##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended December 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
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 14 Philips Parkway, Montvale, New Jersey
    
    07645-9998(Address of principal executive offices)
    
    (Zip Code)
  
 
  þ o
  o þ o o
  o þ




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##### 



PagePART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets (Unaudited) at
December 31, 2007 and June 30, 2007
    
    
    1Condensed Consolidated Statements of Earnings (Unaudited)
Three and Six Months Ended December 31, 2007 and 2006
    
    
    2Condensed Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended December 31, 2007 and 2006
    
    
    3Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    4-20Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    21-30Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    30Item 4. Controls and Procedures
    
    
    31PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    32Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    32Item 4. Submission of Matters to a Vote of Security Holders
    
    
    33Item 6. Exhibits
    
    
    33SignaturesExhibit 31.1. Certification of Principal Executive Officer Regarding Facts
and Circumstances Relating to Quarterly ReportsExhibit 31.2. Certification of Principal Financial Officer Regarding Facts
and Circumstances Relating to Quarterly ReportsExhibit 32.1. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002EX-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
  December 31,
    
    
    June 30,2007
    
    
    2007(Unaudited)
    
    
    (a)AssetsCurrent assets:Cash and cash equivalents
    
    $
    17,396
    
    
    $
    15,780Short-term investments
    
    
    25,399
    
    
    
    23,681Accounts receivable less allowance for
doubtful accounts of $2,207 and $2,603
    
    
    92,225
    
    
    
    85,553Inventories
    
    
    62,349
    
    
    
    59,455Prepaid income taxes
    
    
    
    
    
    
    2,293Prepaid expenses and other current assets
    
    
    12,041
    
    
    
    11,167Current deferred taxes
    
    
    7,268
    
    
    
    7,238Total current assets
    
    
    216,678
    
    
    
    205,167Property, plant and equipment, net of accumulated
depreciation of $105,757 and $100,760
    
    
    83,928
    
    
    
    82,812Long-term investments
    
    
    15,415
    
    
    
    14,346Intangible assets, net
    
    
    25,681
    
    
    
    26,074Goodwill
    
    
    13,595
    
    
    
    12,860Other assets
    
    
    36,560
    
    
    
    34,897$
    391,857
    
    
    $
    376,156Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    29,203
    
    
    $
    18,386Dividends payable
    
    
    
    
    
    
    1,532Accrued expenses
    
    
    13,895
    
    
    
    16,129Accrued compensation
    
    
    14,221
    
    
    
    17,422Deferred revenue
    
    
    4,079
    
    
    
    4,380Income taxes payable
    
    
    6,030
    
    
    
    Total current liabilities
    
    
    67,428
    
    
    
    57,849Other liabilities
    
    
    26,943
    
    
    
    25,220Commitments and contingencies (Note 11)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, 18,952 and 18,867 shares
    
    
    189
    
    
    
    189Additional paid-in capital
    
    
    110,587
    
    
    
    109,384Treasury stock at cost, 3,521 shares
    
    
    (107,037
    )
    
    
    (107,037
    )Retained earnings
    
    
    293,843
    
    
    
    294,765Accumulated other comprehensive loss:Cumulative translation adjustments
    
    
    5,501
    
    
    
    1,899Benefit plan adjustments
    
    
    (5,683
    )
    
    
    (5,827
    )Unrealized gain (loss) on available-for-sale securities
    
    
    86
    
    
    
    (286
    )Total stockholders equity
    
    
    297,486
    
    
    
    293,087$
    391,857
    
    
    $
    376,156
 
 (a)
    
    Derived from audited consolidated financial statements.  1




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##### Table of Contents



Datascope Corp. and Subsidiaries
 
 Condensed Consolidated Statements of Earnings
   Six Months Ended
    
    
    Three Months EndedDecember 31,
    
    
    December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    190,700
    
    
    $
    182,800
    
    
    $
    103,400
    
    
    $
    95,600Cost of sales
    
    
    84,189
    
    
    
    80,212
    
    
    
    45,092
    
    
    
    42,979Gross profit
    
    
    106,511
    
    
    
    102,588
    
    
    
    58,308
    
    
    
    52,621Operating expenses:Research and
development
expenses
    
    
    18,607
    
    
    
    17,197
    
    
    
    9,567
    
    
    
    8,543Selling, general and
administrative
expenses
    
    
    71,608
    
    
    
    70,129
    
    
    
    38,128
    
    
    
