##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 Commission File Number 000-06516
 
 DATASCOPE CORP.
 
  Delaware
    
    13-2529596(State of other jurisdiction of incorporation or
    
    (I.R.S. Employer Identificationorganization)
    
    No.)14 Philips Parkway, Montvale, New Jersey
    
    07645-9998(Address of principal executive offices)
    
    (Zip Code)
  
  
  þ o
  o þ o
 o þ




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##### 



PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets (Unaudited) at March 31, 2007 and June 30, 2006
    
    
    1Condensed Consolidated Statements of Earnings (Unaudited) Three and Nine Months Ended March 31, 2007 and 2006
    
    
    2Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended March 31, 2007 and 2006
    
    
    3Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    4-19Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    20-32Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    32Item 4.
    
    Controls and Procedures
    
    
    33PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    34Item 2.
    
    Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
    
    
    34Item 6.
    
    Exhibits
    
    
    35Signatures
    
    
    
    
    36Exhibit 31.1.
    
    Certification of Principal Executive Officer Regarding Facts and Circumstances Relating to Quarterly Reports
    
    
    37Exhibit 31.2.
    
    Certification of Principal Financial Officer Regarding Facts and Circumstances Relating to Quarterly Reports
    
    
    38Exhibit 32.1.
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    
    39EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATION




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Datascope Corp. and Subsidiaries
 
 Condensed Consolidated Balance Sheets
  March 31,
    
    
    June 30,2007
    
    
    2006(Unaudited)
    
    
    (a)AssetsCurrent assets:Cash and cash equivalents
    
    $
    13,302
    
    
    $
    9,479Short-term investments
    
    
    40,471
    
    
    
    43,147Accounts receivable less allowance for
doubtful accounts of $2,422 and $2,301
    
    
    78,569
    
    
    
    78,133Inventories
    
    
    58,761
    
    
    
    58,759Prepaid income taxes
    
    
    1,871
    
    
    
    3,233Prepaid expenses and other current assets
    
    
    17,854
    
    
    
    13,907Current deferred taxes
    
    
    6,388
    
    
    
    6,522Total current assets
    
    
    217,216
    
    
    
    213,180Property, plant and equipment, net of accumulated
depreciation of $97,771 and $90,928
    
    
    82,767
    
    
    
    85,460Long-term investments
    
    
    14,383
    
    
    
    22,297Intangible assets, net
    
    
    21,921
    
    
    
    20,465Goodwill
    
    
    4,065
    
    
    
    4,065Other assets
    
    
    32,924
    
    
    
    30,213$
    373,276
    
    
    $
    375,680Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    18,761
    
    
    $
    20,071Dividends payable
    
    
    1,526
    
    
    
    1,069Accrued expenses
    
    
    14,411
    
    
    
    14,584Accrued compensation
    
    
    14,254
    
    
    
    16,234Deferred revenue
    
    
    4,008
    
    
    
    3,675Total current liabilities
    
    
    52,960
    
    
    
    55,633Other liabilities
    
    
    26,699
    
    
    
    26,309Commitments and contingencies (Note 10)Stockholders equity:Preferred stock, par value $1.00 per share:Authorized 5,000 shares; Issued, none
    
    
    
    
    
    
    Common stock, par value $0.01 per share:Authorized, 45,000 shares;Issued, 18,823 and 18,721 shares
    
    
    188
    
    
    
    187Additional paid-in capital
    
    
    107,353
    
    
    
    103,728Treasury stock at cost, 3,521 and 3,465 shares
    
    
    (107,037
    )
    
    
    (105,319
    )Retained earnings
    
    
    295,635
    
    
    
    299,255Accumulated other comprehensive loss:Cumulative translation adjustments
    
    
    107
    
    
    
    (1,300
    )Minimum pension liability adjustments
    
    
    (2,437
    )
    
    
    (2,437
    )Unrealized loss on available-for-sale securities
    
    
    (192
    )
    
    
    (376
    )Total stockholders equity
    
    
    293,617
    
    
    
