<PAGE>



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

                                    FORM 10-K

(Mark One)    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    /x/       OF THE SECURITIES EXCHANGE ACT OF 1934
              FOR THE FISCAL YEAR ENDED JUNE 30, 2000

                                       OR

    / /       TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15(d)
              OF THE SECURITIES EXCHANGE ACT OF 1934
              FOR THE TRANSITION PERIOD FROM ________ TO ________

                          Commission File Number 0-6516

                                 DATASCOPE CORP.
             (Exact name of registrant as specified in its charter)

               DELAWARE                                13-2529596
     State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

          14 Philips Parkway
         Montvale, New Jersey                            07645
(Address of principal executive offices)               (Zip Code)

        Registrant's telephone number, including area code (201) 391-8100

        Securities registered pursuant to Section 12(b) of the Act: None
          Securities registered pursuant to section 12(g) of the Act:
                     Common Stock, par value $0.01 per share

      (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 at least the past 90 days. Yes /x/ No / /

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. /x/

      The approximate aggregate market value of the common stock held by
non-affiliates of the registrant as of August 1, 2000 was approximately $449
million. As of August 1, 2000, there were 14,888,133 outstanding shares of the
registrant's common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

      The Registrant's definitive proxy statement to be filed with the
Securities and Exchange Commission no later than October 27, 2000 pursuant to
Regulation 14A of the Securities Exchange Act of 1934 are incorporated by
reference in Items 10 through 13 of Part III of this Form 10-K.

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                                Table of Contents

                                                                            Page
                                                                            ----

                                     Part I
Item 1.  Business                                                              3
Item 2.  Properties                                                           14
Item 3.  Legal Proceedings                                                    15
Item 4.  Submission of Matters to a Vote of Security Holders                  16
Item 4A. Executive Officers of the Company                                    16

                                     Part II
Item 5.  Market for Registrant's Common Equity and Related Stockholder
         Matters                                                              17
Item 6.  Selected Financial Data                                              17
Item 7.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                            19
Item 7A. Quantitative and Qualitative Disclosures About Market Risk           26
Item 8.  Financial Statements and Supplementary Data                          26
Item 9.  Changes in and Disagreements with Accountants on Accounting          26
         and Financial Disclosure

                                    Part III
Item 10. Directors and Executive Officers of the Registrant                   27
Item 11. Executive Compensation                                               27
Item 12. Security Ownership of Certain Beneficial Owners and Management       27
Item 13. Certain Relationships and Related Transactions                       27

                                     Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K     28


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                                     PART I

      This Report on Form 10-K contains statements that constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, which generally can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "estimate," "anticipate,"
"believe," "target," "plan," "project" or "continue" or the negatives thereof or
other variations thereon or similar terminology. These statements appear in a
number of places in this Report on Form 10-K and include statements regarding
our intent, belief or current expectations that relate to, among other things,
trends affecting our financial condition or results of operations and our
business and strategies. We may make additional written or oral forward-looking
statements from time to time in filings with the Securities and Exchange
Commission or otherwise. Forward-looking statements speak only as of the date
the statement is made. Readers are cautioned that these forward-looking
statements are not a guarantee of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of many important
factors. Many of these important factors cannot be predicted or quantified and
are outside of our control, including competitive factors, changes in government
regulation and our ability to introduce new products. The accompanying
information contained in this Report on Form 10-K, including, without
limitation, the information set forth below under Item 1 regarding the
description of our business and under Item 7 concerning "Management's Discussion
and Analysis of Financial Condition and Results of Operations," identifies
additional important factors that could cause these differences. We do not
undertake to publicly update or revise our forward-looking statements even if
experience or future changes make it clear that any projected results expressed
or implied in this Report on Form 10-K will not be realized. All subsequent
written and oral forward-looking statements attributable to us or persons acting
for or on our behalf are expressly qualified in their entirety by this section.

Item 1. Business.

Summary

      Datascope Corp. is a diversified medical device company that manufactures
and markets proprietary products for clinical health care markets in
interventional cardiology and radiology, cardiovascular and vascular surgery,
anesthesiology, emergency medicine and critical care. Our products are
distributed worldwide by direct sales employees and independent distributors.
Originally organized as a New York corporation in 1964, we reincorporated in
Delaware in 1989.

Below is a summary of our four product lines:

o           Cardiac Assist. Datascope is the pioneer in intra-aortic balloon
      pump and catheter therapy. The intra-aortic balloon system that we
      manufacture is used principally to treat cardiac shock, acute heart
      failure, irregular heart-rhythms, and in open-heart surgery, pre-operative
      coronary artery bypass grafting and coronary angioplasty. We believe that
      our cardiac assist products are complemented by our VasoSeal wound closure
      line of collagen products.

o           Patient Monitoring. We manufacture and market a broad line of
      physiological monitors designed to provide for patient safety and
      management of patient care. Our monitors are capable of continuous and
      simultaneous measurement of many different vital signs. These monitors are
      used in operating rooms, emergency rooms, critical care units,
      post-anesthesia care units and recovery rooms, intensive care units, labor
      and delivery rooms and magnetic resonance imaging, or MRI units.

o           Collagen Products. Our collagen products have revolutionized the
      technology that is used to seal arterial puncture wounds to stop bleeding
      after catheterization procedures. We manufacture and sell the VasoSeal
      line of extravascular hemostasis devices. VasoSeal VHD was the first
      vascular sealing device to be approved in the United States. The VasoSeal
      devices provide for reduced time to hemostasis of the arterial puncture
      wound, reduced time to ambulation, cost savings and increased patient
      satisfaction. In addition, the Collagen Products Division manufactures
      surgical hemostatic agents used to stop bleeding during surgery.


                                       3
<PAGE>

o           Vascular Grafts. Our InterVascular subsidiary markets and sells a
      proprietary line of knitted and woven polyester vascular grafts and
      patches for reconstructive vascular and cardiovascular surgery. Vascular
      grafts are used to replace diseased arteries.

      The following table sets forth the relative contribution of our four
product lines to total sales for the last three years:

                                                 Fiscal Year Ended June 30,
                                             ----------------------------------
                                             2000           1999           1998
                                             ----           ----           ----

Cardiac Assist                                39%            41%            42%

Patient Monitoring                            35%            35%            38%

Collagen Products                             19%            16%            12%

Vascular Grafts                                7%             8%             8%

Glossary: We have prepared this short glossary to help you understand our
product lines better.

Angiogram is a series of X-ray visualizations of the heart and blood vessels. A
radiopaque substance, that is, a material that does not allow the passage of
X-rays through it, is injected into a vein or artery, and X-ray pictures are
then taken in rapid succession. The series of pictures produced reveals the size
and shape of veins or arteries in organs and tissues. An angiogram is used as a
diagnostic tool with certain diseases; arteriosclerosis being an example.

Angioplasty is the reconstruction of blood vessels, usually damaged by
atherosclerosis. If the arteries in question are in the heart, a coronary bypass
operation may be recommended. However, the nonsurgical method of balloon
angioplasty is often employed, especially when only one vessel is blocked.

Arteriosclerosis, often called "hardening of the arteries," is an arterial
disorder characterized by a progressive thickening and hardening of the walls of
the arteries. This causes a decrease in or loss of blood circulation. The most
common form of arteriosclerosis is atherosclerosis, which is characterized by
the deposition of fatty substances in large and medium-sized arteries, such as
the arteries that lead to the heart and brain. Atherosclerosis and its
complications are a major cause of death in the United States. Heart and brain
disease are often the direct result of this accumulation of fatty substances
that impair the arteries' ability to nourish vital body organs.

Balloon Angioplasty is a nonsurgical method of clearing coronary and other
arteries, blocked by atherosclerotic plaque, fibrous and fatty deposits on the
walls of arteries. A catheter with a balloon-like tip is threaded up from the
arm or groin through the artery until it reaches the blocked area. The balloon
is then inflated, flattening the plaque and increasing the diameter of the blood
vessel opening. The arterial passage is thus widened.

Hemostasis is the stopping of bleeding, either by physiological properties of
coagulation and vasoconstriction or by surgical or mechanical means.

Below is a more detailed description of our product lines:

      Cardiac Assist. We are the pioneer and leader in intra-aortic balloon
pumping, or cardiac assist systems. Cardiac assist systems are used in the
treatment of cardiac shock, acute heart failure, irregular heart rhythms, and in
open-heart surgery to stabilize the patient before and after an operation,
coronary artery bypass grafting and coronary angioplasty. As part of our cardiac
assist system, we produce a line of disposable intra-aortic balloon catheters.
The balloon catheter serves as the pumping device within the patient's aorta. We
introduced the first balloon catheter capable of insertion by puncturing the
skin. This innovation eliminated the need for surgical


                                       4
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insertion. As a result, the market for cardiac assist products expanded from
open-heart surgery to the interventional cardiology market. We continue to
advance our cardiac assist technology and to introduce new products.

      Intra-aortic balloon therapy is used to stabilize heart function in
instances of cardiac shock, before and after open-heart surgery and angioplasty
and in the management of acute heart failure. Intra-aortic balloon therapy
increases the heart's output and the supply of oxygen-rich blood to the heart's
coronary arteries while reducing the heart muscle's workload and its oxygen
demand. Balloon therapy plays an important role in supporting high risk patients
undergoing coronary artery bypass grafting and acute angioplasty intervention.
It is also used to relieve refractory unstable angina and to correct certain
instances of medically resistant irregular heart rhythms.

Intra-Aortic Balloon Pumps

      We manufacture and market the following intra-aortic balloon pumps:

<TABLE>
<CAPTION>
    Product                               Features                             Significant Developments
    -------                               --------                             ------------------------
<S>                      <C>                                           <C>
System 98                o     Most advanced intra-aortic balloon      o     Approval to distribute in Japan
                               pump on the market                            received in March 1999
                         o     Faster pneumatics                       o     Distribution began in 1998 in the
                         o     Larger display                                United States and European Union
                         o     Better automation
                         o     Features make balloon pumping
                               therapy simpler to administer and
                               faster to initiate

System 97e               o     Uses CardioSync Software, which         o     Distribution began in 1998
                               assists as many heartbeats as                 worldwide
                               possible in the presence of             o     Introduced in 1997 at the
                               complex heart rhythms                         European Society of Cardiology
                         o     Beat-to-beat support can be                   Conference
                               optimized with minimal user
                               intervention
                         o     Built-in modem
                         o     Contains diagnostic software,
                               which enables us to service the
                               unit by modem
</TABLE>

                                       5
<PAGE>

<TABLE>
<S>                      <C>                                           <C>
System 97 "Small         o     Compact design takes up less floor      o     Worldwide distribution began in
Wonder"((Trademark))           space than competing systems                  1994
                         o     Designed for use at bedside or in
                               transport
                         o     Built-in modem allows doctors to
                               make remote diagnosis

System 96                o     Incorporates many of the advanced       o     Introduced in 1996 at the
                               features seen in earlier balloon              European Society of Cardiology
                               pumps                                         Conference
                         o     Provides the performance and            o     Distribution began in 1996
                               flexibility hospitals expect in a             outside the United States
                               variety of clinical situations
                         o     Simple and cost-effective
</TABLE>

Intra-Aortic Balloon Catheters

      We manufacture a broad line of disposable intra-aortic balloon catheters
for use with intra-aortic balloon pumps.

      Our Profile 8 Fr. intra-aortic balloon catheter, based on a co-lumen,
rather than co-axial design is the first catheter to allow the interventional
cardiologist to move from a coronary angioplasty/stent intervention to balloon
pumping using an 8 Fr. sheath. Prior to introduction of the Profile 8 Fr., there
was not an intra-aortic balloon catheter available that was small enough to fit
through a standard 8 Fr. (2.64 mm) sheath used for the angioplasty/stent
procedure. Use of the Profile 8 Fr. is expected to reduce possible vascular
complications, and to make balloon pumping insertion easier and more convenient.

      The Profile 8 Fr. is the first true 8 Fr. intra-aortic balloon catheter.
The folded balloon membrane diameter is the same as the diameter of the catheter
itself. As a result, the Profile 8 Fr. reduces the risk of potential bleeding
complications after insertion. The Profile 8 Fr. can also be inserted without a
sheath. This combination of sheathless insertion and smaller sized catheters (8
Fr.) reduces the cross sectional area occupied by the catheter in the artery.
This reduction results in less obstruction to blood flow around the outside of
the catheter and a potential reduction in ischemic complications.

      The Profile 8 Fr. was:

o     Approved by Japanese authorities in March 1999

o     Introduced in the United States in July 1998

o     Approved by the FDA in May 1998

o     Introduced in European Union in January 1998

      In addition we manufacture a complete line of intra-aortic balloon
catheters to accommodate balloon pumping in both the adult and pediatric
population. Catheters available for use in the pediatric patient include the
2.5cc, 5cc, 7cc, 12cc and 20cc volumes. Our 9.5 Fr. intra-aortic balloon
catheters are available in 25cc, 34cc and 40cc volumes. A 50cc volume is also
available for patients who are taller than 6 feet.

      Clinical Support. We provide the following clinical and educational
services to our customers:

o     24 hour clinical support via modem

o     On-site training and education for all personnel involved with patient
      care

o     Comprehensive educational materials for hospital staff, patient and family


                                       6
<PAGE>

o     Consultative services to help hospitals maximize the goals of IABP therapy
      within the hospital network

o     A comprehensive registry database to assist hospitals in tracking outcomes
      of the patient receiving IABP therapy

      Markets, Sales and Competition. Our cardiac assist products are sold
primarily to major hospitals with open-heart surgery and balloon angioplasty
facilities and to community hospitals with cardiac catheterization laboratories.
Recently, our cardiac assist products have been sold, to a growing degree, to
the broader range of community hospitals, where intra-aortic balloon pumping is
used for temporary support to the patient's heart prior to transport to a major
hospital center where definitive procedures, such as balloon angioplasty or open
heart surgery, can be conducted. Our main competitor for cardiac assist products
is Arrow International Inc.

      Patient Monitoring. We manufacture and market a broad line of
physiological monitors designed to provide for patient safety and management of
patient care. Our monitors are capable of continuous and simultaneous
measurement of many different vital signs. Our monitors are used in operating
rooms, emergency rooms, critical care units, post-anesthesia care units and
recovery rooms, intensive care units, labor and delivery rooms and MRI, or
magnetic resonance imaging units.

Patient Monitors

      Our line of patient monitors and their significant features are as
follows:

      PASSPORT(Registered) 2

o     Newest addition to the PASSPORT family of monitors

o     Portable and bedside use with color or EL display and 4 traces

o     Built in power supply

o     Approximately 23% lighter than PASSPORT XG

o     Graph trend of heart rate, respiration and pulse oximetry for neonatal
      applications

o     New Oridion Microstream(Trademark) CO2 built into the PASSPORT 2
      eliminates the use of an external sensor to obtain a CO2 reading.

o     Optional Arrhythmia and ST segment analysis

o     Supports Masimo SET(Registered) or Nellcor Oxismart(Trademark) pulse
      oximetry

      PASSPORT(Registered) 5L EL

o     Portable and bedside 3 trace capability with electroluminescent display.

o     Battery-powered

o     Offers features of a traditional bedside monitor, such as
      electrocardiograms, or ECGs, non-invasive and invasive blood pressure,
      temperature, respiration and pulse oximetry, or blood oxygen saturation
      and CO2

o     Clinical/hospital information system interface capability

o     Telemetry or hardwire communications to our VISA(Trademark)central station

      PASSPORT(Registered) XG

o     Same as PASSPORT 5L EL, except has a larger and brighter display than many
      competing portable monitors

o     Offers Masimo SET(Registered) advanced pulse oximetry for motion tolerance

o     Offers mainstream and sidestream CO2

o     Optional complete gas analysis via Gas Module II for operating rooms and
      out-patient applications

      PASSPORT(Registered) XG-CD

o     Same as PASSPORT XG, but offers a color display

      VISA(Trademark)

o     Central Station Monitoring system

o     Displays up to eight patients on a single monitor


                                       7
<PAGE>

o     Can support both instrument and ambulatory patient telemetry

o     Compatible with our EXPERT(Registered) and PASSPORT(Registered) monitors

o     Equipment may communicate via hardwire or instrument telemetry

o     Patient information may be exported to hospital/clinical information
      systems

o     Scaleable software options tailor the system to customer requirements

o     Optional arrhythmia and full disclosure software

      VISA(Trademark) II

o     Central Station Monitoring system

o     Displays up to eight patients on a single monitor

o     Can support both instrument and ambulatory patient telemetry

o     Compatible with our EXPERT and PASSPORT monitors

o     Network communications allows for inter-department transfers

o     Optional Remote View Stations allow access to any patient on the
      VISA(Trademark) II network

o     Optional Paging interface alerts caregivers to alarm conditions

o     Optional Vital Access provides modem access of patient information

o     Patient information may be exported to hospital/clinical information
      systems

o     Scaleable software options tailor the system to customer requirements

o     Standard arrhythmia package with optional ST segment analysis

      Accutorr(Registered) Plus

o     First non-invasive blood pressure monitor with an integrated patient
      database that automatically records up to 100 patient measurements

o     Also measures pulse oximetry, or blood oxygen saturation, and temperature

o     Optional recorder module

o     Optional Masimo SET or Nellcor Oxismart Pulse Oximetry

o     New longer life lithium ion battery technology

      EXPERT(Registered)

o     High-end, modular patient monitor

o     Compatible with our VISA central monitoring stations, in either hard wire
      or telemetry mode

o     Compatible with our Gas Module II gas measurement subsystem

o     Integrated patient monitoring system combines modular design with advanced
      monitoring features needed in operating rooms, advanced emergency
      departments, intensive care and critical care units