    34,956Special charges
    
    
    
    
    
    
    7,309
    
    
    
    
    
    
    
    7,30990,215
    
    
    
    94,635
    
    
    
    47,695
    
    
    
    50,808Operating earnings
    
    
    16,296
    
    
    
    7,953
    
    
    
    10,613
    
    
    
    1,813Other (income) expense:Interest income
    
    
    (1,102
    )
    
    
    (1,341
    )
    
    
    (493
    )
    
    
    (613
    )Interest expense
    
    
    86
    
    
    
    65
    
    
    
    18
    
    
    
    36Dividend income
    
    
    
    
    
    
    (196
    )
    
    
    
    
    
    
    (196
    )Gain on sale of
investment
    
    
    (13,173
    )
    
    
    (1,273
    )
    
    
    
    
    
    
    (1,273
    )Other, net
    
    
    251
    
    
    
    224
    
    
    
    182
    
    
    
    131(13,938
    )
    
    
    (2,521
    )
    
    
    (293
    )
    
    
    (1,915
    )Earnings before income
taxes
    
    
    30,234
    
    
    
    10,474
    
    
    
    10,906
    
    
    
    3,728Income taxes
    
    
    11,353
    
    
    
    2,606
    
    
    
    3,817
    
    
    
    393Net earnings
    
    $
    18,881
    
    
    $
    7,868
    
    
    $
    7,089
    
    
    $
    3,335Earnings per share,
basic
    
    $
    1.23
    
    
    $
    0.52
    
    
    $
    0.46
    
    
    $
    0.22Weighted average
number of common
shares outstanding,
basic
    
    
    15,350
    
    
    
    15,213
    
    
    
    15,354
    
    
    
    15,205Earnings per share, diluted
    
    $
    1.22
    
    
    $
    0.51
    
    
    $
    0.46
    
    
    $
    0.22Weighted average
number of common
shares outstanding,
diluted
    
    
    15,496
    
    
    
    15,472
    
    
    
    15,515
    
    
    
    15,488Cash dividends
declared per common
share
    
    $
    1.10
    
    
    $
    1.17
    
    
    $
    
    
    
    $
    0.07
  2




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##### Table of Contents



Datascope Corp. and Subsidiaries
 
 Condensed Consolidated Statements of Cash Flows
   Six Months EndedDecember 31,2007
    
    
    2006Operating Activities:Net earnings
    
    $
    18,881
    
    
    $
    7,868Adjustments to reconcile net earnings to net
cash provided by operating activities:Depreciation
    
    
    7,225
    
    
    
    7,602Amortization
    
    
    3,069
    
    
    
    2,936Provision for supplemental pension and post-retirement medical
    
    
    685
    
    
    
    651Provision for (gains) losses on accounts receivable
    
    
    (37
    )
    
    
    184Cash surrender value of officers life insurance
    
    
    (129
    )
    
    
    (192
    )Realized gain on sale of investment
    
    
    (13,173
    )
    
    
    (1,273
    )Stock-based compensation expense
    
    
    557
    
    
    
    360Excess tax benefits on stock-based compensation
    
    
    (61
    )
    
    
    (93
    )Deferred income tax (benefit) expense
    
    
    (61
    )
    
    
    493Special charges asset write-offs
    
    
    
    
    
    
    365Changes in assets and liabilities:Accounts receivable
    
    
    (4,642
    )
    
    
    2,348Inventories
    
    
    (5,041
    )
    
    
    (4,345
    )Prepaid expenses and other assets
    
    
    2,079
    
    
    
    413Accounts payable
    
    
    10,733
    
    
    
    (1,188
    )Income taxes payable
    
    
    7,165
    
    
    
    Accrued and other liabilities
    
    
    (9,264
    )
    
    
    (2,168
    )Net cash provided by operating activities
    
    
    17,986
    
    
    
    13,961Investing Activities:Capital expenditures
    
    
    (4,188
    )
    
    
    (2,673
    )Purchases of investments
    
    
    (40,178
    )
    
    
    (52,221
    )Proceeds from investment maturities
    
    
    33,123
    
    
    
    47,237Proceeds from investment sales
    
    
    18,255
    
    
    
    17,766Capitalized software
    
    
    (3,828
    )
    
    
    (4,005
    )Purchased technology and licenses
    
    
    (13
    )
    
    
    (109
    )Net cash provided by investing activities
    
    
    3,171
    
    
    
