FORM 10-Q

United States

Securities and Exchange Commission

Washington, D. C. 20549

(Mark One)
X	Quarterly Report Pursuant to Section 13 or 15(d)
	of the Securities Exchange Act of 1934
	For the quarterly period ended:   November 30, 2009
	OR
__	Transition Report Pursuant to Section 13 or 15(d)
	of the Securities Exchange Act of 1934

Commission File Number: 0-14820

IMMUCOR, INC.

(Exact name of registrant as specified in its charter)

Georgia	22-2408354
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

3130 Gateway Drive     Norcross, Georgia 30071

(Address of principal executive offices)     (Zip Code)

Registrant's telephone number:  (770) 441-2051

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    

Yes       No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer X	Accelerated filer
Non-accelerated filer	Smaller reporting company
(do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes       No  X

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

As of December 31, 2009: Common Stock, $0.10 Par Value – 69,864,253

IMMUCOR, INC. AND SUBSIDIARIES

FORM 10-Q

INDEX

		Page
PART I.       FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of November 30, 2009 (unaudited) and May 31, 2009	3
	Condensed Consolidated Statements of Income for the three and six months ended November 30, 2009 (unaudited) and November 30, 2008 (unaudited)	4
	Condensed Consolidated Statement of Shareholders’ Equity and Comprehensive Income for the period June 1, 2009 through November 30, 2009 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the six months ended November 30, 2009 (unaudited) and November 30, 2008 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28
Item 4.	Controls and Procedures	28
PART II.       OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 4.	Submission of Matters to a Vote of Security Holders	30
Item 6.	Exhibits	31
	SIGNATURES	31

2

ITEM 1. Financial Statements

IMMUCOR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

	November 30, 2009		May 31, 2009
ASSETS	(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	156,066	$	136,461
Trade accounts receivable, net of allowance for doubtful accounts of $2,367 at
November 30, 2009 and $2,179 at May 31, 2009		60,789		57,017
Inventories		42,481		38,256
Deferred income tax assets, current portion		7,801		7,979
Prepaid expenses and other current assets		4,733		5,137
Total current assets		271,870		244,850
PROPERTY AND EQUIPMENT, Net		48,811		43,461
GOODWILL		95,778		97,255
INTANGIBLE ASSETS, Net		59,831		61,355
DEFERRED INCOME TAX ASSETS		3,995		3,638
OTHER ASSETS		773		781
Total assets	$	481,058	$	451,340
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	10,144	$	9,344
Accrued expenses and other current liabilities		17,380		20,253
Income taxes payable		7,783		11,469
Deferred revenue, current portion		10,812		11,222
Total current liabilities		46,119		52,288
DEFERRED REVENUE		8,826		10,871
DEFERRED INCOME TAX LIABILITIES		1,215		1,272
OTHER LONG-TERM LIABILITIES		2,299		2,331
Total liabilities		58,459		66,762
COMMITMENTS AND CONTINGENCIES (Note 9)		-		-
SHAREHOLDERS' EQUITY:
Common stock, $0.10 par value; authorized 120,000,000 shares, issued and outstanding
69,862,633 and 70,456,522 shares at November 30, 2009 and May 31, 2009, respectively		6,986		7,046
Additional paid-in capital		33,371		42,012
Retained earnings		368,277		327,242
Accumulated other comprehensive income		13,965		8,278
Total shareholders' equity		422,599		384,578
Total liabilities and shareholders' equity	$	481,058	$	451,340

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

3

IMMUCOR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	November 30,			November 30,			November 30,			November 30,
	2009			2008 (1)			2009			2008 (1)
NET SALES	$	82,570		$	73,021		$	165,641		$	146,197
COST OF SALES (exclusive of amortization shown separately below)		24,431			19,463			47,813			39,214
GROSS PROFIT		58,139			53,558			117,828			106,983
OPERATING EXPENSES:
Research and development		3,898			2,896			7,721			4,777
Selling and marketing		9,765			10,538			19,229			19,732
Distribution		3,721			3,549			7,226			7,017
General and administrative		9,020			7,642			17,508			15,375
Amortization expense		1,073			1,071			2,140			1,596
Total operating expenses		27,477			25,696			53,824			48,497
INCOME FROM OPERATIONS		30,662			27,862			64,004			58,486
NON-OPERATING INCOME (EXPENSE):
Interest income		94			586			284			1,380
Interest expense		(8	)		(77	)		(13	)		(203	)
Other, net		(48	)		(1,230	)		(18	)		(1,650	)
Total non-operating income (expense)		38			(721	)		253			(473	)
INCOME BEFORE INCOME TAXES		30,700			27,141			64,257			58,013
PROVISION FOR INCOME TAXES		10,998			9,803			23,222			20,718
NET INCOME	$	19,702		$	17,338		$	41,035		$	37,295
Earnings per share:
Per common share - basic	$	0.28		$	0.25		$	0.58		$	0.53
Per common share - diluted	$	0.28		$	0.24		$	0.58		$	0.52

(1)  Certain prior year operating expenses have been reclassified to conform with current year presentation.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

4

IMMUCOR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

(Unaudited, amounts in thousands)

