8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 7, 2008

DATASCOPE CORP.

(Exact name of registrant as specified in its charter)

Delaware	0-6516	13-2529596
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

14 Philips Parkway
Montvale, New Jersey	07645-9998
(Address of principal executive offices)	(Zip Code)

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

Datascope Corp. issued a press release on February 7, 2008, announcing its operating results for the second quarter of fiscal 2008. A copy of this press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.

The information, including Exhibit 99.1, in this Form 8-K is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, except as shall otherwise be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

99.1 Press release dated February 7, 2008 issued by Datascope Corp.

SIGNATURES

     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 hereunto duly authorized.

DATASCOPE CORP.

Registrant
 

/s/ Henry M. Scaramelli  

      Vice President, Finance and 

      Chief Financial Officer 

     Dated: February 8, 2008

EXHIBIT INDEX

Exhibit No.

99.1 Press release dated February 7, 2008 issued by Datascope Corp.

EX-99.1

Exhibit No. 99.1

PRESS RELEASE

For Information Contact:

Henry Scaramelli

Chief Financial Officer

Datascope Corp.

(201) 307-5435

www.datascope.com

FOR IMMEDIATE RELEASE:

Datascope Reports Higher Second Quarter Fiscal 2008 Financial Results
Quarterly Sales Exceed $100 Million for the First Time

Montvale, NJ, February 7, 2008 . . . Datascope Corp. (NASDAQ: DSCP) today reported financial results for the second quarter of fiscal 2008.

Net earnings for the second quarter were $7.1 million, or $0.46 per diluted share, up from $3.3 million, or $0.22 per diluted share, last year. Non-GAAP earnings per diluted share were $0.46 versus $0.43 last year, 7% higher and reflecting increased sales and a higher gross margin. Non-GAAP earnings in the second quarter this year were reduced by $0.03 per share due to a higher tax rate of 35.0% compared to 30.2% last year. The higher tax rate was principally attributable to the expiration of a tax benefit related to U.S. export sales, a shift in the geographical mix of earnings to higher tax jurisdictions and the expiration of the U.S. R&D tax credit on December 31, 2007.

Consolidated sales for the second quarter of fiscal 2008 rose 8% to a record $103.4 million compared with $95.6 million last year. Favorable foreign currency translation increased sales by $2.1 million.

For the six months ended December 31, 2007, net earnings were $18.9 million, or $1.22 per diluted share, which included an after-tax gain of $7.8 million, or $0.50 per diluted share from the sale of its investment in Masimo Corporation. Net earnings in the comparable period last year were $7.9 million, or $0.51 per diluted share, including special items. Non-GAAP earnings were $11.1 million, or $0.72 per diluted share, flat versus last year.

Sales in the six-month period were $190.7 million, compared to $182.8 million last year. Favorable foreign exchange translation increased sales by $3.3 million in fiscal 2008 to date.

• Cardiac Assist: Second quarter sales increased 14% to a record $49.3 million. Sales growth reflects strong demand in international markets for balloon pumps and a stocking order from the Company’s new distributor in Japan.

Sales growth of balloon pumps reflects strong demand for Datascope’s new CS300™ balloon pump, launched in March 2007. The CS300 balloon pump teams up with the new Sensation™ 7 Fr. fiber-optic balloon catheter to provide higher fidelity blood pressure monitoring while eliminating the need for an additional invasive arterial pressure catheter as required by conventional balloon pump systems.

As previously announced, at the end of December 2007, Datascope Japan K.K., a wholly-owned subsidiary of Datascope Corp., began management of Datascope’s Intra-Aortic Balloon Pump (IABP) business in Japan. Datascope Japan K.K. is responsible for import, product service, sales support and product surveillance of the IABP business. USCI Holdings Ltd., the Company’s new exclusive distributor is responsible for sales distribution throughout Japan.

Sales of the Safeguard™ pressure-assist hemostasis device continued to show double digit growth versus last year.

Favorable foreign currency translation contributed $1.0 million to cardiac assist sales in the second quarter.