    5,995Financing Activities:Exercise of stock options
    
    
    448
    
    
    
    947Treasury shares acquired under repurchase programs
    
    
    
    
    
    
    (1,718
    )Excess tax benefits on stock-based compensation
    
    
    61
    
    
    
    93Cash dividends paid
    
    
    (18,490
    )
    
    
    (17,364
    )Guaranteed milestone payments
    
    
    (500
    )
    
    
    (500
    )Net cash used in financing activities
    
    
    (18,481
    )
    
    
    (18,542
    )Effect of exchange rates on cash
    
    
    (1,060
    )
    
    
    (423
    )Increase in cash and cash equivalents
    
    
    1,616
    
    
    
    991Cash and cash equivalents, beginning of period
    
    
    15,780
    
    
    
    9,479Cash and cash equivalents, end of period
    
    $
    17,396
    
    
    $
    10,470Supplemental Cash Flow InformationCash paid during the period for:Income taxes paid
    
    $
    7,023
    
    
    $
    4,324Income taxes refunded
    
    $
    3,724
    
    
    $
    3,526Non-cash investing and financing activities:Net transfers of inventory to fixed assets
for use as demonstration equipment
    
    $
    3,716
    
    
    $
    2,992Dividends declared, not paid
    
    $
    
    
    
    $
    1,526
  3




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##### Table of Contents



Datascope Corp. and Subsidiaries
 
 Notes to Condensed Consolidated Financial Statements
  1. Summary of Significant Accounting Policies
   Recently Adopted Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
 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, Not Required to be Adopted as of December 31, 2007
 Fair Value Measurements
 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
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51
 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, Not Required to be Adopted as of December 31, 2007 (Continued)
 Business Combinations
 2. Inventories
  December 31,
    
    
    June 30,2007
    
    
    2007Materials
    
    $
    22,606
    
    
    $
    20,189Work in process
    
    
    11,737
    
    
    
    11,253Finished goods
    
    
    28,006
    
    
    
    28,013$
    62,349
    
    
    $
    59,455
 3. Stockholders Equity
  Net earnings
    
    $
    18,881Foreign currency translation gain
    
    
    3,602Common stock and additional paid-in capital effects of
stock option activity
    
    
    1,203Cash dividends declared on common stock
    
    
    (16,988
    )Benefit plan adjustments
    
    
    144Unrealized gain on available-for-sale securities
    
    
    372Cumulative effect of FIN 48 adoption
    
    
    (2,815
    )Total increase in stockholders equity
    
    $
    4,399
 6




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 4. Earnings Per Share
  Six Months Ended
    
    
    Three Months Ended12/31/07
    
    
    12/31/06
    
    
    12/31/07
    
    
    12/31/06Net earnings
    
    $
    18,881
    
    
    $
    7,868
    
    
    $
    7,089
    
    
    $
    3,335Weighted average shares outstanding
for basic earnings per share
    
    
    15,350
    
    
    
    15,213
    
    
    
    15,354
    
    
    
    15,205Effect of dilutive employee stock awards
    
    
    146
    
    
    
    259
    
    
    
    161
    
    
    
    283Weighted average shares outstanding
for diluted earnings per share
    
    
    15,496
    
    
    
    15,472
    
    
    
    15,515
    
    
    
    15,488Basic earnings per share
    
    $
    1.23
    
    
    $
    0.52
    
    
    $
    0.46
    
    
    $
    0.22Diluted earnings per share
    
    $
    1.22
    
    
    $
    0.51
    
    
    $
    0.46
    
    
    $
    0.22
  5. Comprehensive Income
  Six Months Ended
    
    
    Three Months Ended12/31/07
    
    
    12/31/06
    
    
    12/31/07
    
    
    12/31/06Net earnings
    
    $
    18,881
    
    
    $
    7,868
    
    
    $
    7,089
    
    
    $
    3,335Foreign currency translation gain
    
    
    3,602
    
    
    
    968
    
    
    
    688
    
    
    
    1,153Benefit plan adjustments
    
    
    144
    
    
    
    
    
    
    
    43
    
    
    
    Unrealized gain (loss) on available-for-sale
securities, net of tax
    
    
    372
    
    
    
    227
    
    
    
    204
    
    
    
    (39
    )Total comprehensive income
    
    $
    22,999
    
    
    $
    9,063
    
    
    $
    8,024
    
    
    $
    4,449
 7




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 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)
 CardiacAssist /
    
