<PAGE>

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

                                 ---------------

                                    FORM 10-Q


(X)  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the quarterly period ended February 28, 2005

                                       or

( )  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934.

     For the transition period from ____________ to ____________

     Commission File Number   0-20212


                            ARROW INTERNATIONAL, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Pennsylvania                                         23-1969991
--------------------------------------                     -------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)


2400 Bernville Road, Reading, Pennsylvania                        19605
------------------------------------------                   ----------------
(Address of principal executive offices)                        (Zip Code)


Registrant's telephone number, including area code:           (610) 378-0131
                                                              --------------

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes _X_ No ___

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

           Class                       Shares Outstanding At April 5, 2005
        ------------                   -----------------------------------

Common Stock, No Par Value                         44,548,757

<PAGE>

                            ARROW INTERNATIONAL, INC.

                                 Form 10-Q Index


                                                                            Page
                                                                            ----

PART I.   FINANCIAL INFORMATION

          Item 1.  Financial Statements (Unaudited)

                     Consolidated Balance Sheets at February 28, 2005
                     and August 31, 2004                                     3-4

                     Consolidated Statements of Income                       5-6

                     Consolidated Statements of Cash Flows                   7-8

                     Consolidated Statements of Comprehensive Income           9

                     Notes to Consolidated Financial Statements            10-22

          Item 2.  Management's Discussion and Analysis of Financial
                     Condition and Results of Operations                   23-33

          Item 3.  Quantitative and Qualitative Disclosures
                     About Market Risk                                     33-35

          Item 4.  Controls and Procedures                                    35

PART II.  OTHER INFORMATION

          Item 4.  Submission of Matters to a Vote of Security Holders        36

          Item 5. Other Information                                           36

          Item 6.  Exhibits and Reports on Form 8-K                        36-37


Signature                                                                     38

Exhibit Index                                                                 39

Certifications                                                             40-43


                                      (2)
<PAGE>
<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


                                           ARROW INTERNATIONAL, INC.
                                          CONSOLIDATED BALANCE SHEETS

                                                 (In thousands)
                                                  (Unaudited)


                                                            February 28,                     August 31,
                                                                2005                            2004
                                                      ------------------------        ------------------------
<S>                                                    <C>                             <C>
ASSETS
Current assets:
     Cash and cash equivalents                         $             102,482           $              94,176
     Accounts receivable, net                                         90,078                          83,918
     Inventories                                                     102,616                          96,084
     Prepaid expenses and other                                       18,036                           7,336
     Deferred income taxes                                             8,918                           8,562
                                                      ------------------------        ------------------------
     Total current assets                                            322,130                         290,076
                                                      ------------------------        ------------------------

Property, plant and equipment                                        319,738                         302,978
Less accumulated depreciation                                       (174,134)                       (166,000)
Property, plant and equipment held for sale, net                       1,516                               -
                                                                     147,120                         136,978
                                                      ------------------------        ------------------------

Goodwill                                                              42,815                          42,698
Intangible assets, net                                                43,217                          40,440
Other assets                                                          10,324                           9,889
Prepaid pension costs                                                 29,933                          29,127
                                                      ------------------------        ------------------------
     Total other assets                                              126,289                         122,154
                                                      ------------------------        ------------------------

     Total assets                                      $             595,539           $             549,208
                                                      ========================        ========================


                          See accompanying notes to consolidated financial statements
</TABLE>

                                                      (3)
<PAGE>
<TABLE>
<CAPTION>

                                             ARROW INTERNATIONAL, INC.
                                      CONSOLIDATED BALANCE SHEETS, continued

                                       (In thousands, except share amounts)
                                                    (Unaudited)


                                                                 February 28,                    August 31,
                                                                     2005                           2004
                                                          --------------------------      -----------------------
<S>                                                       <C>                              <C>
LIABILITIES

Current liabilities:
      Current maturities of long-term debt                $                 2,998          $              3,036
      Notes payable                                                        29,032                        26,020
      Accounts payable                                                     17,168                        14,791
      Cash overdrafts                                                         754                         1,136
      Accrued liabilities                                                  20,468                        16,453
      Accrued compensation                                                 13,780                        14,171
      Accrued income taxes                                                  4,383                         4,867
                                                          --------------------------      -----------------------
      Total current liabilities                                            88,583                        80,474
                                                          --------------------------      -----------------------
Long-term debt                                                                  -                             -
Accrued postretirement benefit obligations                                 17,413                        15,327
Deferred income taxes                                                      11,493                         7,076
Commitments and contingencies
SHAREHOLDERS' EQUITY

Preferred stock, no par value;
    5,000,000 shares authorized;
    none issued                                                                 -                             -
Common stock, no par value;
   100,000,000 shares authorized;
    52,957,626 shares issued                                               45,661                        45,661
Additional paid-in capital                                                 24,751                        12,771
Retained earnings                                                         451,685                       443,676
      Less treasury stock at cost:
          8,471,834 and 9,182,802 shares,
          respectively                                                    (55,595)                      (60,261)
Accumulated other comprehensive
   (income)                                                                11,548                         4,484
                                                          --------------------------      -----------------------
      Total shareholders' equity                                          478,050                       446,331
                                                          --------------------------      -----------------------
      Total liabilities and
         shareholders' equity                              $              595,539          $            549,208
                                                          ==========================      =======================


                            See accompanying notes to consolidated financial statements
</TABLE>

                                                       (4)
<PAGE>
<TABLE>
<CAPTION>

                                              ARROW INTERNATIONAL, INC.
                                          CONSOLIDATED STATEMENTS OF INCOME

                                  (In thousands, except share and per share amounts)
                                                     (Unaudited)


                                                                               For the three months ended
                                                                  --------------------------------------------------
                                                                        February 28,               February 29,
                                                                            2005                       2004
                                                                  ------------------------    ----------------------
<S>                                                                <C>                         <C>
Net sales                                                          $              109,209      $            108,294
Cost of goods sold                                                                 58,506                    50,492
                                                                  ------------------------    ----------------------
     Gross profit                                                                  50,703                    57,802
                                                                  ------------------------    ----------------------

Operating expenses:
     Research and development                                                       7,126                     6,383
     Selling, general and administrative                                           35,545                    28,448
     Restructuring charge                                                             930                         -
                                                                  ------------------------    ----------------------
     Operating income                                                               7,102                    22,971
                                                                  ------------------------    ----------------------
Other (income) expenses:
     Interest expense, net of amount capitalized                                      219                       402
     Interest income                                                                 (291)                     (207)
     Other, net                                                                      (108)                     (125)
                                                                  ------------------------    ----------------------
     Other (income) expenses, net                                                    (180)                        70
                                                                  ------------------------    ----------------------
Income before income taxes                                                          7,282                    22,901
Provision for income taxes                                                          1,928                     7,443
                                                                  ------------------------    ----------------------

        Net income                                                 $                5,354      $             15,458
                                                                  ========================    ======================

Basic earnings per common share                                    $                 0.12      $               0.36
                                                                  ========================    ======================
Diluted earnings per common share                                  $                 0.12      $               0.35
                                                                  ========================    ======================
Cash dividends per common share                                    $                 0.15      $               0.09
                                                                  ========================    ======================

Weighted average shares outstanding
    used in computing basic earnings
      per common share                                                         44,213,584                43,503,741
                                                                  ========================    ======================

Weighted average shares outstanding
    used in computing diluted earnings
      per common share                                                         45,009,506                44,202,983
                                                                  ========================    ======================


                             See accompanying notes to consolidated financial statements
</TABLE>

                                                         (5)
<PAGE>
<TABLE>
<CAPTION>

                                              ARROW INTERNATIONAL, INC.
                                          CONSOLIDATED STATEMENTS OF INCOME

                                  (In thousands, except share and per share amounts)
                                                     (Unaudited)


                                                                              For the six months ended
                                                                  --------------------------------------------------
                                                                        February 28,               February 29,
                                                                            2005                       2004
                                                                  ------------------------    ----------------------
<S>                                                                <C>                         <C>
Net sales                                                          $              221,934      $            211,395
Cost of goods sold                                                                114,811                    99,395
                                                                  ------------------------    ----------------------
     Gross profit                                                                 107,123                   112,000
                                                                  ------------------------    ----------------------

Operating expenses:
     Research and development                                                      15,045                    13,227
     Selling, general and administrative                                           64,267                    54,186
     Restructuring charge                                                           1,321                         -
                                                                  ------------------------    ----------------------
     Operating income                                                              26,490                    44,587
                                                                  ------------------------    ----------------------
Other (income) expenses:
     Interest expense, net of amount capitalized                                      308                       601
     Interest income                                                                 (505)                     (297)
     Other, net                                                                      (274)                       14
                                                                  ------------------------    ----------------------
     Other (income) expenses, net                                                    (471)                      318
                                                                  ------------------------    ----------------------
Income before income taxes                                                         26,961                    44,269
Provision for income taxes                                                          8,324                    14,387
                                                                  ------------------------    ----------------------

        Net income                                                 $               18,637      $             29,882
                                                                  ========================    ======================

Basic earnings per common share                                    $                 0.42      $               0.69
                                                                  ========================    ======================
Diluted earnings per common share                                  $                 0.42      $               0.68
                                                                  ========================    ======================
Cash dividends per common share                                    $                0.24       $              0.17
                                                                  ========================    ======================

Weighted average shares outstanding
    used in computing basic earnings
      per common share                                                         44,023,659                43,423,680
                                                                  ========================    ======================

Weighted average shares outstanding
    used in computing diluted earnings
      per common share                                                         44,766,807                44,092,986
                                                                  ========================    ======================


                             See accompanying notes to consolidated financial statements
</TABLE>

                                                         (6)
<PAGE>
<TABLE>
<CAPTION>

                                                  ARROW INTERNATIONAL, INC.
                                            CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                        (In thousands)
                                                         (Unaudited)


                                                                                       For the six months ended
                                                                                 February 28,               February 29,
                                                                                     2005                       2004
                                                                            ---------------------       --------------------
<S>                                                                         <C>                         <C>
Cash flows from operating activities:
       Net income                                                           $             18,637        $            29,882
Adjustments to reconcile net income to
    net cash provided by operating activities:
       Depreciation                                                                        9,937                      9,071
       Amortization                                                                        2,756                      2,397
       LionHeart charge                                                                    4,903                          -
       Early Retirement Plan stock option charge                                           1,142                          -
       Abandonment of facility expansion plan                                                  -                      1,658
       401(k) plan stock contribution                                                        449                        412
       Deferred income taxes                                                               4,045                       (643)
       Loss (gain) on sale of property, plant and equipment                                  209                         24
       Unrealized holding loss on foreign currency options                                  (41)                          -
       (Increase) decrease in prepaid pension costs                                        (806)                      1,189
       Increase in provision for postretirement benefit obligation                         2,086                      1,079
       Non-qualified stock option tax benefit                                              3,162                          -
Changes in operating assets and liabilities, net of effects from acquisition:
       Accounts receivable, net                                                           (2,173)                    (5,858)
       Inventories                                                                        (3,739)                    (4,075)
       Prepaid expenses and other                                                        (10,295)                     5,318
       Accounts payable and accrued liabilities                                              246                       (729)
       Accrued compensation                                                                 (702)                      (367)
       Accrued income taxes                                                                 (762)                     3,973
                                                                            ---------------------       --------------------
       Total adjustments                                                                  10,417                     13,449
                                                                            ---------------------       --------------------
       Net cash provided by operating activities                                          29,054                     43,331

Cash flows from investing activities:
       Capital expenditures                                                              (17,929)                   (10,748)
       Proceeds from sale of property, plant and equipment                                    13                        215
       (Increase) decrease in intangible and other assets                                   (607)                      (348)
       Cash paid for business acquired                                                    (7,148)                         -
                                                                            ---------------------       --------------------
       Net cash used in investing activities                                             (25,671)                   (10,881)
                                                                            ---------------------       --------------------

Cash flows from financing activities:
       Increase (decrease) in notes payable, including both drawdowns
           and repayments                                                                    166                       (889)
       Principal payments of long-term debt                                                    -                       (300)
       Reduction of current maturities of long-term debt                                     (38)                      (569)
       (Decrease) increase in book overdrafts                                               (382)                      (288)
       Dividends paid                                                                     (7,895)                    (6,937)
       Proceeds from stock options exercised                                              11,907                      4,032
                                                                            ---------------------       --------------------
       Net cash provided by (used in) financing activities                                 3,758                     (4,951)

Effect of exchange rate changes on cash
    and cash equivalents                                                                   1,165                      1,089
Net change in cash and cash equivalents                                                    8,306                     28,588
Cash and cash equivalents at beginning of year                                            94,176                     46,975
                                                                            ---------------------       --------------------
Cash and cash equivalents at end of period                                  $            102,482        $            75,563
                                                                            =====================       ====================


                                 See accompanying notes to consolidated financial statements
</TABLE>

                                                          Continued
                                                             (7)
<PAGE>
<TABLE>
<CAPTION>

                                                     ARROW INTERNATIONAL, INC.
                                         CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

                                                          (In thousands)
                                                            (Unaudited)


                                                                                              For the six months ended
                                                                                   ----------------------------------------------
                                                                                        February 28,             February 29,
                                                                                           2005                     2004
                                                                                   --------------------    ----------------------
<S>                                                                                <C>                     <C>
Supplemental schedule of noncash investing and financing activities:

The Company assumed liabilities in conjunction with the purchase of certain
assets as follows:

Estimated fair value of assets acquired                                            $              8,545    $                   -
Liabilities assumed                                                                               1,397                        -
                                                                                   --------------------    ----------------------
Cash paid for assets                                                               $              7,148    $
                                                                                   ====================    ======================

Cash paid for business acquired:
      Working capital                                                              $             3,222     $                   -
      Intangible assets                                                                          5,323                         -
      Accrual for additional payments owed                                                      (1,397)                        -
                                                                                   --------------------    ----------------------
                                                                                   $             7,148     $                   -
                                                                                   ====================    ======================


Treasury Stock issued for 401(k) plan contribution                                 $               449     $                 412
                                                                                   ====================    ======================

Intangible assets acquired by issuing treasury stock                               $                 -     $                 530
                                                                                   ====================    ======================

Dividends declared but not paid                                                    $             6,673     $               3,923
                                                                                   ====================    ======================


                                    See accompanying notes to consolidated financial statements
</TABLE>

                                                            Continued
                                                               (8)
<PAGE>
<TABLE>
<CAPTION>

                                            ARROW INTERNATIONAL, INC.
                                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                                 (In thousands)
                                                   (Unaudited)


                                                                             For the three months ended
                                                                          February 28,          February 29,
                                                                              2005                  2004
                                                                       -----------------    -------------------
<S>                                                                    <C>                  <C>
Net income                                                             $          5,354     $           15,458
Other comprehensive income (expense):
Foreign currency translation adjustments                                          1,543                  1,388
Unrealized holding (loss) on foreign currency
   option contracts                                                                (41)                      -
                                                                       -----------------    -------------------
Other comprehensive income (expense)                                              1,502                  1,388
                                                                       -----------------    -------------------
Total comprehensive income                                             $          6,856     $           16,846
                                                                       =================    ===================


                                                                              For the six months ended
                                                                          February 28,          February 29,
                                                                              2005                  2004
                                                                       -----------------    -------------------
Net income                                                             $         18,637     $           29,882
Other comprehensive income (expense):
Foreign currency translation adjustments                                          7,105                  5,807
Unrealized holding (loss) on foreign currency
    option contracts                                                                (41)                     -
                                                                       -----------------    -------------------
Other comprehensive income (expense)                                              7,064                  5,807
                                                                       -----------------    -------------------
Total comprehensive income                                             $         25,701     $           35,689
                                                                       =================    ===================


                           See accompanying notes to consolidated financial statements
</TABLE>

                                                   Continued
                                                      (9)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 1 - Basis of Presentation:

These unaudited consolidated financial statements include all adjustments,
consisting only of normal recurring accruals, which management considers
necessary for a fair presentation of the consolidated financial position,
results of operations, and cash flows of Arrow International, Inc. (the
"Company") for the interim periods presented. Results for the interim periods
are not necessarily indicative of results for the entire year. Such statements
are presented in accordance with the requirements of Form 10-Q and do not
include all disclosures normally required by generally accepted accounting
principles or those normally made on Form 10-K. These statements should be read
in conjunction with the consolidated financial statements and notes thereto
contained in the Company's Annual Report to Stockholders for the fiscal year
ended August 31, 2004.