												Accumulated
							Additional					Other		Total
	Common Stock						Paid-In			Retained		Comprehensive		Shareholders’
	Shares			Amount			Capital			Earnings		Income*		Equity
BALANCE, MAY 31, 2009		70,456		$	7,046		$	42,012		$	327,242	$	8,278	$	384,578
Shares issued under employee stock plan		66			6			204			-		-		210
Share-based compensation expense		-			-			2,650			-		-		2,650
Stock repurchases and retirements		(659	)		(66	)		(11,661	)		-		-		(11,727	)
Tax benefits related to share-based compensation		-			-			166			-		-		166
Comprehensive income:
Foreign currency translation adjustments		-			-			-			-		5,687		5,687
Net income		-			-			-			41,035		-		41,035
Total comprehensive income															46,722
BALANCE, November 30, 2009		69,863		$	6,986		$	33,371		$	368,277	$	13,965	$	422,599

*Accumulated Other Comprehensive Income balance primarily consists of foreign currency translation adjustments and has no tax effect.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

5

IMMUCOR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)

	Six Months Ended
	November 30,			November 30,
	2009			2008
OPERATING ACTIVITIES:
Net income	$	41,035		$	37,295
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,024			6,313
Loss on retirement of fixed assets		192			129
Provision for doubtful accounts		198			450
Share-based compensation expense		2,650			2,478
Deferred income taxes		(2,078	)		850
Excess tax benefit from share-based compensation		(166	)		(2,880	)
Changes in operating assets and liabilities, net of effects from acquired companies:
Accounts receivable, trade		(2,067	)		(7,519	)
Income taxes		1,172			5,578
Inventories		(9,625	)		(2,045	)
Other assets		325			(2,968	)
Accounts payable		613			156
Deferred revenue		(2,605	)		(1,018	)
Accrued expenses and other liabilities		(3,522	)		(4,511	)
Cash provided by operating activities		34,146			32,308
INVESTING ACTIVITIES:
Purchases of property and equipment		(4,484	)		(3,602	)
Acquisition of businesses, net of cash acquired		-			(108,537	)
Cash used in investing activities		(4,484	)		(112,139	)
FINANCING ACTIVITIES:
Repayments of long-term debt and liabilities		-			(229	)
Repurchase of common stock		(11,727	)		(5,644	)
Proceeds from exercise of stock options		210			2,452
Excess tax benefit from share-based compensation		166			2,880
Cash used in financing activities		(11,351	)		(541	)
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS		1,294			(2,382	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		19,605			(82,754	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		136,461			175,056
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	156,066		$	92,302
SUPPLEMENTAL INFORMATION:
Tax paid	$	24,121		$	14,318
Interest paid		-			33
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Shares surrendered for amounts due on stock options exercised	$	-		$	516
Movement from inventory to property and equipment of instruments placed on rental agreements		6,197			2,762

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

6

IMMUCOR, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of Business

Immucor, Inc. (“Immucor” and, together with its wholly owned subsidiaries, the “Company”) develops, manufactures and sells a complete line of reagents and automated systems used primarily by hospitals, clinical laboratories and donor centers in a number of tests performed to detect and identify certain properties of the cell and serum components of human blood used for the purpose of blood transfusion. The Company operates facilities in the United States, Canada, Europe and Japan.  The unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries.

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information, and the Securities and Exchange Commission’s (“SEC”) instructions for Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the unaudited condensed consolidated financial statements have been recorded in the interim periods presented.  These unaudited, condensed consolidated financial statements should be read in conjunction with the Company’s audited, consolidated financial statements and related notes for the year ended May 31, 2009, included in the Company’s Annual Report on Form 10-K.

The accompanying condensed consolidated financial statements present results of operations for the three and six months ended November 30, 2009. These results are not necessarily indicative of the results that may be achieved for the year ending May 31, 2010, or any other period.

Basis of Consolidation

The condensed consolidated financial statements include the accounts of Immucor and all its subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.

2. INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out basis) or market (net realizable value):

	November 30, 2009		May 31, 2009
	(in thousands)
Raw materials and supplies	$	8,938	$	8,506
Work in process		2,935		3,486
Finished goods		30,608		26,264
	$	42,481	$	38,256

3. SHAREHOLDERS’ EQUITY

During the first quarter of fiscal 2010, in compliance with statutory tax withholding requirements, the Company reacquired from certain restricted shareholders an aggregate of 9,481 shares valued at $0.2 million. During the first quarter of fiscal 2009, the Company similarly either withheld from certain option exercises or reacquired from certain restricted shareholders an aggregate of 34,715 shares valued at $1.0 million. The Company retired these shares and disclosed their value as ‘Stock repurchases and retirements’ in the condensed consolidated statement of shareholders’ equity and comprehensive income and as ‘Repurchase of common stock’ under financing activities in the condensed consolidated statements of cash flows.

The shares acquired were returned to the status of authorized, but unissued shares.

7

4. STOCK REPURCHASE PROGRAM

The Company instituted a stock repurchase program in June 1998. In August 2009, the Board of Directors authorized the Company to repurchase an additional 2,000,000 shares of the Company’s common stock under this repurchase program, bringing the total authorized shares to 11,375,000.

During the three and six months ended November 30, 2009, approximately 300,000 and 650,000 shares were repurchased in the open market under the 1998 repurchase plan for $5.5 million and $11.6 million, respectively.  The Company repurchased 200,000 shares for $4.7 million during the three and six months ended November 30, 2008.  Shares that are repurchased by the Company are returned to the status of authorized but unissued.

As of November 30, 2009, 9,178,356 shares had been repurchased under the program, leaving 2,196,644 shares available for repurchase.  The Company’s stock repurchase program does not have an expiration date.