    
    Interventional /
    
    
    CorporateMonitoring
    
    
    Vascular
    
    
    andProducts
    
    
    Products
    
    
    Other
    
    
    ConsolidatedSix months ended December 31, 2007Net sales to external customers
    
    $
    170,201
    
    
    $
    19,869
    
    
    $
    630
    
    
    $
    190,700Operating earnings (loss)
    
    $
    17,608
    
    
    $
    (1,151
    )
    
    $
    (161
    )
    
    $
    16,296Six months ended December 31, 2006Net sales to external customers
    
    $
    161,725
    
    
    $
    20,498
    
    
    $
    577
    
    
    $
    182,800Operating earnings (loss)
    
    $
    18,528
    
    
    $
    (9,808
    )
    
    $
    (767
    )
    
    $
    7,953Three months ended December 31, 2007Net sales to external customers
    
    $
    92,419
    
    
    $
    10,664
    
    
    $
    317
    
    
    $
    103,400Operating earnings
    
    $
    11,660
    
    
    $
    (1,085
    )
    
    $
    38
    
    
    $
    10,613Three months ended December 31, 2006Net sales to external customers
    
    $
    85,265
    
    
    $
    10,087
    
    
    $
    248
    
    
    $
    95,600Operating earnings (loss)
    
    $
    9,124
    
    
    $
    (7,027
    )
    
    $
    (284
    )
    
    $
    1,813
 Six Months Ended
    
    
    Three Months Ended12/31/07
    
    
    12/31/06
    
    
    12/31/07
    
    
    12/31/06Reconciliation to consolidated
earnings before income taxes:Consolidated operating earnings
    
    $
    16,296
    
    
    $
    7,953
    
    
    $
    10,613
    
    
    $
    1,813Interest income, net
    
    
    1,016
    
    
    
    1,276
    
    
    
    475
    
    
    
    577Dividend income
    
    
    
    
    
    
    196
    
    
    
    
    
    
    
    196Gain on sale of investment
    
    
    13,173
    
    
    
    1,273
    
    
    
    
    
    
    
    1,273Other, net
    
    
    (251
    )
    
    
    (224
    )
    
    
    (182
    )
    
    
    (131
    )Consolidated earnings before
income taxes
    
    $
    30,234
    
    
    $
    10,474
    
    
    $
    10,906
    
    
    $
    3,728
     9




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 7. Stock-Based Awards
    Share-Based Payment
 Six Months Ended
    
    
    Three Months Ended12/31/07
    
    
    12/31/06
    
    
    12/31/07
    
    
    12/31/06Cost of sales
    
    $
    22
    
    
    $
    13
    
    
    $
    14
    
    
    $
    6Research and development expenses
    
    
    105
    
    
    
    69
    
    
    
    49
    
    
    
    35Selling, general and administrative expenses
    
    
    430
    
    
    
    278
    
    
    
    184
    
    
    
    178Total stock-based compensation expense
    
    $
    557
    
    
    $
    360
    
    
    $
    247
    
    
    $
    219Total stock-based compensation expense, net
of tax
    
    $
    329
    
    
    $
    213
    
    
    $
    145
    
    
    $
    130
 10




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 7. Stock-Based Awards (Continued)
  Six Months Ended
    
    Three Months EndedDecember 31,
    
    December 31,2007
    
    2006
    
    2007
    
    2006Expected dividend yield
    
    
    *
    
    
    
    4.04
    %
    
    
    *
    
    
    
    4.04
    %Expected volatility
    
    
    *
    
    
    
    28
    %
    
    
    *
    
    
    
    27
    %Risk-free interest rate
    
    
    *
    
    
    
    4.58
    %
    
    
    *
    
    
    
    4.62
    %Expected life (in years)
    
    
    *
    
    
    
    4.8
    
    
    
    *
    
    
    
    4.8
 
 *
    
    Not applicable.   Stock Options
  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)
  WeightedNumber of
    
    AverageOptions
    
    Exercise PriceOptions outstanding, beginning of year
    
    
    1,741,161
    
    
    $
    32.47Granted
    
    
    
    
    
    
    Exercised
    
    
    (20,837
    )
    
    
    29.56Forfeited/Expired
    
    
    (63,050
    )
    
    
    35.14Options outstanding, end of period
    
    
    1,657,274
    
    
    
    32.40Options vested and expected to vest, end of period
    
    
    1,631,109
    
    
    
