2002 was
$85,000 for each year, respectively. The Customer List is being amortized over a useful
life of 20 years. The estimated amortization expense relating to the Customer List for
each of the next five fiscal years and thereafter is as follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |            | 
| | ---------- | 
| |            | 
| | 2005       | 
| | 2006       | 
| | 2007       | 
| | 2008       | 
| | 2009       | 
| | Thereafter | 
| |            | 
| |            | 
| |            | 

---

# IMMUCOR, INC. AND
SUBSIDIARIES

# SCHEDULE II 
VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED MAY 31, 2004, 2003 AND 2002

| | Balance at                      | Charged to |            | Balance
| | ------------------------------- | ---------- | ---------- | -------
|
|
| | 2004:                           |            |            |        
| | Allowance for doubtful accounts |            | $1,678,361 |        
| | 2003:                           |           
| | Allowance for doubtful accounts |            | $1,483,688 |        
| | 2002:                           |           
| | Allowance for doubtful accounts |            | $1,244,488 |        

| | Note
 1: Deductions for the Allowance for doubtful accounts represent
accounts written off during the period less recoveries of accounts previously written off
and exchange differences generated.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | None.
| | -----

| | Item
9A.  Controls and Procedures.
| | -----------------------------------

| | As
of the end of the period covered by this report, the Company carried out an evaluation,
under the supervision and with the participation of the Companys management,
including the Companys Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Companys disclosure controls and
procedures pursuant to Rule 13a-15(e) and 15(d)-15(e) under the Exchange Act. Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that
the Companys disclosure controls and procedures are effective. There were no
changes in the Companys internal control over financial reporting or in other
factors identified in connection with that evaluation that occurred during the Companys
fourth fiscal quarter of the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the Companys internal control over
financial reporting.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# PART III

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

| | The
information contained under Proposal One  The Election of Directors and
Section 16(a) Beneficial Ownership Reporting Compliance in the Companys
definitive proxy statement related to its 2004 annual meeting of shareholders which the
Company will file with the Securities and Exchange Commission no later than September 28,
2004, is incorporated herein by reference.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Code
of Ethics
| | --------------

| | Immucor
has adopted a code of business conduct and ethics for directors, officers and employees,
known as the Code of Conduct. The Code of Conduct is available on the Company website at
http://www.immucor.com/site/aum_corporate_governance.jsp. Shareholders may request a free
copy of the Code of Conduct by writing to: Steven C. Ramsey, Vice President  Chief
Financial Officer and Secretary, Immucor, Inc., 3130 Gateway Drive, PO Box 5625,
Norcross, GA 30091-5625.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Immucor,
Inc. has retained the services of TeleSentry LLC to provide a 24 hour a day, seven day a
week anonymous hotline service for shareholder reporting of suspected violations of the
Code of Conduct. Shareholders in the U.S. may access the hotline service at (888)
883-1499. International shareholders may access the hotline by dialing 203-557-8604.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | Corporate
Governance and Nominating Committee Charter
| | -----------------------------------------------------

| | Immucor
has adopted the Corporate Governance and Nominating Committee Charter, which is available
on the Companys website at
http://www.immucor.com/site/aum_corporate_governance.jsp. Shareholders may request a free
copy of the Corporate Governance and Nominating Committee Charter by writing to: Steven
C. Ramsey, Vice President  Chief Financial Officer and Secretary, Immucor, Inc.,
3130 Gateway Drive, PO Box 5625, Norcross, GA 30091-5625.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Item
11. Executive Compensation.
| | ---------------------------------

| | The
information contained under Executive Compensation in the Companys
definitive proxy statement related to its 2004 annual meeting of shareholders, which the
Company will file with the Securities and Exchange Commission no later than September 28,
2004, is incorporated herein by reference.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Item
12.  Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
| | ----------------------------------------------------------------------------------------------------------