Note 2 - Inventories:

Inventories are summarized as follows:

                                 February 28,                  August 31,
                                    2005                          2004
                            ----------------------      ----------------------
Finished goods              $              30,016       $              29,036
Semi-finished goods                        29,391                      26,126
Work-in-process                            11,568                       9,493
Raw materials                              31,641                      31,429
                            ----------------------      ----------------------
                            $             102,616       $              96,084
                            ======================      ======================


Note 3 - Commitments and Contingencies:

The Company is a party to certain legal actions, including product liability
matters, arising in the ordinary course of its business. From time to time, the
Company is also subject to legal actions involving patent and other intellectual
property claims.

The Company is currently a defendant in a lawsuit in which the plaintiff alleges
that the Company's Cannon-Cath(TM) split-tip hemodialysis catheters, which were
acquired as part of the Company's acquisition in November 2002 of specified
assets of Diatek, Inc., infringe a patent owned by or licensed to the
plaintiffs. In November 2003, this lawsuit was stayed pending the U.S. Patent
and Trademark Office's ruling on its re-examination of the patent at issue,
which is expected to occur later in calendar 2005, although the Company cannot
presently predict the precise timing. Based on information presently available
to the Company, the Company believes that its products do not infringe any valid
claim of the plaintiffs' patent and that, consequently, it has meritorious legal
defenses with respect to this action.

The Company has commenced a patent infringement lawsuit in the United States
District Court in Baltimore, Maryland against Datascope Corp. of Montvale, New
Jersey. The Company manufactures and sells the Arrow-Trerotola(TM) Percutaneous
Thrombolytic Device (PTD(R)), which is used to mechanically declot native
arterio-venous fistulae and synthetic hemodialysis grafts. The PTD was invented
by Dr. Scott Trerotola while working at Johns Hopkins University. Johns Hopkins
University, the owner of two patents covering the PTD, is also a plaintiff and
the Company is the exclusive licensee of the Trerotola patents. The Company has
alleged that Datascope infringes these two patents.

Although the ultimate outcome of any of these actions is not expected to have a
material adverse effect on the Company's business or financial condition,
whether an adverse outcome in any of these actions would materially adversely
affect the Company's reported results of operations in any future period cannot
be predicted with certainty.


Note 4 - Accounting Policies:

As permitted under Statement of Financial Accounting Standards (SFAS) No. 123,
the Company continues to apply the existing accounting rules under Accounting
Principles Board (APB) No. 25, as amended by SFAS No. 148, and provide pro forma
net income and pro forma earnings per share disclosures for employee stock
option grants made as if the fair value method in measuring compensation costs
for stock options granted subsequent to December 15, 1995 had been applied.

Had compensation expense for stock options granted in fiscal 2005 and 2004 been
recorded based on the fair market value at the grant date, the Company's net
income and basic and diluted earnings per share, net of related income tax
effects, for the periods ended February 28, 2005 and 2004 would have been
reduced to the pro forma amounts indicated in the table below:


                                    Continued
                                      (10)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 4 - Accounting Policies (continued):

<TABLE>
<CAPTION>
                                               For the three months ended                     For the six months ended
                                        ---------------------------------------      ---------------------------------------
                                           February 28,          February 29,           February 28,         February 29,
                                               2005                  2004                   2005                 2004
                                        ------------------    -----------------      -----------------    ------------------
<S>                                      <C>                   <C>                    <C>                 <C>
Net income applicable to common
  shareholders
As reported                              $          5,354      $        15,458        $        18,637     $          29,882
Add: Stock - based employee
  compensation expense included in
  reported net income, net of related
  tax effects                                         771                    -                    771                     -
Deduct:  Total stock-based employee
  compensation expense determined under
  fair value based method for all
  awards, net of related tax effects                 (387)                (378)                  (795)               (1,031)
Pro forma                               $           5,738      $        15,080        $        18,613     $          28,851

Basic earnings per common share
As reported                             $            0.12      $          0.36        $          0.42     $            0.69
Pro forma                               $            0.13      $          0.34        $          0.42     $            0.66

Diluted earnings per common share
As reported                             $            0.12      $          0.35        $          0.42     $            0.68
Pro forma                               $            0.13      $          0.34        $          0.42     $            0.65
</TABLE>

The information provided in the table above includes the impact of both vested
and nonvested options.

Accounts Receivable and Allowance for Doubtful Accounts:
Trade accounts receivable are recorded at the invoiced amount and do not bear
interest. The Company maintains an allowance for doubtful accounts for estimated
losses resulting from the inability of our customers to make required payments.
This allowance is used to state trade receivables at estimated net realizable
value. The Company relies on prior payment trends while giving consideration to
other criteria such as political risk, financial status and other factors to
estimate the cash which ultimately will be received. Such amounts cannot be
known with certainty at the financial statement date. The Company regularly
reviews individual past due balances over 90 days and over a specific amount for
collectability and maintains a specific allowance for customer accounts that
will likely not be collectible due to customer liquidity issues. The Company
also maintains an allowance for estimated future collection losses on existing
receivables, determined based on historical trends.

The following are the changes in the allowance for doubtful accounts for the
three and six months ended February 28, 2005 and 2004:

                                            For the three months ended
                                 -----------------------------------------------
                                     February 28,              February 29,
                                         2005                      2004
                                 ---------------------     ---------------------
       Balance at December 1     $              1,604       $               996
       Additions                                  265                       899
       Write-offs                                 (27)                      (40)
                                 ---------------------     ---------------------
       Balance at February 28    $              1,842       $             1,855
                                 =====================     =====================


                                      (11)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 4 - Accounting Policies (continued):

                                             For the six months ended
                                 -----------------------------------------------
                                      February 28,              February 29,
                                         2005                      2004
                                 ---------------------     ---------------------
       Balance at September 1    $              2,198       $             1,112
       Additions                                  471                       875
       Write-offs                                (827)                     (132)
                                 ---------------------     ---------------------
       Balance at February 28    $              1,842       $             1,855
                                 =====================     =====================

Revenue Recognition:

During the course of the second quarter closing process and in conjunction with
its review of its internal controls, the Company determined that it had
misapplied the accounting treatment related to its shipping terms to U.S.
customers and international distributors. The Company does not have written
agreements with most customers and, as a result, in most of those cases,
shipping terms are only specified on the invoice, which states free-on-board, or
FOB, plant. While the Company does not pay for shipping in most cases or insure
the shipments, its practice has been to credit or replace lost or damaged
shipments. During the past few years, amounts in respect of these credits and
replacements have been less than 0.05% of sales to customers in the U.S. and to
international distributors. Nevertheless, interpretations of Staff Accounting
Bulletin No. 104, Revenue Recognition in Financial Statements (SAB 104), issued
by the Securities and Exchange Commission staff, require that, because of its
practice of replacing lost or damaged shipments, the Company's sales to
customers in the U.S. and to international distributors are the equivalent of
FOB destination orders.

The Company's assessment determined that delivery time to U.S. customers is two
business days and, to its international distributors, is seven days for air and
truck shipments and 55 days for ocean vessel shipments. By applying the
appropriate accounting treatment described above, the amount of sales
corresponding to these numbers of days in transit at the end of the quarter must
be recognized in the succeeding quarter when the shipments are delivered. As a
result, during the second quarter of fiscal 2005, the Company recorded $4,279 as
a reduction to sales and $2,225 against gross profit, or $0.03 diluted earnings
per share. These sales amounts will, however, be recognized in the third quarter
of fiscal 2005. While these sales amounts will be recognized in the third
quarter of fiscal 2005, a similar amount of days sales would be excluded from
the end of the third quarter and the excluded amount would be recognized in the
subsequent quarter. Accordingly, the incremental effect on any future quarter
would be the difference between the adjustment at the beginning of the quarter
and the corresponding adjustment at the end of the quarter. The Company has
concluded in accordance with SEC Staff Accounting Bulletin No. 99 that this
adjustment is not quantitatively or qualitatively material to warrant any prior
period restatement.

The Company's revenue recognition policy is as follows:
Revenue is recognized by the Company at the time its products are delivered and
title and risk of loss has passed to its customer. The Company's net sales
represent gross sales invoiced to customers, less certain related charges,
including discounts, returns, rebates and other allowances. Such charges are
recognized against revenue on an accrual basis. The Company offers sales
discounts to certain customers based on prior experience with these customers,
business needs and regional competition. Product returns are permitted. The
accrual for product returns is based on the Company's history of actual product
returns. To date, product returns have not been material. The Company's practice
is to credit or replace lost or damaged shipments. The Company grants sales
rebates to certain distributors upon achievement of agreed upon pricing for
sales of the Company's products to hospitals. Incurred but unpaid rebates are
accrued by the Company in the period in which they are incurred. The Company's
rebate accrual is based on its history of actual rebates paid. The Company's
reserves for rebates are reviewed at each reporting period and adjusted to
reflect data available at that time. If necessary, the Company will adjust these
estimated reserves, which will impact the amount of net product sales revenue
recognized by the Company in the period of the adjustments.

The Company has disclosed in Note 1 to its consolidated financial statements
included in its Annual Report on Form 10-K for the fiscal year ended August 31,
2004 those accounting policies that it considers to be significant in
determining its results of operations and financial position. Other than as
reported above, there have been no material changes to the critical accounting
policies previously identified and described in the Company's 2004 Form 10-K.
The accounting principles utilized by the Company in preparing its consolidated
financial statements conform in all material respects to generally accepted
accounting principles in the United States of America.

The preparation of these consolidated financial statements requires the
Company's management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses, as well as the disclosure
of contingent assets and liabilities at the date of its financial statements.
The Company bases its estimates on historical experience, actuarial valuations
and various other factors that are believed to be reasonable under the
circumstances, the


                                      (12)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 4 - Accounting Policies (continued):

results of which form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources. Some of
those judgments can be subjective and complex and, consequently, actual results
may differ from these estimates under different assumptions or conditions. While
for any given estimate or assumption made by the Company's management there may
be other estimates or assumptions that are reasonable, the Company believes
that, given the current facts and circumstances, it is unlikely that applying
any such other reasonable estimate or assumption would materially impact the
financial statements.

The Financial Accounting Standards Board (FASB) issued SFAS No. 151, "Inventory
Costs, an Amendment of Accounting Research Bulletin (ARB) No. 43, Chapter 4", in
November 2004. This statement amends the guidance in ARB No. 43 Chapter 4
"Inventory Pricing" to clarify the accounting for abnormal amounts of idle
facility expense, freight, handling costs and wasted material. SFAS No. 151
requires that those items be recognized as current period charges regardless of
whether they meet the criterion of "so abnormal." In addition, this statement
requires that allocation of fixed production overheads to the costs of
conversion be based on the normal capacity of the production facilities. The
provisions of this statement will be effective for inventory costs incurred
during fiscal years beginning after June 15, 2005. The Company is currently
evaluating the impact that this statement will have on its financial statements.

The FASB issued SFAS No. 123R, "Share-Based Payment", in December 2004. This
statement requires that the cost of all forms of equity-based compensation
granted to employees, excluding employee stock ownership plans, be recognized in
a company's income statement and that such cost be measured at the fair value of
the stock options. This statement replaces the guidance in SFAS No. 123,
Accounting for Stock-Based Compensation, and APB No. 25, Accounting for Stock
Issued to Employees. This statement will be effective for financial statements
relating to fiscal periods beginning after June 15, 2005. The Company is
currently evaluating the various transitional methods and the impact that this
statement will have on its financial statements.

Certain prior period information has been reclassified for comparative purposes.


Note 5 - Segment Reporting:

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", requires the reporting of certain financial information for each
operating segment. The Company has one operating segment as defined in this
standard based on the fact that its various business components do not possess
the defined characteristics that would meet the standard's definition of
operating segments. For instance, the Company's current management structure is
designed to operate the business as a whole, with no divisional
responsibilities. Therefore, the Company continues to operate as a single
operating segment. The Company operates in four main geographic regions,
therefore, information about products and geographic areas is presented below.