    32.36Options exercisable, end of period
    
    
    1,514,862
    
    
    
    32.16
      12




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 7. Stock-Based Awards (Continued)
 Restricted Stock
  WeightedAverageShares
    
    Grant PriceNonvested, beginning of year
    
    
    3,908
    
    
    $
    35.84Granted
    
    
    65,920
    
    
    
    32.60Vested
    
    
    
    
    
    
    Forfeited
    
    
    (6,660
    )
    
    
    32.44Nonvested, end of period
    
    
    63,168
    
    
    
    32.82
  8. Retirement Benefit Plans
 Defined Benefit Pension Plans  U.S. and International
  Supplemental Executive Retirement Plans (SERP)
  Post-Retirement Medical Benefits Plan
  13




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 8. Retirement Benefit Plans (Continued)
 Net Periodic Benefit Costs
  Six Months Ended December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006U.S. and International
    
    
    SERPService cost
    
    $
    1,451
    
    
    $
    1,256
    
    
    $
    188
    
    
    $
    175Interest cost
    
    
    2,225
    
    
    
    1,893
    
    
    
    528
    
    
    
    500Expected return on assets
    
    
    (2,122
    )
    
    
    (1,720
    )
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    209
    
    
    
    242
    
    
    
    6
    
    
    
    4Unrecognized prior service (credit) cost
    
    
    (20
    )
    
    
    6
    
    
    
    (48
    )
    
    
    (37
    )Curtailment loss
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    Net periodic benefit costs
    
    $
    1,743
    
    
    $
    1,691
    
    
    $
    674
    
    
    $
    642Employer contributions
    
    $
    2,500
    
    
    $
    1,100
 Six Months EndedDecember 31,2007
    
    
    2006Post-Retirement MedicalService cost
    
    $
    
    
    
    $
    Interest cost
    
    
    8
    
    
    
    6Expected return on assets
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    1
    
    
    
    1Unrecognized prior service cost
    
    
    2
    
    
    
    2Net periodic benefit costs
    
    $
    11
    
    
    $
    9
 14




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 8. Retirement Benefit Plans (Continued)
 Net Periodic Benefit Costs (Continued)
 Three Months Ended December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006U.S. and International
    
    
    SERPService cost
    
    $
    726
    
    
    $
    560
    
    
    $
    94
    
    
    $
    87Interest cost
    
    
    1,112
    
    
    
    844
    
    
    
    264
    
    
    
    250Expected return on assets
    
    
    (1,061
    )
    
    
    (767
    )
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    105
    
    
    
    108
    
    
    
    3
    
    
    
    2Unrecognized prior service (credit) cost
    
    
    (10
    )
    
    
    3
    
    
    
    (24
    )
    
    
    (18
    )Curtailment loss
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    Net periodic benefit costs
    
    $
    872
    
    
    $
    762
    
    
    $
    337
    
    
    $
    321Employer contributions
    
    $
    
    
    
    $
    
 Three Months EndedDecember 31,2007
    
    
    2006Post-Retirement MedicalService cost
    
    $
    
    
    
    $
    Interest cost
    
    
    4
    
    
    
    3Expected return on assets
    
    
    
    
    
    
    Amortization of:Net loss
    
    
    
    
    
    
    1Unrecognized prior service cost
    
    
    1
    
    
    
    1Net periodic benefit costs
    
    $
    5
    
    
    $
    5
 15




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 9. Intangible Assets
  December 31,
    
    
    June 30,2007
    
    
    2007Amortized intangible assets:Purchased technology
    
    $
    22,370
    
    
    $
    22,176Licenses
    
    
    5,651
    
    
    
    5,272Customer relationships and other
    
    
    1,140
    
    
    
    1,077Subtotal
    
    
    29,161
    
    
    
    28,525Accumulated amortization:Purchased technology
    
    
    (1,653
    )
    
    
    (1,300
    )Licenses
    
    
    (2,142
    )
    
    
    (1,512
    )Customer relationships and other
    
    
    (79
    )
    
    
    (12
    )Subtotal
    
    
    (3,874
    )
    
    
    (2,824
    )Amortized intangible assets, net
    
    $
    25,287
    
    
    $
    25,701Indefinite-lived intangible assets:Trade name
    
    $
    394
    
    
    $
    373
 ® ® ®
   Year Ending June 30,2008
    
    2009
    
    2010
    
    2011
    
    2012Amortization expense
    
    $
    957
    
    
    $
    1,913
    
    
    $
    2,014
    
    
    $
    1,538
    
    
    $
    1,628
  16




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 10. Goodwill
  CardiacAssist /
    