      MR Monitor

o     MRI equipment creates powerful magnetic fields that provide an unsafe
      environment for ordinary patient monitors

o     The MR monitor effectively measures vital signs of patients undergoing MRI
      procedures by incorporating state-of-the-art fiberoptic technology which
      is not affected by powerful magnetic fields

      Gas Module II

o     Anesthetic gas measurement subsystem

o     Monitors CO2, oxygen, nitrous oxide and all 5 inhalated anesthetic gases

o     Interfaces with the controls and displays of the PASSPORT XG and new
      PASSPORT 2 monitor, for use in the growing out-patient surgery market

o     Interfaces with the controls and displays of the EXPERT monitor, for use
      in main hospital operating rooms

      We manufacture and market the following sensor systems, which are designed
      to be used with our patient monitors:

      FLEXISENSOR(Registered) Pulse Oximetry Sensors and SENSOR
      GUARD(Registered) Bandages


                                       8
<PAGE>

o     Proprietary sensor system for measuring pulse oximetry, or blood oxygen
      saturation

o     Compatible with PASSPORT, PASSPORT XG, and Accutorr Plus

o     Unique semi-disposable sensors offer low cost option for pulse oximetry

      Significant Developments

      In the past five years, we have expanded our patient monitoring product
      line:

o     Began international shipments of the new PASSPORT 2 in the first quarter,
      and shipments in the U.S. market in the third quarter of fiscal year 2000

o     Received 510(k) clearance for the new PASSPORT 2 in January 2000

o     Added Masimo SET SPO2 technology to the PASSPORT XG product line in 1998

o     Began United States shipments of the Gas Module II in 1998

o     Began United States shipments of the EXPERT in fiscal 1998

o     Received FDA 510(k) clearance of our MR monitor in 1997 and began United
      States shipments in 1998

o     Introduced Accutorr Plus in international markets in fiscal 1996 and the
      United States market in fiscal 1998

      Markets, Sales and Competition. Our patient monitors are used in hospital
operating rooms, emergency rooms, critical care units, post-anesthesia care
units and recovery rooms, intensive care units, labor and delivery rooms and MRI
units. The PASSPORT 2 will allow us to further penetrate into our primary
patient monitoring markets and also to enter new markets, such as the NICU
(Neonatal Intensive Care Unit). The EXPERT monitor has allowed us to compete in
the estimated $350 million United States market for high-end patient monitoring
systems and will enable primary care hospitals to utilize our patient monitoring
products for most of their needs. In addition, we estimate that the United
States market for MRI monitors is $30 million annually.

      A number of companies, some of which are substantially larger than us,
manufacture and market products that compete with our patient monitoring
products. Our major competitors are Agilent (formerly Hewlett Packard), General
Electric/Marquette, Spacelabs and Datex.

      Collagen Products. Our vascular sealing products have revolutionized the
technology that is used to seal arterial punctures to stop bleeding after
catheterization procedures, such as balloon angioplasty, stenting and diagnostic
angiography.

      We manufacture and market two main product lines: the VasoSeal(Registered)
VHD and the VasoSeal(Registered) ES (Extravascular Security); both vascular
hemostasis devices can rapidly seal arterial punctures after procedures
requiring catheterization. We also manufacture surgical hemostatic agents that
are used to stop bleeding during surgery.

VasoSeal VHD and VasoSeal ES (Vascular Hemostasis Devices)

      We manufacture and market the VasoSeal VHD extravascular sealing device,
which was the first device of its kind to be approved in the United States, and
a second generation sealing device, known as VasoSeal ES. Prior to the
introduction of VasoSeal VHD in 1995, the only way to stop bleeding to seal
arterial puncture wounds after catheterization procedures was to supplement the
body's natural process of blood clot formation through the use of manual
compression or mechanical means such as a "C" clamp. The concept behind the
VasoSeal device is simple and it does not involve prolonged compression. A soft
collagen plug is placed between the puncture in the artery and the puncture
wound in the skin. Sealing is accomplished on the outside of the artery. By
design, no foreign objects remain inside of the artery. In addition, the use of
our VasoSeal products permits immediate removal of the sheath used in certain
(coronary and radiology) procedures, rather than leaving the sheath in place for
prolonged periods of time.

      The VasoSeal ES device, introduced in the European Union in 1998 and the
United States in 1999, retains the proprietary, extravascular technology of our
original VasoSeal device. However, the VasoSeal ES device features a
"one-size-fits-all" (5 to 8 Fr.) design that eliminates the need to measure
skin-to-artery distance and the


                                       9
<PAGE>

hospital's need to stock multiple sizes of the device. These features are made
possible by a unique locator that provides an easier method for locating the
arterial puncture site. VasoSeal ES is also the first vascular sealing device to
have been approved by the FDA for use in patients with peripheral vascular
disease, which represents a significant portion of the total patient population
undergoing catherization procedures.

      Advantages of VasoSeal

      Using our VasoSeal devices has the following advantages:

o     Reduces time to ambulation. Patients can be ambulated much faster,
      compared to conventional manual or mechanical compression. We believe
      faster ambulation should result in significant potential savings for
      hospitals because patients can be moved to lower, less expensive levels of
      care. Early ambulation also lowers the use of human and material
      resources, which results in improved hospital efficiencies.

o     Provides increased comfort and satisfaction for patients

o     Frees up valuable recovery room beds

o     Approved for use on patients diagnosed with peripheral vascular disease

o     Eliminates the need for uncomfortable pressure devices, sand bags and
      manual pressure holds

o     Allows the majority of diagnostic angiography patients to be ambulated
      safely within 1 hour after the procedure, compared with 4 to 6 hours under
      standard clinical practice

o     Results in improved patient management within hospitals

o     Approved for deployment by healthcare professionals other than physicians
      (nurses and technicians)

      Clinical Education and Support

      We offer health care providers the following services in connection with
their use of our VasoSeal devices:

o     On-site training and education of all personnel involved with patient care

o     24 hour clinical support

o     Comprehensive educational materials for the staff and patient

o     Consultative services to help facilities identify and maximize the goals
      and objectives of vascular sealing

      Significant Developments

      Since 1993 we have achieved the following regulatory and marketing
milestones in connection with our VasoSeal product line:

o     In Japan, VasoSeal VHD was cleared for reimbursement for certain
      interventional procedures by The Ministry of Health in January, 2000

o     United States shipments of the VasoSeal ES device began in August 1999

o     The VasoSeal ES device was approved by the FDA in December 1998

o     In 1998, we began marketing the VasoSeal device in Germany, France and the
      United Kingdom

o     We received the "CE" mark for the VasoSeal device in 1997 and the VasoSeal
      ES device in 1998, which permits us to sell our VasoSeal product line
      throughout the European Union

o     In 1994, we received regulatory approval to market the VasoSeal device in
      Japan

o     During calendar years 1993 through 1995, we received regulatory approvals
      to market the VasoSeal device in Canada, Australia, Italy, Spain and The
      Netherlands

o     Pre-Market Approval (PMA) Application for the VasoSeal device approved by
      the FDA in September, 1995


                                       10
<PAGE>

      The VasoSeal VHD device has received the following additional approvals
from the FDA:

o     Approval received in August 1999 to market the VasoSeal VHD for use in
      patients with peripheral vascular disease.

o     Approval received in September 1997 for deployment of VasoSeal by nurses
      and technicians.

o     Approval received in April 1997 for use after stent implantation.

o     Approval received in December 1996 for use of VasoSeal in radiology
      procedures.

o     Approval received in August, 1996 for early ambulation in diagnostic
      angiography and delayed sheath pull interventional patients.

      Markets, Sales and Competition. Our VasoSeal line of products is sold to
both interventional cardiology and radiology labs, both in hospitals and
independent diagnostic facilities.

      We believe that our VasoSeal products have created an entirely new market
for improved sealing and management of femoral arterial puncture wounds made
during catheterization procedures. In addition, our VasoSeal products can also
be used following stent implantation. Stents, which are devices that support the
arterial wall, are implanted in approximately 70% of coronary and peripheral
balloon angioplasty procedures.

      In 1999, according to industry estimates, interventional cardiologists and
radiologists in the United States performed approximately 3,700,000 diagnostic
angiography procedures, and 930,000 balloon angioplasty/stent procedures. Based
on currently approved indications for use, the above procedures represent the
potential market for our VasoSeal products in the United States and are growing
at an estimated annual 11% rate for balloon angioplasty/stent and 6% rate for
diagnostic angiography.

      A number of companies, some of which are substantially larger than us,
manufacture and market products that compete with the VasoSeal VHD and VasoSeal
ES devices. Our competitors are Abbott Laboratories (Perclose), St. Jude
Medical, (Angio-Seal) Vascular Solutions, Inc. and Sutura, Inc. Other
competitive products are in development and may be introduced in the near
future.

      Vascular Grafts. Our InterVascular Inc. subsidiary manufactures and
distributes a proprietary line of knitted and woven polyester vascular grafts
and patches for reconstructive vascular and cardiovascular surgery. Vascular
grafts are used to replace and bypass diseased arteries.

      Our vascular graft products and their significant features are:

            InterGard(Registered) Knitted Products

o     Collagen-coated graft for use in most vascular applications for
      reconstruction of abdominal and peripheral arteries.

            InterGard(Registered) Woven Products

o     Designed primarily for use in thoracic aortic repair and open-heart
      surgery

            InterGard(Registered) Silver

o     World's only anti-microbial vascular graft

o     Designed to prevent post-operative infection of the graft, which occurs in
      between 2% and 5% of cases, by using the broad spectrum, anti-infective
      properties of


                                       11
<PAGE>

      silver, which is released from the surface of the graft and onto
      surrounding tissues following implantation

o     Prosthetic graft infections are associated with high morbidity, including
      amputation and high mortality

o     Infection typically lengthens the hospital stay of a patient by up to 50
      days, which usually results in a significant increase in cost

            InterGard Ultra Thin(Trademark)

o     The thinnest knitted polyester collagen coated graft on the market

o     Designed specifically for use in the replacement of peripheral arteries

            InterGard Heparin

o     A heparin bonded collagen coated graft for replacement and bypass of
      peripheral arteries

            HemaCarotid Patches

o     Collagen-coated patches used for repair of carotid and peripheral arteries

o     HemaCarotid patches also manufactured in Ultra Thin version

      Significant Developments

      In the last few years, we have expanded our vascular graft product line:

o     InterGard UltraThin was introduced in the United States during fiscal year
      1999

o     InterGard Silver received the CE mark in April 1999, for commercial sale
      throughout the European Union

o     InterGard Woven Products were introduced in the United States during
      fiscal year 1999

o     Approval of InterGard in both the United States and Japan in fiscal year
      1998

      Markets, Sales and Competition. Our vascular graft products are sold to
vascular and cardio-thoracic surgeons. Products are distributed exclusively in
the United States by Impra, a division of C.R. Bard, Inc.

      A number of companies, some of which are substantially larger than us,
manufacture and market products that compete with our vascular graft products.
Our major competitors are Boston Scientific, Vascutek, Gore and C.R. Bard.

      Life Science Research Products. In 1998, we entered the life science
research market by forming a new subsidiary, Genisphere Inc. Genisphere has
developed reagents based on a new, proprietary class of DNA molecules known as
3DNA(Registered), or Three Dimensional Nucleic Acid. A reagent is a substance
that is used to produce a chemical reaction so as to detect and measure other
substances. Our 3DNA-based reagents have been shown to increase the sensitivity
of nucleic acid detection and may also provide substantially greater sensitivity
for the detection of proteins than was previously possible using conventional
assays. Our first products were probes designed for use in conventional blot
assays. Genisphere had an agreement with Fisher Scientific LLC ("Fisher") that
provided Fisher with the non-exclusive right to distribute only Genisphere's
first generation blot products in the U.S. and Puerto Rico. Genisphere
terminated its distribution agreement with Fisher effective in September 2000
because we are no longer actively promoting the first generation blot products.

      Based on our new market entry strategy, our life science research products
will be primarily targeted at the research and development department of
pharmaceutical and biotechnology companies. In this new target market, use of
new research technologies occurs much faster and potential customers are more
highly concentrated and easier to reach, when compared to the mature academic
research market, which was our initial target market. Our first products for
this market are detection systems designed to improve the reliability and
sensitivity of microarray experiments.


                                       12
<PAGE>

      A number of companies, some of which are substantially larger than us,
manufacture and market products that compete with our life science research
products. Our major competitors include Amersham Pharmacia Biotech and
PerkinElmer Life Sciences Inc.

Research and Development

      We invested approximately $24.9 million in 2000, $29.0 million in 1999 and
$30.1 million in 1998 on research and development of new products and the
improvement of our existing products. We have established relationships with
several teaching hospitals for the purpose of clinically evaluating our new
products. We also have consulting arrangements with physicians and scientists in
the areas of research, product development and clinical evaluation.

Marketing and Sales Organization

      Our products are sold throughout the world through our own direct sales
organization and through independent distributors. Our worldwide sales
organization employs approximately 330 people, and consists of sales
representatives, sales managers, clinical education specialists and sales
support personnel. We have a worldwide clinical education staff, most of whom
are critical care and catheterization lab nurses. They conduct seminars and
provide in-service training to nurses and physicians on a continuing basis.

      We provide service and maintenance to purchasers of our products under
warranty. After the warranty expires, we provide service and maintenance on a
contract basis. We employ service representatives in the United States and
Europe, and maintain service facilities in the United States, The Netherlands,
France, Germany and the United Kingdom. We conduct regional service seminars
throughout the United States for our customers and their biomedical engineers
and service technicians.

      International sales as a percentage of our total sales were 29% in 2000,
28% in 1999 and 29% in 1998. We are continuing to expand our international
presence. We have subsidiaries in the United Kingdom, France, Germany, Italy,
Belgium, Spain and The Netherlands. Because a portion of our international sales
are made in foreign currencies, we bear the risk of adverse changes in exchange
rates for such sales. Please see Notes 1, 2 and 8 to the Financial Statements
for additional information with respect to our international operations and
foreign currency exposures. Our sales are broadly based and no customer accounts
for more than 10% of our total sales

Competition

      We believe that customers, primarily hospitals and other medical
institutions, choose among competing products on the basis of product
performance, features, price and service. In general, we believe price has
become an important factor in hospital purchasing decisions because of pressure
to cut costs. These pressures on hospitals result from Federal and State
regulations that limit reimbursement for services provided to Medicare and
Medicaid patients. Many companies, some of which are substantially larger than
us, are engaged in manufacturing competing products. We have identified our
major competitors in the above sections which described our product lines.

Suppliers

      Our products are made of components which we manufacture or which are
usually available from existing and alternate sources of supply. We purchase
certain components from single or preferred sources of supply. Recently, we have
become more dependent on the use of original equipment manufacturers to supply
certain patient monitoring products such as the EXPERT monitor, the Gas Module
II and the MR monitor. Our use of single or preferred sources of supply
increases our exposure to price increases and production delays. In addition,
certain of our suppliers have been contemplating, and in a few cases have begun,
reducing or eliminating sales of their products to medical device manufacturers
like us. We are not able to predict whether or not additional suppliers will
withhold their products from medical device manufacturers, including us. To
date, we have not experienced any material disruption or delay in processing our
components.

Patents


                                       13
<PAGE>

      We hold a number of United States and foreign patents. In addition, we
also have filed a number of patent applications that are currently pending. We
do not believe the expiration or invalidity of any of our patents would have a
material adverse effect on our business as currently conducted.

Employees

      We currently employ approximately 1,230 people. We believe our
relationship with our employees is good.

Regulation

      Our medical devices are subject to regulation by the FDA. In some cases,
they are also subject to regulation by state and foreign governments. The
Medical Device Amendment of 1976 and the Safe Medical Device Act of 1990, which
are amendments to the Federal Food, Drug and Cosmetics Act of 1938, require
manufacturers of medical devices to comply with certain controls that regulate
the composition, labeling, testing, manufacturing and distribution of medical
devices. FDA regulations known as "Current Good Manufacturing Practices for
Medical Devices" provide standards for the design, manufacture, packages,
labels, storage, installation and service of medical devices. Our manufacturing
and assembling facilities are subject to routine FDA inspections. The FDA can
also conduct investigations and evaluations of our products at its own
initiative or in response to customer complaints or reports of malfunctions. The
FDA also has the authority to require manufacturers to recall or correct
marketed products which it believes do not comply with the requirements of these
laws.