•	Patient Monitoring: Second quarter sales were $43.1 million, an increase of 2% over last year. The increase was primarily due to Artema® sales of gas modules, currently running at an annualized rate of over $11 million.
	Sales of central monitoring systems and bedside monitors decreased 5%, primarily due to comparison with a strong second quarter last year which included several large international orders. In addition, the Company believes certain customers are deferring orders for capital equipment to future periods due to tightening credit markets. Favorable foreign currency translation contributed $0.7 million to Patient Monitoring sales in the second quarter.
	In October 2007, Datascope announced the launch of NetGuard™, its new, revolutionary wireless clinician alert system. NetGuard is the first monitoring system that is specifically designed to protect today’s unmonitored patient by detecting life-threatening heart rhythms. The Company estimates that tens of thousands of patients die each year from cardiac arrest precipitated by a dangerous heart rhythm that is unrelated to the patient’s natural illness.
	Datascope’s initial focus is to create selected beta site installations and then launch its national sales campaign for NetGuard. The beta sites are expected to turn into reference sites for NetGuard. Reference sites will be instrumental in promoting acceptance and sales of NetGuard in the broader market by physicians and hospitals nationwide and around the world.

	On December 18, 2007, the Company announced that it booked the first order for NetGuard. In this installation, NetGuard will provide for continuous ECG monitoring of 50 patients in the Emergency Department of a 300-bed hospital in the Southwest region of the United States. In support of the NetGuard concept, the patients that will be continuously monitored by NetGuard are currently unmonitored. The Company expects to install the system in the fourth quarter of fiscal 2008.
•	InterVascular: Second quarter sales rose 28% to $9.5 million, the increase due principally to sales of peripheral vascular stent products obtained under the Company’s exclusive distribution agreement with the Sorin Group of Milan, Italy. As previously disclosed, Datascope has an option to acquire this business.
	Sales of vascular grafts increased 10% from higher sales in certain international markets, partially offsetting lower sales to InterVascular’s exclusive U.S. distributor. Favorable foreign currency translation contributed $0.5 million to InterVascular sales in the quarter.

Balance Sheet

The Company’s financial position continued strong in the second quarter with cash and marketable securities of $56.8 million, a current ratio of 3.2:1 and no debt. On January 9, 2008, Datascope’s Board of Directors declared a regular quarterly cash dividend of $0.10 per share, payable on February 8, 2008 to stockholders of record as of January 22, 2008.

Conference Call

Datascope will hold a conference call and webcast to discuss its second quarter fiscal 2008 financial results on February 8, 2008, at 12:00 noon (ET). To access the conference call, please dial (888) 661-5176. You may also access the webcast of the conference call on the Company’s website, www.datascope.com.

Non-GAAP Measures

Datascope prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP. In an effort to provide investors with additional information regarding the Company’s results and to provide a meaningful period-over-period comparison of the Company’s financial performance, the Company uses non-GAAP financial measures as defined by the Securities and Exchange Commission. The differences between U.S. GAAP and non-GAAP financial measures are reconciled below. In presenting comparable results, the Company discloses non-GAAP financial measures when it believes such measures will be useful to investors, analysts and other interested parties in evaluating the Company’s underlying business performance on a comparable basis with past and future reported earnings per share. Management uses the non-GAAP financial measures to evaluate the Company’s financial performance against internal budgets and targets. Importantly, the Company believes non-GAAP financial measures should be considered in addition to, and not in lieu of, U.S. GAAP financial measures. These non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. The Company’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

About Datascope Corp.

Datascope Corp. is the global leader of intra-aortic balloon counterpulsation, a pioneer and leader in the global patient monitoring market and a diversified medical device company that develops, manufactures and markets proprietary products for clinical health care markets in interventional cardiology and radiology, cardiovascular and vascular surgery, anesthesiology, emergency medicine and critical care. The Company’s products are sold throughout the world through direct sales representatives and independent distributors. Founded in 1964, Datascope is headquartered in Montvale, New Jersey. For news releases, webcasts and other Company information please visit Datascope’s website, www.datascope.com.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Many of these risks cannot be predicted or quantified and are at least partly outside our control, including the risk that NetGuard does not have the potential to create a new, significant market in monitoring currently unmonitored patients, that we are not the first Company to address this market, that NetGuard will not be a significant opportunity for new growth, and that market conditions may change, particularly as the result of competitive activity in the markets served by the Company, as well as other risks detailed in documents filed by Datascope with the Securities and Exchange Commission.