The following table provides quarterly information about the Company's sales by
product category:

<TABLE>
<CAPTION>
                                              Quarter ended                              Quarter ended
                                            February 28, 2005                          February 29, 2004
                                   ------------------------------------      --------------------------------------
                                      Critical             Cardiac               Critical             Cardiac
                                        Care                Care                   Care                Care
                                   ----------------    ----------------      -----------------   ------------------
<S>                                <C>                 <C>                   <C>                 <C>
    Sales to external customers    $         93,200    $         16,000      $          92,000   $           16,300
</TABLE>


                                      (13)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 5 - Segment Reporting (continued):

The following tables present quarterly information about geographic areas:

<TABLE>
<CAPTION>
                                                           Quarter ended February 28, 2005
                              ----------------------------------------------------------------------------------------
                                 United          Asia and                         International
                                 States           Africa           Europe           Americas           Consolidated
                              -------------   -------------    --------------    --------------    -------------------
<S>                           <C>             <C>              <C>               <C>               <C>
 Sales to unaffiliated
      customers               $      67,900   $      15,400    $       19,800    $        6,100    $           109,200


                                                           Quarter ended February 29, 2004
                              ----------------------------------------------------------------------------------------
                                 United          Asia and                         International
                                 States           Africa           Europe           Americas           Consolidated
                              -------------   -------------    --------------    --------------    -------------------
 Sales to unaffiliated
      customers               $      70,300   $      14,900    $       17,600    $        5,500    $           108,300
</TABLE>

The following table provides year-to-date information about the Company's sales
by product category:

<TABLE>
<CAPTION>
                                              Six Months ended                        Six Months ended
                                              February 28, 2005                       February 29, 2004
                                   ------------------------------------      --------------------------------------
                                      Critical             Cardiac               Critical             Cardiac
                                        Care                Care                   Care                Care
                                   ----------------    ----------------      -----------------   ------------------
<S>                                <C>                 <C>                   <C>                 <C>
 Sales to external customers       $        189,200    $         32,700      $         181,000   $           30,400
</TABLE>

The following tables present year-to-date information about geographic areas:

<TABLE>
<CAPTION>
                                                         Six Months ended February 28, 2005
                              ----------------------------------------------------------------------------------------
                                 United          Asia and                         International
                                 States           Africa           Europe           Americas           Consolidated
                              -------------   -------------    --------------    --------------    -------------------
<S>                           <C>             <C>              <C>               <C>               <C>
 Sales to unaffiliated
      customers               $     136,600   $      33,100    $       39,800    $       12,400    $           221,900


                                                         Six Months ended February 29, 2004
                              ----------------------------------------------------------------------------------------
                                 United          Asia and                         International
                                 States           Africa           Europe           Americas           Consolidated
                              -------------   -------------    --------------    --------------    -------------------
 Sales to unaffiliated
      customers               $     137,400   $      30,500    $       32,600    $       10,900    $           211,400
</TABLE>

Note 6 - Business Acquisition:

In September 2004, the Company purchased certain assets of one of its
distributors in Italy, AB Medica S.p.A. (ABM), for a total purchase price of
approximately $8,545, subject to post-closing adjustments, with additional
amounts payable contingent upon the sales levels of products under sales
contracts purchased by the Company. ABM had been one of the Company's
distributors in Italy since 1982. The asset purchase agreement includes the
purchase of customer lists, distributorship rights, as well as the inventory and
specified tender contracts associated with the sale by ABM of the


                                      (14)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 6 - Business Acquisition (continued):

Company's products. The Company began selling directly in Italy through its
subsidiary, Arrow Italy S.p.A., in the first quarter of fiscal 2005. As of
February 28, 2005, pursuant to the asset purchase agreement, the Company has
paid $7,148 in cash and recorded a current liability of $1,397 for additional
payment installments. The purchase price for this acquisition did not exceed the
estimated fair value of the net assets acquired and, therefore, no goodwill has
been recorded by the Company in connection therewith. Intangible assets acquired
of $5,323, consisting of customer lists and distributorship rights, are being
amortized over five years based on the anticipated period over which the Company
expects to benefit from the transaction. Included in the first quarter of fiscal
2005 was a $1,467 charge, or $990 against net income, for the step-up of
inventory purchased from ABM. The results of operations of this business are
included in the Company's consolidated financial statements from the date of
acquisition. The purchase price for this acquisition was allocated as follows:

                Inventories                     $     3,222
                Intangible assets                     5,323
                                                  ---------
                   Total purchase price         $     8,545
                                                  =========

Pro forma amounts are not presented as the acquisition described above did not
have any material effect on the Company's results of operations or financial
condition for any of the periods presented.


Note 7 - Stock Option Plans:

The Company has adopted three stock plans, the 1992 Stock Incentive Plan (the
"1992 Plan"), which was adopted on April 1, 1992, the Directors' Stock Incentive
Plan, as amended (the "Directors' Plan"), which was approved by the Company's
shareholders on January 17, 1996, with amendments thereto approved by the
Company's shareholders on January 19, 2000, and the 1999 Stock Incentive Plan
(the "1999 Plan"), which was approved by the Company's shareholders on June 19,
2000, with non-material amendments thereto approved by the Company's Board of
Directors on October 27, 2004. The 1992 and 1999 Plans authorize the granting of
stock options, stock appreciation rights and restricted stock. The Directors'
Plan authorizes the granting of a maximum of 300,000 non-qualified stock
options. Under the Directors' Plan, members of the Board of Directors of the
Company and its subsidiaries are eligible to participate if they are not also
employees or consultants of the Company or its subsidiaries, and do not serve on
the Board of Directors as representatives of the interest of shareholders who
have made an investment in the Company. The Directors' Plan authorizes an
initial grant of an option to purchase 10,000 shares of common stock upon each
eligible director's initial election to the Board of Directors and the grant of
an additional option to purchase 3,000 shares of common stock on the date each
year when directors are elected to the Board of Directors.

The Company follows the provision of APB No. 25, "Accounting for Stock Issued to
Employees", and related interpretations, which require compensation expense for
options to be recognized only if the market price of the underlying stock
exceeds the exercise price on the date of grant. Accordingly, the Company has
not recognized compensation expense for its options granted during the three and
six months ended February 28, 2005 and February 29, 2004, respectively.

In the three months ended February 28, 2005 and February 29, 2004, the Company
granted 87,500 and zero options, respectively, to key employees to purchase
shares of the Company's common stock pursuant to the 1999 Plan. The exercise
price per share was $30.60 for options granted during the three months ended
February 28, 2005. During the six months ended February 28, 2005 and February
29, 2004, the Company granted 102,500 and 1,240,000 options, respectively, to
key employees to purchase shares of the Company's common stock pursuant to the
1999 Plan. The exercise price per share ranged from $29.08 - $30.60 for options
granted during the six months ended February 28, 2005 and ranged from $25.00 -
$25.80 in the same period of fiscal 2004. These amounts represent the fair
market value of the common stock of the Company on the respective dates that the
options were granted. The options expire ten years from the grant date. The
options vest ratably over four years, at one year intervals from the grant date
and, once vested, are exercisable at any time.

In both the three and six months ended for each of February 28, 2005 and
February 29, 2004, the Company granted 27,000 options to its directors to
purchase shares of the Company's common stock pursuant to the Directors Plan.
The exercise price per share for the 2005 and 2004 awards was $30.60 and $26.42,
respectively, which was equal to the fair market value of the common stock of
the Company on the respective dates that the options were granted. These options
expire ten years from the grant date. The options vest fully one year from the
grant date and, once vested, are exercisable at any time.


                                      (15)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 7 - Stock Option Plans (continued):

<TABLE>
<CAPTION>
                                                                         For the three months ended
                                               -------------------------------------------------------------------------------
                                                         February 28, 2005                         February 29, 2004
                                               ---------------------------------------    ------------------------------------
                                                                        Weighted                                 Weighted
                                                                        Average                                  Average
                                                                        Exercise                                 Exercise
                                                   Shares                Price                Shares              Price
                                               ----------------    -------------------    ---------------    -----------------
<S>                                                <C>                   <C>                 <C>                  <C>
Outstanding at December 1                          2,868,194             $20.82              3,405,920            $19.94
Granted                                              114,500             $30.60                 27,000            $26.42
Exercised                                           (530,016)            $17.68               (131,588)           $15.37
Terminated                                            (3,250)            $22.96                (16,480)           $19.87
                                               ----------------                           ---------------

Outstanding at February 28                         2,449,428             $21.95              3,284,852            $20.19

Exercisable at  February 28                        1,204,877             $19.50              1,359,006            $16.36


                                                                          For the six months ended
                                               -------------------------------------------------------------------------------
                                                         February 28, 2005                         February 29, 2004
                                               ---------------------------------------    ------------------------------------
                                                   Shares               Weighted              Shares             Weighted
                                                                        Average                                  Average
                                                                        Exercise                                 Exercise
                                                                         Price                                    Price
                                               ----------------    -------------------    ---------------    -----------------
Outstanding at September 1                         3,084,152             $20.49              2,318,260            $16.81
Granted                                              129,500             $30.42              1,267,000            $25.28
Exercised                                           (701,834)            $17.12               (263,778)           $15.13
Terminated                                           (62,390)            $21.80                (36,630)           $18.67
                                               ----------------                           ---------------

Outstanding at February 28                         2,449,428             $21.95              3,284,852            $20.19

Exercisable at  February 28                        1,204,877             $19.50              1,359,006            $16.36
</TABLE>

Stock options outstanding at February 28, 2005 are summarized in the table
below:

<TABLE>
<CAPTION>
                                                       Weighted             Weighted                            Weighted
                                                        Average              Average                            Average
        Range of                   Number              Remaining            Exercise           Number           Exercise
     Exercise Prices             Outstanding       Contractual Life           Price          Exercisable         Price
--------------------------     ---------------    --------------------    -------------    --------------    ---------------
<S>                            <C>                <C>                     <C>              <C>               <C>
     $12.56 - $17.50               326,510               3.95                $14.98            326,510           $14.98
     $17.51 - $21.47               874,579               6.14                $18.99            580,907           $19.02
     $21.48 - $26.42              1,118,839              8.56                $25.32            297,460           $25.40
     $26.43 - $30.60               129,500               9.81                $30.42               -                -
</TABLE>


                                      (16)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 7 - Stock Option Plans (continued):

The Company has adopted the disclosure provisions of SFAS No. 123, "Accounting
for Stock-Based Compensation". As permitted under SFAS No. 123, the Company
continues to apply the existing accounting rules under APB No. 25 and provide
pro forma net income and pro forma earnings per share disclosures for employee
stock option grants made as if the fair value method in measuring compensation
cost for stock options granted subsequent to December 15, 1995 had been applied.

The per share weighted average value of stock options granted in the first six
months of fiscal 2005 and 2004 was $5.68 and $5.77, respectively. The fair value
was estimated as of the grant date using the Black-Scholes option pricing model
with the following average assumptions:

                                   February 28, 2005          February 29, 2004
                                  -------------------        -------------------

Risk-free interest rate                  2.90%                      2.02%
Dividend yield                           2.08%                      1.43%
Volatility factor                        22.75%                    26.33%
Expected lives                          5 years                    5 years


Note 8 - Warranty

The Company's primary warranty obligation relates to sales of its intra-aortic
balloon pumps. The Company offers a warranty of one year to its U.S. customers
and two years to its international customers. As of February 28, 2005 and
February 29, 2004, the Company's total estimated product warranty obligation was
$614 and 827, respectively. Because this estimate is based primarily on
historical experience, actual costs may differ from the amounts estimated. The
change in the warranty obligation for the six months ended February 28, 2005 is
as follows:

                Balance as of September 1, 2004         $       740
                Additional warranties issued                    498
                Expenditures / Expirations                     (624)
                                                        ------------
                Balance as of February 28, 2005         $       614
                                                        ============


Note 9 - Retirement Benefits

Pension Plans:

The Company has three noncontributory pension plans that cover substantially all
employees. Benefits under the plans are based upon an employee's compensation
and years of service and, where applicable, the provisions of negotiated labor
contracts. It is the Company's policy to make contributions to these plans
sufficient to meet the minimum funding requirements of applicable laws and
regulations plus such additional amounts, if any, as the Company's actuarial
consultants advise to be appropriate. The projected unit credit method is
utilized for determination of actuarial amounts.

Plan assets consist principally of U.S. government securities, short-term
investments, other equity securities and cash equivalents.

On September 1, 2000, the Company established a Defined Benefit Supplemental
Executive Retirement Plan to provide pension benefits to selected executives and
retired executives/directors of the Company. The plan is unfunded and the
benefits provided under the plan are intended to be in addition to other
employee retirement benefits offered by the Company, including but not limited
to tax-qualified employee retirement plans.

Postretirement Benefits Other Than Pensions:

The Company provides limited amounts of postretirement health and life insurance
benefit plan coverage for some of its employees. The determination of the cost
of postretirement health benefit plans is based on comprehensive hospital,
medical, surgical and dental benefit provisions ("Other Benefits"). The
determination of the cost of postretirement life insurance benefits is based on
stated policy amounts.


                                      (17)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 9 - Retirement Benefits (continued):

Early Retirement Plan:

On October 27, 2004, the Company's Board of Directors approved a voluntary early
retirement program for all of the Company's salaried exempt and non-exempt
employees in its three locations in the Reading, Pennsylvania area who attained
age 57 or older and had at least five years of service with the Company as of
January 31, 2005. The program provided that each such eligible employee who made
an election to retire from the Company on or between November 10, 2004 and
January 31, 2005 would (1) receive payments equal to two weeks pay for each year
of his or her service with the Company and a lump sum payment of $20,000, (2) be
treated as if such employee retired under the salaried pension plan at his or
her normal retirement date without any additional years of service being
credited, but without any reduction for early commencement of benefits, and (3)
have their stock options issued under the Company's stock incentive plans, which
are unvested as of the effective date of his or her retirement, accelerated so
as to vest and become fully exercisable as of such date.

During the second quarter of fiscal 2005, the Company recorded $1,860 related to
pension and $814 related to other post-retirement benefits related to the early
retirement program, which are not included in the net periodic benefit costs
below. These charges to expense and credit to prepaid pension and accrued post
retirement benefit obligations resulted from the Company's waiver in connection
with the early retirement program of the normal discount that customarily would
have applied to a participant's benefits if the participant had otherwise
elected to retire prior to his/her normal retirement date.

The following summarizes the components of the net periodic benefit costs:

<TABLE>
<CAPTION>
                                            Pension Benefits                          Other Benefits
                                   ------------------------------------     ------------------------------------
                                       For the Three Months Ended               For the Three Months Ended
                                   ------------------------------------     ------------------------------------
                                     February 28,        February 29,         February 28,        February 29,
                                         2005                2004                 2005                2004
                                   ----------------    ----------------     ----------------    ----------------
<S>                                <C>                 <C>                  <C>                 <C>
    Service cost                          $  1,665             $   811              $    88             $    79
    Interest cost                            2,580               1,199                  225                 156
    Expected return on plan assets          (3,402)             (1,682)                   -                   -
    Amortization of prior
       service costs                           625                 225                   (3)                (15)
    Amortization of transition
       obligation (asset)                      (69)                (26)                  12                   8
    Amortization of net
       actuarial (gain) loss                   571                 210                   25                  35
    Plan acquisition
       differential                              -                  36                   (7)                 (5)
                                   ----------------    ----------------     ----------------    ----------------
         Net periodic (benefit)
            cost                          $  1,970             $   773              $   340             $   258
                                   ================    ================     ================    ================


                                            Pension Benefits                          Other Benefits
                                   ------------------------------------     ------------------------------------
                                       For the Six Months Ended                 For the Six Months Ended
                                   ------------------------------------     ------------------------------------
                                     February 28,        February 29,         February 28,        February 29,
                                         2005                2004                 2005                2004
                                   ----------------    ----------------     ----------------    ----------------
    Service cost                          $  2,550             $ 1,633              $   199             $   182
    Interest cost                            3,941               2,413                  484                 366
    Expected return on plan assets          (5,205)             (3,385)                   -                   -
    Amortization of prior
       service costs                           927                 453                  (43)                (38)
    Amortization of transition
       obligation (asset)                     (105)                (52)                  25                  21
    Amortization of net
       actuarial (gain) loss                   850                 423                   78                  82
    Plan acquisition
       differential                              -                  74                  (14)                (13)
                                   ----------------    ----------------     ----------------    ----------------
         Net periodic (benefit)
            cost                           $ 2,958             $ 1,559              $   729             $   600
                                   ================    ================     ================    ================
</TABLE>


                                      (18)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 10 - Restructuring Charges:

In August 2004, the Company initiated the consolidation of its operations at its
Winston-Salem, North Carolina and San Antonio, Texas facilities into other
existing manufacturing facilities. These steps are part of the Company's overall
manufacturing realignment and capacity increases announced in June 2004. The
transitional work on the consolidation has begun and the consolidation is
expected to continue into the second half of fiscal 2005. Severance payments
relate to approximately 53 employees primarily in manufacturing at both
facilities and the remaining accrual balance is expected to be paid in the third
quarter of fiscal 2005. All other restructuring costs are expected to be paid
over the remainder of fiscal 2005 and fiscal 2006. Restructuring charges related
to this manufacturing realignment are summarized in the table below:

<TABLE>
<CAPTION>
                                                                    Actual Costs Expensed
                                              ------------------------------------------------------------------
                                                For the                      For the                  Costs
                                Estimate of      Twelve       For the         Three                  expensed
                                   Total         Months     Three Months      Months               but not yet     Estimated
                                 Expected        Ended         Ended          Ended                 paid as of     Costs yet
                               Restructuring   August 31,   November 30,     February     Total      February        to be
                                  Charges         2004          2004         28, 2005    to Date     28, 2005       Expensed
                               -------------  ------------  ------------   ------------ ---------  -------------  ------------
<S>                            <C>            <C>           <C>            <C>          <C>        <C>            <C>
Severance and related
   expenses                           $  466        $  208        $  184        $    74    $  466        $  283       $      -
Property, plant and
   equipment carrying
   cost and costs of
   disposal                              273             -            48              -        48             -            225
Other, including
   equipment and
   inventory moving costs,
   employee relocation
   costs, and external
   consulting fees                       208             -             8             11        19             -            189
                               -------------  ------------  ------------   ------------ ---------  -------------  ------------
Total restructuring
   charges                            $  947        $  208        $  240        $    85    $  533        $  283       $    414
                               =============  ============  ============   ============ =========  =============  ============
</TABLE>

The Company has segregated its San Antonio facility and related equipment as
held for sale on the Company's Balance Sheet as of February 28, 2005.