| | The
information required by Item 201(d) of Regulation S-K appears under Market for
Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities  Stock Repurchase Program above. The remainder of the
information called for by this item will be contained under Security Ownership of
Certain Beneficial Owners and Management in the Companys definitive proxy
statement related to its 2004 annual meeting of shareholders, which the Company will file
with the Securities and Exchange Commission no later than September 28, 2004, is
incorporated herein by reference.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | The
information contained under Certain Relationships and Related Transactions in
the Companys definitive proxy statement related to its 2004 annual meeting of
shareholders which the Company will file with the Securities and Exchange Commission no
later than September 24, 2004, is incorporated herein by reference.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Item
14. Principal Accountant Fees and Services.
| | -------------------------------------------------

| | The
information contained under Audit Committee Report and Independent
Public Accountants in the Companys definitive proxy statement related to its
2004 annual meeting of shareholders which the Company will file with the Securities and
Exchange Commission no later that September 28, 2004, is incorporated herein by
reference.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# PART IV

| | Item
15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
| | ---------------------------------------------------------------------------

| | (a) | Documents
filed as part of this report:
| | --- | ---------------------------------------

| | 1. | Consolidated
Financial Statements
| | -- | ---------------------------------

| | The Consolidated
 Financial  Statements,   Notes  thereto,  and  Report  of  Independent  Registered
 Public          Accounting Firm thereon are included in Part II, Item 8 of this report.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Consolidated
Financial Statement Schedule included in Part II, Item 8 of this report
| | -- | ------------------------------------------------------------------------------------

| | Schedule II -- 
Valuation and Qualifying Accounts
| | -------------------------------------------------

| | Other financial
statement schedules are omitted as they are not required or not applicable.
| | -------------------------------------------------------------------------------------------

| | 3. | Exhibits
| | -- | --------

| | 3.1 | Amended
 and  Restated  Articles  of  Incorporation  (incorporated  by  reference  to Exhibit 3.1
to                   Immucor, Inc.'s quarterly report on Form 10-Q filed on January 16,
2001).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | 3.2 | Amended
and Restated Bylaws (amended and restated as of October 17, 2003).
| | --- | --------------------------------------------------------------------------

| | 4.1 | Amended
and Restated  Shareholder  Rights Agreement dated as of November 20, 2001 between
 Immucor,  Inc. and                   EquiServe Trust Company,  N.A. as Rights Agent
(incorporated by reference to Exhibit 4.1 to Immucor,                   Inc.'s quarterly
report on Form 10-Q filed on January 14, 2002).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1 | Standard
 Industrial  Lease,  dated July 21,  1982,  between  the Company  and Colony  Center,
 Ltd.                   (incorporated  by reference to Exhibit 10.2 to Immucor,  Inc.'s
 Annual  Report on Form 10-K for the                   fiscal year ended May 31, 1985).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1-1 | Lease
Amendment dated June 28, 1989,  between the Company and Colony Center,  Ltd.
 (incorporated by                   reference to Exhibit 10.1-1 to Immucor,  Inc.'s
Annual Report on Form 10-K for the fiscal year ended                   May 31, 1989).
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1-2 | Lease
Amendment dated November 8, 1991,  between the Company and Colony Center,  Ltd.
 (incorporated                   by reference to Exhibit  10.1-1 to Immucor,  Inc.'s
 Annual  Report on Form 10-K for the fiscal year                   ended May 31, 1992).
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1-3 | Lease
Agreement,  dated February 2, 1996, between the Company and Connecticut General Life
Insurance                   Company  (incorporated by reference to Exhibit 10.1-3 to
Immucor,  Inc.'s Annual Report on Form 10-K                   for the fiscal year ended
May 31, 1996).
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1-4 | Lease
 Amendment,  dated March 8, 1998,  between the Company and Connecticut  General Life
Insurance                   Company  (incorporated by reference to Exhibit 10.1-4 to
Immucor,  Inc.'s Annual Report on Form 10-K                   for the fiscal year ended
May 31, 1998).
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1-5 | Lease
Amendment,  dated August 11, 1999, between the Company and Connecticut  General Life
Insurance                   Company  (incorporated by reference to Exhibit 10.1-5 to
Immucor,  Inc.'s Annual Report on Form 10-K                   for the fiscal year ended
May 31, 1999).
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.2 | Agreement,
 dated March 11, 1983,  between the Company and The Kansas City Group, as amended through
                  January 21, 1985  (incorporated by reference to Exhibit 10.2 to
Registration  Statement No. 33-16275                   on Form S-1).
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3 | Agreement
 dated August 27,  1987,  between the Company and the Kansas City Group  amending
 Exhibit                   10.2  (incorporated  by reference to Exhibit 10.3 to Immucor,
 Inc.'s Annual Report on Form 10-K for                   the fiscal year ended May 31,
1989).
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.4 | United
 States  Department of Health and Human  Services  Establishment  License dated  December
28,                   1982, for the  manufacture  of biological  products  (incorporated
 by reference to Exhibit 10.12 to                   Registration Statement No. 33-966 on
Form S-1).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.5 | United
States  Department of Health and Human Services  Product License dated December 28, 1982,
for                   the manufacture and sale of reagent red blood cells  (incorporated
 by reference to Exhibit 10.13 to                   Registration Statement No. 33-966 on
Form S-1).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.6 | United
States  Department of Health and Human Services  Product  License dated May 20, 1983, for
the                   manufacture  and  sale of blood  grouping  sera  (incorporated  by
 reference  to  Exhibit  10.14 to                   Registration Statement No. 33-966 on
Form S-1).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.7 | United
States  Department of Health and Human Services  Product  License date November 18, 1983,
for                   the  manufacture  and sale of  anti-human  serum  (incorporated  by
 reference  to Exhibit  10.15 to                   Registration Statement No. 33-966 on
Form S-1).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.8* | Amended
and Restated 2003 Stock Option Plan.
| | ----- | --------------------------------------------