      Under the Act, all medical devices are classified as Class I, Class II, or
Class III devices. In addition to the above requirements, Class II devices must
comply with pre-market notification, or 510(k), regulations and with performance
standards or special controls established by the FDA. Subject to certain
exceptions, a Class III device must receive pre-market approval from the FDA
before it can be commercially distributed in the United States. Our principal
products are designated as Class II and Class III devices.

      We also receive inquiries from the FDA and other agencies. Sometimes, we
may disagree with positions of members of the staffs of those agencies. To date,
the resolutions of such disagreements with the staffs of the FDA and other
agencies have not resulted in material cost to us.

      We are also subject to certain federal, state and local environmental
regulations. The cost of complying with these regulations has not been, and we
do not expect them to be, material to our operations.

      We are also subject to laws and regulations concerning the reimbursement
of our customer's costs incurred in purchasing our medical devices and products.
Healthcare providers that purchase our medical devices and products generally
rely on third-party payors, including the Health Care Financing Administration
(HCFA) which administers Medicaid and Medicare, and other types of insurance
programs, to reimburse all or part of the cost of such devices. The laws and
regulations in this area are constantly changing and we are unable to predict
whether, and the extent to which, we may be affected in the future by
legislative or regulatory developments relating to the reimbursement of our
medical devices and products.

Health Care Reform

      We believe that concerns about potential health care reform legislation
have slowed the domestic sales of medical devices generally. Our management
cannot predict at this time what impact, if any, the adoption by the United
States Congress of health care reform legislation would have on our business.

Item 2. Properties.

      The following table contains information concerning our real property that
we own or lease and which we consider important to our business:


                                       14
<PAGE>

<TABLE>
<CAPTION>
Location                                 General Character                      Ownership or
                                        and Use of Property                      Expiration
                                                                                Date of Lease
<S>                            <C>                                            <C>
Fairfield, New Jersey          75,000 sq. feet, used for Cardiac Assist       Owned
                               facility and manufacturing of intra-aortic
                               balloons.

Hoevelaken, The Netherlands    12,700 sq. feet, used for administrative       Owned
                               offices and the European central warehouse

La Ciotat, France              30,000 sq. feet, used by InterVascular for     Owned  - 18,000 sq. feet
                               administrative offices and the production of   Leased - 12,000 sq. feet
                               vascular grafts.                               (until 5/30/07)



Mahwah, New Jersey             130,000 sq. feet, used for:                    Owned
                               o Patient Monitoring facility -
                               administrative offices, research and
                               development and manufacturing of patient
                               monitoring products.
                               o Manufacturing of cardiac assist balloon
                               pump systems.

Mahwah, New Jersey             90,000 sq. feet, used for:                     Owned
                               o Collagen Products facility -
                               administrative offices, warehousing and
                               distribution.
                               o Warehousing and distribution of cardiac
                               assist products.
                               o Corporate records storage.

Montvale, New Jersey           38,000 sq. feet, used as our corporate         Owned
                               headquarters.

Vaals, The Netherlands         17,500 sq. feet, used in the manufacturing     Owned
                               and research and development for collagen
                               products.
</TABLE>

      We also lease office space in the United States, the United Kingdom,
France, Italy, Belgium, Spain and Germany. We believe that our facilities and
equipment are in good working condition and are adequate for our needs.

Item 3. Legal Proceedings.

      We are subject, in the ordinary course of our business, to product
liability litigation. We believe we have meritorious defenses in all material
pending lawsuits. We also believe that we maintain adequate insurance against
any potential liability. We receive comments and recommendations with respect to
our products from the staff of the FDA and from other agencies on an on-going
basis. We may or may not agree with these comments and recommendations. However,
we are not a party to any formal regulatory administrative proceedings.

      On July 21, 1999, we instituted patent infringement litigation relating to
a vascular sealing method against Vascular Solutions, Inc. ("Vascular
Solutions") in the United Stated District Court, District of Minnesota. In that
litigation, our complaint alleges that the manufacture, use and/or sale of
Vascular Solutions' Duett device, infringes our United States Patent 5,725,498.
We seek relief in the form of a preliminary and permanent injunction against the
marketing and/or sale of Vascular Solutions' Duett device.

      In response to our complaint, Vascular Solutions filed an answer and
counterclaim. Their answer generally denied the allegations of our complaint and
their counterclaim claimed that we tortiously interfered and unfairly competed
by filing the complaint which impacted upon their ability to raise capital
through an initial public offering.

      We believe that we will be successful in prosecuting our complaint and
defending against Vascular Solutions' counterclaim.


                                       15
<PAGE>

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

      No matters were submitted to a vote of security holders in the fourth
quarter of fiscal 2000.

Item 4A. Executive Officers of the Company.

      The following table sets forth the names, ages, positions and offices of
our executive officers:

Name                 Age   Positions and Offices Presently Held

Lawrence Saper       72    Chairman of the Board and Chief Executive Officer
Murray Pitkowsky     69    Senior Vice President, Secretary and Acting
                           President, InterVascular Inc.
Leonard S. Goodman   56    Vice President, Chief Financial Officer and Treasurer
Nicholas E. Barker   42    Vice President, Corporate Design
James Cooper         49    Vice President, Human Resources
John Gilbert         43    Vice President; President, Collagen Products
Brent Glendening     46    Vice President and Chief Information Officer
Donald Southard      54    Vice President; President, Patient Monitoring
Paul J. Southworth   56    Vice President; President, Cardiac Assist
S. Arieh Zak         39    Vice President, Regulatory Affairs and Corporate
                           Counsel


                                       16
<PAGE>

                                     PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.

Market Information

      Our common stock is traded over-the-counter and is listed on The Nasdaq
Stock Market. Our Nasdaq symbol is DSCP. The following table sets forth, for
each quarter period during the last two fiscal years, the high and low sale
prices as reported by The Nasdaq Stock Market.

Fiscal Year                            High                             Low
-----------                            ----                             ---

1999
First Quarter                          26 3/4                           18 3/4
Second Quarter                         25 3/8                           16
Third Quarter                          30                               19 1/8
Fourth Quarter                         33 1/2                           24

2000
First Quarter                          35 3/4                           29 3/4
Second Quarter                         41                               33
Third Quarter                          42 1/2                           30 15/16
Fourth Quarter                         40 1/4                           31 1/16

      As of August 1, 2000, there were approximately 716 holders of record of
our common stock.

Dividend Policy

      On December 7, 1999, the Board of Directors inaugurated quarterly cash
dividends of $0.04 per share of common stock. Cash dividends were paid January
14, 2000, March 30, 2000 and June 30, 2000. Our dividend policy is reviewed
periodically.

Recent Sales of Unregistered Securities

      None.

Item 6. Selected Financial Data.

      The following table sets forth selected financial data for Datascope as of
the dates and for the periods indicated. The data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operation" and the financial statements and related notes thereto on pages F-2
to F-25.


                                       17
<PAGE>

                         SELECTED FINANCIAL INFORMATION

Earnings Statement Data:
  (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                   Year Ended June 30,
                                         -------------------------------------------------------------------------
                                           2000            1999            1998            1997            1996
                                         ---------       ---------       ---------       ---------       ---------
<S>                                      <C>             <C>             <C>             <C>             <C>
Net Sales                                $ 298,800       $ 269,100       $ 242,400       $ 225,600       $ 211,300
                                         ---------       ---------       ---------       ---------       ---------

Cost of sales                              116,557         103,776          93,596          89,795          84,215

Cost of sales, point of view charge             --              --              --              --           9,600

Research and development                    24,934          28,994          30,109          26,815          24,275

Selling, general and administrative        116,792         105,847          93,740          86,962          80,493

Special Items                               (3,825)          3,429              --           8,554         (10,691)
                                         ---------       ---------       ---------       ---------       ---------

                                           254,458         242,046         217,445         212,126         187,892
                                         ---------       ---------       ---------       ---------       ---------

Operating earnings                          44,342          27,054          24,955          13,474          23,408

Other (income) expense:

  Interest income                           (3,659)         (3,342)         (4,972)         (4,744)         (4,226)

  Interest expense                              21              29              25              18              50

  Other, net                                   132             583             187             380             743
                                         ---------       ---------       ---------       ---------       ---------

                                            (3,506)         (2,730)         (4,760)         (4,346)         (3,433)
                                         ---------       ---------       ---------       ---------       ---------

Earnings before taxes on income             47,848          29,784          29,715          17,820          26,841

Taxes on income                             14,773           8,372           8,074           3,716           6,424
                                         ---------       ---------       ---------       ---------       ---------

Net earnings                             $  33,075       $  21,412       $  21,641       $  14,104       $  20,417
                                         =========       =========       =========       =========       =========

Earnings per share, Basic                $    2.18       $    1.40       $    1.37       $    0.88       $    1.27
                                         ---------       ---------       ---------       ---------       ---------

Earnings per share, Diluted              $    2.06       $    1.36       $    1.32       $    0.86       $    1.24
                                         ---------       ---------       ---------       ---------       ---------

<CAPTION>
Balance Sheet Data:
  (in thousands)                                                         June 30,
                                         -------------------------------------------------------------------------
                                           2000            1999            1998            1997            1996
                                         ---------       ---------       ---------       ---------       ---------
<S>                                      <C>             <C>             <C>             <C>             <C>

Total assets                             $ 294,791       $ 269,494       $ 253,048       $ 237,862       $ 234,464

Long-term debt                                  --              --              --              --              --

Working capital                          $ 120,799       $ 125,421       $ 115,968       $ 121,575       $ 119,588

Stockholders' equity                     $ 227,787       $ 214,455       $ 201,482       $ 192,243       $ 181,680

Cash Dividends                           $   1,809              --              --              --              --
</TABLE>


                                       18
<PAGE>

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

Results of Operations

     The following table shows the comparison of net earnings and earnings per
diluted share over the past three fiscal years.

                                             (Dollars in millions, except EPS)
                                                    Year ended June 30,
                                             -----------------------------------
                                              2000          1999          1998
                                             ------        -------       -------
      Net Earnings (1)                        $33.1         $21.4         $21.6
      Earnings per share, diluted (1)         $2.06         $1.36         $1.32

Comparison of Results - Fiscal 2000 vs. Fiscal 1999

Sales

      The following table shows sales by product line over the past three fiscal
years.

                                                   Sales by Product Line
                                                   (Dollars in millions)
                                                    Year ended June 30,
                                              -------------------------------
                                               2000        1999        1998
                                              ------      ------      ------
      Cardiac Assist                          $116.9      $110.6      $102.9
        % change from prior year                   6%          8%          0%
        % of total sales                          39%         41%         42%

      Patient Monitoring                      $104.2      $ 95.0      $ 91.5
        % change from prior year                  10%          4%          4%
        % of total sales                          35%         35%         38%

      Collagen Products                       $ 56.8      $ 42.9      $ 29.1
        % change from prior year                  32%         47%         54%
        % of total sales                          19%         16%         12%

      Vascular Grafts                         $ 20.9      $ 20.6      $ 18.9
        % change from prior year                   2%          9%         19%
        % of total sales                           7%          8%          8%

      Total Sales                             $298.8      $269.1      $242.4
        % change from prior year                  11%         11%          7%

----------
(1)   Net earnings and earnings per share in fiscal years 2000 and 1999 shown
      above include the following special items.

            Fiscal 2000 Gain on sale of technology of $2.5 million after tax or
                        $0.16 per diluted share.

            Fiscal 1999 Restructuring charge of $2.2 million after tax or $0.14
                        per diluted share.

      Excluding the special items, net earnings and diluted earnings per share
      was $30.6 million or $1.90 per diluted share in fiscal 2000 and $23.6
      million or $1.50 per diluted share in fiscal 1999.


                                       19
<PAGE>

      Sales of the Cardiac Assist / Monitoring Products segment in fiscal 2000
increased 8% to $221.1 million.

      Cardiac Assist

      Sales of Cardiac Assist products increased 6% to $116.9 million in fiscal
2000 due to the contribution of newly introduced products: the Profile 8 Fr.
intra-aortic balloon catheter and the System 98 balloon pump. Worldwide market
acceptance of both of these products continued strong.

      Patient Monitoring

      Patient Monitoring product sales increased 10% to a record $104.2 million,
due primarily to shipments of the new Passport 2(TM), the company's
next-generation portable bedside monitor, which was introduced in international
markets in the second quarter. The market launch of the Passport 2 in the U.S.
followed receipt of 510(k) clearance from FDA in the third quarter and resulted
in a strong ramp up of shipments in the fourth quarter. Sales of the new
Accutorr(R) Plus blood pressure monitor continued to grow at a double digit
rate.

      Sales of the Collagen Products / Vascular Grafts segment increased 22% in
fiscal 2000 to $77.7 million.

      Collagen Products

      Sales of VasoSeal(R) arterial puncture sealing devices increased 32% to a
record $55.8 million from $42.3 million last year. The business continued to
benefit from solid market growth, higher average selling prices and increased
sales force productivity. VasoSeal ES, the company's second generation product,
which was introduced worldwide in the first quarter, continued to grow strongly.
During the fourth quarter, VasoSeal ES sales rose to about 30% of worldwide
VasoSeal sales. Sales of hemostats were not significant.

      Vascular Grafts

      International sales of InterVascular Inc., which account for over 85% of
its total sales, increased 13% due to continued strong demand for new products,
particularly the InterGard(R) Silver, the world's first anti-microbial vascular
graft. Total sales of InterVascular rose only 2% to $20.9 million as the
company's U.S. distributor reduced inventories, resulting in a sharp decline in
domestic sales.

      Genisphere (Life Science Research Products)

      Sales of Genisphere products in fiscal 2000 were not significant. The
Genisphere business continued to implement its revised market entry strategy,
which was announced last year. Genisphere is now focusing on developing
3DNA-based products to improve the performance of newly-developing technologies
for drug discovery used by the pharmaceutical and biotech industries. Investment
spending for the development of the Genisphere business was approximately $1
million in fiscal 2000.

      The stronger U.S. dollar compared to major European currencies decreased
consolidated sales by approximately $3.6 million in fiscal 2000 compared to
fiscal 1999.

Costs and Expenses

      The gross profit percentage was 61.0% for fiscal 2000 compared to 61.4%
last year, with the benefit of increased sales of higher margin products being
offset by lower average selling prices for certain patient monitoring products.

      Research and development (R&D) expenses declined 14% in fiscal 2000
compared to fiscal 1999 because of cost savings from the restructuring program
implemented in the second half of last year and lower development expenses in
the Patient Monitoring product line. As a percentage of sales R&D expenses were
8.3% in fiscal 2000 compared to 10.8% in fiscal 1999.

     Selling, general and administrative expenses (SG&A) increased 10% in fiscal
2000 compared to last year primarily as a result of the expansion of the U.S.
VasoSeal field force, increased selling and marketing expenses


                                       20
<PAGE>

related to higher sales, introduction of new products and higher corporate
expenses. As a percentage of sales, SG&A expenses were 39.1% in fiscal 2000
compared to 39.3% in fiscal 1999.

      The stronger U.S. dollar compared to major European currencies decreased
SG&A expenses by approximately $2.3 million in fiscal 2000 compared to fiscal
1999.

Interest Income

      Interest income for fiscal 2000 of $3.7 million increased $0.3 million or
9% compared to fiscal 1999. The increased interest income in fiscal 2000 was
attributable to a 6% increase in the average investment portfolio from $62.8
million to $66.4 million and an increase in the average yield to 5.5% from 5.2%.

Income Taxes

      The consolidated effective tax rate for fiscal 2000 was 30.9% compared to
28.1% for fiscal 1999. The tax rate in both years was lower than the federal
statutory tax rate primarily as a result of:

      o     the tax benefit from the Foreign Sales Corporation

      o     earnings in an international tax exempt industrial zone

      o     interest income exempt from federal income tax.

      The higher tax rate in fiscal 2000 compared to last year was due mainly to
the impact of higher earnings taxed at a higher statutory tax rate, expiration
of a tax exemption for a manufacturing subsidiary in Europe during fiscal 2000
and a lower R&D tax credit resulting from reduced R&D spending, partially offset
by the favorable impact from a higher state net operating loss carryforward
utilization.

      We operate a manufacturing subsidiary in an industrial development zone in
Europe. Profits from those manufacturing activities were exempt from corporation
taxes until January 31, 2000. Alternative tax planning strategies have been
implemented to reduce the impact of the expiration of this tax exemption.

Net Earnings

      Net earnings were $33.1 million or $2.06 per diluted share in fiscal 2000
compared to $21.4 million, or $1.36 per diluted share last year. The increase
was attributable to:

      o     sales growth.

      o     a more profitable product mix.

      o     cost savings from the restructuring program implemented in the
            second half of fiscal 1999.

      o     Special Items - fiscal 2000 gain on sale of technology of $2.5
            million after tax, compared to a special charge of $2.2 million for
            restructuring in fiscal 1999.

      Excluding the special items recorded in fiscal 2000 and fiscal 1999, net
earnings were $30.6 million or $1.90 per diluted share compared to $23.6
million, or $1.50 per diluted share last year.