    293,738$
    373,276
    
    
    $
    375,680
 
 1




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##### Table of Contents



Datascope Corp. and Subsidiaries
 
 Condensed Consolidated Statements of Earnings
   Nine Months Ended
    
    
    Three Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    280,400
    
    
    $
    273,900
    
    
    $
    97,600
    
    
    $
    93,100Cost of sales
    
    
    124,015
    
    
    
    120,344
    
    
    
    43,604
    
    
    
    40,235Gross profit
    
    
    156,385
    
    
    
    153,556
    
    
    
    53,996
    
    
    
    52,865Operating expenses:Research and development
expenses
    
    
    25,777
    
    
    
    27,714
    
    
    
    8,580
    
    
    
    9,568Selling, general and
administrative expenses
    
    
    106,091
    
    
    
    105,008
    
    
    
    36,161
    
    
    
    36,060Special items
    
    
    5,458
    
    
    
    (810
    )
    
    
    (1,851
    )
    
    
    137,326
    
    
    
    131,912
    
    
    
    42,890
    
    
    
    45,628Operating earnings
    
    
    19,059
    
    
    
    21,644
    
    
    
    11,106
    
    
    
    7,237Other (income) expense:Interest income
    
    
    (1,910
    )
    
    
    (1,656
    )
    
    
    (569
    )
    
    
    (563
    )Interest expense
    
    
    87
    
    
    
    263
    
    
    
    22
    
    
    
    170Dividend income
    
    
    (196
    )
    
    
    (4,523
    )
    
    
    
    
    
    
    (4,523
    )Other, net
    
    
    (903
    )
    
    
    1,396
    
    
    
    146
    
    
    
    325(2,922
    )
    
    
    (4,520
    )
    
    
    (401
    )
    
    
    (4,591
    )Earnings before income taxes
    
    
    21,981
    
    
    
    26,164
    
    
    
    11,507
    
    
    
    11,828Income taxes
    
    
    6,252
    
    
    
    6,589
    
    
    
    3,646
    
    
    
    2,760Net earnings
    
    $
    15,729
    
    
    $
    19,575
    
    
    $
    7,861
    
    
    $
    9,068Earnings per share, basic
    
    $
    1.03
    
    
    $
    1.32
    
    
    $
    0.52
    
    
    $
    0.60Weighted average number of common
shares outstanding, basic
    
    
    15,223
    
    
    
    14,884
    
    
    
    15,242
    
    
    
    15,011Earnings per share, diluted
    
    $
    1.02
    
    
    $
    1.29
    
    
    $
    0.51
    
    
    $
    0.59Weighted average number of common
shares outstanding, diluted
    
    
    15,488
    
    
    
    15,220
    
    
    
    15,544
    
    
    
    15,377Cash dividends declared per common share
    
    $
    1.27
    
    
    $
    1.21
    
    
    $
    0.10
    
    
    $
    0.07
  2




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##### Table of Contents



Datascope Corp. and Subsidiaries
 
 Condensed Consolidated Statements of Cash Flows
   Nine Months EndedMarch 31,2007
    
    
    2006Operating Activities:Net earnings
    
    $
    15,729
    
    
    $
    19,575Adjustments to reconcile net earnings to net
cash provided by operating activities:Depreciation
    
    
    11,444
    
    
    
    11,274Amortization
    
    
    4,603
    
    
    
    3,933Provision for supplemental pension
    
    
    963
    
    
    
    873Provision for losses on accounts receivable
    
    
    218
    
    
    
    235Cash surrender value of officers life insurance
    
    
    (288
    )
    
    
    (288
    )Gain on sale of assets
    
    
    (2,235
    )
    
    
    (810
    )Realized (gain) loss on sale of investments
    
    
    (1,268
    )
    
    
    853Stock-based compensation expense
    
    
    642
    
    
    
    417Excess tax benefits on stock-based compensation
    
    
    (186
    )
    
    
    (1,406
    )Deferred income tax expense (benefit)
    
    
    311
    
    
    
    (19
    )Special charges asset write-offs
    
    
    365
    
    
    
    1,614Changes in assets and liabilities:Accounts receivable
    
    
    405
    
    
    
    (2,174
    )Inventories
    
    
    (4,529
    )
    