| | 10.9* | Amended
and Restated 1998 Stock Option Plan.
| | ----- | --------------------------------------------

| | 10.10* | Amended
and Restated 1995 Stock Option Plan.
| | ------ | --------------------------------------------

| | 10.11* | 1990
Stock Option Plan,  including form of Stock Option  Agreement used thereunder
 (incorporated by                   reference to Exhibit  10.15 to Immucor,  Inc.'s
Annual Report on Form 10-K for the fiscal year ended                   May 31, 1995).
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | 10.12* | Employment
 Agreement dated October 13, 1998, between the Company and Steven C. Ramsey (incorporated
                  by  reference to Exhibit  10.20 to Immucor,  Inc.'s  Annual  Report on
Form 10-K for the fiscal year                   ended May 31, 1999).
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.13 | Loan
 Agreement  among  Immucor,  Inc.,  Dominion  Biologicals,  Limited,  and Immucor
 Medizinische                   Diagnostik  GmbH, as borrowers,  and Wachovia Bank,
 National  Association,  as lender,  dated as of                   February 23, 2001
 (incorporated  by reference to Exhibit 10.23 to Immucor,  Inc.'s quarterly report
                  on Form 10-Q filed April 23, 2001).
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.14 | Loan
Modification No. 1 dated as of September 11, 2001 between Immucor,  Inc., Dominion
Biologicals,                   Limited, Immucor Medizinische Diagnostik GmbH and Wachovia
Bank, National Association  (incorporated                   by reference to Exhibit
 10.21 to Immucor,  Inc.'s  quarterly  report on Form 10-Q filed January 14,
                  2002).
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.15* | Form
of  indemnification  agreement  between  the Company and  certain  directors
 (incorporated  by                   reference to Exhibit 10.22 to Immucor, Inc.'s
quarterly report on Form 10-Q filed January 14, 2002).
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.16 | Loan
 Modification  No. 2 dated as of July 18, 2002 between  Immucor,  Inc.,  Dominion
 Biologicals,                   Limited,   Immucor   Medizinische   Diagnostik   GmbH
 and  Wachovia  Bank,   National   Association                   (incorporated  by
reference to Exhibit  10.23 to Immucor,  Inc.'s Annual Report on Form 10-K for the
                  fiscal year ended May 31, 2002).
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.17 | Loan
Agreement among Immucor,  Inc., as borrower, and SunTrust Bank, as lender, dated as of
December                   18, 2003  (incorporated  by reference to Exhibit 10.1 to
Immucor,  Inc.'s  quarterly  report on Form                   10-Q filed April 14, 2004).
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.18 | Human
 Extracellular  Matrix  Mesh Supply  Agreement  dated June 30,  2003,  between the
Company and                   Inamed Corporation.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------