Foreign Currency

      Due to the global nature of our operations, we are subject to the
exposures that arise from foreign exchange rate fluctuations. Our objective in
managing our exposure to foreign currency fluctuations is to minimize net
earnings volatility associated with foreign exchange rate changes. We enter into
foreign currency forward exchange contracts to hedge foreign currency
transactions which are primarily related to certain receivables denominated in
foreign currencies. Our hedging activities do not subject us to exchange rate
risk because gains and losses on these contracts offset losses and gains on the
liabilities and transactions being hedged. A portion of the net foreign
transaction gain or loss is reported in our statement of consolidated earnings
in cost of sales and the balance in other income and expense. We do not use
derivative financial instruments for trading purposes.


                                       21
<PAGE>

      As of June 30, 2000, we had a notional amount of $5.2 million of foreign
exchange forward contracts outstanding, all of which were in European
currencies. The foreign exchange forward contracts generally have maturities
that do not exceed 12 months and require us to exchange foreign currencies for
U.S. dollars at maturity, at rates agreed to when the contract is signed.

Comparison of Results - Fiscal 1999 vs. Fiscal 1998

Sales

      Sales of the Cardiac Assist / Monitoring Products segment increased 6% to
$205.6 million in fiscal 1999 compared to $194.4 million in fiscal 1998.

      Cardiac Assist

      Sales of Cardiac Assist products in fiscal 1999 increased 8% over fiscal
1998 to $110.6 million, a reversal of the negative or substantially flat
comparisons of the previous two years. Renewed sales growth is attributed to
worldwide customer response to our two major new Cardiac Assist products: the
Profile 8 Fr. intra-aortic balloon introduced in the fourth quarter of fiscal
1998 and the System 98 balloon pump introduced in the first quarter of fiscal
1999. Sales in the United States increased 8% over fiscal 1998 as the business
expanded its market share in each of the last three quarters of fiscal 1999.
International sales grew 6% over fiscal 1998 primarily attributable to increased
sales to the European direct markets.

      Patient Monitoring

      Sales of Patient Monitoring products increased 4% over fiscal 1998 to
$95.0 million . The increase was produced by higher sales of Visa Central
Station monitors and of several new patient monitoring products introduced in
fiscal 1998 including the Expert(TM) and Accutorr(R)Plus. While sales of
Passport monitors declined for the year because of lower sales during the first
nine months, Passport shipments increased in the fourth quarter approximately
22% (both units and dollar sales) driven, in part, by Year 2000 compliance
programs.

      Sales of the Collagen Products / Vascular Grafts segment increased 32% to
$63.5 million in fiscal 1999 compared to $48.0 million in fiscal 1998.

      Collagen Products

      Sales of VasoSeal devices rose 49% in fiscal 1999 to a record $42.3
million reflecting:

      o     vigorous growth of the arterial puncture sealing market

      o     excellent clinical performance of the VasoSeal(R)VHD product

      o     expansion of the direct sales and clinical support organization in
            the United States.

      VasoSeal(R)ES, our second generation product, was launched in the first
quarter of fiscal 2000 and is expected to complement the VHD product and
strengthen VasoSeal's competitive position. Sales of hemostats were not
significant.

      Vascular Grafts

      Sales of InterVascular, Inc.'s vascular grafts in fiscal 1999 increased 9%
to $20.6 million. In the second half of the year, sales increased approximately
22% over the comparable six month period last year, driven by sales of new
products, including the Heparin coated graft, the improved woven graft and the
InterGard(R) Silver, the world's first anti-microbial vascular graft which was
launched in Europe during the fourth quarter. In addition, higher sales in
fiscal 1999 benefitted from shipments to InterVascular's U.S. distributor, which
more than doubled compared to the prior year.


                                       22
<PAGE>

      Genisphere (Life Science Research Products)

      There were no sales of Genisphere products in fiscal 1999 and 1998.
Spending for the development of the Genisphere business was $2.8 million in
fiscal 1999. Our decision to revise the market entry strategy for Genisphere's
proprietary 3DNA technology was based on the following conclusions:

      o     Our attempt to capture a significant share of the academic research
            market for Southern and Northern blots, as originally planned, would
            be too costly and time-consuming.

      o     Instead, we are now focusing on developing 3DNA-based products to
            improve the performance of newly-developing technologies for drug
            discovery used by the pharmaceutical and biotech industries. In this
            market, use of new research technologies occurs much faster and
            potential customers are more highly concentrated and easier to
            reach.

      o     The first Genisphere products aimed at the drug discovery market are
            fluorescent probes designed to improve the detection sensitivity and
            reliability of microarrays. This is a new research tool whose use is
            growing rapidly.

      o     Because the new market entry strategy does not contemplate near-term
            sales until the fluorescent probe products are launched, we
            suspended manufacturing of our 3DNA reagent and we are using our
            existing inventory.

      The foreign exchange rate effect of the weaker U.S. dollar compared to
major European currencies increased consolidated sales by approximately $0.3
million in fiscal 1999 compared to fiscal 1998.

Costs and Expenses

      Cost of Sales as a percentage of sales remained unchanged at 38.6% in
fiscal 1999. The favorable effect of increased sales volume of higher margin
products and increased average selling prices for VasoSeal were offset by lower
average selling prices for older patient monitoring and cardiac assist products.

      Research and development (R&D) expenses declined 4% in fiscal 1999
compared to fiscal 1998 because of lower development expenses in the Cardiac
Assist and Patient Monitoring product lines, partially offset by increased
expenses for the development of second and third generation VasoSeal products.
As a percentage of sales R&D expenses were 10.8% in fiscal 1999 compared to
12.4% in fiscal 1998.

      Selling, general and administrative expenses (SG&A) increased 13% in
fiscal 1999 compared to fiscal 1998 primarily as a result of the expansion of
the U.S. VasoSeal selling and clinical organization, filling open sales and
clinical positions in the patient monitoring and cardiac assist sales forces and
higher corporate expenses. As a percentage of sales, SG&A expenses were 39.3% in
fiscal 1999 compared to 38.7% in fiscal 1998.

      The weakening of the U.S. dollar compared to major European currencies
increased SG&A expenses by approximately $0.3 million in fiscal 1999 compared to
fiscal 1998.

Restructuring Charge

      During fiscal 1999 we recorded a pretax restructuring charge of $3.4
million, equivalent to $2.2 million after tax or $0.14 per diluted share. Based
on a review by senior management of all company operations in the first half of
fiscal 1999, a restructuring plan was approved to reduce our cost structure and
streamline certain operations. The cost reduction programs and related
restructuring charges consist of the following:

      o     Lease termination costs and asset writedowns related to the closing
            of InterVascular's Clearwater, Florida leased manufacturing facility
            in order to reduce costs and centralize operations in one expanded
            facility in


                                       23
<PAGE>

      La Ciotat, France.

      The asset writedowns relate primarily to research and production equipment
and leasehold improvements that will be removed from service and disposed. The
assets have no salvage value.

      o     Employee severance expenses related to workforce reductions and
            closing of the Clearwater facility. Approximately 70% of the 80
            terminated employees left by June 30, 1999. The balance of the
            employees received notification prior to year-end and will be
            leaving over the next 15 months. The employee terminations were
            primarily in administrative, R&D and manufacturing positions.

      The annual cost savings for the workforce reduction is approximately $2.5
million. The workforce reduction did not have any significant impact on our
operations.

      o     Writedown of certain Genisphere fixed assets based on the revised
            market entry strategy for the proprietary 3DNA technology. Under the
            revised market entry strategy we will focus product development on
            improving the performance of newly-developing technologies for drug
            discovery used by the pharmaceutical and biotech industries.

      No significant additional expenditures are anticipated to complete the
restructuring program.

Interest Income

      Interest income was $3.3 million in fiscal 1999 compared to $5.0 million
in fiscal 1998. The 33% lower interest income in fiscal 1999 compared to fiscal
1998 was attributable to a $21.8 million decrease in the average investment
portfolio and a decline in the average yield to 5.2% from 5.5%. The decline in
the average investment portfolio was caused primarily by:

      o     cash used for stock repurchase programs ($11.5 million)

      o     increased capital expenditures ($6.1 million), primarily
            attributable to $7.2 million for the new Patient Monitoring facility
            in Mahwah, New Jersey

      o     increased inventory to support new products ($4.4 million).

Income Taxes

      The consolidated effective tax rate for fiscal 1999 was 28.1% compared to
27.2% for fiscal 1998. The tax rate in both years was lower than the federal
statutory tax rate primarily as a result of:

      o     the tax benefit from the Foreign Sales Corporation

      o     earnings in an international tax exempt industrial zone

      o     interest income exempt from federal income tax.

      The higher tax rate in fiscal 1999 compared to fiscal 1998 was due mainly
to the impact of higher earnings taxed at a higher statutory tax rate and a
lower R&D tax credit resulting from reduced R&D spending.

      We operate a manufacturing subsidiary in an industrial development zone in
Europe. Profits from those manufacturing activities were exempt from corporation
taxes until January 31, 2000.

Net Earnings

      Net earnings were $21.4 million or $1.36 per diluted share in fiscal 1999
compared to $21.6 million or $1.32 per diluted share in fiscal 1998 with the
increase in earnings driven by the strong sales growth in all product lines.
Impacting net earnings in fiscal 1999 was a restructuring charge of $2.2 million
after tax or $0.14 per diluted share (see restructuring charge above). Excluding
restructuring charges, net earnings in fiscal 1999 were $23.6 million or $1.50
per diluted share compared to $21.6 million in the prior year, or $1.32 per
diluted share.


                                       24
<PAGE>

Liquidity and Capital Resources

      Working capital at June 30, 2000 was $120.8 million compared to $125.4
million and the current ratio was 3.3:1 compared to 4.0:1 last year. Working
capital was impacted primarily by increases in accounts payable and accrued
compensation related to higher sales and earnings.

      In fiscal 2000 cash provided by operations was $48.5 million, attributable
to higher net earnings, depreciation and amortization and increased accounts
payable and accrued liabilities. Net cash used in investing activities was $30.2
million, attributable to the purchase of $28.4 million of property, plant and
equipment, primarily for the new Patient Monitoring and Collagen Products
facilities in Mahwah, New Jersey, and a $2.5 million equity investment in AMG,
and an allied company. Net cash used in financing activities was $20.7 million,
attributable to stock repurchases of $24.2 million and $1.8 million dividends
paid, offset by $5.3 million cash received from exercise of stock options.

      In fiscal 1999 cash provided by operations was $11.9 million, attributable
to net earnings and depreciation and amortization, partially offset by increased
accounts receivable and inventories. Net cash used in investing activities was
$0.1 million in fiscal 1999, attributable to the purchase of $14.3 million of
property, plant and equipment, including $7.2 million for the new Patient
Monitoring facility in Mahwah, New Jersey, and purchases of marketable
securities, offset by maturities of marketable securities. Cash used in
financing activities was $10.8 million in fiscal 1999, attributable to stock
repurchases of $13.0 million, partially offset by $2.2 million cash received
from exercise of stock options.

      In fiscal 1998 cash provided by operations was $18.9 million. Cash was
used to purchase $8.2 million of equipment and to purchase $14.0 million of our
stock under the stock repurchase program.

      The company purchased about 734,000 of its common shares for approximately
$24 million during fiscal year 2000 under both the $20 million share repurchase
program authorized in August 1998 and the $30 million share repurchase program
authorized in September, 1999. The August 1998 program was completed in
September 1999 and a balance of about $15 million remains available under the
existing share repurchase program.

      We believe our financial resources are sufficient to meet our projected
cash requirements.

      The moderate rate of current U.S. inflation has not significantly affected
the Company.

Year 2000 Readiness

      Starting in fiscal 1998 we commenced a program to identify, remediate,
test and develop contingency plans for the Year 2000 issue in our computer
information systems (CIS), products, vendors, suppliers and customers. As of
August 11, 2000, we had not experienced any Year 2000 problems regarding our
computer information systems, products, vendors, suppliers or customers that
caused disruptions in any of our business operations. The cost to modify the
computer software programs used in our CIS was covered by existing service
agreements with the software vendors. The assessments, testing and verification
of our CIS products was performed by existing staff and no significant outside
resources were required. Despite the use of internal resources for the Year 2000
Program, there was no significant deferral of other CIS projects. We do not
anticipate that any remaining cost for the Year 2000 Program will be material to
our financial condition or results of operations.

Euro Conversion

      As part of the European Economic and Monetary Union (EMU), a single
currency (Euro) will replace the national currencies of most of the European
countries in which we conduct our business. The conversion rates between the
Euro and the participating nations' currencies have been fixed irrevocably as of
January 1, 1999. During a transition period from January 1, 1999 to December 31,
2001 parties may settle transactions using either Euro or the participating
country's national currency. The participating national currencies will be
removed from


                                       25
<PAGE>

circulation between January 1, 2002 and June 30, 2002 and replaced by Euro notes
and coinage. Full conversion of all affected country operations to Euro is
expected to be completed by the time national currencies are removed from
circulation.

      We are currently involved in the phased conversion to the Euro and the
effects on revenues, costs and various business strategies are being assessed.
We are able to conduct business in both the Euro and national currencies on an
as needed basis, as required by the European Union. The cost of software and
business process conversion is not expected to be material to our financial
condition or results of operations.

Statement Concerning Forward Looking Information

      This Management's Discussion and Analysis of Results of Operations and
Financial Condition includes forward-looking statements that involve risks and
uncertainties because of the possibility that market conditions may change,
particularly as the result of competitive activity in the cardiac assist and
other markets served by the Company, the Company's ability to gain market
acceptance for new products and the Company's dependence on certain suppliers
for patient monitoring and VasoSeal products. Additional risks are the ability
of the Company to successfully introduce new products, continued demand for the
Company's products generally, the rapid and significant changes that
characterize the medical device industry and the ability to continue to respond
to such technological changes, the uncertain timing of regulatory approvals, as
well as other risks detailed from time to time in documents filed by Datascope
with the Securities and Exchange Commission.

Recent Pronouncements

      Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS No. 133), establishes
accounting and reporting standards for derivative instruments and for hedging
activities. It requires companies to recognize all derivatives as either assets
or liabilities in the statement of financial position and measure those
instruments at fair value. We have adopted SFAS No. 133 in the first quarter of
fiscal 2001, in accordance with the deferral provision in SFAS No. 137. The
adoption of SFAS No. 133 did not have a material effect on our financial
statements.

      In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
We are required to adopt SAB 101 in the fourth quarter of fiscal 2001. We
anticipate that the adoption of SAB 101 will not have a significant impact on
our financial statements.

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

      Due to the global nature of our operations, we are subject to the
exposures that arise from foreign exchange rate fluctuations. Our objective in
managing our exposure to foreign currency fluctuations is to minimize net
earnings volatility associated with foreign exchange rate changes. We enter into
foreign currency forward exchange contracts to hedge foreign currency
transactions which are primarily related to certain intercompany receivables
denominated in foreign currencies. Our hedging activities do not subject us to
exchange rate risk because gains and losses on these contracts offset losses and
gains on the assets, liabilities and transactions being hedged. A portion of the
net foreign transaction gain or loss is reported in our statement of
consolidated earnings in cost of sales and the balance in other income and
expense. We do not use derivative financial instruments for trading purposes.

      As of June 30, 2000, we had a notional amount of $5.2 million of foreign
exchange forward contracts outstanding, all of which were in European
currencies. The foreign exchange forward contracts generally have maturities
that do not exceed 12 months and require us to exchange foreign currencies for
United States dollars at maturity, at rates agreed to when the contract is
signed.

Item 8. Financial Statements and Supplementary Data.

      See financial statements following Item 14 of this Annual Report on Form
10-K.

Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.

      Not applicable.


                                       26
<PAGE>

PART III

Items 10. Directors and Executive Officers of the Registrant.

      Except for the information included in Item 4A of this report, the
information required by this item is incorporated by reference from our
definitive proxy statement to be filed with the Securities and Exchange
Commission no later than October 27, 2000 pursuant to Regulations 14A of the
Securities Exchange Act of 1934.

Item 11. Executive Compensation.

      The information required by this item is incorporated by reference from
our definitive proxy statement to be filed with the Securities and Exchange
Commission no later than October 27, 2000 pursuant to Regulations 14A of the
Securities Exchange Act of 1934.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

      The information required by this item is incorporated by reference from
our definitive proxy statement to be filed with the Securities and Exchange
Commission no later than October 27, 2000 pursuant to Regulations 14A of the
Securities Exchange Act of 1934.

Item 13. Certain Relationships and Related Transactions.

      The information required by this item is incorporated by reference from
our definitive proxy statement to be filed with the Securities and Exchange
Commission no later than October 27, 2000 pursuant to Regulations 14A of the
Securities Exchange Act of 1934.