    
    (11,235
    )Prepaid expenses and other assets
    
    
    (1,597
    )
    
    
    (2,799
    )Accounts payable
    
    
    (1,433
    )
    
    
    (517
    )Accrued and other liabilities
    
    
    (2,695
    )
    
    
    (2,297
    )Net cash provided by operating activities
    
    
    20,449
    
    
    
    17,229Investing Activities:Capital expenditures
    
    
    (4,052
    )
    
    
    (4,482
    )Proceeds from asset sales
    
    
    3,000
    
    
    
    1,155Purchases of investments
    
    
    (72,329
    )
    
    
    (52,418
    )Proceeds from investment maturities
    
    
    59,912
    
    
    
    29,583Proceeds from investment sales
    
    
    23,826
    
    
    
    28,065Capitalized software
    
    
    (5,712
    )
    
    
    (2,666
    )Purchased technology and licenses
    
    
    (2,204
    )
    
    
    (241
    )Other
    
    
    (88
    )
    
    
    (88
    )Net cash provided by (used in) investing activities
    
    
    2,353
    
    
    
    (1,092
    )Financing Activities:Short-term borrowings
    
    
    
    
    
    
    15,200Repayments of short-term borrowings
    
    
    
    
    
    
    (15,700
    )Exercise of stock options
    
    
    2,628
    
    
    
    12,561Treasury shares acquired under repurchase programs
    
    
    (1,718
    )
    
    
    (144
    )Excess tax benefits on stock-based compensation
    
    
    186
    
    
    
    1,406Cash dividends paid
    
    
    (18,863
    )
    
    
    (18,006
    )Guaranteed milestone payments
    
    
    (500
    )
    
    
    (500
    )Net cash used in financing activities
    
    
    (18,267
    )
    
    
    (5,183
    )Effect of exchange rates on cash
    
    
    (712
    )
    
    
    (2
    )Increase in cash and cash equivalents
    
    
    3,823
    
    
    
    10,952Cash and cash equivalents, beginning of period
    
    
    9,479
    
    
    
    12,188Cash and cash equivalents, end of period
    
    $
    13,302
    
    
    $
    23,140Supplemental Cash Flow InformationCash paid during the period for:Income taxes paid
    
    $
    7,862
    
    
    $
    9,230Income taxes refunded
    
    $
    3,527
    
    
    $
    2,935Non-cash investing and financing activities:Net transfers of inventory to fixed assets
for use as demonstration equipment
    
    $
    4,581
    
    
    $
    4,527Dividends declared, not paid
    
    $
    1,526
    
    
    $
    1,074Cancellation of treasury stock
    
    
    
    
    
    $
    685




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##### Table of Contents



Datascope Corp. and Subsidiaries
 
 Notes to Condensed Consolidated Financial Statements
  1. Summary of Significant Accounting Policies
   Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting for
Income Taxes.
 Fair
Value Measurements
 4




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 1. Summary of Significant Accounting Policies (Continued)
 Recent Accounting Pronouncements (Continued)
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans .
 Quantifying Misstatements
 5




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 1. Summary of Significant Accounting Policies (Continued)
 Recent Accounting Pronouncements (Continued)
 Accounting for
Deferred Compensation and Postretirement Benefits Aspects of Collateral Assignment Split-Dollar
Life Insurance Arrangements Employers Accounting for Postretirement Benefits Other Than Pensions Omnibus Opinion
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
 2. Inventories
  March 31,
    
    
    June 30,2007
    
    
    2006Materials
    
    $
    22,112
    
    
    $
    24,408Work in process
    
    
    12,425
    
    
    
    12,582Finished goods
    
    
    24,224
    
    
    
    21,769$
    58,761
    
    
    $
    58,759
 6




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 3. Stockholders Equity
  Net earnings
    
    $
    15,729Foreign currency translation gain
    
    
    1,407Common stock and additional paid-in capital effects of
stock option activity
    