| | 10.19* | Employment
Agreement dated May 1, 2004, between the Company and Edward L. Gallup.
| | ------ | ---------------------------------------------------------------------------------

| | 10.20* | Employment
Agreement dated May 1, 2004, between the Company and Ralph A. Eatz.
| | ------ | ------------------------------------------------------------------------------

| | 10.21* | Employment
Agreement dated December 1, 2003, between the Company and Dr. Gioacchino De Chirico.
| | ------ | -----------------------------------------------------------------------------------------------

| | 10.22* | Amendment
 No. 1, dated May 1,  2004,  to the  Employment  Agreement  between  the  Company  and
Dr.                   Gioacchino De Chirico.
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------

| | 21 | Subsidiaries
of the Registrant.
| | -- | -------------------------------

| | 23.1 | Consent
of Independent Registered Public Accounting Firm.
| | ---- | ---------------------------------------------------------

| | 31.1 | Certification
of Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
| | ---- | -------------------------------------------------------------------------------------------

| | 31.2 | Certification
of Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
| | ---- | -------------------------------------------------------------------------------------------

| | 32.1 | Certification
of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | ---------------------------------------------------------------------------------------------------

| | 32.2 | Certification
of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | ---------------------------------------------------------------------------------------------------

| | *Denotes | a
management contract or compensatory plan or arrangement.
| | -------- | ----------------------------------------------------------

| | (b) | The
following report on Form 8-K was filed during the quarter ended May 31, 2004.
| | --- | ---------------------------------------------------------------------------------

| | On | March
31, 2004,  the Company  filed a Current  Report on Form 8-K to furnish the  Company's
 third quarter          2004  earnings  release dated March 25, 2004 and a transcript  of
the investor  conference  call also held on          March 25, 2004.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | See
Exhibits listed under Item 15(a)(3).
| | --- | ----------------------------------------

| | (d) | Not
applicable.  See Item 15(a)(2).
| | --- | -----------------------------------

---

# 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.

# IMMUCOR, INC.

By:/s/ DR. GIOACCHINO DE CHIRICO

Dr. Gioacchino De Chirico, President and Chief Executive Officer August 16, 2004

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.

/s/ EDWARD L. GALLUP
Edward L. Gallup, Director, Chairman of the Board of Directors,
(Principal Executive Officer)August 16, 2004

/s/ DR. GIOACCHINO DE CHIRICO
Dr. Gioacchino De Chirico, Director, President and Chief Executive OfficerAugust 16, 2004

/s/ STEVEN C. RAMSEY
Steven C. Ramsey, Vice President Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) 
August 16, 2004

/s/ RALPH A. EATZ
Ralph A. Eatz, Director, Senior Vice President  Chief Scientific OfficerAugust 16, 2004

/s/ ROSWELL S. BOWERS
Roswell S. Bowers, DirectorAugust 16, 2004

/s/ MARK KISHEL
Mark Kishel, M.D., DirectorAugust 16, 2004

/s/ JOSEPH E. ROSEN
August 16, 2004

/s/ JOHN A. HARRIS
John A. Harris, DirectorAugust 16, 2004

---

# EXHIBIT INDEX

# Number Description

| | 3.1 | Amended
 and  Restated  Articles  of  Incorporation  (incorporated  by  reference  to Exhibit 3.1
to                   Immucor, Inc.'s quarterly report on Form 10-Q filed on January 16,
2001).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.2 | Amended
and Restated Bylaws (amended and restated as of October 17, 2003).
| | --- | --------------------------------------------------------------------------