5. SHARE-BASED COMPENSATION

Plan summary

During the first six months of fiscal 2010, the Immucor, Inc. 2005 Long-Term Incentive Plan (the “2005 Plan”) was the only plan under which the Company was authorized to grant stock incentive awards. Under the 2005 Plan, the Company is able to award stock options, stock appreciation rights, restricted stock, deferred stock, and other performance-based awards as incentive and compensation to employees and directors. Awards for up to 3,600,000 shares of the Company’s common stock may be granted under the 2005 Plan.  There is a restriction on the number of shares that may be used for awards other than stock options (1,800,000), and a separate restriction on the number of shares that may be used for grants of incentive stock options (also 1,800,000), but there is no restriction on the number of shares that may be used for grants of non-incentive stock options. As of November 30, 2009, awards for 2,213,721 shares have been granted under the 2005 Plan and 1,386,279 shares are still available for future awards, of which a maximum of 1,347,590 can be awarded as restricted shares. Options are granted at the closing market price on the date of the grant. Option awards generally vest equally over a four-year period and have a six-year contractual term. Restricted stock awards generally vest equally over a five-year period.  The 2005 Plan provides for accelerated vesting of option and restricted stock awards if there is a change in control, as defined in the 2005 Plan.

Valuation method used and assumptions

The fair value of each option grant in the three and six months ended November 30, 2009 and 2008 was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	Three Months Ended		Six Months Ended
	November 30,	November 30,	November 30,	November 30,
	2009	2008	2009	2008
Risk-free interest rate (1)	1.93%	2.88%	2.16%	3.27%
Expected volatility (2)	45.78%	41.34%	45.55%	42.20%
Expected life (years) (3)	4.25	4.25	4.25	4.25
Expected dividend yield (4)	-	-	-	-

1.  Based on the U.S. Treasury yield curve in effect at the time of grant.

2. Expected stock price volatility is based on the average historical volatility of the Company’s shares during the period corresponding to the expected life of the options.

3. Represents the period of time options are expected to remain outstanding.  As the Company has so far only awarded “plain vanilla options” as described by ASC 718-10-S99, “Compensation – Stock Compensation: Overall: SEC Materials”, the Company used the “simplified method” for determining the expected life of the options granted. The “simplified method” calculates expected term as the sum of the vesting term and the original contractual term divided by two. The Company will continue to use the “simplified method” until such time that it has sufficient historical data for options with six-year contractual terms to estimate the expected term of these share-based awards.

4. The Company has not paid dividends on its common stock and does not expect to pay dividends on its common stock in the near future.

8

Stock option activity

The options granted under the 2005 Plan during the six months ended November 30, 2009 have a six-year term with vesting of 25% at each anniversary of the issuance date; the restricted shares vest 20% at each anniversary of the issuance date.  The Company has not granted any option or share awards with market or performance conditions. Compensation costs for stock options with tiered vesting terms are recognized evenly over the vesting periods.

The following is a summary of the changes in outstanding options for the six months ended November 30, 2009:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (1)
								(in thousands)
Outstanding at May 31, 2009		2,556,096		$	18.26
Granted  (2)		307,107		$	16.48
Exercised  (3)		(26,371	)	$	7.99
Forfeited		(49,863	)	$	26.52
Expired		(16,381	)	$	25.02
Outstanding at November 30, 2009		2,770,588		$	17.97		4.1	$	13,787
Exercisable at November 30, 2009		1,680,422		$	14.06		3.7	$	12,948

1) The aggregate intrinsic value in the above table represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of options that are in the money as of the date presented).

2) The weighted-average grant-date fair value of share options granted during the first six months of fiscal years 2010 and 2009 was $6.38 and $10.65, respectively.

3) The total intrinsic value of share options exercised during the first six months of fiscal years 2010 and 2009 was $0.3 million and $9.6 million, respectively.

As of November 30, 2009, there was $8.4 million of total unrecognized compensation cost related to nonvested stock option awards. This compensation cost is expected to be recognized through November 2013, based on existing vesting terms with the weighted average remaining expense recognition period being approximately 2.6 years.

Restricted stock activity

The following is a summary of the changes in nonvested restricted stock for the three months ended November 30, 2009:

	Number of Shares			Weighted-Average Grant-Date Fair Value
Nonvested stock outstanding at May 31, 2009		141,190		$	23.72
Granted		251,512		$	16.27
Vested		(39,224	)	$	22.92
Forfeited		(7,365	)	$	18.35
Nonvested stock outstanding at November 30, 2009		346,113		$	18.51

The total fair value of restricted shares vested was $0.9 million and $0.8 million during the six months ended November 30, 2009 and 2008, respectively.

As of November 30, 2009, there was $5.7 million of total unrecognized compensation cost related to nonvested restricted stock awards. This compensation cost is expected to be recognized through June 2014, based on existing vesting terms with the weighted average remaining expense recognition period being approximately 3.8 years.

9

6. COMPREHENSIVE INCOME

The components of comprehensive income for the three and six months ended November 30, 2009 and 2008 are as follows (in thousands):

	Three Months Ended					Six Months Ended
	November 30,		November 30,			November 30,		November 30,
	2009		2008			2009		2008
Net income	$	19,702	$	17,338		$	41,035	$	37,295
Net foreign currency translation adjustments		4,433		(6,391	)		5,687		(11,349	)
Comprehensive income	$	24,135	$	10,947		$	46,722	$	25,946

No tax effect is recorded for foreign currency translation adjustments as the foreign net assets translated are deemed permanently invested.

7. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share in accordance with ASC 260, “Earnings per Share”.  Basic earnings per common share are calculated by dividing net income by weighted-average common shares outstanding during the period.  Diluted earnings per common share are calculated by dividing net income by weighted-average common shares outstanding during the period plus dilutive potential common shares, which are determined as follows (in thousands, except per share data):

	Three Months Ended				Six Months Ended
	November 30,		November 30,		November 30,		November 30,
	2009		2008		2009		2008
Numerator for basic and diluted earnings per share:
Net Income	$	19,702	$	17,338	$	41,035	$	37,295
Denominator:
For basic earnings per share
- weighted average shares basis		70,090		70,409		70,244		70,338
Effect of dilutive stock options and restricted stock		542		818		510		881
Denominator for diluted earnings per share
-adjusted weighted average shares basis		70,632		71,227		70,754		71,219
Earnings per common share – basic	$	0.28	$	0.25	$	0.58	$	0.53
Earnings per common share – diluted	$	0.28	$	0.24	$	0.58	$	0.52

The effect of 1,800,730 and 617,364 out-of-the-money options for the quarter ended November 30, 2009 and 2008, respectively, and 1,912,674 and 543,145 out-of-money options for the six months ended November 30, 2009 and 2008, respectively, were excluded from the above calculation as inclusion of these securities would be anti-dilutive.

8. SEGMENT AND GEOGRAPHIC INFORMATION

The Company’s operations and segments are organized around geographic areas.  Immucor’s “Europe” segment includes the operations of Belgium, France, Germany, Italy, Portugal, Spain and the United Kingdom. The foreign locations principally function as distributors of products developed and manufactured by the Company in the United States and Canada. Effective August 4, 2008, the U.S. column also includes the operations of BioArray Solutions Ltd. which was acquired during the first quarter of fiscal 2009. The accounting policies applied in the preparation of the Company’s consolidated financial statements are applied consistently across all segments.  Intersegment sales are recorded at market price and are eliminated in consolidation.

The basis of segmentation has been refined since the Form 10-Q for the quarter ended November 30, 2008. The information for European locations has been combined in this report. In the prior year report, the information for certain European locations was reported separately. All prior year data has been retroactively adjusted to align with current reporting.

Segment information for the three and six months ended November 30, 2009 and 2008 is summarized below (in thousands).

10

	For the Three Months Ended November 30, 2009
	U.S.		Europe			Canada		Japan		Elims			Consolidated
Traditional reagent revenues:
Unaffiliated customers	$	39,320	$	7,674		$	2,333	$	2,034	$	-		$	51,361
Affiliates		1,181		1,252			91		-		(2,524	)		-
Total		40,501		8,926			2,424		2,034		(2,524	)		51,361
Capture revenues:
Unaffiliated customers		12,484		6,051			1,154		316		-			20,005
Affiliates		1,789		804			-		-		(2,593	)		-
Total		14,273		6,855			1,154		316		(2,593	)		20,005
Net instrument revenues:
Unaffiliated customers		6,198		2,930			581		316		-			10,025
Affiliates		1,220		1,929			-		-		(3,149	)		-
Total		7,418		4,859			581		316		(3,149	)		10,025
Net molecular immunohematology revenues:
Unaffiliated customers		764		415			-		-		-			1,179
Affiliates		391		-			-		-		(391	)		-
Total		1,155		415			-		-		(391	)		1,179
Net Sales		63,347		21,055			4,159		2,666		(8,657	)		82,570
Income (loss) from operations		26,876		1,748			1,870		407		(239	)		30,662
Depreciation		1,893		994			103		34		-			3,024
Amortization		1,010		42			-		21		-			1,073
Income tax (benefit) expense		9,781		651			652		-		(86	)		10,998
Capital expenditures		1,558		(686	)		51		9		-			932

	For the Three Months Ended November 30, 2008
	U.S.		Europe			Canada		Japan		Elims			Consolidated
Traditional reagent revenues:
Unaffiliated customers	$	37,350	$	5,740		$	2,260	$	1,879	$	-		$	47,229
Affiliates		1,467		999			128		-		(2,594	)		-
Total		38,817		6,739			2,388		1,879		(2,594	)		47,229
Capture revenues:
Unaffiliated customers		10,321		5,094			889		220		-			16,524
Affiliates		1,408		741			-		-		(2,149	)		-
Total		11,729		5,835			889		220		(2,149	)		16,524
Net instrument revenues:
Unaffiliated customers		5,969		2,176			383		81		-			8,609
Affiliates		497		1,340			-		-		(1,837	)		-
Total		6,466		3,516			383		81		(1,837	)		8,609
Net molecular immunohematology revenues:
Unaffiliated customers		659		-			-		-		-			659
Affiliates		-		-			-		-		-			-
Total		659		-			-		-		-			659
Net Sales		57,671		16,090			3,660		2,180		(6,580	)		73,021
Income (loss) from operations		27,100		(806	)		1,379		125		64			27,862
Depreciation		1,423		843			64		43		-			2,373
Amortization		984		69			-		19		-			1,072
Income tax expense		9,155		86			531		-		31			9,803
Capital expenditures		539		1,009			210		5		-			1,763