    
    Interventional /Monitoring
    
    
    VascularProducts
    
    
    Products
    
    
    ConsolidatedGoodwill, beginning of year
    
    $
    11,079
    
    
    $
    1,781
    
    
    $
    12,860Adjustment to acquisition purchase price
    
    
    9
    
    
    
    
    
    
    
    9Currency adjustment
    
    
    726
    
    
    
    
    
    
    
    726Goodwill, end of period
    
    $
    11,814
    
    
    $
    1,781
    
    
    $
    13,595
 11. Commitments and Contingencies
 Legal Proceedings
    17




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 11. Commitments and Contingencies (Continued)
 Credit Arrangements
  12. Dividends and Stock Repurchase Program
   13. Income Taxes
  18




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 13. Income Taxes (Continued)
 Adoption of New Accounting Standard
  Balance at
    
    
    
    
    
    Balance atJune 30,
    
    FIN 48
    
    July 1,2007
    
    Adjustment
    
    2007Other assets
    
    $
    34,897
    
    
    $
    239
    
    
    $
    35,136Accrued expenses / income taxes payable
    
    
    17,661
    
    
    
    (1,578
    )
    
    
    16,083Other liabilities
    
    
    25,220
    
    
    
    4,632
    
    
    
    29,852Retained earnings
    
    
    294,765
    
    
    
    (2,815
    )
    
    
    291,950
    19




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##### Table of Contents



Datascope Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements  Continued
 14. Special Items
  
    
    Interventional Products Division exit plan totaling $5.0 million.
    
    Severance, settlement, and other termination benefits of $6.0 million for workforce
reductions in the Patient Monitoring Division, the European sales organization, Corporate,
and Genisphere.
    
    Goodwill impairment charge of $2.3 million related to Genisphere.
    
    Inquiry expenses of $1.7 million related to the Audit Committee investigations of ethics
line reports.
    
    Gain on sale of ProGuide assets totaling $2.2 million.
  15. Gain on Sale of Investment
  16. Subsequent Event
  20




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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
       21




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##### Table of Contents



®
 ® ®
  22




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##### Table of Contents



Results of Operations
 Net Sales
       23




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##### Table of Contents



Gross Profit (Net Sales Less Cost of Sales)
   Research and Development Expense (R&D)
  24




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##### Table of Contents



Selling, General & Administrative Expense (SG&A)
     25




---



##### Table of Contents



Interest Income
  Gain on Sale of Investment
  Income Taxes
  Net Earnings
   Subsequent Event
  26




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##### Table of Contents



Liquidity and Capital Resources
            27




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##### Table of Contents



Information Concerning Forward Looking Statements
  Critical Accounting Policies
  28




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##### Table of Contents



Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
 , Fair Value Measurements
 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
 29




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##### Table of Contents



Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Business Combinations
 
 Quantitative and Qualitative Disclosures about Market Risk
    30




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##### Table of Contents



Controls and Procedures
    31




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##### Table of Contents





















Total Value of SharesTotal
    
    
    
    
    
    
    Total Number of
    
    
    that May Yet BeNumber of
    
    
    Average
    
    
    Shares Purchased as
    
    
    Purchased Under theShares
    
    
    Price
    
    
    a Part of Publicly
    
    
    ProgramsFiscal Period
    
    Purchased
    
    
    Per Share
    
    
    Announced Programs
    
    
    ($ 000s)10/01/07 - 10/31/07
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    42,96311/01/07 - 11/30/07
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    42,96312/01/07 - 12/31/07
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    42,963Total
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    42,963
  32




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##### Table of Contents



Election of Class I DirectorsWilliam L. Asmundson
    
    For:
    
    
    5,682,610
    
    
    Withheld:
    
    
    86,363James J. Loughlin
    
    For:
    
    
    5,755,427
    
    
    Withheld:
    
    
    13,546David R. Dantzker, M.D.
    
    For:
    
    
    7,814,992
    
    
    Withheld:
    
    
    163,477William J. Fox
    
    For:
    
    
    3,207,476
    
    
    Withheld:
    
    
    4,770,993
  For:           12,478,432Against:
    8,252Abstain:
    843,473
  
  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
 33




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##### Table of Contents



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