    
    3,626Cash dividends declared on common stock
    
    
    (19,349
    )Purchases under stock repurchase plans
    
    
    (1,718
    )Unrealized gain on available-for-sale securities
    
    
    184Total decrease in stockholders equity
    
    $
    (121
    )
 4. Earnings Per Share
  Nine Months Ended
    
    
    Three Months Ended3/31/07
    
    
    3/31/06
    
    
    3/31/07
    
    
    3/31/06Net earnings
    
    $
    15,729
    
    
    $
    19,575
    
    
    $
    7,861
    
    
    $
    9,068Weighted average shares outstanding
for basic earnings per share
    
    
    15,223
    
    
    
    14,884
    
    
    
    15,242
    
    
    
    15,011Effect of dilutive employee stock awards
    
    
    265
    
    
    
    336
    
    
    
    302
    
    
    
    366Weighted average shares outstanding
for diluted earnings per share
    
    
    15,488
    
    
    
    15,220
    
    
    
    15,544
    
    
    
    15,377Basic earnings per share
    
    $
    1.03
    
    
    $
    1.32
    
    
    $
    0.52
    
    
    $
    0.60Diluted earnings per share
    
    $
    1.02
    
    
    $
    1.29
    
    
    $
    0.51
    
    
    $
    0.59
  7




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 5. Comprehensive Income
  Nine Months Ended
    
    
    Three Months Ended3/31/07
    
    
    3/31/06
    
    
    3/31/07
    
    
    3/31/06Net earnings
    
    $
    15,729
    
    
    $
    19,575
    
    
    $
    7,861
    
    
    $
    9,068Foreign currency translation gain (loss)
    
    
    1,407
    
    
    
    (76
    )
    
    
    439
    
    
    
    790Unrealized gain (loss) on available-for-sale
securities, net of tax
    
    
    184
    
    
    
    (74
    )
    
    
    (43
    )
    
    
    (99
    )Total comprehensive income
    
    $
    17,320
    
    
    $
    19,425
    
    
    $
    8,257
    
    
    $
    9,759
 6. Segment Information
     8




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 6. Segment Information (Continued)
 Cardiac
    
    
    InterventionalAssist /
    
    
    Products /
    
    
    CorporateMonitoring
    
    
    Vascular
    
    
    AndProducts
    
    
    Grafts
    
    
    Other
    
    
    ConsolidatedNine months ended March 31, 2007Net sales to external customers
    
    $
    244,051
    
    
    $
    35,446
    
    
    $
    903
    
    
    $
    280,400Operating earnings (loss)
    
    $
    25,873
    
    
    $
    (8,864
    )
    
    $
    2,050
    
    
    $
    19,059Nine months ended March 31, 2006Net sales to external customers
    
    $
    233,506
    
    
    $
    39,158
    
    
    $
    1,236
    
    
    $
    273,900Operating earnings (loss)
    
    $
    33,267
    
    
    $
    (8,701
    )
    
    $
    (2,922
    )
    
    $
    21,644Three months ended March 31, 2007Net sales to external customers
    
    $
    84,770
    
    
    $
    12,504
    
    
    $
    326
    
    
    $
    97,600Operating earnings
    
    $
    8,651
    
    
    $
    1,566
    
    
    $
    889
    
    
    $
    11,106Three months ended March 31, 2006Net sales to external customers
    
    $
    79,995
    
    
    $
    12,738
    
    
    $
    367
    
    
    $
    93,100Operating earnings (loss)
    
    $
    10,553
    
    
    $
    (1,155
    )
    
    $
    (2,161
    )
    
    $
    7,237
 Reconciliation to consolidated
    
    Nine Months Ended
    
    
    Three Months Endedearnings before income taxes:
    
    3/31/07
    
    
    3/31/06
    
    
    3/31/07
    
    
    3/31/06Consolidated operating earnings
    
    $
    19,059
    
    
    $
    21,644
    
    
    $
    11,106
    
    
    $
    7,237Interest income, net
    
    
    (1,823
    )
    
    
    (1,393
    )
    
    
    (547
    )
    
    
    (393
    )Dividend income
    
    
    (196
    )
    
    
    (4,523
    )
    
    
    
    
    
    
    (4,523
    )Other, net
    
    
    (903
    )
    