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	For the Six Months Ended November 30, 2009
	U.S.		Europe		Canada		Japan		Elims			Consolidated
Traditional reagent revenues:
Unaffiliated customers	$	82,160	$	14,950	$	4,719	$	4,251	$	-		$	106,080
Affiliates		2,423		2,491		136		-		(5,050	)		-
Total		84,583		17,441		4,855		4,251		(5,050	)		106,080
Capture revenues:
Unaffiliated customers		23,586		11,748		2,414		560		-			38,308
Affiliates		3,440		1,534		-		-		(4,974	)		-
Total		27,026		13,282		2,414		560		(4,974	)		38,308
Net instrument revenues:
Unaffiliated customers		12,053		5,740		1,137		387		-			19,317
Affiliates		2,633		3,245		-		-		(5,878	)		-
Total		14,686		8,985		1,137		387		(5,878	)		19,317
Net molecular immunohematology revenues:
Unaffiliated customers		1,411		525		-		-		-			1,936
Affiliates		488		-		-		-		(488	)		-
Total		1,899		525		-		-		(488	)		1,936
Net Sales		128,194		40,233		8,406		5,198		(16,390	)		165,641
Income (loss) from operations		55,574		3,900		3,940		595		(5	)		64,004
Depreciation		3,639		2,001		169		75		-			5,884
Amortization		2,016		84		-		40		-			2,140
Income tax expense		20,270		1,460		1,379		-		113			23,222
Capital expenditures		4,169		242		56		17		-			4,484
Property & equipment, net		34,981		11,934		1,645		251		-			48,811
Total assets at period end		551,355		81,028		28,018		19,936		(199,279	)		481,058

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	For the Six Months Ended November 30, 2008
	U.S.		Europe			Canada		Japan		Elims			Consolidated
Traditional reagent revenues:
Unaffiliated customers	$	74,999	$	12,815		$	4,727	$	3,961	$	-		$	96,502
Affiliates		2,695		2,114			191		-		(5,000	)		-
Total		77,694		14,929			4,918		3,961		(5,000	)		96,502
Capture revenues:
Unaffiliated customers		19,122		10,587			1,592		396		-			31,697
Affiliates		3,288		1,387			-		-		(4,675	)		-
Total		22,410		11,974			1,592		396		(4,675	)		31,697
Net instrument revenues:
Unaffiliated customers		11,344		4,916			782		146		-			17,188
Affiliates		2,443		3,094			-		-		(5,537	)		-
Total		13,787		8,010			782		146		(5,537	)		17,188
Net molecular immunohematology revenues:
Unaffiliated customers		810		-			-		-		-			810
Affiliates		-		-			-		-		-			-
Total		810		-			-		-		-			810
Net Sales		114,701		34,913			7,292		4,503		(15,212	)		146,197
Income (loss) from operations		55,843		(103	)		2,936		48		(238	)		58,486
Depreciation		2,686		1,834			114		85		-			4,719
Amortization		1,406		152			-		36		-			1,594
Income tax (benefit) expense		18,980		684			1,123		-		(69	)		20,718
Capital expenditures		1,534		1,745			305		18		-			3,602
Property & equipment,  net		27,690		8,733			1,338		393		-			38,154
Total assets at period end		475,158		58,562			20,117		17,799		(176,173	)		395,463

Net export sales to unaffiliated customers (in thousands):

	Three Months Ended				Six Months Ended
	November 30,		November 30,		November 30,		November 30,
	2009		2008		2009		2008
United States	$	1,327	$	1,209	$	2,663	$	2,254
Europe		1,977		1,167		3,368		2,815
Canada		576		564		1,167		1,072
Total net export sales	$	3,880	$	2,940	$	7,198	$	6,141

9. COMMITMENTS AND CONTINGENCIES

In June 2009, we announced that the FDA, in an administrative action based on a January 2009 inspection, issued a notice of intent to revoke our biologics license with respect to our Reagent Red Blood Cells and Anti-E (Monoclonal) Blood Grouping Reagent products. Under this administrative action, we have the opportunity to demonstrate or achieve compliance before the FDA initiates revocation proceedings or takes other action. The FDA did not order the recall of any of our products or restrict us from selling these products. This administrative action was a follow on to a warning letter that we had received in May 2008. We had been working on a remediation plan, submitted after the warning letter, but had failed to make adequate progress at the time of the FDA’s follow up January 2009 inspection. In response to the June 2009 administrative action, we submitted a detailed remediation plan that outlines our actions and timelines to correct the FDA’s noted deficiencies from the January 2009 inspection. The Company’s detailed remediation plan is based on a quality project that began in early calendar 2009.  The Company is targeting to complete the FDA-remediation efforts associated with its quality project during its third fiscal quarter of 2010.

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In April 2009, Immucor, Inc. received a subpoena from the United States Department of Justice, Antitrust Division (“DOJ”), requiring it to produce documents for the period beginning September 1, 2000 through the present, pertaining to an investigation of possible violations of the federal criminal antitrust laws in the blood reagents industry. The Company has been cooperating with the DOJ and intends to continue cooperating. At this time the Company cannot reasonably assess the timing or outcome of the investigation or its effect, if any, on its business.

In October 2007, the Company reported that the Federal Trade Commission (“FTC”) was investigating whether Immucor violated federal antitrust laws or engaged in unfair methods of competition through three acquisitions made in the period from 1996 through 1999, and whether Immucor or others engaged in unfair methods of competition by restricting price competition. The FTC letter requested that the Company provide certain documents and information to the FTC concerning those acquisitions and concerning its product pricing activities since then.  In July 2008, the FTC formalized its document and information requests into a Civil Investigative Demand (“CID”) and also required the Company to provide certain additional information within the same general scope of its previous requests. Most recently, the FTC has served a CID which requires that it be provided with copies of documents provided to the DOJ in the DOJ’s investigation described above.  The Company has been cooperating with the FTC and intends to continue cooperating. At this time the Company cannot reasonably assess the timing or outcome of the investigation or its effect, if any, on its business.