                                       27
<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a)   1. Financial Statements

      Our consolidated financial statements are filed on the pages listed below,
as part of Part II, Item 8 of this report:

                                                                            Page
                                                                            ----

      Report of Independent Auditors                                         F-1
      Consolidated balance sheets -- June 30,
        2000 and 1999                                                        F-2
      Statements of consolidated earnings -- Years
        ended June 30, 2000, 1999 and 1998                                   F-3
      Statements of consolidated stockholders'
        equity -- Years ended June 30, 2000, 1999
        and 1998                                                             F-4
      Statements of consolidated cash flows --
        Years ended June 30, 2000, 1999 and 1998                             F-5
      Notes to consolidated financial statements                      F-6 - F-25

      2. Financial Statement Schedules

         Schedule II -- Valuation and Qualifying Accounts                    S-1

      All other schedules have been omitted because they are inapplicable, or
not required, or the information is included in the financial statements or
footnotes.


                                       28
<PAGE>

            3. Exhibits

Exhibit
 Number                            Document Description
 ------                            --------------------

   2.1      Agreement and Plan of Merger, dated as of October 25, 1989, by and
            between the registrant and Datascope New York, incorporated by
            reference to Exhibit 2 to the registrant's Registration Statement on
            Form 8-B, filed with the Commission on January 1990 (the "Form
            8-B").
   3.1      Restated Certificate of Incorporation as filed with the Secretary of
            State of the State of Delaware on October 30, 1989, incorporated by
            reference as Exhibit 3.1 to the Form 8-B.
   3.2      By-Laws, as currently in effect, incorporated by reference to
            Exhibit 3.2 to Annual Report on Form 10-K for fiscal year ended June
            30, 1993 (the "1993 10-K").
   4.1      Specimen of certificate of Common Stock, incorporated by reference
            to Exhibit 4.2 to the Form 8-B.
   4.2      Form of Certificate of Designations of the Registrant's Series A
            Preferred Stock, incorporated by reference to Exhibit 2.2 to the
            Company's Registration Statement on Form 8-A, filed with the
            Commission on May 31, 1991 (the "May 31, 1991 Form 8-A").
   4.3      Form of Rights Agreement, dated as of May 22, 1991, between the
            Company and Continental Stock Transfer & Trust Company, incorporated
            by reference to Exhibit 2.1 to the May 31, 1991 Form 8-A .
   4.4      Form of Amendment to Rights Agreement, dated as of May 24,
            2000, between the Company and Continental Stock Transfer &
            Trust Company, incorporated by reference to Exhibit 2 to
            the June 1, 2000 Form 8-A/A.
   10.1     1981 Incentive Stock Option Plan, incorporated by reference to
            Exhibit 10.2.1 to the Form 8-B .
   10.2     Stock Option Agreements, dated November 30, 1982, between David
            Altschiller, William Asmundson, Alan Patricof and Norman Schneider,
            respectively, and the registrant, incorporated by reference to
            Exhibit 10.5 to Annual Report on Form 10-K for the fiscal year ended
            June 30, 1989 (the "1989 10-K").
   10.3     Stock Option Agreement, dated December 7, 1988 between Joseph
            Grayzel, M.D. and the registrant, incorporated by reference to
            Exhibit 10.6 to the 1989 10-K.
   10.4     Stock Option Agreements, dated as of March 1, 1990, between David
            Altschiller, William Asmundson, Joseph Grayzel, Alan Patricof and
            Norman Schneider, respectively, and the registrant, incorporated by
            reference to Exhibit 10.9 to Annual Report on Form 10-K for the
            fiscal year ended June 30, 1990.
   10.5     Stock Option Agreement, dated as of September 28, 1990, between
            David Altschiller and the registrant, incorporated by reference to
            Exhibit 10.8 to the Annual Report on Form 10-K for the fiscal year
            ended June 30, 1991.
   10.6     Datascope Corp. 1995 Stock Option Plan, as amended, incorporated by
            reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the
            quarter ended December 31, 1997 (the "2Q 1998 10-Q").
   10.7     Datascope Corp. 1997 Executive Bonus Plan, incorporated by reference
            to Exhibit 10.2 to the 2Q 1998 10-Q.
   10.8     Datascope Corp. Annual Incentive Plan, incorporated by reference to
            Exhibit 10.3 to the 2Q 1998 10-Q.
   10.9     Datascope Corp. Compensation Plan for Non-Employee Directors,
            incorporated by reference to Exhibit 10.4 to the 2Q 1998 10-Q.
  10.10     Employment Agreement, dated as of July 1, 1996, by and between
            Datascope Corp. and Lawrence Saper, incorporated by reference to
            Exhibit 10.8 to the Annual Report on Form 10-K for the fiscal year
            ended June 30, 1997.
  10.11     Split-Dollar Agreement made as of July 25, 1994 by and among
            Datascope Corp., Lawrence Saper and Carol Saper, Daniel Brodsky and
            Helen Nash, Trustees of the Saper Family 1994 Trust UTA. dtd.
            6/28/94, incorporated by reference to Exhibit 10.15 to Annual Report
            on Form 10-K for fiscal year ended June 30, 1996 (the "1996 10-K").


                                       29
<PAGE>

  10.12     Modification Agreement made as of July 25, 1994 by and among
            Datascope Corp., Lawrence Saper and Carol Saper, Daniel Brodsky and
            Helen Nash, Trustees of the Saper Family 1994 Trust UTA. dtd.
            6/28/94, incorporated by reference to Exhibit 10.16 to the 1996
            10-K.
  10.13     Assignment made as of July 25, 1994 by Carol Saper, Daniel Brodsky
            and Helen Nash, Trustees of the Saper Family 1994 Trust UTA. dtd.
            6/28/94 of Metropolitan Life Insurance Company Insurance Policy No.
            940 750 122UM in favor of Datascope Corp., incorporated by reference
            to Exhibit 10.17 to the 1996 10-K.
  10.14     Assignment made as of July 25, 1994 by Carol Saper, Daniel Brodsky
            and Helen Nash, Trustees of the Saper Family 1994 Trust UTA. dtd.
            6/28/94 of Security Mutual Life Insurance Company of New York
            Insurance Policy No. 11047711 in favor of Datascope Corp.,
            incorporated by reference to Exhibit 10.18 to the 1996 10-K.
  10.15     Form of Datascope Corp. Stock Option Agreement for William E. Cohn,
            incorporated by reference to the Registration Statement on Form S-8,
            filed with the Commission on June 20, 2000 (the "Form S-8").
  10.16     Form of Datascope Corp. Stock Option Agreement for Thor W. Nilsen,
            incorporated by reference to the Form S-8.
  10.17     Form of Datascope Corp. Stock Option Agreement for Robert Getts,
            Ph.D., incorporated by reference to the Form S-8.
  10.18     Form of Datascope Corp. Stock Option Agreement for Robert Getts,
            Ph.D, James Kadushin and William Ohley, Ph.D., incorporated by
            reference to the Form S-8.
  10.19     Form of Datascope Corp. Stock Option Agreement for Arno Nash and
            Alan Abramson, incorporated by reference to the Form S-8.
  10.20     Form of Datascope Corp. Stock Option Agreement for Gerald Zemel,
            M.D. and Charles Brown, M.D., incorporated by reference to the Form
            S-8.
  10.21     Form of Datascope Corp. Stock Option Agreement for David
            Altschiller, incorporated by reference to the Form S-8.
  10.22*    Amendment to Employment Agreement, dated as of May 30, 2000, by and
            between Datascope Corp. and Lawrence Saper.
  21.1*     List of Subsidiaries.
  23.1*     Consent of Deloitte & Touche LLP.

* Filed with this report.

(b)   Reports on Form 8-K.

      None.

(c)   Exhibits.

      See Item 14(a)(3) above.


                                       30
<PAGE>

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.

                                        DATASCOPE CORP.


Date: August 14, 2000                   By: /s/ Lawrence Saper
                                            ------------------------------------
                                              Name: Lawrence Saper
                                              Title: Chairman of the Board
                                                     and Chief Executive Officer

      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.

<TABLE>
<CAPTION>
        Signatures                             Title                                 Date
        ----------                             -----                                 ----
<S>                           <C>                                              <C>
/s/ Lawrence Saper            Chairman of the Board and Chief Executive        August 14, 2000
-------------------------     Officer (Principal Executive Officer)
Lawrence Saper


/s/ Leonard S. Goodman        Vice President, Chief Financial Officer          August 14, 2000
-------------------------     and Treasurer (Principal Financial and
Leonard S. Goodman            Accounting Officer)


/s/ Alan Abramson             Director                                         August 14, 2000
-------------------------
Alan Abramson


/s/ David Altschiller         Director                                         August 14, 2000
-------------------------
David Altschiller


/s/ William Asmundson         Director                                         August 14, 2000
-------------------------
William Asmundson


/s/ Joseph Grayzel, M.D.      Director                                         August 14, 2000
-------------------------
Joseph Grayzel, M.D.


/s/ George Heller             Director                                         August 14, 2000
-------------------------
George Heller


/s/ Arno Nash                 Director                                         August 14, 2000
-------------------------
Arno Nash
</TABLE>

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Datascope Corp.
Montvale, New Jersey

We have audited the accompanying consolidated balance sheets of Datascope Corp.
and its subsidiaries (the "Company") as of June 30, 2000 and 1999, and the
related consolidated statements of earnings, stockholders' equity and cash flows
for each of the three years in the period ended June 30, 2000. Our audits also
included the financial statement schedule listed in the index at Item 14 (a)
(2). These financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the consolidated financial statements and the financial statement
schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit 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, such consolidated financial statements present fairly, in all
material respects, the financial position of Datascope Corp. and its
subsidiaries as of June 30, 2000 and 1999, and the results of their operations
and their cash flows for each of the three years in the period ended June 30,
2000 in conformity with accounting principles generally accepted in the United
States of America. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.


/s/ Deloitte & Touche LLP
-------------------------
New York, New York
July 24, 2000


                                      F-1
<PAGE>

                        Datascope Corp. and Subsidiaries
                           Consolidated Balance Sheets
                                 (In thousands)

                                                               June 30,
                                                      -------------------------
                                                        2000            1999
                                                      ---------       ---------
Assets
Current Assets:
  Cash and cash equivalents                           $   2,102       $   4,572
  Short-term investments                                 53,096          45,539
  Accounts receivable less allowance for
    doubtful accounts of $1,644 and $1,192               69,081          64,289
  Inventories                                            38,986          42,747
  Prepaid expenses and other current assets              10,014           9,439
                                                      ---------       ---------
      Total Current Assets                              173,279         166,586

Property, Plant and Equipment, net                       86,243          63,321
Non-Current Marketable Securities                        12,235          20,496
Other Assets                                             23,034          19,091
                                                      ---------       ---------
                                                      $ 294,791       $ 269,494
                                                      =========       =========

Liabilities and Stockholders' Equity
Current Liabilities:
  Accounts payable                                    $  14,250       $  10,565
  Accrued expenses                                       11,165          10,721
  Accrued compensation                                   19,662          13,804
  Deferred revenue                                        4,773           4,380
  Taxes on income                                         2,630           1,695
                                                      ---------       ---------
      Total Current Liabilities                          52,480          41,165

Other Liabilities                                        14,524          13,874

Stockholders' Equity
  Preferred stock, par value $1.00 per share:
    Authorized 5 million shares; Issued, none                --              --
  Common stock, par value $.01 per share:
    Authorized, 45 million shares; Issued and
    outstanding, 17,028 and 16,663 shares                   170             167
  Additional paid-in capital                             60,646          52,570
  Treasury stock at cost, 2,149 and 1,416 shares        (55,247)        (31,079)
  Retained earnings                                     230,187         198,921
  Accumulated other comprehensive loss                   (7,969)         (6,124)
                                                      ---------       ---------
                                                        227,787         214,455
                                                      ---------       ---------
                                                      $ 294,791       $ 269,494
                                                      =========       =========

                 See notes to consolidated financial statements


                                      F-2
<PAGE>

                        Datascope Corp. and Subsidiaries
                       Statements of Consolidated Earnings
                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                              Year Ended June 30,
                                                    -----------------------------------------
                                                      2000            1999            1998
                                                    ---------       ---------       ---------
<S>                                                 <C>             <C>             <C>
Net Sales                                           $ 298,800       $ 269,100       $ 242,400
                                                    ---------       ---------       ---------

Costs and Expenses:
  Cost of sales                                       116,557         103,776          93,596
  Research and development expenses                    24,934          28,994          30,109
  Selling, general and administrative expenses        116,792         105,847          93,740
  Gain on sale of technology                           (3,825)             --              --
  Restructuring charges                                    --           3,429              --
                                                    ---------       ---------       ---------
                                                      254,458         242,046         217,445
                                                    ---------       ---------       ---------
Operating Earnings                                     44,342          27,054          24,955

Other (Income) Expense:
  Interest income                                      (3,659)         (3,342)         (4,972)
  Interest expense                                         21              29              25
  Other, net                                              132             583             187
                                                    ---------       ---------       ---------
                                                       (3,506)         (2,730)         (4,760)
                                                    ---------       ---------       ---------
Earnings Before Taxes on Income                        47,848          29,784          29,715
Taxes on Income                                        14,773           8,372           8,074
                                                    ---------       ---------       ---------
Net Earnings                                        $  33,075       $  21,412       $  21,641
                                                    =========       =========       =========

Earnings Per Share, Basic                           $    2.18       $    1.40       $    1.37
                                                    =========       =========       =========

Weighted Average Number of
  Common Shares Outstanding, Basic                     15,169          15,247          15,840
                                                    =========       =========       =========

Earnings Per Share, Diluted                         $    2.06       $    1.36       $    1.32
                                                    =========       =========       =========

Weighted Average Number of
  Common Shares Outstanding, Diluted                   16,080          15,721          16,403
                                                    =========       =========       =========
</TABLE>

                 See notes to consolidated financial statements


                                      F-3
<PAGE>

                        Datascope Corp. and Subsidiaries
                 Statements of Consolidated Stockholders' Equity
                        (Shares and dollars in thousands)

<TABLE>
<CAPTION>
                                        Common Stock                        Treasury Stock                    Accumulated
                                    ---------------------   Additional  -----------------------                Other Com-
                                                   Par       Paid-in                             Retained     prehensive
                                     Shares       Value      Capital      Shares      Cost       Earnings        Loss       Total
                                    ---------  ----------  ------------  ---------  ----------  ----------- -------------- ---------
<S>                                 <C>         <C>         <C>         <C>          <C>          <C>         <C>         <C>
Balance, June 30, 1997                 16,245   $     162   $  44,266        (223)   ($  4,151)   $ 155,868   ($  3,902)  $ 192,243

Net earnings                                                                                         21,641                  21,641
Currency translation                                                                                             (1,208)     (1,208)
                                                                                                                          ---------
Total comprehensive income                                                                                                   20,433
                                                                                                                          ---------

Stock option transactions                 149           2       2,383                     (220)                               2,165
Tax benefit relating to exercise
  of stock options                                                612                                                           612
Cancellation of treasury stock                                   (220)                     220                                   --
Treasury shares acquired
  under repurchase programs                                                  (570)     (13,971)                             (13,971)
                                    ---------   ---------   ---------   ---------    ---------    ---------   ---------   ---------
Balance, June 30, 1998                 16,394         164      47,041        (793)     (18,122)     177,509      (5,110)    201,482

Net earnings                                                                                         21,412                  21,412
Currency translation                                                                                             (1,014)     (1,014)
                                                                                                                          ---------
Total comprehensive income                                                                                                   20,398
                                                                                                                          ---------

Stock option transactions                 144           2       2,831                     (649)                               2,184
Issuance of common stock for
  acquisition of Polyprobe, Inc.
  and Alpha Probe, Inc.                   125           1       2,699                                                         2,700
Tax benefit relating to exercise
  of stock options                                                648                                                           648
Cancellation of treasury stock                                   (649)                     649                                   --
Treasury shares acquired
  under repurchase programs                                                  (623)     (12,957)                             (12,957)
                                    ---------   ---------   ---------   ---------    ---------    ---------   ---------   ---------
Balance, June 30, 1999                 16,663         167      52,570      (1,416)     (31,079)     198,921      (6,124)    214,455

Net earnings                                                                                         33,075                  33,075
Currency translation                                                                                             (1,845)     (1,845)
                                                                                                                          ---------
Total comprehensive income                                                                                                   31,230
                                                                                                                          ---------

Stock option transactions                 365           4       7,740                   (2,450)                               5,294
Tax benefit relating to exercise
  of stock options                                              2,785                                                         2,785
Cancellation of treasury stock                         (1)     (2,449)                   2,450                                   --
Treasury shares acquired
  under repurchase programs                                                  (733)     (24,168)                             (24,168)
Cash dividends on common stock                                                                       (1,809)                 (1,809)
                                    ---------   ---------   ---------   ---------    ---------    ---------   ---------   ---------
Balance, June 30, 2000                 17,028   $     170   $  60,646      (2,149)   ($ 55,247)   $ 230,187   ($  7,969)  $ 227,787
                                    =========   =========   =========   =========    =========    =========   =========   =========
</TABLE>