As part of its plans to rationalize its production operations and related
logistics in Europe, in November 2004, the Company determined to move its
European Distribution Center, previously situated in Weesp, Netherlands, to a
more centralized European location in the Limberg region of Belgium in order to
have better access to existing carrier transportation networks and allow for
more cost-competitive expansion of its European operations in the future. The
Company continued to implement this relocation in the second quarter of fiscal
2005 and expects to complete the relocation and related logistics in the second
half of fiscal 2005, at an estimated total cost of $1,610. Restructuring charges
related to this distribution center relocation and related logistics are
summarized below:


                                      (19)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 10 - Restructuring Charges (continued):

<TABLE>
<CAPTION>
                                                                    Actual Costs Expensed
                                              ------------------------------------------------------------------
                                                For the                      For the                  Costs
                                Estimate of      Twelve       For the         Three                  expensed
                                   Total         Months     Three Months      Months               but not yet     Estimated
                                 Expected        Ended         Ended          Ended                 paid as of     Costs yet
                               Restructuring   August 31,   November 30,     February     Total      February        to be
                                  Charges         2004          2004         28, 2005    to Date     28, 2005       Expensed
                               -------------  ------------  ------------   ------------ ---------  -------------  ------------
<S>                            <C>            <C>           <C>            <C>          <C>        <C>            <C>
Severance and related
   expenses                          $   958             -       $   151        $   467   $   618       $    467       $   340
Lease termination costs                  256             -                          227       227            227            29
Property, plant and
   equipment carrying
   cost and costs of
   disposal                               98             -             -              -         -              -            98
Other, including
   equipment and
   inventory moving costs,
   employee relocation
   costs, and external
   consulting fees                       298             -             -            151       151              -           147
                               -------------  ------------  ------------   ------------ ---------  -------------  ------------
Total restructuring
   charges                           $ 1,610             -       $   151        $   845   $   996       $    694       $   614
                               =============  ============  ============   ============ =========  =============  ============
</TABLE>

Note 11 - Earnings Per Share

The following is a reconciliation of weighted average common shares outstanding
assuming dilution used in the calculation of earnings per share for the three
and six months ended February 28, 2005 and February 29, 2004.

<TABLE>
<CAPTION>
                                                              For the Three           For the Three
                                                               Months Ended            Months ended
                                                               February 28,            February 29,
                                                                   2005                    2004
                                                           ---------------------    -------------------
<S>                                                                     <C>                   <C>
Net income                                                              $5,354                $15,458

Weighted average common shares outstanding                              44,214                 43,504

Incremental common shares issuable: stock options
   and awards                                                              796                    699
                                                           ---------------------    -------------------

Weighted average common shares outstanding
   assuming dilution                                                    45,010                 44,203
                                                           =====================    ===================

Basic earnings per common share                                          $0.12                  $0.36
                                                           =====================    ===================

Diluted earnings per common share                                        $0.12                  $0.35
                                                           =====================    ===================
</TABLE>


                                      (20)
<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Note 11 - Earnings Per Share (continued):

<TABLE>
<CAPTION>
                                                                        For the Six Months         For the Six
                                                                              Ended                Months ended
                                                                           February 28,            February 29,
                                                                               2005                    2004
                                                                       ---------------------    -------------------
<S>                                                                    <C>                      <C>
Net income                                                                         $18,637                $29,882

Weighted average common shares outstanding                                          44,024                 43,424

Incremental common shares issuable: stock options
   and awards                                                                          743                    669
                                                                       ---------------------    -------------------

Weighted average common shares outstanding
   assuming dilution                                                                44,767                 44,093
                                                                       =====================    ===================

Basic earnings per common share                                                      $0.42                  $0.69
                                                                       =====================    ===================

Diluted earnings per common share                                                    $0.42                  $0.68
                                                                       =====================    ===================
</TABLE>

All stock options outstanding to purchase shares of common stock were included
in the computation of earnings per share assuming dilution because the options
exercise prices were less than the average market price of the Company's common
stock at February 28, 2005 and February 29, 2004, respectively.


Note 12 - Product Recall

As previously reported, on December 3, 2004, the Company announced a nationwide
recall of all of its NEO?PICC(R) 1.9 FR Peripherally Inserted Central Catheters
(the "NeoPICC Catheters") as a result of having received several reports of
adverse events involving the utilization of the NeoPICC Catheters. The NeoPICC
Catheter is part of the Company's NEO?Care product line of catheters and related
procedure kits for neonatal intensive care that it acquired from Klein Baker
Medical, Inc. in March 2003. The Company is cooperating with the U.S. Food and
Drug Administration (the "FDA") in conducting the voluntary recall. As of April
7, 2005, the Company has not received any product liability claims in connection
with the product recall.

The Company sent recall notices to approximately 800 hospitals and 16 dealers.
In the first quarter of fiscal 2005, the Company recorded a charge against net
sales of $500, representing its issued sales credits as of January 7, 2005 and
an estimate for those sales credits yet to be issued relating to returned
NeoPICC Catheters. As of February 28, 2005, the Company has issued sales credits
totaling $478, leaving an estimated accrual of $22 for any additional credits
yet to be issued.

Following the recall, the FDA inspected the Company's corporate headquarters and
the facility where the NeoPICC Catheters were manufactured and provided the
Company with a list of inspectional observations, to which the Company has
responded. As part of its previously announced plans to rationalize its global
manufacturing and logistics operations, the Company decided to accelerate the
integration of the NEO?Care manufacturing operations into its existing
manufacturing structure. In order to facilitate this integration of NEO?Care and
to address each of the inspectional observations of the FDA, the Company
temporarily ceased the manufacture, shipment and sales of its NEO?Care product
line, including the NeoPICC Catheters, until it has adequately addressed each of
the inspectional observations. Shipment of the NeoPICC Catheters will resume
after receipt of FDA clearance of a new 510(k) premarket notification for these
products.

The Company's fiscal 2004 NEO?Care product line sales were $7,646. Inventories
of NeoPICC Catheters at February 28, 2005 amounted to $208, which the Company
has fully reserved for as of February 28, 2005. Inventories of other NEO?Care
products were approximately $1,721 at February 28, 2005.


Note 13 - Early Retirement Program

On October 27, 2004, the Company's Board of Directors approved a voluntary early
retirement program for all of the Company's salaried exempt and non-exempt
employees in its three locations in the Reading, Pennsylvania area who attained
age 57 or older and had at least five years of service with the Company as of
January 31, 2005. The program provided that each such eligible employee who made
an election to retire from the Company on or between November 10, 2004 and
January 31, 2005 would (1) receive payments equal to two weeks pay for each year
of his or her service with the Note 13 - Early Retirement Program (continued):


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<PAGE>

                            ARROW INTERNATIONAL, INC.
                   Notes to Consolidated Financial Statements

                    (In thousands, except per share amounts)
                                   (Unaudited)


Company and a lump sum payment of $20,000, (2) be treated as if such employee
retired under the salaried pension plan at his or her normal retirement date
without any additional years of service being credited, but without any
reduction for early commencement of benefits, and (3) have their stock options
issued under the Company's stock incentive plans, which are unvested as of the
effective date of his or her retirement, accelerated so as to vest and become
fully exercisable as of such date.

During the second quarter of fiscal 2005, the Company recorded $6,839 in total
costs with respect to this program, of which $1,883 was recorded to cost of
sales and $4,956 to selling, general and administrative expenses. Of the $6,839
in total costs, $2,674 was related to pension and other post retirement benefits
and $3,023 was a cash charge related to severance and related costs. The
remaining $1,142 was incurred as a non-cash charge for accelerated vesting of
stock options held by participants in this program. A total of 28 participants
elected into the program.


Note 14 - LionHeart Impairment Charge

As announced on April 7, 2005, the Company's Board of Directors unanimously
voted to discontinue the development, sales and marketing programs related to
its LionHeart Left Ventricular Assist System (LVAS).

As reported on March 21, 2005, there were no sales of the Company's LionHeart
devices during either of the first two quarters of fiscal year 2005. As a
result, the Company made a provision in its second fiscal quarter of $2,079 for
LionHeart inventory in excess of anticipated requirements. In addition, the
Company wrote off in the second fiscal quarter ended February 28, 2005 its
remaining investment in the LionHeart program, which included $2,824 in
equipment and components. The write off of equipment was recorded in accordance
with the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets." The Company reached its conclusion that its LionHeart
equipment was impaired based on the completion of a study during the second
quarter by an outside consulting firm, which included the use of future cash
flow analyses to estimate the fair value of these assets. This conclusion was
confirmed by the Board of Directors' decision on April 6, 2005. The total write
off in the second quarter related to the LionHeart was $4,903, of which $4,562
was recorded to cost of sales and $341 to research and development expenses.


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                            ARROW INTERNATIONAL, INC.


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
           of Operations

THE FOLLOWING DISCUSSION INCLUDES CERTAIN FORWARD-LOOKING STATEMENTS. SUCH
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A NUMBER OF FACTORS, INCLUDING
MATERIAL RISKS, UNCERTAINTIES AND CONTINGENCIES, WHICH COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THE FORWARD-LOOKING STATEMENTS. FOR A
DISCUSSION OF IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THE FORWARD-LOOKING STATEMENTS, SEE ITEM 1. BUSINESS - CERTAIN
RISKS RELATING TO ARROW IN THE COMPANY'S ANNUAL REPORT ON FORM L0-K FOR THE
FISCAL YEAR ENDED AUGUST 31, 2004 AND THE COMPANY'S OTHER PERIODIC REPORTS AND
DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.


Results of Operations

THREE MONTHS ENDED FEBRUARY 28, 2005 COMPARED TO THREE MONTHS ENDED FEBRUARY 29,
2004:

NET SALES.
Net sales for the three months ended February 28, 2005 increased by $0.9
million, or 0.8%, to $109.2 million from $108.3 million in the same period last
year, due primarily to an increase in critical care product sales and a
favorable foreign exchange impact during the second quarter of fiscal 2005 as a
result of the weakness of the U.S. dollar relative to currencies of countries in
which the Company operates direct sales subsidiaries. This increase was offset
in part by an unfavorable impact of $4.3 million against net sales in the second
quarter of fiscal 2005 related to the Company's misapplication of the accounting
treatment for its shipping terms, as further discussed below under "- Critical
Accounting Policies and Estimates - Revenue Recognition." The foreign exchange
impact resulted in increased sales for the quarter of $1.6 million or 1.5% of
total Company sales. Net sales represent gross sales invoiced to customers less
certain related charges, discounts, returns, and rebates. The following is a
summary of the Company's sales by product platform:

<TABLE>
<CAPTION>

Sales by Product Platform
(in millions)                                                QUARTER ENDED
                                                             -------------
                                             FEBRUARY 28, 2005           FEBRUARY 29, 2004
                                             -----------------           -----------------
<S>                                                <C>                           <C>
       Central Venous Catheters                    $ 57.0                        $ 55.8
       Specialty Catheters                           34.3                          33.2
       Stepic Distributed Products                    1.9                           3.0
                                                   ------                        ------
            Subtotal Critical Care                   93.2                          92.0
       Cardiac Care                                  16.0                          16.3
                                                   ------                        ------
            TOTAL                                  $109.2                        $108.3
                                                   ======                        ======
</TABLE>

Sales of critical care products increased 1.3% to $93.2 million from $92.0
million in the comparable prior year period due primarily to increased sales of
central venous and specialty catheters offset by decreased sales of products
distributed by Stepic Medical, the Company's former New York City distributor,
the net assets of which it acquired in September 2002. Sales of central venous
catheters increased in the second quarter of fiscal 2005 due primarily to a
continued increase in the number of hospitals that are purchasing the Company's
procedure kits featuring its safety devices and ARROWg+ard(R) antiseptic surface
treatments, as well as increased sales of renal access products, offset in part
by decreased sales of neonatal products resulting from the Company's previously
reported decision in January 2005 to temporarily cease manufacturing, shipping
and selling of its NeoCare(R) product line until it completes the integration
of its NeoCare(R) manufacturing operations. Sales of specialty catheters
increased in the second quarter of fiscal 2005 due primarily to improved sales
of arterial products and intravenous and extension sets. Sales of cardiac care
products decreased by 1.8% to $16.0 million in the second quarter of fiscal 2005
from $16.3 million in the comparable prior year period due primarily to reduced
domestic sales of intra-aortic balloon pumps. Total Company U.S. sales decreased
3.4% to $67.9 million in the second quarter of fiscal 2005 from $70.3 million in
the comparable prior year period, principally as a result of decreased sales of
products distributed by Stepic Medical, decreased sales of central venous
catheters primarily attributable to the temporary loss of NeoCare(R) product
sales during the quarter and decreased sales of intra-aortic balloon pumps that
the Company believes are attributable to customers' delaying their purchases of
the Company's AutoCAT(R)2 WAVETM intra-aortic balloon pump until the upgraded
software for this product becomes available later this summer, offset by
increased sales of specialty catheters. International sales increased by 8.7% to
$41.3 million in the second quarter of fiscal 2005 from $38.0 million in the
comparable prior year period, principally as a result of increased sales of
central venous catheters, specialty catheters, intra-aortic balloon pumps, and
the effect of foreign currency exchange rates, as noted above. International
sales represented 37.8% of net sales in the second quarter of fiscal 2005,
compared to 35.1% in the same prior year period.

The ARROWg+ard(R) conversion percentages, which are the number of units sold
with the ARROWg+ard(R) antiseptic surface treatments as a percentage of the
Company's total multilumen and hemodialysis unit sales, increased to 38% from
36% in the comparable prior year period for total Company sales. The
ARROWg+ard(R) conversion percentages for the U.S. market increased to 64% from
61% in the comparable prior year period.


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                            ARROW INTERNATIONAL, INC.


The safety device procedure kits conversion percentages, which are the number of
units sold with the Company's procedure kits featuring its safety devices as a
percentage of the total number of units sold of the Company's products that
could potentially include safety device procedure kits, increased to 9% of total
Company sales in the second quarter of fiscal 2005 from 7% in the comparable
prior year period. The safety device procedure kit conversion percentages for
the U.S. market in the second quarter of fiscal 2005 increased to 17% from 13%
in the comparable prior year period.