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

	Six Months Ended						Three Months Ended
	December 31,						December 31,
	2007			2006			2007			2006
Net sales	$	190,700		$	182,800		$	103,400		$	95,600
Cost of sales		84,189			80,212			45,092			42,979
Gross profit		106,511			102,588			58,308			52,621
Operating expenses:
Research and development expenses		18,607			17,197			9,567			8,543
Selling, general and administrative expenses		71,608			70,129			38,128			34,956
Special charges		—			7,309			—			7,309
		90,215			94,635			47,695			50,808
Operating earnings		16,296			7,953			10,613			1,813
Other (income) expense:
Interest, net		(1,016	)		(1,276	)		(475	)		(577	)
Dividend income		—			(196	)		—			(196	)
Gain on sale of investment		(13,173	)		(1,273	)		—			(1,273	)
Other, net		251			224			182			131
		(13,938	)		(2,521	)		(293	)		(1,915	)
Earnings before income taxes		30,234			10,474			10,906			3,728
Income taxes		11,353			2,606			3,817			393
Net earnings	$	18,881		$	7,868		$	7,089		$	3,335
Earnings per share, basic	$	1.23		$	0.52		$	0.46		$	0.22
Weighted average number of common shares outstanding, basic		15,350			15,213			15,354			15,205
Earnings per share, diluted	$	1.22		$	0.51		$	0.46		$	0.22
Weighted average number of common shares outstanding, diluted		15,496			15,472			15,515			15,488

Datascope Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)

	December 31,			June 30,
	2007			2007
Assets
Current assets:
Cash and cash equivalents	$	17,396		$	15,780
Short-term investments		25,399			23,681
Accounts receivable less allowance for doubtful accounts of $2,207 and $2,603		92,225			85,553
Inventories		62,349			59,455
Prepaid income taxes		—			2,293
Prepaid expenses and other current assets		12,041			11,167
Current deferred taxes		7,268			7,238
Total current assets		216,678			205,167
Property, plant and equipment, net of accumulated depreciation of $105,757 and $100,760		83,928			82,812
Long-term investments		15,415			14,346
Intangible assets, net		25,681			26,074
Goodwill		13,595			12,860
Other assets		36,560			34,897
	$	391,857		$	376,156
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	29,203		$	18,386
Dividends payable		—			1,532
Accrued expenses		13,895			16,129
Accrued compensation		14,221			17,422
Deferred revenue		4,079			4,380
Income taxes payable		6,030			—
Total current liabilities		67,428			57,849
Other liabilities		26,943			25,220
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $1.00 per share:
Authorized 5,000 shares; Issued, none		—			—
Common stock, par value $0.01 per share:
Authorized, 45,000 shares; Issued, 18,952 and 18,867 shares		189			189
Additional paid-in capital		110,587			109,384
Treasury stock at cost, 3,521 shares		(107,037	)		(107,037	)
Retained earnings		293,843			294,765
Accumulated other comprehensive loss:
Cumulative translation adjustments		5,501			1,899
Benefit plan adjustments		(5,683	)		(5,827	)
Unrealized gain (loss) on available-for-sale securities		86			(286	)
Total stockholders’ equity		297,486			293,087
	$	391,857		$	376,156

Datascope Corp. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)

	Six Months Ended						Three Months Ended
	December 31,						December 31,
	2007			2006			2007		2006
Net earnings as reported	$	18,881		$	7,868		$	7,089	$	3,335
Non-GAAP adjustments, net of tax:
Special charges		—			4,782			—		4,782
Gain on sale of investment		(7,791	)		(1,273	)		—		(1,273	)
Special dividend income		—			(170	)		—		(170	)
Net earnings as adjusted (non-GAAP)	$	11,090		$	11,207		$	7,089	$	6,674
Earnings per share, diluted, as reported	$	1.22		$	0.51		$	0.46	$	0.22
Non-GAAP adjustments, net of tax:
Special charges		—			0.30			—		0.30
Gain on sale of investment		(0.50	)		(0.08	)		—		(0.08	)
Special dividend income		—			(0.01	)		—		(0.01	)
Earnings per share, diluted, as adjusted (non-GAAP)	$	0.72		$	0.72		$	0.46	$	0.43
Shares used in per share calculation		15,496			15,472			15,515		15,488