                 See notes to consolidated financial statements


                                      F-4
<PAGE>


                        Datascope Corp. and Subsidiaries
                      Statements of Consolidated Cash Flows
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                Year Ended June 30,
                                                                       --------------------------------------
                                                                         2000           1999           1998
                                                                       --------       --------       --------
<S>                                                                    <C>            <C>            <C>
Operating Activities:
  Net Earnings                                                         $ 33,075       $ 21,412       $ 21,641
  Adjustments to reconcile net earnings to net
    cash provided by operating activities:
      Depreciation and amortization                                      12,931         12,095         10,358
      Provision for supplemental pension                                    389            165            708
      Provision for losses on accounts receivable                           567            357            277
      Deferred income tax (benefit)                                        (774)          (890)           847
      Tax benefit relating to stock options exercised                     2,785            648            612
  Changes in assets and liabilities net of effects of
    equity investment in AMG and acquisition of
    Polyprobe, Inc. and Alpha Probe, Inc.
      Accounts receivable                                                (6,228)        (9,920)        (3,458)
      Inventories                                                        (4,073)       (13,114)       (14,236)
      Other assets                                                       (2,407)        (2,520)        (3,228)
      Accounts payable                                                    3,790         (3,742)         7,758
      Income taxes payable                                                  934          1,695           (807)
      Accrued and other liabilities                                       7,465          5,697         (1,555)
                                                                       --------       --------       --------
  Net cash provided by operating activities                              48,454         11,883         18,917
                                                                       --------       --------       --------

Investing Activities:
  Purchases of property, plant and equipment                            (28,355)       (14,281)        (8,157)
  Purchases of marketable securities                                    (94,641)       (50,959)       (88,576)
  Maturities of marketable securities                                    95,343         65,611         91,132
  Equity investment in AMG                                               (2,525)            --             --
  Acquisition of Polyprobe, Inc. and Alpha Probe, Inc.                       --           (450)            --
                                                                       --------       --------       --------
  Net cash used in investing activities                                 (30,178)           (79)        (5,601)
                                                                       --------       --------       --------

Financing Activities:
  Exercise of stock options                                               5,294          2,184          2,165
  Treasury shares acquired under repurchase programs                    (24,168)       (12,958)       (13,971)
  Cash dividends paid                                                    (1,809)            --             --
                                                                       --------       --------       --------
  Net cash used in financing activities                                 (20,683)       (10,774)       (11,806)
                                                                       --------       --------       --------

  Effect of exchange rates on cash                                          (63)           178           (743)
                                                                       --------       --------       --------

Increase in cash and cash equivalents                                    (2,470)         1,208            767
Cash and cash equivalents, beginning of year                              4,572          3,364          2,597
                                                                       --------       --------       --------

Cash and cash equivalents, end of year                                 $  2,102       $  4,572       $  3,364
                                                                       ========       ========       ========

Supplemental Cash Flow Information
  Cash paid during the year for:
    Interest                                                           $     21       $     29       $     25
                                                                       --------       --------       --------
    Income taxes                                                       $ 11,928       $  7,007       $  7,302
                                                                       --------       --------       --------

  Non-cash transactions:
    Net transfers of inventory to fixed assets
      for use as demonstration equipment                               $  6,962       $  8,315       $  8,189
                                                                       --------       --------       --------
    Issuance of common stock for acquisition
      of Polyprobe, Inc. and Alpha Probe, Inc.                         $     --       $  2,700       $     --
                                                                       --------       --------       --------
</TABLE>

                 See notes to consolidated financial statements


                                      F-5
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

1. Summary of Significant Accounting Policies

Principles of Consolidation

      The consolidated financial statements include the accounts of Datascope
Corp. and its subsidiaries (the "Company" - which may be referred to as our, us
or we). All material intercompany balances and transactions have been
eliminated.

Cash and Cash Equivalents

      Cash and cash equivalents consist primarily of highly liquid investments
which have original maturities less than 90 days.

Inventories

      Inventories are stated at the lower of cost, determined on a first-in,
first-out basis, or market.

Property, Plant and Equipment

      Property, plant and equipment are stated at cost less accumulated
depreciation and amortization. Additions and improvements are capitalized, while
maintenance and repairs are expensed as incurred. Asset and accumulated
depreciation accounts are relieved for dispositions, with resulting gains or
losses reflected in earnings. Depreciation of plant and equipment is provided
using the straight-line method over the estimated useful lives of the various
assets, or for leasehold improvements, over the term of the lease, if shorter.

Foreign Currency Translation

      Assets and liabilities of foreign subsidiaries have been translated at
year-end exchange rates, while revenues and expenses have been translated at
average exchange rates in effect during the year. Resulting cumulative
translation adjustments have been recorded as a separate component of
stockholders' equity.

Taxes on Income

      Deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates in effect for the years in which the
differences are expected to reverse.

Revenue Recognition

      We recognize revenue and all related costs, including warranty, when
product is shipped and title passes to the customer. For certain products where
we maintain consigned inventory at customer locations, revenue is recognized at
the time we are notified that the product has been used by the customer. Revenue
for service contracts is recognized ratably over the term of the contract.

      In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
We are required to adopt SAB 101 in the fourth quarter of fiscal 2001. We
anticipate that the adoption of SAB 101 will not have a significant impact on
our financial statements.


                                      F-6
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

1. Summary of Significant Accounting Policies - (Continued)

Earnings Per Share

      In accordance with Statement of Financial Accounting Standards No. 128,
"Earnings per Share," we report basic earnings per share, which is based upon
weighted average common shares outstanding, and diluted earnings per share which
includes the dilutive effect of stock options outstanding.

Impairment of Long Lived Assets

      The recoverability of the excess of cost over fair value of net assets
acquired is evaluated by an analysis of operating results and consideration of
other significant events or changes in the business environment. If we believe
an impairment exists, the carrying amount of these assets is reduced to fair
value as defined in Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of."

Other Assets

      a.    Goodwill - Goodwill represents the excess of cost over the fair
            value of net assets acquired and is amortized using the
            straight-line method over periods not exceeding 20 years.
            Unamortized goodwill was $6.74 million at June 30, 2000 and $5.21
            million at June 30, 1999.

            During the third quarter fiscal 2000 we purchased a 30% equity
            interest in AMG GmbH, a private German distributor of proprietary
            stent products, and in an allied development and manufacturing
            company. The cost of the investment was $2.5 million, including $0.3
            million of related expenses, and was paid in cash. Goodwill of $2.2
            million related to the equity investment is being amortized over 15
            years.

            During fiscal 1999 we acquired Polyprobe, Inc. and Alpha Probe, Inc.
            for $3.2 million. The acquisitions were accounted for using the
            purchase method of accounting and were paid for by issuing 125,141
            shares of our common stock plus $450 thousand in cash. Goodwill of
            $3.1 million related to these purchases is being amortized over 10
            years.

      b.    Capitalized Software Development - In accordance with Statement of
            Financial Accounting Standards No. 86, "Accounting for the Costs of
            Computer Software to be Sold, Leased, or Otherwise Marketed," costs
            incurred in the research and development of new software products
            and enhancements to existing software products are expensed as
            incurred until technological feasibility has been established. After
            technological feasibility is established, any additional software
            development costs are capitalized and included in Other Assets. The
            amount of capitalized software development costs was $5.9 million at
            June 30, 2000 and $3.7 million at June 30, 1999. Software
            development costs are amortized using the straight-line method over
            the remaining estimated economic life of the product, not to exceed
            5 years. Amortization of software development costs was $428
            thousand in fiscal 2000 and $51 thousand in fiscal 1999.

            The carrying value of capitalized software costs is regularly
            reviewed by the Company, and a loss would be recognized if the net
            realizable value falls below the unamortized cost.

Use of Estimates

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.


                                      F-7
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

1. Summary of Significant Accounting Policies - (Continued)

Reclassifications

      The presentation of certain prior year information has been reclassified
to conform with the current year presentation.

2. Financial Instruments

      The fair value of accounts receivable and payable are assumed to equal
their carrying value because of their short maturity.

      Fair values of short-term investments are based upon quoted market prices,
including accrued interest, and approximate their carrying values due to their
short maturities. Fair values of non-current marketable securities are also
based upon quoted market prices and include accrued interest.

      We determined that our investment portfolio will be held-to-maturity and
is therefore carried at amortized cost.


                                      F-8
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

2. Financial Instruments - (Continued)

      As of June 30, 2000, marketable securities were classified as follows:

<TABLE>
<CAPTION>
                                                        Gross Unrealized
                                         Amortized      ----------------
      Short Term                            Cost        Gains     Losses    Fair Value
                                          -------       -----     -------   ----------
<S>                                       <C>           <C>       <C>        <C>
      U.S. Treasury Securities ......     $49,653       $  12     $   112    $49,553
      Tax-Exempt Securities .........       3,443          --           1      3,442
                                          -------       -----     -------    -------
        Short-term total ............     $53,096       $  12     $   113    $52,995
                                          =======       =====     =======    =======

      Long Term
      U.S. Treasury Securities ......     $ 8,098       $  --     $    28    $ 8,070
      Tax-Exempt Securities .........       4,137           3           7      4,133
                                          -------       -----     -------    -------
        Long-term total .............     $12,235       $   3     $    35    $12,203
                                          =======       =====     =======    =======
        Totals ......................     $65,331       $  15     $   148    $65,198
                                          =======       =====     =======    =======
</TABLE>

      As of June 30, 1999, marketable securities were classified as follows:

<TABLE>
<CAPTION>
                                                        Gross Unrealized
                                         Amortized      ----------------
      Short Term                            Cost        Gains     Losses    Fair Value
                                          -------       -----     -------   ----------
<S>                                       <C>           <C>       <C>        <C>
      U.S. Treasury Securities ......     $34,870       $   7     $    21    $34,856
      Tax-Exempt Securities .........      10,669          51          --     10,720
                                          -------       -----     -------    -------
        Short-term total ............     $45,539       $  58     $    21    $45,576
                                          =======       =====     =======    =======

      Long Term
      U.S. Treasury Securities ......     $15,009       $ 232     $    --    $15,241
      Tax-Exempt Securities .........       5,487          38           2      5,523
                                          -------       -----     -------    -------
        Long-term total .............     $20,496       $ 270     $     2    $20,764
                                          =======       =====     =======    =======
        Totals ......................     $66,035       $ 328     $    23    $66,340
                                          =======       =====     =======    =======
</TABLE>

      We invest our excess cash primarily in U.S. Treasury and tax-exempt
securities. Since we hold all short- and long-term securities until maturity,
such investments are subject to little market risk. We have not incurred losses
related to these investments.

Derivative Financial Instruments

      We have limited involvement with derivative financial instruments and do
not use them for trading purposes. We utilize foreign currency forward exchange
contracts to mitigate the foreign exchange impact of transaction gains or losses
relating to intercompany receivables.

      As of June 30, 2000, we had a notional amount of $5.2 million of foreign
exchange forward contracts outstanding, all of which were in European
currencies. The foreign exchange forward contracts generally have


                                      F-9
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

2. Financial Instruments - (Continued)

maturities that do not exceed 12 months and require that we exchange foreign
currencies for U.S. dollars at maturity, at rates agreed to at inception of the
contracts. The foreign currency forward exchange contracts are with large
international financial institutions.

      None of our foreign currency forward exchange contracts are designated as
economic hedges of our net investment in foreign subsidiaries.

      Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS No. 133), establishes
accounting and reporting standards for derivative instruments and for hedging
activities. It requires companies to recognize all derivatives as either assets
or liabilities in the statement of financial position and measure those
instruments at fair value. We have adopted SFAS No. 133 in the first quarter of
fiscal 2001, in accordance with the deferral provision in SFAS No. 137. The
adoption of SFAS No. 133 did not have a material effect on our financial
statements.

Concentration of Credit Risk

      Concentrations of credit risk with respect to trade receivables are
limited due to the large number of customers comprising our customer base.
Ongoing credit evaluations of customers' financial condition are performed. We
maintain reserves for potential credit losses and these losses have not exceeded
our expectations.

3.  Inventories

                                                         June 30,
                                                --------------------------
                                                 2000               1999
                                                -------            -------
      Materials ....................            $17,462            $17,787
      Work in process ..............              7,888              9,778
      Finished goods ...............             13,636             15,182
                                                -------            -------
                                                $38,986            $42,747
                                                =======            =======

4. Property, Plant and Equipment

                                                                 June 30,
                                                          ----------------------
                                                            2000          1999
                                                          --------      --------
      Land .........................................      $ 11,000      $  8,506
      Buildings ....................................        29,378        21,306
      Machinery, furniture and equipment ...........        83,602        79,146
      Leasehold improvements .......................         3,910         3,881
      Construction in progress .....................        16,587         3,835
                                                          --------      --------
                                                           144,477       116,674
      Less accumulated depreciation and
        amortization  ..............................        58,234        53,353
                                                          --------      --------
                                                          $ 86,243      $ 63,321
                                                          ========      ========

      Depreciation expense was $11.9 million in 2000, $11.6 million in 1999 and
$10.1 million in 1998. We estimate the useful life of machinery and equipment at
5 years, furniture at 8 years and buildings at 40 years.

      Costs incurred for the new Patient Monitoring and Collagen Products
facilities in Mahwah, New Jersey were $23.1 million in 2000 and $7.2 million in
1999. The Collagen Products facility was placed in service in the first quarter
of fiscal 2001. Costs of $9.4 million for this facility are included in land and
buildings.


                                      F-10
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

5. Taxes on Income

      The provision for taxes on income consisted of the following:

<TABLE>
<CAPTION>
                                                              Year Ended June 30,
                                                     -------------------------------------
                                                       2000           1999          1998
                                                     --------       --------      --------
<S>                                                  <C>            <C>           <C>
      Taxes currently payable:
        Federal ...............................      $ 12,479       $  7,404      $  5,550
        State .................................         1,177          1,139           803
        Foreign ...............................         1,891            719           874
                                                     --------       --------      --------
          Total current .......................        15,547          9,262         7,227
      Deferred income taxes:
        Federal ...............................          (580)          (801)          925
        State .................................          (194)           (89)         (104)
        Foreign ...............................             -              -            26
                                                     --------       --------      --------
          Total deferred ......................          (774)          (890)          847
                                                     --------       --------      --------
            Total provision for taxes on income      $ 14,773       $  8,372      $  8,074
                                                     ========       ========      ========
</TABLE>

      Amounts are reflected in the preceding table based on the location of the
taxing authorities. As of June 30, 2000 we have not made a U.S. tax provision
for the unremitted earnings of our international subsidiaries. These earnings,
which approximated $40.53 million as of June 30, 2000 are expected, for the most
part, to be permanently reinvested outside of the United States.

      We operate a manufacturing subsidiary in an industrial development zone in
Europe. Profits from those manufacturing activities were exempt from corporation
taxes until January 31, 2000. Alternative tax planning strategies have been
implemented to reduce the impact from the expiration of this tax exemption.

      Reconciliations of the U.S. statutory income tax rate to our effective tax
rate follow:

<TABLE>
<CAPTION>
                                                                           Year Ended June 30,
                                                    -------------------------------------------------------------------
                                                             2000                  1999                  1998
                                                    ---------------------  ----------------------  --------------------
                                                                Effective               Effective             Effective
                                                     Amount        Rate     Amount         Rate     Amount       Rate
                                                    --------    ---------  --------     ---------  --------   ---------
<S>                                                 <C>            <C>     <C>             <C>     <C>           <C>
Tax computed at federal statutory rate .......      $ 16,747       35.0%   $ 10,425        35.0%   $ 10,400      35.0%
(Decrease) increase resulting from:
Benefit attributable to foreign sales corp ...        (1,075)      (2.2)       (956)       (3.2)       (821)     (2.8)
State taxes on income, net of federal
  income tax benefit .........................           639        1.3         683         2.3         454       1.5
Research and development credit, net .........          (278)      (0.6)       (325)       (1.1)       (518)     (1.7)
Income exempt from foreign corporate taxes ...        (1,119)      (2.3)     (1,369)       (4.6)     (1,432)     (4.8)
Rate differential on foreign income ..........           124        0.3         (31)       (0.2)        206       0.7
Interest income exempt from federal income tax          (233)      (0.5)       (282)       (0.9)       (239)     (0.8)
Other ........................................           (32)      (0.1)        227         0.8          24       0.1
                                                    --------       ----    --------        ----    --------      ----
  Total provision for taxes on income ........      $ 14,773       30.9%   $  8,372        28.1%   $  8,074      27.2%
                                                    ========       ====    ========        ====    ========      ====
</TABLE>


                                      F-11
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

5. Taxes on Income - (Continued)

      Deferred taxes arise because of different treatment between financial
statement accounting and tax accounting, known as "temporary differences." We
record the tax effect of these temporary differences as "deferred tax assets"
(generally items that can be used as a tax deduction or credit in future
periods) and "deferred tax liabilities" (generally items that we receive a tax
deduction for, but have not yet been recorded in the statement of consolidated
earnings).