GROSS PROFIT.
Gross profit decreased 12.3% to $50.7 million in the three months ended February
28 2005, compared to $57.8 million in the same period of fiscal 2004. As a
percentage of net sales, gross profit decreased to 46.4% during the three months
ended February 28, 2005 from 53.4% in the comparable prior year period. The
decrease in gross margin was due primarily to (1) the recording of a provision
to cost of sales of $4.6 million in the second quarter of fiscal 2005 for
inventory and manufacturing equipment related to the Company's LionHeart, Left
Ventricular Assist System (LVAS) as a consequence of the Board of Directors'
recent decision to discontinue the development, sales and marketing program
related to the LionHeart, as further discussed below under "- Six Months Ended
February 28, 2005 Compared to Six Months Ended February 29, 2004 - Research and
Development - LionHeart(TM) LVAS"; (2) incremental cost of sales of $1.9 million
in the second quarter of fiscal 2005 related to the Company's voluntary early
retirement program; and (3) higher manufacturing costs associated with the
Company's higher production requirements, which have strained its current
manufacturing capacity and ability to meet increased customer demand. The
Company is responding to these capacity concerns by increasing its worldwide
manufacturing capacity, integrating and rationalizing existing facilities, and
making capital expenditures to improve the effectiveness of its production
technology, processes and equipment as part of its Project Operational
Excellence, as further discussed below under "- Liquidity and Capital Resources
- Investing Activities." The Company anticipates continued lower gross margins,
compared to prior periods, until these capacity increases and productivity
improvements are fully implemented.

PRODUCT RECALL.
As previously reported, on December 3, 2004 the Company announced a nationwide
recall of all of its NEO?PICC(R) 1.9 FR Peripherally Inserted Central Catheters
(the "NeoPICC Catheters") as a result of having received several reports of
adverse events involving the utilization of the NeoPICC Catheters. The NeoPICC
Catheter is part of the Company's NEO?Care product line of catheters and related
procedure kits for neonatal intensive care that it acquired from Klein Baker
Medical, Inc. in March 2003. The Company is cooperating with the U.S. Food and
Drug Administration (the "FDA") in conducting the voluntary recall. As of April
7, 2005, the Company has not received any product liability claims in connection
with the product recall.

The Company sent recall notices to approximately 800 hospitals and 16 dealers.
In the first quarter of fiscal 2005, the Company recorded a charge against net
sales of $0.5 million, representing its issued sales credits as of January 7,
2005 and an estimate for those sales credits yet to be issued relating to
returned NeoPICC Catheters. As of February 28, 2005, the Company has issued
sales credits totaling $478,000, leaving an estimated accrual of $22,000 for any
additional credits yet to be issued.

Following the recall, the FDA inspected the Company's corporate headquarters and
the facility where the NeoPICC Catheters were manufactured and provided the
Company with a list of inspectional observations, to which the Company has
responded. As part of its previously announced plans to rationalize its global
manufacturing and logistics operations, the Company decided to accelerate the
integration of the NEO?Care manufacturing operations into its existing
manufacturing structure. In order to facilitate this integration of NEO?Care and
to address each of the inspectional observations of the FDA, the Company
temporarily ceased the manufacture, shipment and sales of its NEO?Care product
line, including the NeoPICC Catheters, until it has adequately addressed each of
the inspectional observations. Shipment of the NeoPICC Catheters will resume
after receipt of FDA clearance of a new 510(k) premarket notification for these
products. Shipments of the NEO?Care product line, other than the NeoPICC
Catheters, are presently expected to resume in the first quarter of fiscal 2006.

The Company's fiscal 2004 NEO?Care product line sales were $7.6 million.
Inventories of NeoPICC Catheters at February 28, 2005 amounted to $0.2 million,
which the Company has fully reserved for as of February 28, 2005. Inventories of
other NEO?Care products were approximately $1.7 million at February 28, 2005.

RESEARCH AND DEVELOPMENT.
Research and development expenses increased by 10.9% to $7.1 million in the
three months ended February 28, 2005, compared to $6.4 million in the comparable
prior year period. As a percentage of net sales, these expenses increased in the
second quarter of fiscal 2005 to 6.5% compared to 5.9% in the same period in
fiscal 2004. The increase in research and development expenses was due mainly to
(1) the Company's charge in the second quarter of fiscal 2005 of $0.3 million
for the write off of equipment associated with the discontinuation of its
LionHeart LVAS program, as further discussed below, and (2) increased research
and development spending on the CorAide(TM) continuous flow ventricular assist
system, the Company's joint research and development program with The Cleveland
Clinic Foundation. This increase was offset by a decrease in research and
development spending on the LionHeart program, which included $0.7 million in
the second quarter of fiscal 2005 for development of the Lionheart's second
generation electronics. A description of the current status of the Company's
major research and development programs is provided below under "Six Months
Ended February 28, 2005 Compared to Six Months Ended February 29, 2004 -
Research and Development."


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<PAGE>

                            ARROW INTERNATIONAL, INC.


SELLING, GENERAL AND ADMINISTRATIVE.
Selling, general and administrative expenses increased by 25.0% to $35.5 million
during the three months ended February 28, 2005 from $28.4 million in the
comparable prior year period and, as a percentage of net sales, increased to
32.5% in the second quarter of fiscal 2005 from 26.2% in the comparable period
of fiscal 2004. This increase was due to several factors, including incremental
expenses of $5.0 million related to the Company's voluntary early retirement
program and increased expenses of $0.8 million related to the Company's pension
and postretirement welfare plans based on adjusting certain estimated data to
actual data received during the second fiscal quarter of 2005.

RESTRUCTURING CHARGES.
The Company recorded $0.9 million ($0.6 million after tax, or $0.01 diluted
earnings per share) of restructuring expenses in the second quarter of fiscal
2005 related primarily to additional accrued severance payments associated with
its consolidation of operations at its Winston-Salem, North Carolina and San
Antonio, Texas facilities into other existing manufacturing facilities, and
additional accrued severance payments and lease termination costs associated
with the relocation of its European Distribution Center from Weesp, Netherlands
to a more centralized European location in the Limberg region of Belgium. See "-
Liquidity and Capital Resources - Investing Activities - Multiyear Capital
Investment Plan."

OPERATING INCOME.
Principally due to the above factors, operating income decreased in the second
quarter of fiscal 2005 by 69.1% to $7.1 million from $23.0 million in the
comparable prior year period.

OTHER (INCOME) EXPENSES, NET.
Other (income) expenses, net, was $0.2 million of income in the second quarter
of fiscal 2005 compared to $0.1 million of expense in the same prior year
period. Other expenses (income), net, consists principally of interest expense
and foreign exchange gains and losses associated with the Company's direct sales
subsidiaries.

INCOME BEFORE INCOME TAXES.
As a result of the factors discussed above, income before income taxes decreased
in the second quarter of fiscal 2005 by 68.1% to $7.3 million from $22.9 million
in the comparable prior year period. For the second quarter of fiscal 2005, the
Company's effective income tax rate decreased to 26.5% from 32.5% in the
comparable prior year period due to more favorable than expected fiscal year
2004 research and development tax credits resulting from the completion of the
Company's analysis of these credits during the second quarter of fiscal 2005.

On October 22, 2004, the President signed The American Jobs Creation Act of 2004
(the "Act"). The Act included some of the most significant changes to corporate
taxation since 1996 and, among other things, eliminates the Extraterritorial
Income Regime (the "ETI") over a three-year phase out period beginning in 2005.
However, the phase out will still allow the Company to obtain a significant
percentage of the ETI benefit for fiscal 2005 and 2006 with a somewhat smaller
benefit for fiscal 2007. The ETI will be totally phased out by the Company's
2008 fiscal year end. Additionally, the Act provides for a deduction for U.S.
domestic manufacturers beginning in the Company's fiscal year 2006. This new
deduction begins at 3% of the Company's U.S. domestic manufacturing income for
the Company's fiscal years 2006 and 2007, increasing to 6% for the Company's
fiscal years 2008 to 2010 and achieves its maximum rate of 9% for the Company's
fiscal years 2010 and beyond. While the Company is not yet able to make an exact
calculation of the overall effect of these changes, management believes that the
phased out repeal of the ETI benefit during 2005 and 2006 and the phase in of
the new manufacturing deduction benefit from 2006 to 2011 should not have a
material adverse effect on the Company's effective tax rate, although it
believes that the net effect will be less of an income tax benefit to the
Company for the remainder of fiscal 2005 and beyond.

NET INCOME.
Net income in the second quarter of fiscal 2005 decreased by 65.2% to $5.4
million from $15.5 million in the comparable prior year period, primarily as a
result of the above factors. As a percentage of net sales, net income
represented 4.9% in the three months ended February 28, 2005 compared to 14.3%
in the same period of fiscal 2004.

PER SHARE INFORMATION.
Basic earnings per common share were $0.12 in the three months ended February
28, 2005, down 66.7%, or $0.24 per share, from $0.36 in the comparable prior
year period. Diluted earnings per share were $0.12 in the three months ended
February 28, 2005, down 65.7%, or $0.23 per share, from $0.35 in the comparable
prior year period. Weighted average shares of common stock outstanding used in
computing basic earnings per common share increased to 44,213,584 in the second
quarter of fiscal 2005 from 43,503,741 in the comparable prior year period
primarily as a result of an increase in stock option exercises due to a higher
market price of the Company's stock relative to average outstanding option
exercise prices during the fiscal year. Weighted average shares of common stock
outstanding used in computing diluted earnings per common share increased to
45,009,506 in the second quarter of fiscal 2005 from 44,202,983 in the
comparable prior year period primarily as a result of an increase in potentially
dilutive shares resulting from an increased share price and an increase in stock
option exercises for the reasons described above.


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<PAGE>

                            ARROW INTERNATIONAL, INC.


SIX MONTHS ENDED FEBRUARY 28, 2005 COMPARED TO SIX MONTHS ENDED FEBRUARY 29,
2004:

NET SALES.
Net sales for the six months ended February 28, 2005 increased by $10.5 million,
or 5.0%, to $221.9 million from $211.4 million in the same period last year, due
primarily to an increase in critical care product sales and a favorable foreign
exchange impact during the six months ended February 28, 2005 as a result of the
weakness of the U.S. dollar relative to currencies of countries in which the
Company operates direct sales subsidiaries. This increase was offset in part by
an unfavorable impact of $4.3 million against net sales in the first half of
fiscal 2005 related to the Company's misapplication of the accounting treatment
for its shipping terms, as further discussed below under "- Critical Accounting
Policies and Estimates - Revenue Recognition." The foreign exchange impact
resulted in increased sales for the six months ended February 28, 2005 of $3.5
million or 1.7% of total Company sales. The following is a summary of the
Company's sales by product platform:

<TABLE>
<CAPTION>

Sales by Product Platform (in millions)                    SIX MONTHS ENDED
                                                           ----------------
                                             FEBRUARY 28, 2005           FEBRUARY 29, 2004
                                             -----------------           -----------------
<S>                                              <C>                           <C>
       Central Venous Catheters                  $116.3                        $109.4
       Specialty Catheters                         69.1                          65.5
       Stepic Distributed Products                  3.8                           6.1
                                                 ------                        ------
            Subtotal Critical Care                189.2                         181.0
       Cardiac Care                                32.7                          30.4
                                                 ------                        ------
            TOTAL                                $221.9                        $211.4
                                                 ======                        ======
</TABLE>

Sales of critical care products increased by 4.5% to $189.2 million for the six
months ended February 28, 2005 from $181.0 million in the comparable prior year
period due primarily to increased sales of central venous and specialty
catheters offset by decreased sales of products distributed by Stepic Medical,
the Company's New York City distributor, the net assets of which it acquired in
September 2002. Sales of central venous catheters increased in the six months
ended February 28, 2005, due primarily to a continued increase in the number of
hospitals that are purchasing the Company's procedure kits featuring its safety
devices and ARROWg+ard(R) antiseptic surface treatments, as well as increased
sales of renal access products, offset in part by decreased sales of neonatal
products resulting from the Company's temporary cessation of manufacturing,
shipping and selling of the NeoCare(R) product line in January 2005. Sales of
specialty catheters increased in the six months ended February 28, 2005 due to
improved sales of arterial products, intravenous and extension sets, and
epidural products. Cardiac care product sales increased by 7.6% to $32.7 million
from $30.4 million in the comparable prior year period, due primarily to
increased international sales of intra-aortic balloon pumps and Super
Arrow-Flex(R) products. Total Company U.S. sales decreased 0.6% to $136.6
million for the six months ended February 28, 2005 from $137.4 million in the
comparable prior year period. International sales increased by 15.3% to $85.3
million from $74.0 million in the comparable prior year period, principally as a
result of increased sales of central venous catheters, specialty catheters,
intra-aortic balloon pumps, Super Arrow-Flex(R) products and the effect of
foreign currency exchange rates, as noted above. International sales represented
38.4% of net sales for the six months ended February 28, 2005 compared to 35.0%
in the comparable period of fiscal 2004.

The ARROWg+ard(R) conversion percentages, which are the number of units sold
with the ARROWg+ard(R) antiseptic surface treatments as a percentage of the
Company's total multilumen and hemodialysis unit sales, increased to 38% from
37% in the comparable prior year period for total Company sales. The
ARROWg+ard(R) conversion percentages for the U.S. market increased to 64% from
61% in the comparable prior year period.

The safety device procedure kits conversion percentages, which are the number of
units sold with the Company's procedure kits featuring its safety devices as a
percentage of the total number of units sold of the Company's products that
could potentially include safety device procedure kits, increased to 8% of total
Company sales in the first half of fiscal 2005 from 7% in the comparable prior
year period. The safety device procedure kit conversion percentages for the U.S.
market in the first half of fiscal 2005 increased to 16% from 13% in the
comparable prior year period.

GROSS PROFIT.
Gross profit decreased 4.4% to $107.1 million in the six months ended February
28, 2005, compared to $112.0 million in the same period of fiscal 2004. As a
percentage of net sales, gross profit decreased to 48.3% during the six months
ended February 28, 2005 from 53.0% in the comparable period of fiscal 2004. The
decrease in gross margin was due primarily to (1) the recording of a provision
to cost of sales of $4.6 million in the second quarter of fiscal 2005 for
inventory and manufacturing equipment related to the Company's LionHeart LVAS as
a consequence of the Board of Directors' recent decision to discontinue the
development, sales and marketing programs related to the LionHeart, as further
discussed below under " - Research and Development - LionHeart LVAS"; (2)
incremental cost of sales of $1.9 million in the second quarter of fiscal 2005
related to the Company's voluntary early retirement program; (3) lower margins
realized in the first half of fiscal 2005 on the sale of inventories of products
acquired as part of the Company's purchase of the net assets of AB Medica, the
Company's former Italian distributor, in September 2004, as further discussed
below under "Liquidity and Capital Resources - Investing Activities"; and (4)
unfavorable inventory adjustments in fiscal 2005 resulting from the scrapping of
returned goods and cycle counting of finished goods inventory quantities in the
Company's U.S. distribution center.


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<PAGE>

                            ARROW INTERNATIONAL, INC.