| | 4.1 | Amended
and Restated  Shareholder  Rights  Agreement dated as of November 20, 2001 between
 Immucor,                   Inc. and EquiServe Trust Company,  N.A. as Rights Agent
(incorporated by reference to Exhibit 4.1 to                   Immucor, Inc.'s quarterly
report on Form 10-Q filed on January 14, 2002).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1 | Standard
 Industrial  Lease,  dated July 21,  1982,  between  the Company  and Colony  Center,
 Ltd.                   (incorporated  by reference to Exhibit 10.2 to Immucor,  Inc.'s
 Annual  Report on Form 10-K for the                   fiscal year ended May 31, 1985).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1-1 | Lease
Amendment dated June 28, 1989,  between the Company and Colony Center,  Ltd.
 (incorporated by                   reference to Exhibit 10.1-1 to Immucor,  Inc.'s
Annual Report on Form 10-K for the fiscal year ended                   May 31, 1989).
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1-2 | Lease
Amendment dated November 8, 1991,  between the Company and Colony Center,  Ltd.
 (incorporated                   by reference to Exhibit  10.1-1 to Immucor,  Inc.'s
 Annual  Report on Form 10-K for the fiscal year                   ended May 31, 1992).
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1-3 | Lease
Agreement,  dated February 2, 1996, between the Company and Connecticut General Life
Insurance                   Company  (incorporated by reference to Exhibit 10.1-3 to
Immucor,  Inc.'s Annual Report on Form 10-K                   for the fiscal year ended
May 31, 1996).
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1-4 | Lease
 Amendment,  dated March 8, 1998,  between the Company and Connecticut  General Life
Insurance                   Company  (incorporated by reference to Exhibit 10.1-4 to
Immucor,  Inc.'s Annual Report on Form 10-K                   for the fiscal year ended
May 31, 1998).
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1-5 | Lease
Amendment,  dated August 11, 1999,  between the Company and Connecticut  General Life
Insurance Company                   (incorporated  by reference to Exhibit 10.1-5 to
Immucor,  Inc.'s Annual Report on Form 10-K for the                   fiscal year ended
May 31, 1999).
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.2 | Agreement,
 dated March 11, 1983,  between the Company and The Kansas City Group, as amended through
                  January 21, 1985  (incorporated by reference to Exhibit 10.2 to
Registration  Statement No. 33-16275                   on Form S-1).
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3 | Agreement
 dated August 27,  1987,  between the Company and the Kansas City Group  amending
 Exhibit                   10.2  (incorporated  by reference to Exhibit 10.3 to Immucor,
 Inc.'s Annual Report on Form 10-K for                   the fiscal year ended May 31,
1989).
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.4 | United
 States  Department of Health and Human  Services  Establishment  License dated  December
28,                   1982, for the  manufacture  of biological  products  (incorporated
 by reference to Exhibit 10.12 to                   Registration Statement No. 33-966 on
Form S-1).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.5 | United
States  Department of Health and Human Services  Product License dated December 28, 1982,
for                   the manufacture and sale of reagent red blood cells  (incorporated
 by reference to Exhibit 10.13 to                   Registration Statement No. 33-966 on
Form S-1).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.6 | United
States  Department of Health and Human Services  Product  License dated May 20, 1983, for
the                   manufacture  and  sale of blood  grouping  sera  (incorporated  by
 reference  to  Exhibit  10.14 to                   Registration Statement No. 33-966 on
Form S-1).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.7 | United
States  Department of Health and Human Services  Product  License date November 18, 1983,
for                   the  manufacture  and sale of  anti-human  serum  (incorporated  by
 reference  to Exhibit  10.15 to                   Registration Statement No. 33-966 on
Form S-1).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.8* | Amended
and Restated 2003 Stock Option Plan.
| | ----- | --------------------------------------------