      The tax effects of the major items recorded as deferred tax assets and
liabilities are:

                                                           June 30,
                                                 -------------------------------
                                                     2000             1999
                                                 -------------     -------------
                                                 Deferred Tax      Deferred Tax
                                                    Assets            Assets
                                                 (Liabilities)     (Liabilities)
                                                 -------------     -------------
Inventories ................................       $ 3,284           $ 2,433
Warranty ...................................         1,250             1,229
Sales returns & allowances .................           113               419
Accrued expenses ...........................           597               272
Foreign & state tax credits ................           911               833
Unrealized foreign exchange losses .........           263               251
Deferred state income taxes ................          (174)             (352)
                                                   -------           -------
  Current ..................................         6,244             5,085
                                                   -------           -------
Supplemental pension .......................         4,555             4,403
Tax loss carryforwards .....................         1,459             2,044
Accelerated depreciation ...................        (4,134)           (3,217)
Accrued pension expense ....................           (27)             (189)
Asset writedowns ...........................           611               611
Other, net .................................           598               380
Less:  Valuation allowance .................        (1,459)           (2,044)
                                                   -------           -------
  Non-current ..............................         1,603             1,988
                                                   -------           -------
    Total ..................................       $ 7,847           $ 7,073
                                                   =======           =======

      The net current deferred tax assets have been included in prepaid expenses
and other current assets and the net non-current deferred tax assets have been
included in other assets on the accompanying consolidated balance sheets.

      A valuation allowance is recorded because some items recorded as deferred
tax assets may not be realizable. The valuation allowance reduces the deferred
tax assets to our best estimate of net deferred assets which more likely than
not will be realized.

      The valuation allowance decreased by $585 thousand during fiscal 2000 due
to the net decrease of foreign and state tax loss carryforwards. The valuation
allowance of $1.46 million at June 30, 2000 was comprised of tax benefits of
$347 thousand of foreign tax loss carryforwards and $1.11 million of state tax
loss carryforwards. Benefits from foreign tax loss carryforwards of $125
thousand expire during the period 2001 through 2005 and $222 thousand may be
carried forward indefinitely. The benefits of state tax loss carryforwards
expire during the period 2002 through 2015.


                                      F-12
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

6. Other Liabilities

      Other Liabilities at June 30, 2000 and 1999 were comprised of the
following:

                                                                 June 30,
                                                          ----------------------
                                                           2000           1999
                                                          -------        -------
      Supplemental pension payable ...............        $11,289        $10,918
      Non-current deferred income ................          1,700          1,580
      Other non-current liabilities ..............          1,535          1,376
                                                          -------        -------
                                                          $14,524        $13,874
                                                          =======        =======

7. Stock Options, Shareholder Rights and Stock Repurchase Plans

Stock Option Plans

      We have two employee stock option plans covering 5,825,000 shares of
common stock as well as option agreements with certain consultants and members
of the board of directors. The plans provide that options may be granted at a
price of 100% of fair market value on date of grant, may be exercised in full or
in installments, at the discretion of the board of directors, and must be
exercised within ten years from date of grant.

      A summary of activity under the stock option plans is as follows:

<TABLE>
<CAPTION>
                                                            Year Ended June 30,
                             ---------------------------------------------------------------------------------
                                      2000                         1999                         1998
                             -----------------------      -----------------------      -----------------------
                                            Weighted                     Weighted                     Weighted
                                             Average                      Average                      Average
                                            Exercise                     Exercise                     Exercise
                               Shares         Price         Shares        Price          Shares        Price
                             ---------      --------      ---------      --------      ---------      --------
<S>                          <C>             <C>          <C>             <C>          <C>             <C>
Outstanding at
 July 1 ..............       2,313,756       $20.33       2,156,670       $18.72       1,934,869       $16.93
  Granted ............         444,100        36.85         521,775        26.03         476,700        25.00
  Exercised ..........        (427,334)       17.68        (168,478)       16.44        (156,737)       15.09
  Canceled ...........         (85,910)       25.17        (196,211)       21.19         (98,162)       19.69
                             ---------                    ---------                    ---------
Outstanding at
 June 30 .............       2,244,612        23.92       2,313,756        20.33       2,156,670        18.72
                             =========                    =========                    =========
Exercisable at
 June 30 .............       1,278,007       $19.81       1,341,617       $17.76       1,243,616       $16.41
                             ---------                    ---------                    ---------
</TABLE>

     At June 30, 2000 there were 3,159,970 shares of common stock reserved for
stock options.


                                      F-13
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

7. Stock Options, Shareholder Rights and Stock Repurchase Plans - (Continued)

      We adopted Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," (SFAS No. 123) in fiscal 1997. We
continue to account for our employee stock-based awards using the intrinsic
value method in accordance with APB Opinion No. 25 "Accounting for Stock Issued
to Employees." Under APB Opinion No. 25, because the exercise price of our
employee stock options equals the market price of the underlying stock on the
date of grant, no compensation expense is recognized.

      In accordance with SFAS No. 123 the fair value of option grants is
estimated on the date of grant using an option-pricing model. Had the fair value
method of accounting been applied to our stock option plans, pro forma net
income and earnings per share would have been reported as the following pro
forma amounts:

<TABLE>
<CAPTION>
                                                           Year Ended June 30,
                                                    ---------------------------------
                                                     2000         1999         1998
                                                    -------      -------      -------
<S>                                                 <C>          <C>          <C>
      Net earnings - as reported .............      $33,075      $21,412      $21,641
                                                    -------      -------      -------
      Net earnings - pro forma ...............      $30,258      $19,168      $20,514
                                                    -------      -------      -------
      Basic earnings per share -
       as reported ...........................      $  2.18      $  1.40      $  1.37
                                                    -------      -------      -------
      Basic earnings per share - pro forma ...      $  1.99      $  1.26      $  1.30
                                                    -------      -------      -------
      Diluted earnings per share - as reported      $  2.06      $  1.36      $  1.32
                                                    -------      -------      -------
      Diluted earnings per share - pro forma .      $  1.88      $  1.22      $  1.25
                                                    -------      -------      -------
</TABLE>

      This pro forma impact only takes into account options granted since July
1, 1995 and is likely to increase in future years as additional options are
granted and amortized ratably over the respective vesting period.

      The fair values of option grants were determined using the Black-Scholes
option-pricing model with the following assumptions:

                                               Year Ended June 30,
                                        ----------------------------------
                                          2000         1999         1998
                                        ---------     -------      -------
      Dividend yield .............           0.40%       None         None

      Volatility .................             35%         35%          33%

      Risk-free interest rate ....           6.17%       5.78%        5.52%

      Expected life ..............      4.5 Years     4 Years      4 Years

      The weighted average fair value of options granted was $14.29 in 2000,
$9.34 in 1999 and $8.43 in 1998.


                                      F-14
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

7. Stock Options, Shareholder Rights and Stock Repurchase Plans - (Continued)

      The following table summarizes information concerning outstanding and
exercisable stock options at June 30, 2000.

<TABLE>
<CAPTION>
                                  Stock Options Outstanding               Stock Options Exercisable
                       ----------------------------------------------     -------------------------
                                         Weighted            Weighted                    Weighted
                                          Average            Average                     Average
Range of Exercise                        Remaining           Exercise                    Exercise
     Prices             Options       Contractual Life        Price         Options       Price
-----------------      ---------      ----------------       --------      ---------     --------
<S>                    <C>                  <C>               <C>          <C>            <C>
$ 7.38 --  $14.00        440,550            3.07              $13.95         440,550      $13.95
$14.25 --  $24.69        901,412            6.17              $20.81         581,454      $20.39
$25.06 --  $39.19        902,650            9.12              $31.88         256,003      $28.56
                       ---------                                           ---------
                       2,244,612            6.75              $23.92       1,278,007      $19.81
                       =========                                           =========
</TABLE>

Shareholder Rights Plan

      On May 22, 1991, we adopted a Shareholder Rights Plan. The purpose of the
plan is to prevent us from being the target of an unsolicited tender offer or
unfriendly takeover. On May 16, 2000, we amended the Shareholder Rights Plan to
provide for (i) an extension of the final expiration date of the Shareholder
Rights Plan from June 2, 2001 to June 2, 2011 and (ii) a change in the purchase
price of the rights from $300.00 to $200.00 per one one-thousandths of a share
of Series A Preferred Stock, subject to adjustment.

      Under the plan, our common stockholders were issued one preferred stock
purchase right for each share of common stock owned by them. Until they are
redeemed by us or expire, each preferred stock purchase right entitles the
holder to purchase .001 share of our Series A Preferred Stock, par value $1.00
per share, at an exercise price of $200. We may redeem the preferred stock
purchase rights for $.01 per right at any time until after the date on which our
right to redeem them has expired. In addition, the preferred stock purchase
rights do not become exercisable until our right to redeem them has expired. Our
right to redeem the preferred stock purchase rights expires on the 10th business
day after the date of a public announcement that a person, or an acquiring
person, has acquired ownership of our stock representing 15 percent or more of
our shareholders' general voting power. Before an acquiring person acquires 50%
or more of our outstanding common stock, the plan provides that we may offer to
exchange the rights, in whole or in part, on the basis of an exchange ratio of
one share of common stock for each right. However, any rights owned by the
acquiring person and its affiliates and associates will be null and void and
cannot be exchanged for common stock.

      The plan also provides that, after the date of a public announcement that
a person has acquired ownership of our stock representing 15 percent or more of
our shareholders' general voting power, generally each holder of a preferred
stock purchase right will have the right to purchase, at the exercise price, a
number of shares of our preferred stock having a market value equal to twice the
exercise price. The plan further provides that if certain other business
combinations occur, generally each holder of a preferred stock purchase right
will have the right to purchase, at the exercise price, a number of shares of
the acquiring person's common stock having a market value of twice the exercise
price.

Stock Repurchase Plans

      On May 3, 1996, we announced a stock repurchase program for up to $20
million of our common stock to be repurchased when market conditions and other
relevant factors were favorable. We acquired 876,702 shares and completed the
program in fiscal 1999.


                                      F-15
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

7. Stock Options, Shareholder Rights and Stock Repurchase Plans - (Continued)

      We announced a second $20 million stock repurchase program on August 5,
1998. We acquired 832,286 shares and completed this program in fiscal 2000.

      We announced a third stock repurchase program for $30 million on September
14, 1999. We acquired 440,266 shares through June 30, 2000 at a cost of $15.25
million.

Stock Compensation Plan for Non-Employee Directors

      We have a compensation plan for non-employee directors, which became
effective in calendar year 1998. A summary of this plan is shown below:

      o     Any member of the board of directors who is not an employee or a
            consultant to us or any of our divisions or subsidiaries will
            receive an annual retainer (currently $24 thousand) payable in
            shares of our common stock.

      o     Payment of the annual retainer is made in January for the prior
            calendar year.

      o     A non-employee director may elect to defer receipt of the annual
            retainer in which case the annual retainer will be paid entirely in
            shares of our common stock that will be deposited into a director's
            account established under the plan.

      o     In the case of a non-employee director who does not elect to defer
            the retainer (or who has not filed a form of election), 39.6% of the
            retainer will be paid in cash (to approximate current federal income
            tax liability) and the balance in our common stock.

      o     Distribution of amounts in a director's account will be made when an
            event of distribution occurs, in accordance with the method of
            distribution stated in the form of election.

8. Segment Information

      Our business is the development, manufacture and sale of medical devices.
We have two reportable segments, Cardiac Assist/Monitoring Products and Vascular
Grafts/Collagen Products.

      The Cardiac Assist/Monitoring Products segment includes electronic
intra-aortic balloon pumps and catheters that are used in the treatment of
vascular disease and electronic physiological monitors that provide for patient
safety and management of patient care.

      The Vascular Graft/Collagen Products segment includes a proprietary line
of knitted and woven polyester vascular grafts and patches for reconstructive
vascular and cardiovascular surgery and extravascular hemostasis devices, which
are used to seal arterial puncture wounds to stop bleeding after cardiovascular
catheterization procedures.

      We have aggregated our product lines into two segments based on similar
manufacturing processes, distribution channels, regulatory environments and
customers. Management evaluates the revenue and profitability performance of
each of our product lines to make operating and strategic decisions. We have no
intersegment revenue.


                                      F-16
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

8. Segment Information (Continued)

<TABLE>
<CAPTION>
                                           Cardiac     Vascular
                                           Assist/      Grafts/    Corporate
                                          Monitoring   Collagen       and
                                           Products    Products      Other      Consolidated
                                          ----------   --------    ---------    ------------
<S>                                        <C>          <C>        <C>            <C>
      Year ended June 30, 2000
      Net sales to external customers      $221,120     $77,680    $     --       $298,800
      Operating earnings                   $ 27,321     $17,613    $ (4,417)      $ 40,517
      Assets (a)                           $155,088     $52,724    $ 86,979       $294,791
      Capital expenditures                 $ 16,258     $11,456    $    641       $ 28,355
      Depreciation and amortization        $ 10,242     $ 1,410    $  1,205       $ 12,857

      Year ended June 30, 1999
      Net sales to external customers      $205,638     $63,462    $     --       $269,100
      Operating earnings                   $ 26,950     $ 7,397    $ (3,864)      $ 30,483
      Assets (a)                           $140,962     $40,237    $ 88,295       $269,494
      Capital expenditures                 $ 12,078     $ 1,654    $    549       $ 14,281
      Depreciation and amortization        $  9,354     $ 1,497    $  1,244       $ 12,095

      Year ended June 30, 1998
      Net sales to external customers      $194,357     $48,043    $     --       $242,400
      Operating earnings                   $ 24,568     $ 3,522    $ (3,135)      $ 24,955
      Assets (a)                           $118,464     $33,650    $100,934       $253,048
      Capital expenditures                 $  4,681     $ 1,524    $  1,952       $  8,157
      Depreciation and amortization        $  7,897     $ 1,129    $  1,332       $ 10,358
</TABLE>

      (a)   Assets within Corporate and Other include cash, marketable
            securities, property, plant and equipment including the corporate
            headquarters, goodwill and cash surrender value of officers life
            insurance.


                                      F-17
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

8. Segment Information (Continued)

      Reconciliation to consolidated earnings before income taxes:

                                                    Year Ended June 30,
                                            ----------------------------------
                                              2000         1999         1998
                                            --------     --------     --------
      Consolidated operating earnings       $ 40,517     $ 30,483     $ 24,955
      Interest income, net                     3,638        3,313        4,947
      Other expense                             (132)        (583)        (187)
      Special items (b)                        3,825       (3,429)          --
                                            --------     --------     --------
      Consolidated earnings before taxes    $ 47,848     $ 29,784     $ 29,715
                                            ========     ========     ========

      (b) Gain on sale of technology in fiscal 2000 and restructuring expenses
      in fiscal 1999.

     The following table presents net sales by geography based on the location
of the external customer.

                                                    Year Ended June 30,
                                            ----------------------------------
                                              2000         1999         1998
                                            --------     --------     --------
      United States ....................    $212,409     $193,146     $171,033
      Foreign countries ................      86,391       75,954       71,367
                                            --------     --------     --------
      Total ............................    $298,800     $269,100     $242,400
                                            ========     ========     ========

     The following table presents long-lived assets by geography.

                                                    Year Ended June 30,
                                            ----------------------------------
                                              2000         1999         1998
                                            --------     --------     --------
      United States ....................    $ 94,608     $ 70,526     $ 54,418
      Foreign countries ................      13,570       10,225        9,297
                                            --------     --------     --------
      Total ............................    $108,178     $ 80,751     $ 63,715
                                            ========     ========     ========


                                      F-18
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

9. Retirement Benefit Plans

      We have various retirement benefit plans covering substantially all U.S.
and international employees. Total expense for the domestic and international
retirement plans was $4.40 million in 2000, $3.98 million in 1999 and $3.85
million in 1998.

Defined Benefit Plan - U.S.

      We have a defined benefit pension plan designed to provide retirement
benefits to substantially all U.S. employees. U.S. pension benefits are based on
years of service, compensation and the primary social security benefits. Funding
for the U.S. plan is within the range prescribed under the Employee Retirement
Income Security Act of 1974.