RESEARCH AND DEVELOPMENT.
Research and development expenses increased by 13.6% to $15.0 million in the six
months ended February 28, 2005 from $13.2 million in the comparable prior year
period. As a percentage of net sales, these expenses increased in the first half
of fiscal 2005 to 6.8% compared to 6.2% in the same period in fiscal 2004. The
increase in research and development expenses was due primarily to (1) the
Company's charge in the second quarter of fiscal 2005 of $0.3 million for the
write off of equipment associated with the discontinuation of its LionHeart LVAS
program, as further discussed below; (2) increased research and development
expenditures for the Company's critical care product line, including incremental
research and development spending on its ARROWg+ard(R) antiseptic treatment
products; and (3) increased research and development spending on the
LionHeart(TM) program, which included $1.7 million in the first half of fiscal
2005 for development of the LionHeart(TM)'s second generation electronics. The
current status of the Company's principal product development programs is
summarized below.

AUTOCAT(R)2 WAVE. The Company continues to market and make modifications to its
AutoCAT(R)2 WAVETM intra-aortic balloon pump and associated LightWAVE(TM)
catheter system, which utilizes fiber optic pressure-sensing catheter
instrumentation and provides total automation of the pumping process for all
patients, including those with severely arrhythmic heartbeats. The growing
interest in this product has resulted in increased customer feedback, providing
the Company with valuable information for making additional product
enhancements. As a result of this customer feedback, the Company is undertaking
a significant upgrade of the software for this product, which it believes will
increase the overall competitiveness of the device, which the Company plans to
complete and release in the summer of 2005. During the second quarter of fiscal
2005, net sales of the AutoCAT(R)2 WAVETM and related LightWAVE(TM) catheters
decreased 8.3% over the first quarter of fiscal 2005, which the Company believes
is attributable to customers' delaying their purchases until the release of the
new software. Development of this product is an ongoing process, with product
improvements constantly being made and introduced as the underlying technology
advances and the Company learns more about customer requirements.

Although the Company is encouraged by the early sales results of its AutoCAT(R)2
WAVETM and related LightWAVE(TM) catheter system, the selling cycle for
intra-aortic balloon pumps is long and involves a number of decision-makers in
any given hospital. As a result, the Company is cautiously optimistic about this
product's future sales growth. The Company continues to believe that this new
technology represents a major step forward in intra-aortic balloon pumping and
should enable the Company to gain market share based on superior performance
across a range of cardiac requirements.

LIONHEART(TM) LVAS. As announced on April 7, 2005, the Company's Board of
Directors unanimously voted to discontinue the development, sales and marketing
programs related to its LionHeart LVAS. This decision was based on the Company's
review of ventricular assist technology trends, its experience in marketing the
device in Europe, the input it received from the medical community, as well as
the data and analysis of the outside consultants it retained to analyze the
long-term commercial opportunity of this program. In addition, the Company
thoroughly assessed the significant additional time and investment required to
maximize the potential of the LionHeart. Based on consideration of all of these
factors, the Board determined that the LionHeart is not economically viable for
the Company, as it would not realize adequate returns for its shareholders in an
acceptable period of time.

As reported on March 21, 2005, there were no sales of the Company's LionHeart
devices during either of the first two quarters of fiscal year 2005. As a
result, the Company made a provision in its second fiscal quarter of $2.1
million for LionHeart inventory in excess of anticipated requirements. In
addition, the Company wrote off in the second fiscal quarter ended February 28,
2005 its remaining investment in the LionHeart program, which included $2.8
million in equipment and components. The write off of equipment was recorded in
accordance with the provisions of SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." The Company reached its conclusion that its
LionHeart equipment was impaired based on the completion of a study during the
second quarter by its outside consulting firm which included the use of future
cash flow analyses to estimate the fair value of these assets. This conclusion
was confirmed by the Board of Directors' decision on April 6, 2005. The total
write off in the second quarter related to the LionHeart was $4.9 million, of
which $4.6 million was recorded to cost of sales and $0.3 million to research
and development expenses.

CORAIDE(TM) LVAS. The Company has completed development of modifications to its
CorAide(TM) continuous flow ventricular assist device to resolve elevated levels
of hemolysis (plasma-free hemoglobin) experienced in the first implant of the
device. In February 2005, CorAide(TM) LVAS devices were implanted in two
patients at Bad Oyenhausen, Germany in connection with the Company's clinical
trial and both patients are recovering as expected, with no indications of the
elevated levels of hemolysis experienced with its first CorAide(TM) implant. On
April 7, 2005, the Company announced that its Board of Directors had decided to
continue the clinical trials of its CorAide(TM) continuous flow ventricular
assist device in Europe.

The Company considers the CorAide(TM) to be a long-term development program. The
first version of the CorAide(TM) device is not fully implantable and is intended
to provide support for patients waiting for heart transplantation or considered
candidates for bridging to natural recovery of ventricular function. The Company
believes that the CorAide(TM)'s smaller size, less invasive surgical approach
and inherently simpler design promises better opportunities for broader market
acceptance.

The Company's Board and management plans to review the CorAide(TM) program
regularly to assess its commercial viability.


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<PAGE>

                            ARROW INTERNATIONAL, INC.


HEMOSONIC(TM). THE Company is continuing its development of an improved version
of its HemoSonicTM cardiac output monitoring device that continuously measures
descending aortic blood flow using a non-invasive esophageal ultrasound probe.
The Company believes the improved version will be more user-friendly and better
able to meet the needs of a broader range of physicians. The Company is
currently in the final stages of this development and expects to begin market
evaluation of the new model later in calendar 2005. The Company is also
currently in the process of evaluating a number of enhancements to this product.

SELLING, GENERAL AND ADMINISTRATIVE.
Selling, general and administrative expenses increased by 18.6% to $64.3 million
during the six months ended February 28, 2005 from $54.2 million in the
comparable prior year period and, as a percentage of net sales, increased to
29.0% in the first half of fiscal 2005 from 25.6% in the comparable period of
fiscal 2004. This increase was due primarily to: (1) an incremental expense of
$5.0 million related to the Company's voluntary early retirement program; (2) a
$1.0 million increase in expenses related to the Company's international
operations as a result of the weakness of the U.S. dollar relative to currencies
of countries in which the Company operates direct sales subsidiaries; (3)
increased expenses of $0.8 million related to the Company's pension and
postretirement welfare plans based on adjusting certain estimated data to actual
data received during the second quarter of fiscal 2005; (4) increased expenses
of $1.4 million related to the continued enhancement of the Company's European
Sales Office, increased expenses related to the completion of a study by an
outside consulting firm of the Company's Left Ventricular Assist System program
during the first quarter of fiscal 2005, and increased severance costs.

RESTRUCTURING CHARGES.
The Company recorded $1.3 million ($0.9 million after tax, or $0.02 diluted
earnings per share) of restructuring expenses in the first half of fiscal 2005
related primarily to accrued severance payments associated with its
consolidation of operations at its Winston-Salem, North Carolina and San
Antonio, Texas facilities into other existing manufacturing facilities and
accrued severance payments and lease termination costs associated with the
relocation of its European Distribution Center from Weesp, Netherlands to a more
centralized European location in the Limberg region of Belgium. See " -
Liquidity and Capital Resources - Investing Activities - Multiyear Capital
Investment Plan."

OPERATING INCOME.
Principally due to the above factors, operating income decreased in the first
half of fiscal 2005 by 40.6% to $26.5 million from $44.6 million in the
comparable period of fiscal 2004.

OTHER EXPENSES (INCOME), NET.
Other expenses (income), net, increased to $0.5 million of income in the first
half of fiscal 2005 from $0.3 million of expense in the same prior year period
due in part to the Company earning a higher amount of interest in the first half
of fiscal 2005 on its investment of cash balances. Other expenses (income), net,
consist principally of interest income, interest expense and foreign exchange
gains and losses associated with the Company's direct sales subsidiaries.

INCOME BEFORE INCOME TAXES.
As a result of the factors discussed above, income before income taxes decreased
in the first half of fiscal 2005 by 39.1% to $27.0 million from $44.3 million in
the comparable prior year period. For the six month period ended February 28,
2005, the Company's effective income tax rate decreased to 30.9% from 32.5% in
the comparable prior year period due to more favorable than expected fiscal year
2004 research and development tax credits resulting from the completion of the
Company's analysis of these credits during the second quarter of fiscal 2005.

NET INCOME.
Net income decreased by 37.8% to $18.6 million in the six months ended February
28, 2005 from $29.9 million in the first half of fiscal 2004. As a percentage of
net sales, net income represented 8.4% during the six months ended February 28,
2005 compared to 14.1% in the same period of fiscal 2004.

PER SHARE INFORMATION.
Basic earnings per common share were $0.42 in the six month period ended
February 28, 2005, down 39.1%, or $0.27 per share, from $0.69 in the comparable
prior year period. Diluted earnings per common share were $0.42 in the six month
period ended February 28, 2005, down 38.2%, or $0.26 per share, from $0.68 per
share in the comparable prior year period. Weighted average shares of common
stock outstanding used in computing basic earnings per common share increased to
44,023,659 in the first half of fiscal 2005 from 43,423,680 in the comparable
prior year period primarily as a result of an increase in stock option exercises
due to a higher market price of the Company's stock relative to average
outstanding option exercise prices during the fiscal year. Weighted average
shares of common stock outstanding used in computing diluted earnings per common
share increased to 44,766,807 in the first half of fiscal 2005 from 44,092,986
in the comparable prior period primarily as a result of an increase in
potentially dilutive shares resulting from an increased share price and an
increase in stock option exercises for the reasons described above.


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<PAGE>

                            ARROW INTERNATIONAL, INC.


LIQUIDITY AND CAPITAL RESOURCES

OPERATING ACTIVITIES.
CASH FROM OPERATIONS. The Company's primary source of funds continues to be cash
generated from operations, as shown in the Company's Consolidated Statement of
Cash Flows included in Item 1 of this report. For the six months ended February
28, 2005, net cash provided by operations was $29.1 million, a decrease of $14.2
million, or 32.8%, from the comparable prior year period due primarily to a
decrease in net income, as more fully explained above in the "Six Months Ended
February 28, 2005 Compared to Six Months Ended February 29, 2004", an increase
in prepaid expenses and a decrease in accrued income taxes offset in part by an
increase in deferred income taxes and an increase in inventory, as more fully
explained below.

PREPAID EXPENSES. Prepaid expenses and other increased $10.7 million in the six
months ended February 28, 2005 compared to a $5.1 million decrease in the same
period of fiscal 2004, due primarily to a $6.3 million increase in the first
half of fiscal 2005 related to a change in the current domestic income tax
balance as a result of a depreciation adjustment, as described below, and the
Company's receipt in fiscal 2004 of $8.0 million for an income tax refund
related to the settlement of an Internal Revenue Service audit pertaining
primarily to depreciation and tax credits related to research and development
costs.

INCOME TAXES. Accrued income taxes decreased $0.5 million in the first half of
fiscal 2005 compared to a $4.5 million increase in the same period of fiscal
2004 and the Company's net deferred income tax liability increased $4.1 million
in the six months ended February 28, 2005 compared to a $0.9 million decrease in
the same period of fiscal 2004, due primarily to a change in classification from
accrued income tax to deferred income tax in the first half of fiscal 2005 for a
depreciation deduction that was not originally anticipated in the Company's
fiscal year 2004 domestic tax filing.

INVENTORY. Inventories increased $6.5 million in the first half of fiscal 2005
as compared to a $5.3 million increase in the same period of fiscal 2004. The
increase in fiscal 2005 is primarily due to inventory acquired in connection
with the Company's acquisition of AB Medica during the first quarter of fiscal
2005, as further discussed below, and incremental inventory value booked in the
second quarter of fiscal 2005 as a result of the Company's misapplication of the
accounting treatment related to its shipping terms, as further discussed below,
resulting in the reversal of sales and a corresponding increase in inventory.
The increase in fiscal 2004 was primarily due to additional production and
related manufacturing costs necessary to support the Company's higher rate of
sales growth.

ACCOUNTS RECEIVABLE. Accounts receivable, measured in days sales outstanding
during the period, increased to 73 days at February 28, 2005 from 71 days at
August 31, 2004, due primarily to increased days sales outstanding in Greece, as
described below.

As of February 28, 2005, the Company had an accounts receivable balance from its
Greek customers of $7.3 million, of which approximately 90% is related to Greek
government-backed hospital customers. The days sales outstanding is currently
630 days, which is significantly higher than that of the Company's overall
February 28, 2005 average customer days sales outstanding of 73 days. However,
according to information provided by the Hellenic Association of Scientific and
Medical Equipment Suppliers as of February 1, 2005, the average days sales
outstanding for medical equipment supply companies in the Greek market was
approximately 620 days. The Company's payment terms in this market are generally
45 days. The Company has concluded that the government of Greece has been
delaying payments due to its government-backed hospitals, which has led to an
increase in the Company's days sales outstanding for its Greek customers. The
Greek government has announced a plan to resume its payments on its trade debt,
which should allow its hospitals to repay their outstanding balances to their
vendors. As of April 7, 2005, the Greek government has made two installments of
approximately 25% each of its total obligation to its government-backed
hospitals and plans to fully pay the balance by the end of calendar year 2005.
The government of Greece has initiated similar plans in the past to reduce
delinquent trade debt, which have resulted in the Company's realization of a
material portion of outstanding receivables following the implementation of
those plans. As a result, the Company currently believes that this situation
will be resolved and that ultimate collectability of these receivables, net of
discounts, is not a significant risk. In addition, the Greek government has also
passed a law requiring full payment on all outstanding receivables from
government-backed hospitals generated after December 23, 2004. However, because
the Company's assessment is based in part on political factors beyond its
control, the Company cannot assure that these receivables will be collected or
when they will be collected, and will continue to evaluate their collectability
and establish reserves when and to the extent necessary. As of February 28,
2005, the Company has recorded an allowance of $0.4 million to reserve for both
specifically identified, potentially uncollectible, private Greek customer
balances and an estimated amount for the Greek government's discount on the
Company's outstanding government-backed hospital customer balance. The Company
currently evaluates all of its trade receivables on a regular basis, including
those with its Greek customers, to ensure that each receivable is recorded at
net realizable value.

EARLY RETIREMENT PROGRAM. As previously reported, on October 27, 2004, the
Company's Board of Directors approved a voluntary early retirement program for
all of the Company's salaried exempt and non-exempt employees in its three
locations in the Reading, Pennsylvania area who attained age 57 or older and had
at least five years of service with the Company as of January 31, 2005. The
program provided that each such eligible employee who made an election to retire
from the Company on or between November 10, 2004 and January 31, 2005 would (1)
receive payments equal to two weeks pay for each year of his or her service with
the Company and a lump sum payment of $20,000, (2) be treated as if such
employee retired under the salaried pension plan at his or her normal retirement
date without any additional years of service being credited, but without any
reduction for early commencement of benefits, and (3) have their stock options
issued under the Company's stock incentive plans, which are unvested as of the
effective date of his or her retirement, accelerated so as to vest and become
fully exercisable as of such date.


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                            ARROW INTERNATIONAL, INC.


During the second quarter of fiscal 2005, the Company recorded $6.8 million in
total costs with respect to this program, of which $1.9 million was recorded to
cost of sales and $4.9 million to selling, general and administrative expenses.
Of the $6.8 million in total costs, $2.7 million was related to pension and
other post retirement benefits and $3.0 million was a cash charge related to
severance and related costs. The remaining $1.1 million was incurred as a
non-cash charge for accelerated vesting of stock options held by participants in
this program. A total of 28 participants elected to participate in this program,
including, as previously reported, the Company's former President and Chief
Operating Officer and its Executive Vice President - Global Business
Development.