---

| | 10.9* | Amended
and Restated 1998 Stock Option Plan.
| | ----- | --------------------------------------------

| | 10.10* | Amended
and Restated 1995 Stock Option Plan.
| | ------ | --------------------------------------------

| | 10.11* | 1990
Stock Option Plan,  including form of Stock Option  Agreement used thereunder
 (incorporated by                   reference to Exhibit  10.15 to Immucor,  Inc.'s
Annual Report on Form 10-K for the fiscal year ended                   May 31, 1995).
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.12* | Employment
 Agreement dated October 13, 1998, between the Company and Steven C. Ramsey (incorporated
                  by  reference to Exhibit  10.20 to Immucor,  Inc.'s  Annual  Report on
Form 10-K for the fiscal year                   ended May 31, 1999).
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.13 | Loan
 Agreement  among  Immucor,  Inc.,  Dominion  Biologicals  Limited,  and  Immucor
 Medizinische                   Diagnostik  GmbH, as borrowers,  and Wachovia Bank,
 National  Association,  as lender,  dated as of                   February 23, 2001
 (incorporated  by reference to Exhibit 10.23 to Immucor,  Inc.'s quarterly report
                  on Form 10-Q filed April 23, 2001).
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.14 | Loan
Modification No. 1 dated as of September 11, 2001 between Immucor,  Inc., Dominion
 Biologicals                   Limited, Immucor Medizinische Diagnostik GmbH and Wachovia
Bank, National Association  (incorporated                   by reference to Exhibit
 10.21 to Immucor,  Inc.'s  quarterly  report on Form 10-Q filed January 14,
                  2002).
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.15* | Form
of  indemnification  agreement  between  the Company and  certain  directors
 (incorporated  by                   reference to Exhibit 10.22 to Immucor, Inc.'s
quarterly report on Form 10-Q filed January 14, 2002).
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.16 | Loan
 Modification  No. 2 dated as of July 18, 2002  between  Immucor,  Inc.,  Dominion
 Biologicals                   Limited, Immucor Medizinische Diagnostik GmbH and Wachovia
Bank, National Association  (incorporated                   by  reference to Exhibit
 10.23 to Immucor,  Inc.'s  Annual  Report on Form 10-K for the fiscal year
                  ended May 31, 2002).
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.17 | Loan
Agreement among Immucor,  Inc., as borrower, and SunTrust Bank, as lender, dated as of
December                   18, 2003  (incorporated  by reference to Exhibit 10.1 to
Immucor,  Inc.'s  quarterly  report on Form                   10-Q filed April 14, 2004).
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.18 | Human
 Extracellular  Matrix  Mesh Supply  Agreement  dated June 30,  2003,  between the
Company and                   Inamed Corporation.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------

| | 10.19* | Employment
Agreement dated May 1, 2004, between the Company and Edward L. Gallup.
| | ------ | ---------------------------------------------------------------------------------

| | 10.20* | Employment
Agreement dated May 1, 2004, between the Company and Ralph A. Eatz.
| | ------ | ------------------------------------------------------------------------------

| | 10.21* | Employment
Agreement dated December 1, 2003, between the Company and Dr. Gioacchino De Chirico.
| | ------ | -----------------------------------------------------------------------------------------------

| | 10.22 | Amendment
 No. 1, dated May 1,  2004,  to the  Employment  Agreement  between  the  company  and
Dr.                   Gioacchino De Chirico.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | 21 | Subsidiaries
of the Registrant.
| | -- | -------------------------------

| | 23.1 | Consent
of Independent Registered Public Accounting Firm.
| | ---- | ---------------------------------------------------------

| | 31.1 | Certification
of Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
| | ---- | -------------------------------------------------------------------------------------------

| | 31.2 | Certification
of Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
| | ---- | -------------------------------------------------------------------------------------------

| | 32.1 | Certification
of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | ---------------------------------------------------------------------------------------------------

| | 32.2 | Certification
of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | ---------------------------------------------------------------------------------------------------

*Denotes a management contract or
compensatory plan or arrangement.