      The change in benefit obligation, change in plan assets and funded status
of the U.S. defined benefit pension plan is shown below:

<TABLE>
<CAPTION>
                                                                        Year Ended June 30,
                                                               --------------------------------------
                                                                 2000           1999           1998
                                                               --------       --------       --------
<S>                                                            <C>            <C>            <C>
      Change in Benefit Obligation
        Pension benefit obligation at beginning of year .      $ 29,240       $ 25,913       $ 21,282
        Service cost ....................................         2,018          1,903          1,587
        Interest cost ...................................         1,971          1,800          1,577
        Plan amendments .................................             -            (41)             -
        Actuarial (gain)/loss ...........................        (4,710)           152          1,853
        Benefits paid ...................................          (605)          (487)          (386)
                                                               --------       --------       --------
          Pension benefit obligation at end of year .....      $ 27,914       $ 29,240       $ 25,913
                                                               ========       ========       ========

      Change in Plan Assets
        Fair value of plan assets at beginning of year ..      $ 26,444       $ 23,623       $ 20,460
        Actual return on assets .........................         1,614          1,675          2,090
        Employer contributions ..........................           750          1,633          1,459
        Benefits paid ...................................          (605)          (487)          (386)
                                                               --------       --------       --------
          Fair value of plan assets at end of year ......      $ 28,203       $ 26,444       $ 23,623
                                                               ========       ========       ========

      Funded Status at June 30,
        Pension benefit obligation ......................      $(27,914)      $(29,240)      $(25,913)
        Fair value of plan assets .......................        28,203         26,444         23,623
                                                               --------       --------       --------
        Funded status - plan assets more (less) than
          benefit obligation ............................           289         (2,796)        (2,290)
        Unrecognized prior service cost .................            26             27             69
        Unrecognized net actuarial (gain) loss ..........        (1,321)         2,953          2,652
        Unrecognized net obligation remaining at
          June 30, ......................................           254            325            396
                                                               --------       --------       --------
          (Accrued) Prepaid pension cost ................      $   (752)      $    509       $    827
                                                               ========       ========       ========
</TABLE>


                                      F-19
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

9. Retirement Benefit Plans - (Continued)

      The components of net pension expense of the U.S. defined benefit pension
plan include the following:

<TABLE>
<CAPTION>
                                                                                   Year Ended June 30,
                                                                          -------------------------------------
                                                                           2000           1999           1998
                                                                          -------        -------        -------
<S>                                                                       <C>            <C>            <C>
      Pension Expense
        Service cost ...............................................      $ 2,018        $ 1,904        $ 1,587
        Interest cost ..............................................        1,971          1,800          1,576
        Expected return on assets ..................................       (2,050)        (1,855)        (1,706)
        Amortization of net loss and unrecognized prior service
          cost  ....................................................            1             31              4
        Amortization of the remaining unrecognized net obligation ..           71             71             71
                                                                          -------        -------        -------
          Net pension expense ......................................      $ 2,011        $ 1,951        $ 1,532
                                                                          =======        =======        =======

<CAPTION>
                                                                                   Year Ended June 30,
                                                                          -------------------------------------
                                                                           2000           1999           1998
                                                                          -------        -------        -------
<S>                                                                       <C>            <C>            <C>
      Actuarial Assumptions
        Discount rate ..............................................         7.75%          7.00%          7.00%
        Salary increase ............................................         6.00%          6.00%          6.00%
        Long-term return on assets .................................         7.75%          7.75%          7.75%
</TABLE>

      Plan assets are invested in U.S. Government and corporate securities and
include investments in our common stock of $3.46 million (96,000 shares) at June
30, 2000.

Defined Benefit Plans - International

      We have international defined benefit pension plans. Retirement benefits
are based on years of service, final average earnings and social security
benefits. Funding policies are based on local statutes and the assets are
invested in guaranteed insurance contracts.

      The funded status and components of net pension expense of the
international defined benefit pension plans are shown below:

<TABLE>
<CAPTION>
                                                                       Year Ended June 30,
                                                               -----------------------------------
                                                                2000          1999          1998
                                                               -------       -------       -------
<S>                                                            <C>           <C>           <C>
      Funded Status at June 30,
        Pension benefit obligation ......................      $(1,554)      $(1,827)      $(1,722)
        Fair value of plan assets .......................          272           266           249
                                                               -------       -------       -------
        Funded status ...................................       (1,282)       (1,561)       (1,473)
        Unrecognized net actuarial loss .................          815         1,256         1,326
        Unrecognized net obligation remaining at
          June 30, ......................................           67            83           100
                                                               -------       -------       -------
          Accrued pension cost ..........................      $  (400)      $  (222)      $   (47)
                                                               =======       =======       =======
</TABLE>


                                      F-20
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

9. Retirement Benefit Plans - (Continued)

<TABLE>
<CAPTION>
                                                                                Year Ended June 30,
                                                                          -------------------------------
                                                                          2000         1999         1998
                                                                          -----        -----        -----
<S>                                                                       <C>          <C>          <C>
      Pension Expense
        Service cost ...............................................      $ 192        $ 199        $ 179
        Interest cost ..............................................        119          114          100
        Expected return on assets ..................................        (27)         (26)         (42)
        Amortization of net loss and unrecognized prior service
          cost .....................................................         35           37           25
        Amortization of the remaining unrecognized net obligation ..         17           17           17
                                                                          -----        -----        -----
          Net pension expense ......................................      $ 336        $ 341        $ 279
                                                                          =====        =====        =====
      Actuarial Assumptions
        Discount rate ..............................................       7.75%        7.00%        7.00%
        Salary increase ............................................       6.00%        6.00%        6.00%
        Long-term return on assets .................................       7.75%        7.75%        7.75%
</TABLE>

Supplemental Retirement Plans

      We have noncontributory, unfunded supplemental defined benefit retirement
plans for the Chairman and Chief Executive Officer, Mr. Lawrence Saper, and
certain current and former key officers. Life insurance has been purchased to
recover a substantial portion of the net after tax cost for these supplemental
retirement plans. The assumptions used to develop the supplemental pension cost
and the actuarial present value of the projected benefit obligation are reviewed
annually.

      A summary of Mr. Saper's supplemental pension plan is as follows:

o     Mr. Saper is entitled to receive a lifetime pension of up to 60% of his
      average earnings for the three-year period in which Mr. Saper's
      compensation was greatest of the ten years immediately preceding his
      retirement.

o     The supplementary retirement benefit will not be less than the value of
      the benefit that would have been payable had his retirement occurred at
      age 65.

o     The plan provides survivor benefits in the form of a $10 million life
      insurance policy, maintained pursuant to a split-dollar agreement between
      us, Mr. Saper and a trust for the benefit of Mr. Saper's family.

      The supplemental pension expense for Mr. Saper recognized in the
consolidated financial statements was $304 thousand in 2000, $148 thousand in
1999 and $526 thousand in 1998.

      The supplemental retirement plan covering certain current and former key
officers provides a pension at age 65, for up to 15 years, based on a
predetermined earnings level for the five-year period prior to retirement. The
supplemental retirement benefit for one current officer provides a lifetime
fixed dollar benefit commencing at the later of age 55 or date of retirement.
The supplemental pension expense for these executives recognized in the
consolidated financial statements was $101 thousand in 2000, $17 thousand in
1999 and $182 thousand in 1998.


                                      F-21
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

9.  Retirement Benefit Plans - (Continued)

     The change in benefit obligation, funded status and components of net
pension expense of the supplemental defined benefit retirement plans are shown
below:

<TABLE>
<CAPTION>
                                                                        Year Ended June 30,
                                                              ----------------------------------------
                                                                2000            1999            1998
                                                              --------        --------        --------
<S>                                                           <C>             <C>             <C>
       Change in Benefit Obligation
         Pension benefit obligation at beginning of year      $  8,474        $  7,466        $  8,328
         Service cost ..................................           212             183             165
         Interest cost .................................           592             513             467
         Actuarial (gain)/loss .........................          (312)            137          (1,459)
         Benefits paid .................................           (35)            (35)            (35)
                                                              --------        --------        --------
           Pension benefit obligation at end of year ...      $  8,931        $  8,264        $  7,466
                                                              ========        ========        ========

      Funded Status at June 30,
         Pension benefit obligation/Funded Status ......      $ (8,931)       $ (8,264)       $ (7,466)
         Unrecognized prior service cost ...............           410             440             661
         Unrecognized net actuarial gain ...............        (2,768)         (3,094)         (3,982)
                                                              --------        --------        --------
           Accrued pension liability ...................      $(11,289)       $(10,918)       $(10,787)
                                                              ========        ========        ========

      Pension Expense
         Service cost ..................................      $    212        $    224        $    164
         Interest cost .................................           591             472             467
         Amortization of net gain ......................          (638)           (751)           (765)
         Amortization of unrecognized prior service
           cost ........................................           240             220             842
                                                              --------        --------        --------
           Net pension expense .........................      $    405        $    165        $    708
                                                              ========        ========        ========

      Actuarial Assumption
         Discount rate .................................          7.75%           7.00%           7.00%
</TABLE>

Defined Contribution Plans

      We have defined contribution savings and supplemental retirement plans
that cover substantially all U.S. employees and certain international employees.
The plans provide an incentive to employees to save and invest regularly for
their retirement. In the U.S. we maintain a 401(k) savings and supplemental
retirement plan for eligible domestic employees. The contributions are based on
matching 50% of participating employees' contributions up to a maximum of 6% of
compensation. The provisions for the international defined contribution plans
vary by local country. The total expense under these plans was $1.65 million for
2000, $1.53 million for 1999 and $1.33 million for 1998.


                                      F-22
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

10. Commitments and Contingencies

Leases

      Future minimum rental commitments under noncancellable operating leases
are as follows:

     Year
     ----
     2001 ......................................................    $2,904
     2002 ......................................................     1,909
     2003 ......................................................     1,333
     2004 ......................................................       446
     2005 ......................................................       146
     Thereafter ................................................       110
                                                                    ------
       Total future minimum rental payments ....................    $6,848
                                                                    ======

      Total rent expense amounted to approximately $5.0 million in 2000, $4.54
million in 1999 and $4.16 million in 1998.

Litigation

      We are subject to litigation in the ordinary course of our business. We
believe we have meritorious defenses in all material pending lawsuits and that
the outcome will not have a material adverse effect on our financial position or
results of operations.

Credit Arrangements

      We have lines of credit totaling $100.4 million, with interest payable at
each lender's prime rate. We did not have any borrowings at June 30, 2000 or
June 30, 1999. Of the total available, $25 million expires in November 2000, $25
million expires in December 2000 and $25 million expires in August 2001. These
lines are renewable annually at the option of the banks, and we plan to renew
them. We also have $25.4 million in lines of credit with no expiration date.

11. Gain on Sale of Technology

      In the third quarter of fiscal 2000 we announced the sale of technology
from a discontinued R&D project at our InterVascular, Inc. subsidiary. The sale
resulted in an after-tax gain of $2.5 million.

12. Restructuring Charge

      In the third and fourth quarters of fiscal 1999, we recorded pre-tax
restructuring charges totaling $3.43 million, or $0.14 per share, related to
cost reduction programs. The pre-tax restructuring charge recorded in the third
quarter was $864 thousand or $0.04 per share and the restructuring charge
recorded in the fourth quarter was $2.57 million or $0.10 per share. The cost
reduction programs and related restructuring charges consist of the following:

      o     Lease termination costs and asset writedowns related to the closing
            of InterVascular's Clearwater, Florida leased manufacturing
            facility. The knitting and weaving operations currently housed in
            the Clearwater facility will be moved to InterVascular's expanded
            manufacturing facility in La Ciotat, France in the second quarter of
            fiscal 2001.

            The asset writedowns relate primarily to research and production
            equipment and leasehold improvements that will be removed from
            service and disposed. The assets have no salvage value.


                                      F-23
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

12. Restructuring Charge - (Continued)

      o     Employee severance expenses related to workforce reductions and
            closing of the Clearwater facility. Approximately 70% of the 80
            terminated employees left by June 30, 1999, and 90% by June 30,
            2000. The balance of the employees will be leaving over the next 6
            months. The employee terminations were primarily in administrative,
            R&D and manufacturing positions.

      o     Writedown of certain Genisphere fixed assets based on our revised
            market entry strategy for the 3DNA technology. The asset writedowns
            were primarily for manufacturing equipment that was removed from
            service.

      A summary of the restructuring charges is shown below:

<TABLE>
<CAPTION>
                                                    Clearwater,                      Genisphere
                                                      Florida       Employee            Asset
                                                   Plant Closure    Severance         Writedown          Total
                                                   -------------    ---------         ---------         ------
<S>                                                   <C>             <C>               <C>             <C>
      Fiscal 1999 charges ................            $  880          $1,674            $  875          $3,429
      Utilized in fiscal 1999 ............               535             482               875           1,892
      Utilized in fiscal 2000 ............               187             881                --           1,068
                                                      ------          ------            ------          ------
      Remaining liability at June 30,
        2000 .............................            $  158          $  311            $   --          $  469
                                                      ======          ======            ======          ======
</TABLE>

     The remaining liability is for severance for employees who will be leaving
over the next six months and certain Clearwater, Florida plant closure costs. No
additional expenditures are expected to complete the restructuring program.


                                      F-24
<PAGE>

Datascope Corp. and Subsidiaries
Notes To Consolidated Financial Statements
(in thousands, except per share data)

13. Quarterly Financial Data (Unaudited)

<TABLE>
<CAPTION>
                                                         Year Ended June 30, 2000
                                       ------------------------------------------------------------
                                         First       Second        Third       Fourth
                                        Quarter      Quarter      Quarter      Quarter       Total
                                       --------     --------     --------     --------     --------
<S>                                    <C>          <C>          <C>          <C>          <C>
      Net sales .................      $ 63,500     $ 74,800     $ 77,600     $ 82,900     $298,800
                                       --------     --------     --------     --------     --------
      Gross margin ..............      $ 39,376     $ 46,017     $ 47,622     $ 49,228     $182,243
                                       --------     --------     --------     --------     --------
      Net earnings ..............      $  4,830     $  7,371     $ 10,495     $ 10,379     $ 33,075
                                       --------     --------     --------     --------     --------
      Earnings per share, basic .      $   0.32     $   0.49     $   0.70     $   0.70     $   2.18
                                       --------     --------     --------     --------     --------
      Earnings per share,
        diluted .................      $   0.30     $   0.46     $   0.66     $   0.66     $   2.06
                                       --------     --------     --------     --------     --------

<CAPTION>
                                                         Year Ended June 30, 1999
                                       ------------------------------------------------------------
                                         First       Second        Third       Fourth
                                        Quarter      Quarter      Quarter      Quarter       Total
                                       --------     --------     --------     --------     --------
<S>                                    <C>          <C>          <C>          <C>          <C>
      Net sales .................      $ 55,700     $ 66,700     $ 70,500     $ 76,200     $269,100
                                       --------     --------     --------     --------     --------
      Gross margin ..............      $ 34,106     $ 41,048     $ 43,303     $ 46,867     $165,324
                                       --------     --------     --------     --------     --------
      Net earnings ..............      $  2,681     $  5,886     $  5,966     $  6,879     $ 21,412
                                       --------     --------     --------     --------     --------
      Earnings per share, basic .      $   0.17     $   0.39     $   0.39     $   0.45     $   1.40
                                       --------     --------     --------     --------     --------
      Earnings per share,
        diluted .................      $   0.17     $   0.38     $   0.38     $   0.43     $   1.36
                                       --------     --------     --------     --------     --------
</TABLE>

      Quarterly and total year earnings per share are calculated independently
based on the weighted average number of shares outstanding during each period.

14. Earnings Per Share

      The computation of basic and diluted earnings per share is shown in the
table below.

<TABLE>
<CAPTION>
                                                                                     Year Ended June 30,
                                                                              ---------------------------------
                                                                               2000         1999         1998
                                                                              -------      -------      -------
<S>                                                                           <C>          <C>          <C>
      Net earnings .....................................................      $33,075      $21,412      $21,641
                                                                              -------      -------      -------
      Weighted average shares outstanding for basic earnings per share .       15,169       15,247       15,840
      Effect of dilutive employee stock options ........................          911          474          563
                                                                              -------      -------      -------
      Weighted average shares outstanding for diluted earnings per
        share ..........................................................       16,080       15,721       16,403
                                                                              =======      =======      =======
      Basic earnings per share .........................................      $  2.18      $  1.40      $  1.37
                                                                              -------      -------      -------
      Diluted earnings per share .......................................      $  2.06      $  1.36      $  1.32
                                                                              -------      -------      -------
</TABLE>


                                      F-25
<PAGE>

                        Datascope Corp. and Subsidiaries

                 Schedule II--Valuation and Qualifying Accounts
                                 (In thousands)

<TABLE>
<CAPTION>
           Column A                Column B             Column C          Column D      Column E
      --------------------------   ------------   ----------------------  ----------    ----------
                                                        Additions
                                                  ----------------------
                                                    (1)          (2)
                                                  Charged     Charged to  Deductions
                                   Balance at     to costs    other       from          Balance at
                                   beginning of   and         accounts-   reserves-     close of
           Description             period         expenses    describe    describe      period
      --------------------------   ------------   --------    ----------  ----------    ----------
<S>                                   <C>          <C>          <C>        <C>          <C>
      Year Ended June 30, 2000
      Allowance for
      doubtful accounts ........      $1,192       $  567       $  --      $  115(A)    $1,644
                                      ======       ======       =====      ======       ======
      Reserve for warranty costs         640           --          --          --          640
                                      ======       ======       =====      ======       ======

      Year Ended June 30, 1999
      Allowance for
      doubtful accounts ........      $1,078       $  357       $  --      $  243(A)    $1,192
                                      ======       ======       =====      ======       ======
      Reserve for warranty costs         640           --          --          --          640
                                      ======       ======       =====      ======       ======

      Year Ended June 30, 1998
      Allowance for
      doubtful accounts ........      $  922       $  277       $  --      $  121(A)    $1,078
                                      ======       ======       =====      ======       ======
      Reserve for warranty costs         700           --          --          60(A)       640
                                      ======       ======       =====      ======       ======
</TABLE>

(A)   Write-offs


                                      S-1