INVESTING ACTIVITIES.
Net cash used in the Company's investing activities increased to $25.7 million
in the six months ended February 28, 2005 from $10.9 million in the comparable
period of fiscal 2004, due primarily to the Company's acquisition, as further
discussed below, of AB Medica in the first quarter of fiscal 2005 and increased
capital expenditures primarily in support of the Company's multi-year capital
investment plan, including related investments in production technology and
equipment, and development and implementation of enhanced good manufacturing
practices and quality systems, all as part of its Project Operational
Excellence, as further discussed below.

ACQUISITION OF AB MEDICA. In September 2004, the Company purchased certain
assets of one of its distributors in Italy, AB Medica S.p.A. ("ABM"), for a
total purchase price of approximately $8.5 million, subject to post-closing
adjustments, with additional amounts payable contingent upon the sales levels of
products under sales contracts purchased by the Company. ABM had been one of the
Company's distributors in Italy since 1982. The asset purchase agreement
includes the purchase of customer lists, distributorship rights, as well as the
inventory and specified tender contracts associated with the sale by ABM of the
Company's products. The Company began selling directly in Italy through its
subsidiary, Arrow Italy S.p.A., in the first quarter of fiscal 2005. As of
February 28, 2005, pursuant to the asset purchase agreement, the Company has
paid $7.1 million in cash and recorded a current liability of $1.4 million for
additional payment installments. The purchase price for this acquisition did not
exceed the estimated fair value of the net assets acquired and, therefore, no
goodwill has been recorded by the Company in connection therewith. Intangible
assets acquired of $5.3 million, consisting of customer lists and
distributorship rights, are being amortized over five years based on the
anticipated period over which the Company expects to benefit from the
transaction. Included in the first quarter of fiscal 2005 was a $1.5 million
charge, or $1.0 million against net income ($0.02 diluted earnings per share),
for the step-up of inventory purchased from ABM. The results of operations of
this business are included in the Company's consolidated financial statements
from the date of acquisition. The purchase price for this acquisition was
allocated as follows:

                (in millions)
                Inventories                             $   3.2
                Intangible assets                           5.3
                                                        -------
                   Total purchase price                 $   8.5
                                                        =======

MULTI-YEAR CAPITAL INVESTMENT PLAN. As previously reported, the Company's Board
of Directors has authorized the initiation of a multi-year capital investment
plan to increase its worldwide manufacturing capacity and rationalize its
production operations. This plan is being initiated to support projections for
future growth and to integrate operations acquired in recent years. The first
phase of this effort will include the construction or acquisition of additional
manufacturing facilities in Zdar, Czech and Chihuahua, Mexico, which commenced
in the first quarter of fiscal 2005. Based on preliminary estimates received
from its contractors, the Company currently anticipates the total cost of this
capacity increase to be between $20.0 million and $27.0 million over a
three-year period. In addition, the Company also anticipates spending between
$10.0 million and $15.0 million over the next three years for equipment related
to this expansion of its manufacturing capacity. As of February 28, 2005, the
Company had spent $7.0 million in connection with this capital investment plan.

As part of its plans to rationalize its operations in the United States, in
August 2004, the Company initiated the consolidation of its operations at its
Winston-Salem, North Carolina and San Antonio, Texas facilities into other
existing manufacturing facilities. The transitional work on this consolidation
has begun and is expected to continue into the second half of fiscal 2005. To
date, in connection with this restructuring, the Company has accrued costs of
$0.5 million, consisting primarily of severance payments, of which $0.3 million
has been paid as of February 28, 2005. Severance payments relate to
approximately 53 employees primarily in manufacturing at both facilities, and
the remaining accrual balance is expected to be paid in the third quarter of
fiscal 2005. All other restructuring costs are expected to be paid during the
remainder of fiscal 2005 and in fiscal 2006.

As part of its plans to rationalize its production operations and related
logistics in Europe, in November 2004, the Company determined to move its
European Distribution Center, previously situated in Weesp, Netherlands, to a
more centralized European location in the Limberg region of Belgium in order to
have better access to existing carrier transportation networks and allow for
more cost-competitive expansion of its European operations in the future. The
Company continued this re-location in the second quarter of fiscal 2005 and
estimates it will incur a total of $1.6 million related to this plan. As of
February 28, 2005, the Company has accrued costs of $1.0 million related to this
re-location, of which $0.3 million has been paid during the first six months of
fiscal 2005.

PROJECT OPERATIONAL EXCELLENCE. During the second quarter of fiscal 2005, the
Company took additional steps in implementing its previously announced program
designed to help it achieve operational process excellence in four key areas:
product quality, safety, customer service and cost. This program includes (1) as
discussed above under "- Multi-Year Capital Investment Plan," restructuring the
Company's manufacturing to increase production capacity and better align its
production facilities with the geographical markets they serve, (2) improving
the effectiveness of the Company's production technology by investing in new,
state-of-the-art manufacturing equipment and processes, and (3) developing and
implementing enhanced good manufacturing practices and quality systems to
maintain and establish process excellence.


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                            ARROW INTERNATIONAL, INC.


In connection with the Company's efforts to enhance its good manufacturing
practices and quality system compliance, it has engaged Quintiles Consulting, a
provider of global consulting services to the medical device, pharmaceutical and
biologics industries, to assist its project teams in implementing rigorous
compliance procedures that in many respects are expected to exceed those under
existing regulatory requirements with the objective of achieving the highest
practicable levels of product quality assurance. The Company currently estimates
the costs of these efforts will be up to approximately $3.5 million over the
remainder of fiscal 2005.

FINANCING ACTIVITIES.
Financing activities provided $3.8 million of net cash in the six months ended
February 28, 2005 compared to using $5.0 million in the same prior year period,
primarily as a result of an increase in proceeds from stock option exercises due
to a higher stock price relative to the average outstanding option exercise
prices during the first six months of fiscal 2005.

The Company's Board of Directors has authorized the repurchase of up to a
maximum of 4,000,000 shares under its share repurchase program. As of February
28, 2005, the Company had repurchased a total of 3,603,600 shares under this
program for approximately $57.5 million since the program's inception in March
1999. However, no shares were repurchased by the Company under the program (or
otherwise) in the six months ended February 28, 2005.

CREDIT FACILITIES.
To provide additional liquidity and flexibility in funding its operations, the
Company from time to time borrows amounts under credit facilities and other
external sources of financing. At February 28, 2005, the Company had a revolving
credit facility providing a total of $65.0 million in available revolving credit
for general business purposes, of which $22.0 million was outstanding, all of
which is owed by its foreign subsidiaries. Under this credit facility, the
Company is required to comply with, among others, the following financial
covenants: maintain a ratio of total liabilities to tangible net worth (total
assets less total liabilities and intangible assets) of no more than 1.5 to 1
and a cash flow coverage ratio of 1.25 to 1 or greater; a limitation on certain
mergers, consolidations and sales of assets by the Company or its subsidiaries;
a limitation on the Company's and its subsidiaries' incurrence of liens; and a
requirement that the lender approve the incurrence of additional indebtedness
unrelated to the revolving credit facility when the aggregate principal amount
of such new additional indebtedness exceeds $75.0 million. At February 28, 2005,
the Company was in compliance with all such covenants. Failure to remain in
compliance with these covenants could trigger an acceleration of the Company's
obligation to repay all outstanding borrowings under this credit facility.

Certain other foreign subsidiaries of the Company had revolving credit
facilities totaling the U.S. dollar equivalent of $33.9 million, of which $7.0
million was outstanding as of February 28, 2005.

Interest rate terms for both U.S. and foreign bank credit facilities are based
on either bids provided by the lender or the prime rate, London Interbank
Offered Rates (LIBOR) or Certificate of Deposit Rates, plus applicable margins.
Certain of these borrowings, primarily those with U.S. banks, are due on demand.
Interest is payable monthly during the revolving credit period. Combined
borrowings under these facilities increased $3.0 million and $2.2 million during
the six months ended February 28, 2005 and February 29, 2004, respectively.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS.
A summary of all of the Company's contractual obligations and commercial
commitments as of February 28, 2005 were as follows:

<TABLE>
<CAPTION>
                                                                               PAYMENTS DUE
                                                                                    OR
                                                                           COMMITMENT EXPIRATION
                                                                                 BY PERIOD
                                                       ------------------------------------------------------------
CONTRACTUAL OBLIGATIONS AND                                                                                 MORE
COMMERCIAL COMMITMENTS                                                                                      THAN
----------------------                                                 LESS THAN       1 - 3    3 - 5         5
($ IN MILLIONS)                                          TOTAL            1 YEAR       YEARS    YEARS       YEARS
                                                         -----            ------       -----    -----       -----
<S>                                                     <C>              <C>          <C>       <C>         <C>
Current maturities of long-term debt                    $   3.0          $   3.0      $    -    $    -      $    -
Operating leases                                           13.0              4.9         4.7       2.0         1.4
Purchase obligations (1)                                   34.6             34.6           -         -           -
Other long-term obligations                                 0.6                -         0.2       0.1         0.3
Lines of credit (2)                                        29.0             29.0           -         -           -
Standby letters of credit                                   2.1              2.1           -         -           -
                                                        -------          -------      ------    ------      ------

Total cash contractual obligations and
     commercial commitments                             $  82.3          $  73.6      $  4.9    $  2.1      $  1.7
                                                        =======          =======      ======    ======      ======
</TABLE>

(1)  Includes open purchase orders primarily relating to the purchase of raw
     materials, equipment and certain consulting and information systems
     services.
(2)  Includes short-term indebtedness of the Company and its subsidiaries under
     various revolving credit facilities, as discussed above.


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                            ARROW INTERNATIONAL, INC.


OUTLOOK.
--------
Based upon its present plans, the Company believes that cash generated from its
operations and available credit resources, including its ability to extend
maturities of borrowings outstanding under its lines of credit in the ordinary
course consistent with past practice, will be adequate to repay current portions
of long-term debt, to finance currently planned capital expenditures, including
those pursuant to the Company's multi-year capital investment plan and other
initiatives related to its Project Operational Excellence discussed above, and
to meet the currently foreseeable liquidity needs of the Company.

During the periods discussed above, the overall effects of inflation and
seasonality on the Company's business were not significant.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Revenue Recognition:

During the course of the second quarter closing process and in conjunction with
its review of its internal controls, the Company determined that it had
misapplied the accounting treatment related to its shipping terms to U.S.
customers and international distributors. The Company does not have written
agreements with most customers and, as a result, in most of those cases shipping
terms are only specified on the invoice, which states free-on-board, or FOB,
plant. While the Company does not pay for shipping in most cases or insure the
shipments, its practice has been to credit or replace lost or damaged shipments.
During the past few years, amounts in respect of these credits and replacements
have been less than 0.05% of sales to customers in the U.S. and to international
distributors. Nevertheless, interpretations of Staff Accounting Bulletin No.
104, Revenue Recognition in Financial Statements (SAB 104), issued by the
Securities and Exchange Commission staff, require that, because of its practice
of replacing lost or damaged shipments, the Company's sales to customers in the
U.S. and to international distributors are the equivalent of FOB destination
orders.

The Company's assessment determined that delivery time to U.S. customers is two
business days and, to its international distributors, is seven days for air and
truck shipments and 55 days for ocean vessel shipments. By applying the
appropriate accounting treatment described above, the amount of sales
corresponding to these numbers of days in transit at the end of the quarter must
be recognized in the succeeding quarter when the shipments are delivered. As a
result, during the second quarter of fiscal 2005, the Company recorded $4.3
million as a reduction to sales and $2.2 million against gross profit, or $0.03
diluted earnings per share. These sales amounts will, however, be recognized in
the third quarter of fiscal 2005. While these sales amounts will be recognized
in the third quarter of fiscal 2005, a similar amount of days sales would be
excluded from the end of the third quarter and the excluded amount would be
recognized in the subsequent quarter. Accordingly, the incremental effect on any
future quarter would be the difference between the adjustment at the beginning
of the quarter and the corresponding adjustment at the end of the quarter. The
Company has concluded in accordance with SEC Staff Accounting Bulletin No. 99
that this adjustment is not quantitatively or qualitatively material to warrant
any prior period restatement.

The Company's revenue recognition policy is as follows:
Revenue is recognized by the Company at the time its products are delivered and
title and risk of loss has passed to its customer. The Company's net sales
represent gross sales invoiced to customers, less certain related charges,
including discounts, returns, rebates and other allowances. Such charges are
recognized against revenue on an accrual basis. The Company offers sales
discounts to certain customers based on prior experience with these customers,
business needs and regional competition. Product returns are permitted. The
accrual for product returns is based on the Company's history of actual product
returns. To date, product returns have not been material. The Company's practice
is to credit or replace lost or damaged shipments. The Company grants sales
rebates to certain distributors upon achievement of agreed upon pricing for
sales of the Company's products to hospitals. Incurred but unpaid rebates are
accrued by the Company in the period in which they are incurred. The Company's
rebate accrual is based on its history of actual rebates paid. The Company's
reserves for rebates are reviewed at each reporting period and adjusted to
reflect data available at that time. If necessary, the Company will adjust these
estimated reserves, which will impact the amount of net product sales revenue
recognized by the Company in the period of the adjustments.

The Company has disclosed in Note 1 to its consolidated financial statements
included in its Annual Report on Form 10-K for the fiscal year ended August 31,
2004 those accounting policies that it considers to be significant in
determining its results of operations and financial position. Other than as
reported above, there have been no material changes to the critical accounting
policies previously identified and described in the Company's 2004 Form 10-K.
The accounting principles utilized by the Company in preparing its consolidated
financial statements conform in all material respects to generally accepted
accounting principles in the United States of America.

The preparation of these consolidated financial statements requires the
Company's management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses, as well as the disclosure
of contingent assets and liabilities at the date of its financial statements.
The Company bases its estimates on historical experience, actuarial valuations
and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying value of assets and liabilities that are not readily apparent from
other sources. Some of those judgments can be subjective and complex and,
consequently, actual results may differ from these estimates under different
assumptions or conditions. While for any given estimate or assumption made by
the Company's management there may be other estimates or assumptions that are
reasonable, the Company believes that, given the current facts and
circumstances, it is unlikely that applying any such other reasonable estimate
or assumption would materially impact the financial statements.


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                            ARROW INTERNATIONAL, INC.


NEW ACCOUNTING STANDARDS

The FASB issued SFAS No. 151, "Inventory Costs, an Amendment of Accounting
Research Bulletin (ARB) No. 43, Chapter 4", in November 2004. This statement
amends the guidance in ARB No. 43 Chapter 4 "Inventory Pricing" to clarify the
accounting for abnormal amounts of idle facility expense, freight, handling
costs and wasted material. SFAS No. 151 requires that those items be recognized
as current period charges regardless of whether they meet the criterion of "so
abnormal." In addition, this statement requires that allocation of fixed
production overheads to the costs of conversion be based on the normal capacity
of the production facilities. The provisions of this statement will be effective
for inventory costs incurred during fiscal years beginning after June 15, 2005.
The Company is currently evaluating the impact that this statement will have on
its financial statements.