Beginning in May 2009, more than 30 lawsuits were filed in 10 different United States District Courts against the Company, Ortho-Clinical Diagnostics, Inc. and Johnson & Johnson Health Care Systems, Inc. alleging that the defendants conspired to fix prices at which blood reagents are sold, asserting claims under Section 1 of the Sherman Act, and seeking declaratory and injunctive relief, treble damages, costs, and attorneys’ fees. All of these complaints make substantially the same allegations and seek to certify a class of persons and entities who purchased blood reagents from any of the defendants between January 1, 2000 and the present. Most of the complaints limit the proposed class to persons and entities in the United States, but some do not contain that limitation. In August 2009, these cases were ordered to be centralized in the United States District Court for the Eastern District of Pennsylvania.  That court now has before it motions to appoint interim lead counsel for plaintiffs. There has been no discovery in any of these cases, and no court has made a determination whether any of the plaintiffs’ claims have merit or should be allowed to proceed as a class action. The Company intends to vigorously defend against these cases. At this time the Company cannot reasonably assess the timing or outcome of this litigation or its effect, if any, on its business.

In August 2009, the City of Pontiac General Employees’ Retirement System filed a class action lawsuit in the United States District Court for the Northern District of Georgia against the Company and nine of its current and former directors and officers, alleging that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The plaintiff seeks to certify a class of purchasers of the Company’s Common Stock between October 19, 2005 and April 23, 2009.  The complaint alleges that the defendants failed to disclose that the Company was operating in violation of United States antitrust laws. In September 2009, Thomas Schlenker filed a similar class action lawsuit in the United States District Court for the Eastern District of Pennsylvania against the Company and ten of its current and former directors and officers, also alleging that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.  This plaintiff also seeks to certify a class of purchasers of the Company’s securities for the same class period.  The Company has not yet responded to the complaints, but intends to vigorously defend these lawsuits. At this time, the Company cannot reasonably assess the timing or outcome of this litigation or its effect, if any, on its business.

Other than as set forth above or as previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2009, as filed with the SEC on July 24, 2009, we are not currently subject to any additional material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us.  However, from time to time, we may become a party to certain legal proceedings in the ordinary course of business.

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10. RECENT ACCOUNTING PRONOUNCEMENTS

Adopted by the Company in fiscal 2010

In June 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles – A Replacement of FASB Statement No. 162” (“SFAS 168”). SFAS 168 establishes the FASB Accounting Standards CodificationTM (ASC) as the single source of authoritative U.S. generally accepted accounting principles (U.S. GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. SFAS 168 and the Codification are effective for financial statements issued for interim and annual periods ending after September 15, 2009, which corresponds to the Company’s second quarter of fiscal 2010. Upon adoption, the Codification superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification became non-authoritative. Following SFAS 168, the FASB will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts. Instead, the FASB will issue Accounting Standards Updates (“ASU”), which will serve only to: (a) update the Codification; (b) provide background information about the guidance; and (c) provide the bases for conclusions on the change(s) in the Codification. The adoption of SFAS 168 during the second quarter of fiscal 2010 did not have a material impact on the Company’s consolidated financial statements.

In September 2006, the Financial Accounting Standards Board (“FASB”) issued an update to ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). The update provides guidance for using fair value to measure assets and liabilities, and also responds to investors' requests for expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings.  This update applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value in any new circumstances. For financial assets and liabilities, this update is effective for fiscal years beginning after November 15, 2007. The Company adopted the provisions for the financial assets and liabilities in fiscal 2009 and adoption did not have a material impact on the Company’s results of operations or financial position.  For nonfinancial assets and liabilities, this update is effective for fiscal years beginning after November 15, 2008. The adoption of provisions of the update to ASC 820 for nonfinancial assets and liabilities during the first quarter of fiscal 2010 did not have a material impact on the Company’s results of operations or financial position.

In December 2007, the FASB issued an update to ASC 805, “Business Combinations” (“ASC 805”). This update will significantly change the financial accounting and reporting of business combination transactions. The update also establishes principles for how an acquirer recognizes and measures the identifiable assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The update to ASC 805 is effective for acquisition dates on or after the beginning of an entity’s first year that begins after December 15, 2008. The adoption of the update to ASC 805 during the first quarter of fiscal 2010 did not have a material impact on the Company’s consolidated financial statements.

In December 2007, the FASB issued an update to ASC 810, “Consolidation” (“ASC 810”). This update establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. This update is effective for fiscal years beginning on or after December 15, 2008. The adoption of the update to ASC 810 during the first quarter of fiscal 2010 did not have a material impact on the Company’s consolidated financial statements.

In April 2008, the FASB issued an update to ASC 350, “Intangibles – Goodwill and Other” (“ASC 350”), which amends the factors an entity must consider when developing renewal or extension assumptions used in determining the useful life of a recognized intangible asset. It also requires entities to provide certain disclosures about its assumptions. This update is effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. The adoption of the update to ASC 350 during the first quarter of fiscal 2010 did not have a material impact on the Company’s consolidated financial statements.

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In June 2008, the FASB issued an update to ASC 260, “Earnings Per Share”, (“ASC 260”).  This update states that unvested share-based payment awards that contain rights to receive nonforfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. The update is effective for fiscal years beginning after December 15, 2008, and interim periods within those years. The adoption of ASC 260-40-45-61A during the first quarter of fiscal 2010 did not have a material impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued an update to ASC 825, “Financial Instruments” (“ASC 825”). This update requires disclosures about fair value of financial instruments not measured on the balance sheet at fair value in interim financial statements as well as in annual financial statements. Prior to this update, fair values for these assets and liabilities were only disclosed annually. This update requires all entities to disclose the methods and significant assumptions used to estimate the fair value of financial instruments. This update is effective for interim periods ending after June 15, 2009. Disclosure is not required for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, comparative disclosures are required only for periods ending after initial adoption. The adoption of ASC 825-10-65-1 during the first quarter of fiscal 2010 did not have a material impact on the Company’s consolidated financial statements.