    
    1,396
    
    
    
    146
    
    
    
    325Consolidated earnings before
income taxes
    
    $
    21,981
    
    
    $
    26,164
    
    
    $
    11,507
    
    
    $
    11,828
  ®
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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 6. Segment Information (Continued)
   7. Stock-Based Awards
   Share-Based Payment
  10




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 7. Stock-Based Awards (Continued)
 Stock Options
    Nine Months Ended
    
    Three Months EndedMarch 31,
    
    March 31,2007
    
    2006
    
    2007
    
    2006Expected dividend yield
    
    
    4.03
    %
    
    
    3.72
    %
    
    
    3.85
    %
    
    
    3.47
    %Expected volatility
    
    
    28
    %
    
    
    29
    %
    
    
    27
    %
    
    
    29
    %Risk-free interest rate
    
    
    4.58
    %
    
    
    4.52
    %
    
    
    4.50
    %
    
    
    4.80
    %Expected life (in years)
    
    
    4.8
    
    
    
    4.9
    
    
    
    4.8
    
    
    
    4.8
  WeightedNumber of
    
    
    AverageOptions
    
    
    Exercise PriceOptions outstanding, beginning of year
    
    
    2,040,626
    
    
    $
    32.47Granted
    
    
    146,250
    
    
    
    33.71Exercised
    
    
    (95,162
    )
    
    
    28.64Forfeited/Expired
    
    
    (217,054
    )
    
    
    34.92Options outstanding, end of period
    
    
    1,874,660
    
    
    $
    32.47Options expected to vest, end of period
    
    
    1,825,248
    
    
    $
    32.42Options exercisable, end of period
    
    
    1,626,760
    
    
    $
    32.15
 11




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 7. Stock-Based Awards (Continued)
 Stock Options (Continued)
      Restricted Stock
  12




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 8. Retirement Benefit Plans
 Defined Benefit Plans  U.S. and International
  Supplemental Executive Retirement Plans (SERPs)
  13




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 8. Retirement Benefit Plans (Continued)
  Nine Months Ended March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006U.S. and International
    
    
    SERPsService cost
    
    $
    2,007
    
    
    $
    2,506
    
    
    $
    262
    
    
    $
    290Interest cost
    
    
    3,040
    
    
    
    2,874
    
    
    
    750
    
    
    
    622Expected return on assets
    
    
    (2,766
    )
    
    
    (2,573
    )
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    9
    
    
    
    904
    
    
    
    7
    
    
    
    17Unrecognized prior service cost
    
    
    351
    
    
    
    10
    
    
    
    (56
    )
    
    
    (56
    )Curtailment loss
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    Net pension expense
    
    $
    2,655
    
    
    $
    3,721
    
    
    $
    963
    
    
    $
    873Employer contributions
    
    $
    5,000
    
    
    $
    7,618
 Three Months Ended March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006U.S. and International
    
    
    SERPsService cost
    
    $
    692
    
    
    $
    658
    
    
    $
    87
    
    
    $
    90Interest cost
    
    
    1,030
    
    
    
    754
    
    
    
    250
    
    
    
    192Expected return on assets
    
    
    (930
    )
    
    
    (675
    )
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    2
    
    
    
    238
    
    
    
    3
    
    
    
    5Unrecognized prior service cost
    
    
    170
    
    
    
    2
    
    
    
    (19
    )
    
    
    (18
    )Net pension expense
    
    $
    964
    
    
    $
    977
    
    
    $
    321
    
    
    $
    269Employer contributions
    
    $
    3,900
    
    
    $
    5,063
  14




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 9. Intangible Assets and Goodwill
  March 31,
    
    
    June 30,2007
    
    
    2006Purchased technology and licenses, gross
    
    $
    24,260
    
    
    $
    21,941Accumulated amortization
    
    
    (2,339
    )
    
    
    (1,476
    )Purchased technology and licenses, net
    
    $
    21,921
    
    
    $
    20,465
 ® ®
    Goodwill
  15




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 10. Commitments and Contingencies
 Legal Proceedings
  Credit Arrangements
  Other Contingencies
  11. Dividends and Stock Repurchase Program
    16