The FASB issued SFAS No. 123R "Share-Based Payment", in December 2004. This
statement requires that the cost of all forms of equity-based compensation
granted to employees, excluding employee stock ownership plans, be recognized in
a company's income statement and that such cost be measured at the fair value of
the stock options. This statement replaces the guidance in SFAS No. 123,
Accounting for Stock-Based Compensation, and APB No. 25, Accounting for Stock
Issued to Employees. This statement will be effective for financial statements
relating to fiscal periods beginning after June 15, 2005. The Company is
currently evaluating the various transitional methods and the impact that this
statement will have on its financial statements.


CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements contained in this report or in other written or oral
statements made from time to time by the Company may contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such statements may use
words such as "anticipate," "estimate," "expect," "believe," "may," "intend" and
similar words or terms. Although the Company believes that the expectations in
such forward-looking statements are reasonable, the Company cannot assure you
that such expectations will prove to have been correct. The forward-looking
statements are based upon a number of assumptions and estimates that, while
presented with specificity and considered reasonable by the Company, are
inherently subject to significant business, economic and competitive risks,
uncertainties and contingencies which are beyond the control of the Company, and
upon assumptions with respect to future business decisions which are subject to
change. Accordingly, the forward-looking statements are only an estimate, and
actual results will vary from the forward-looking statements, and these
variations may be material. The Company is not obligated to update any
forward-looking statement, but investors are urged to consult any further
disclosures the Company makes in the Company's filings with the Securities and
Exchange Commission. Consequently, the inclusion of the forward-looking
statements should not be regarded as a representation by the Company of results
that actually will be achieved. Forward-looking statements are necessarily
speculative in nature, and it is usually the case that one or more of the
assumptions in the forward-looking statements do not materialize. Investors are
cautioned not to place undue reliance on the forward-looking statements. The
Company cautions investors that the factors set forth below, which are described
in further detail in Item 1. Business - "Certain Risks Relating to Arrow" in the
Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2004
and in its other filings with the Securities and Exchange Commission, could
cause the Company's results to differ materially from those stated in the
forward-looking statements. These factors include: (1) stringent regulation of
the Company's products by the U.S. Food and Drug Administration and, in some
jurisdictions, by state, local and foreign governmental authorities; (2) the
highly competitive market for medical devices and the rapid pace of product
development and technological change in this market; (3) pressures imposed by
the health care industry to reduce the cost or usage of medical products and
services; (4) dependence on patents and proprietary rights to protect the
Company's trade secrets and technology, and the need for litigation to enforce
or defend these rights; (5) risks associated with the Company's international
operations; (6) potential product liability risks inherent in the design,
manufacture and marketing of medical devices; (7) risks associated with the
Company's use of derivative financial instruments; and (8) dependence on the
continued service of key members of the Company's management.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Financial Instruments:

During the six month periods ended February 28, 2005 and February 29, 2004, the
percentage of the Company's sales invoiced in currencies other than U.S. dollars
was 26.8% and 23.9%, respectively. In addition, a part of the Company's cost of
goods sold is denominated in foreign currencies. The Company enters into foreign
currency forward contracts and foreign currency option contracts, which are
derivative financial instruments, with major financial institutions to reduce
the effect of these foreign currency risks exposures, primarily on U.S. dollar
cash inflows resulting from the collection of intercompany receivables
denominated in foreign currencies and to hedge anticipated sales in foreign
currencies to foreign subsidiaries. Such transactions occur throughout the year
and are probable, but not firmly


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                            ARROW INTERNATIONAL, INC.


committed. Foreign currency forward contracts are marked to market each
accounting period, and the resulting gains or losses on these contracts are
recorded in Other (Income) / Expense of the Company's consolidated statements of
income. Gains and losses on these contracts are offset by changes in the U.S.
dollar value of the foreign currency denominated assets, liabilities and
transaction being hedged. The premiums paid on foreign currency option contracts
are recorded as assets and amortized over the life of the option. Other than the
risk associated with the financial condition of the counterparties, the
Company's maximum exposure related to foreign currency options is limited to the
premiums paid. The total premiums authorized to be paid in any fiscal year
cannot exceed $1.0 million pursuant to the terms of the Foreign Currency
Management Policy Statement approved by the Company's Board of Directors in
fiscal 2001. Gains and losses on purchased option contracts result from changes
in intrinsic or time value. Both time value and intrinsic value gains and losses
are recorded in shareholders' equity (as a component of comprehensive income)
until the period in which the underlying sale by the foreign subsidiary to an
unrelated third party is recognized, at which point those deferred gains and
losses are recognized in net sales. By their nature, all such contracts involve
risk, including the risk of nonperformance by counterparties. Accordingly,
losses relating to these contracts could have a material adverse effect upon the
Company's business, financial condition and results of operations. Based upon
the Company's knowledge of the financial condition of the counterparties to its
existing foreign currency forward contracts, the Company believes that it does
not have any material exposure to any individual counterparty. The Company's
policy prohibits the use of derivative instruments for speculative purposes. The
Company expects to continue to utilize foreign currency forward contracts to
manage its exposure, although there can be no assurance that the Company's
efforts in this regard will be successful. As of February 28, 2005, outstanding
foreign currency forward contracts totaling the U.S. dollar equivalent of $16.5
million mature at various dates through May 2005. As of February 28, 2005, the
Company had no foreign currency option contracts outstanding. The Company
expects to continue to utilize foreign currency forward contracts and foreign
currency option contracts to manage its exposure, although there can be no
assurance that the Company's efforts in this regard will be successful.

The Company's exposure to credit risk consists principally of trade receivables.
Hospitals and international dealers account for a substantial portion of trade
receivables and collateral is generally not required. The risk associated with
this concentration is limited due to the Company's ongoing credit review
procedures.

At February 28, 2005, the Company had foreign currency forward contracts to sell
foreign currencies which mature at various dates through May 2005. The following
table identifies foreign currency forward contracts to sell foreign currencies
at February 28, 2005 and August 31, 2004, as follows:

<TABLE>
<CAPTION>
                                                  February 28, 2005                      August 31, 2004
                                            Notional         Fair Market          Notional          Fair Market
                                            Amounts             Value              Amounts             Value
                                         ---------------    ---------------    ----------------    ---------------
<S>                                      <C>                <C>                <C>                 <C>
Foreign currency: (U.S. Dollar Equivalents)
     Japanese yen                        $          475     $          479     $             -     $            -
     Canadian dollars                               564                568                   -                  -
     Euro                                        11,609             11,667              14,643             14,603
     Mexican peso                                   708                709               1,379              1,393
     African rand                                   475                512                 445                450
                                         ---------------    ---------------    ----------------    ---------------
                                         $       13,831     $       13,935     $        16,467     $       16,446
                                         ===============    ===============    ================    ===============
</TABLE>

At February 28, 2005, the Company also had foreign currency forward contracts to
buy foreign currencies which mature at various dates through April 2005. The
following table identifies foreign currency forward contracts to buy foreign
currencies at February 28, 2005 and August 31, 2004:

<TABLE>
<CAPTION>
                                                  February 28, 2005                      August 31, 2004
                                            Notional         Fair Market          Notional          Fair Market
                                            Amounts             Value              Amounts             Value
                                         ---------------    ---------------    ----------------    ---------------
<S>                                      <C>                 <C>               <C>                  <C>
Foreign currency: (U.S. Dollar Equivalents)
Czech koruna                             $        2,433     $        2,451     $         3,031     $        2,996
Euro                                                  -                  -               7,305              7,306
Mexican peso                                        218                218                 703                702
                                         ---------------    ---------------    ----------------    ---------------
                                         $        2,651     $        2,669     $        11,039     $       11,004
                                         ===============    ===============    ================    ===============
</TABLE>


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                            ARROW INTERNATIONAL, INC.


From time to time, the Company purchases foreign currency option contracts to
hedge anticipated sales in foreign currencies to foreign subsidiaries. The
option premiums paid are recorded as assets and amortized over the life of the
option. Other than the risk associated with the financial condition of the
counterparties, the Company's maximum exposure related to foreign currency
options is limited to the premiums paid. The total premiums authorized to be
paid in any fiscal year cannot exceed $1.0 million pursuant to the terms of the
Foreign Currency Management Policy Statement as approved by the Company's Board
of Directors in fiscal 2001. Gains and losses on purchased option contracts
result from changes in intrinsic or time value. Both time value and intrinsic
value gains and losses are recorded in shareholders' equity (as a component of
comprehensive income / (expense)) until the period in which the underlying sale
by the foreign subsidiary to an unrelated third party is recognized, at which
point those deferred gains and losses are recognized in net sales. During the
three and six months periods ended February 28, 2005 and February 29, 2004, the
Company did not recognize any time value losses nor did it recognize any
intrinsic value losses against cost of sales. At February 28, 2005, the Company
had an unrealized holding loss of less than $0.1 million related to these
foreign currency option contracts. The Company had no foreign currency option
contracts outstanding at February 28, 2005 and August 31, 2004.


Item 4.  Controls and Procedures

An evaluation was performed under the supervision and with the participation of
the Company's management, including its Chief Executive Officer, or CEO, and its
Chief Financial Officer, or CFO, of the effectiveness of the Company's
disclosure controls and procedures as of February 28, 2005. In preparing its
financial statements for the second quarter of fiscal 2005, the Company
determined that it had misapplied the accounting treatment related to its
shipping terms to U.S. customers and international distributors, and, as
described in Item 2 of this report under "Critical Accounting Policies and
Estimates", has now applied the appropriate accounting treatment for this item
and adjusted its net sales and gross profit for the second quarter of fiscal
2005 accordingly in order to rectify the misapplication. Based on that
evaluation, the Company's management, including its CEO and CFO, have concluded
that, after giving effect to its application of the appropriate accounting
treatment noted above, the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed in the reports
that the Company files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms. Except as stated
above, there have been no significant changes in the Company's internal controls
over financial reporting or in other factors identified in connection with this
evaluation that occurred during the three months ended February 28, 2005 that
have materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.


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                            ARROW INTERNATIONAL, INC.


PART II.      OTHER INFORMATION

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

         (a) The Company held its annual meeting of shareholders on January 19,
         2005.
         (b) At the annual meeting, the following matters were voted upon: (i)
         the election of three directors (in connection with which (A) proxies
         were solicited pursuant to Regulation 14D under the Securities Exchange
         Act of 1934,
         (B) there was no solicitation in opposition to management's nominees as
         listed in the proxy statement, and (C) all such nominees were elected);
         and
         (ii) the ratification of the appointment of PricewaterhouseCoopers LLP
         as independent accountants of the Company for the current fiscal year.

         With respect to the election of directors, votes were cast as follows:

                                                  Carl G. Anderson, Jr.
                                                  ---------------------
              Votes for                                    37,884,681
              Withheld                                      4,301,735


                                                        John E. Gurski
                                                        --------------
              Votes for                                    40,223,035
              Withheld                                      1,963,381

                                                   Marlin Miller, Jr.
                                                   ------------------
              Votes for                                    35,974,049
              Withheld                                      6,212,367

          With respect to the other matter, votes were cast as follows:

                                          Ratification of the Appointment
                               of Independent Registered Public Accounting Firm
                               ------------------------------------------------
              Votes for                                    41,841,597
              Votes against                                   335,900
              Abstentions                                       8,919

              There were no broker non-votes in respect of these matters.


Item 5.       Other Information

As announced on April 7, 2005, the Company's Board of Directors unanimously
voted to discontinue the development, sales and marketing programs related to
its LionHeart LVAS.

As reported on March 21, 2005, there were no sales of the Company's LionHeart
devices during either of the first two quarters of fiscal year 2005. As a
result, the Company made a provision in its second fiscal quarter of $2.1
million for LionHeart inventory in excess of anticipated requirements. In
addition, the Company wrote off in the second fiscal quarter ended February 28,
2005 its remaining investment in the LionHeart program, which included $2.8
million in equipment and components. The write off of equipment was recorded in
accordance with the provisions of SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." The Company reached its conclusion that its
LionHeart equipment was impaired based on the completion of a study during the
second quarter by an outside consulting firm which included the use of future
cash flow analyses to estimate the fair value of these assets. This conclusion
was confirmed by the Board of Directors' decision on April 6, 2005. The total
write off in the second quarter related to the LionHeart was $4.9 million, of
which $4.6 million was recorded to cost of sales and $0.3 million to research
and development expenses.


Item 6.       Exhibits and reports on Form 8-K

              (a)    Exhibits

                     See Exhibit Index on page 39 for a list of the Exhibits
                     filed as a part of this report.

              (b)    Reports on Form 8-K


                       o    Current Report on Form 8-K, dated December 3, 2004,
                               reporting under Item 8.01. Other Events,
                               announcing the Company's voluntary nationwide
                               recall of all its NeoCare(R) 1.9 FR Peripherally
                               Inserted Central Catheters.

                       o    Current Report on Form 8-K, dated December 20, 2004,
                               reporting under Item 2.02. Results of Operations
                               and Financial Condition, announcing the Company's
                               first quarter fiscal 2005 earnings.


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<PAGE>

                            ARROW INTERNATIONAL, INC.


                       o    Current Report on Form 8-K, dated January 10, 2005,
                               reporting under Item 2.02. Results of Operations
                               and Financial Condition, announcing the Company
                               first quarter fiscal 2005 earnings on Form 10-Q.

                       o    Current Report on Form 8-K, dated January 19, 2005,
                               reporting under Item 5.02. Departure of Directors
                               or Principal Officers; Election of Directors;
                               Appointment of Principal Officers, announcing the
                               Company's 2005 Annual Meeting of Shareholders and
                               the re-election of Carl G. Anderson, Jr., John E.
                               Gurski and Marlin Miller, Jr. as Directors of the
                               Company and the election of Carl G. Anderson, Jr.
                               to the additional office of President of the
                               Company.

                       o    Current Report on Form 8-K, dated March 21, 2005,
                               reporting under Item 2.02. Results of Operations
                               and Financial Condition, announcing the Company's
                               preliminary second quarter fiscal 2005 earnings.

                       o    Current Report on Form 8-K, dated April 6, 2005,
                               reporting under Item 2.02. Results of Operations
                               and Financial Condition and Item 8.01. Other
                               Events, announcing the Company's Board of
                               Directors' decision to discontinue the
                               development, sales and marketing programs related
                               to its LionHeart LVAS.


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<PAGE>

                            ARROW INTERNATIONAL, INC.


                                    SIGNATURE

Pursuant to the requirements 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.

                                        ARROW INTERNATIONAL, INC.
                                              (Registrant)

Date:  April 14, 2005           By:     /S/ Frederick J. Hirt
                                   --------------------------------------------
                                               (signature)

                                        Frederick J. Hirt
                                        Chief Financial Officer and
                                        Senior Vice President of Finance
                                        (Principal Financial Officer and
                                        Chief Accounting Officer)


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                            ARROW INTERNATIONAL, INC.


                                  EXHIBIT INDEX




EXHIBIT      DESCRIPTION
NUMBER       OF EXHIBIT                                    METHOD OF FILING
------       ----------                                    ----------------

31.1         Rule 13a-4(a) / 15d-4(a)                      Furnished herewith
             Certification of the Chief Executive
             Officer

31.2         Rule 13a-14(a) / 15d-14(a)                    Furnished herewith
             Certification of the Chief Financial
             Officer

32.1         Section 1350 Certification of the             Furnished herewith
             Chief Executive Officer

32.2         Section 1350 Certification of the             Furnished herewith
             Chief Financial Officer


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