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Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 12. Income Taxes
  13. Special Items
 Fiscal 2007
 Interventional Products Division Exit Plan
    17




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 13. Special Items (Continued)
 Workforce Reductions in Patient Monitoring Division, the European Sales Organization and Genisphere
      IP
    
    
    WorkforceExit Plan
    
    
    Reductions
    
    
    TotalFiscal 2007 Special ChargesSeverance expenses
    
    $
    2,948
    
    
    $
    3,231
    
    
    $
    6,179Contractual obligations
    
    
    999
    
    
    
    
    
    
    
    999Fixed assets and other
    
    
    515
    
    
    
    
    
    
    
    515Total
    
    $
    4,462
    
    
    $
    3,231
    
    
    $
    7,693Utilized Through March 31, 2007Severance expenses
    
    $
    2,629
    
    
    $
    2,801
    
    
    $
    5,430Contractual obligations
    
    
    972
    
    
    
    
    
    
    
    972Fixed assets and other
    
    
    515
    
    
    
    
    
    
    
    515Subtotal
    
    
    4,116
    
    
    
    2,801
    
    
    
    6,917Remaining balance, March 31, 2007
    
    $
    346
    
    
    $
    430
    
    
    $
    776
  18




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 13. Special Items (Continued)
 Gain on Sale of ProGuide Assets
  Fiscal 2006
    19




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##### Table of Contents



Datascope Corp. and Subsidiaries
 
 Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
 Business Overview
    ®
   20




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##### Table of Contents



® ®
    Results of Operations
 Net Sales
  ®
  21




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##### Table of Contents



®
 ®
 22




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##### Table of Contents



23




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##### Table of Contents



Gross Profit (Net Sales Less Cost of Sales)
  Research and Development Expense (R&D)
     Selling, General & Administrative Expense (SG&A)
  24




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##### Table of Contents



Special Items
 Fiscal 2007
 Interventional Products (IP) Division Exit Plan
   25




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##### Table of Contents



Gain on Sale of ProGuide Assets
  Workforce Reductions in the Patient Monitoring Division, the European Sales Organization and
Genisphere
      26




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##### Table of Contents



Fiscal 2006
    Interest Income
  Dividend Income
   Other, Net
  27




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##### Table of Contents



Income Taxes
  Net Earnings
   New Distribution Agreement
  Liquidity and Capital Resources
    28




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##### Table of Contents



29




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##### Table of Contents



Information Concerning Forward Looking Statements
  Critical Accounting Policies
  Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting
for Income Taxes
 30




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##### Table of Contents



Fair
Value Measurements
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans
 Quantifying Misstatements
 31




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##### Table of Contents



Accounting for
Deferred Compensation and Postretirement Benefits Aspects of Collateral Assignment Split-Dollar
Life Insurance Arrangements Employers Accounting for Postretirement Benefits Other Than Pensions Omnibus Opinion
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
    32




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Item 4. Controls and Procedures
    33




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
  Total Value ofTotal Number of
    
    
    Shares that MayTotal Number of
    
    
    Average
    
    
    Shares Purchased
    
    
    Yet Be PurchasedShares
    
    
    Price
    
    
    as a Part of Publicly
    
    
    Under the ProgramsFiscal Period
    
    Purchased
    
    
    Per Share
    
    
    Announced Programs
    
    
    ($ 000s)01/01/07 - 01/31/07
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    42,96302/01/07 - 02/28/07
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,96303/01/07 - 03/31/07
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,963Total third quarter
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    42,963
  34




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Item 6. Exhibits
 31.1
    
    Certification of Principal Executive Officer Regarding Facts and Circumstances Relating
to Quarterly Reports31.2
    
    Certification of Principal Financial Officer Regarding Facts and Circumstances Relating
to Quarterly Reports32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
 
 35




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DATASCOPE CORP.
RegistrantBy:
    /s/ Lawrence SaperLawrence SaperChairman of the Board and
Chief Executive OfficerBy:
    /s/ Henry M. ScaramelliHenry M. ScaramelliVice President and Chief Financial Officer (Acting)  36