In May 2009, the FASB established ASC 855, “Subsequent Events” (“ASC 855”).  ASC 855 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued.  The effective date of ASC 855 is interim or annual financial periods ending after June 15, 2009.   This codification topic does not apply to subsequent events or transactions that are within the scope of other applicable generally accepted accounting principles that provide different guidance on the accounting treatment for subsequent events or transactions. ASC 855 would apply to both interim financial statements and annual financial statements and should not result in significant changes in the subsequent events that are reported. ASC 855 introduces the concept of financial statements being available to be issued. It requires the disclosure of the date through which a Company has evaluated subsequent events and the basis for that date, whether that represents the date the financial statements were issued or were available to be issued. ASC 855 should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. The adoption of ASC 855 during the first quarter of fiscal 2010 did not have a material impact on the Company’s consolidated financial statements.

In August 2009, the FASB issued ASU 2009-05, “Measuring Liabilities at Fair Value,” which is an amendment of ASC 820-10, “Fair Value Measurements and Disclosures: Overall.” ASU 2009-05 provides clarification for circumstances where a quoted price in an active market for the identical liability is not available.  In that situation, entities are required to measure fair value in one or more of the following techniques:

1) A valuation technique that uses

a.The quoted price of the identical liability when traded as an asset

b.Quoted prices for similar liabilities or similar liabilities when traded as an asset

2)Another valuation technique that is consistent with the principles of ASC 820, such as an income approach or a market approach.

ASU 2009-05 also clarifies that a reporting entity is not required to adjust the fair value of a liability to include inputs relating to the existence of transfer restrictions on that liability.  The provisions of this update are effective for the first reporting period (including interim periods) beginning after issuance.  The adoptions of the provisions of this update to ASC 820 during the second quarter of fiscal 2010 did not have a material impact on the Company’s consolidated financial statements.

Not yet adopted by the Company

In June 2009, the FASB issued an update to ASC 860, “Transfers and Servicing” (“ASC 860”). This update will require more information about transfers of financial assets, including securitization transactions, and where entities have continuing exposure to the risks related to transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures. It also enhances information reported to users of financial statements by providing greater transparency about transfers of financial assets and an entity’s continuing involvement in transferred financial assets.  This update will be effective at the start of a reporting entity’s first fiscal year beginning after November 15, 2009, which corresponds to the Company’s first quarter of fiscal 2011. Early application is not permitted. The Company is currently evaluating the impact of adoption of this update to ASC 860 on its financial statements.

16

In June 2009, the FASB issued an update to ASC 810, “Consolidation” (“ASC 810”). This update changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s purpose and design and the reporting entity’s ability to direct the activities of the other entity that most significantly impact the other entity’s economic performance. This update will require a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity will be required to disclose how its involvement with a variable interest entity affects the reporting entity’s financial statements. The update will be effective at the start of a reporting entity’s first fiscal year beginning after November 15, 2009, which corresponds to the Company’s first quarter of fiscal 2011. Early application is not permitted. The Company is currently evaluating the impact of adoption of this update of ASC 810 on its financial statements.

In October 2009, the FASB issued ASU 2009-13, “Multiple Deliverables Revenue Arrangements,” which is an amendment of ASC 605-25, “Revenue Recognition: Multiple Element Arrangements.”  This update addresses the accounting for multiple-deliverable arrangements to allow the vendor to account for deliverables separately instead of as one combined unit by amending the criteria for separating consideration in multiple-deliverable arrangements.  This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on a) vendor-specific objective evidence (VSOE), b) third-party evidence or c) best estimate of selling price.  The residual method of allocation has been eliminated and arrangement consideration is now required to be allocated to all deliverables at the inception of the arrangement using the selling price method.  Additionally, expanded disclosures will be required relating to multiple deliverable revenue arrangements.  This update will be effective for fiscal years beginning on or after June 15, 2010, which corresponds to the Company’s first quarter of fiscal 2012.  Early adoption is permitted.  The Company is currently evaluating the impact of the adoption of this update to ASC 605-25 on its financial statements.

In December 2009, the FASB issued ASU 2009-16, “Accounting for Transfers of Financial Assets,” which is an amendment of ASC 860, “Transfers and Servicing.”  This update will require more information about the transfer of financial assets.  More specifically, ASU 2009-16 eliminates the concept of a “special purpose entity”, changes the requirements for derecognizing financial assets, and enhances the information reported to users of financial statements.  This update will be effective for fiscal years beginning on or after November 15, 2009, which corresponds to the Company’s first quarter of fiscal 2011.  Early application is not permitted.  The Company is currently evaluating the impact of the adoption of this update to ASC 860 on its financial statements.

11. SUBSEQUENT EVENTS

The Company has evaluated its November 30, 2009 consolidated financial statements for subsequent events through January 7, 2010, the date the consolidated financial statements were issued and filed with the SEC. The Company is not aware of any subsequent events which would require recognition or disclosure in the consolidated condensed financial statements.

ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

From time to time the Company makes statements or projections about future financial results or economic performance, or statements about plans and objectives for future operations, which are referred to as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the safe harbor provisions set forth in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words such as “plans,” “expects,” “believes,” “anticipates,” “estimates,” “projects,” “will,” “should” and other words of similar meaning.  We sometimes use forward-looking statements in discussions of our business, for example, when discussing future operations, financial performance, product development and new product launches, FDA and other regulatory applications and approvals, market position and expenditures.  Some of the statements in this report are such forward-looking statements.  Factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company include the following, some of which are described in greater detail below: the outcome and costs associated with the Company’s Quality Process Improvement Project; the outcome of the administrative action (“notice of intent to revoke our biological license”) received from the Food and Drug Administration (“FDA”); customer reaction to the FDA action and the subsequent impact on the business; lower than expected demand for the Company’s instruments; the decision of customers to defer capital spending; the unexpected change in the mix of instruments being purchased instead of acquired through other means, which could significantly change costs recognized in the period; the failure of customers to efficiently integrate the Company’s instruments into their blood banking operations; increased competition in the sale of instruments and reagents, particularly in the United States; unanticipated operational problems that result in non-compliance with FDA regulations; the failure to effectively integrate BioArray operations into the Company’s overall operations; product development obstacles including obstacles related to the development of the Galileo Neo and the next generation automated instrument for the molecular immunohematology products; regulatory obstacles including obstacles in securing regulatory approval of the molecular immunohematology products; the inability to hire and retain, and the unexpected loss of, key managers; changes in interest rates; fluctuations in foreign currency conversion rates; the strengthening of the U.S. Dollar versus any of the functional currencies in which the Company operates and its adverse impact on reported results; the inability of the Company’s Japanese and French subsidiaries as well as our molecular immunohematology operations to attain expected revenue, gross margin and net income levels; the outcome of any legal claims or regulatory investigations known or unknown, including the ongoing investigations by the Department of Justice and the Federal Trade Commission, and the related customer and shareholder lawsuits; the Company’s inability to protect its intellectual property, particularly as to the molecular immunohematology products, or its infringement of the intellectual property of others; lower than expected market acceptance of the molecular immunohematology products; the unexpected application of different accounting rules; general economic conditions; and adverse developments with respect to the operation or performance of the Company, its products and its affiliates or the market price of its common stock. Investors are cautioned not to place undue reliance on any forward-looking statements. The Company cautions that historical results should not be relied upon as indications of future performance.  The Company assumes no obligation to update any forward-looking statements.  Additional information concerning these and other factors which could cause differences between forward-looking statements and future actual results is discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended May 31, 2009 as filed with the SEC on July 24, 2009 as such risk factors may be revised or expanded in this report.

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Overview

Our Business

We develop, manufacture, and sell a complete line of reagents and automated systems used primarily by hospitals, clinical laboratories and blood banks in tests performed to detect and identify certain properties of human blood prior to blood transfusions. We have manufacturing facilities in the United States and Canada. We sell our products from these facilities and through our affiliates in Western Europe and Japan as well as through third-party distributors in other markets.

We operate in a highly regulated industry and are subject to continuing compliance with multiple country-specific statutes, regulations and standards. For example, in the U.S. the Food and Drug Administration (“FDA”) regulates all aspects of the blood banking industry, including the marketing of reagents and instruments used to detect and identify blood properties.

Our strategy is to drive automation in the blood bank with the goal of improving the blood bank’s operations as well as patient safety. We have introduced several instruments in the past, and we continue to focus on developing new instruments and improving our existing instruments. We received FDA clearance in June 2007 to market our Galileo Echo® (“Echo”) instrument. The Echo is a compact bench top, fully-automated walk-away instrument that meets the needs of the small- to medium-sized hospital market as well as integrated delivery networks that want to standardize the operations of their blood banks. Like our high volume Galileo® instrument, Echo uses Capture® technology, our proprietary reagents, and offers an extensive test menu and significant labor reduction while increasing productivity and patient safety.

In August 2008, we invested in what we believe will be the future of the blood bank – molecular immunohematology – with our acquisition of privately-held BioArray Solutions (“BioArray”). BioArray pioneered the development of DNA typing of blood for transfusion. With the goal of improving transfusion medicine, we believe that molecular immunohematology will revolutionize blood bank operations. In many countries, blood pre-transfusion testing is limited to the prevention of transfusion reactions and not for the prevention of alloimmunization, which occurs when antigens foreign to the patient are inadvertently introduced into the patient’s blood system through transfusions. If alloimmunization occurs, the patient develops new antibodies in response to the foreign antigens, thereby complicating future transfusions. By using multiplex, cost-effective molecular testing, we plan to introduce a system that allows testing to prevent alloimmunization for better patient care. We are currently working on the next generation instrument to allow for the further commercialization of our molecular immunohematology technology. Our current timeline is to have a research use only instrument available in the first half of calendar 2011.

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Recent Developments

Two significant recent developments are the acquisition of BioArray and the development of the next generation automated instrument to allow the full scale commercialization of our acquired molecular immunohematology offering, which are discussed above under “Our Business.” The following discusses other recent developments in our business.

Continued market penetration of the Echo instrument – We launched our latest instrument, the Echo, in the first quarter of fiscal 2008. The Echo features STAT functionality, exceptional mean time between failures and what we believe is the fastest turnaround time in the industry. The Echo is targeted at the small- to medium-sized hospital market, the largest segment of our market, numbering approximately 6,000 worldwide. As of November 30, 2009, we had received orders for a total of 720 Echo instruments worldwide. We believe continued market penetration of Echo will be a growth driver for the Company.

Upcoming launch of Galileo Neo™ – We are currently developing a new version of the Galileo, named the Galileo Neo, which will be our fourth generation automated instrument. We believe the original Galileo, which was launched in Western Europe in 2002 and in the U.S. in 2004, is approaching its natural replacement cycle of 5-7 years. Galileo Neo, like the original Galileo, will be targeted at high volume customers: large hospitals, donor centers and reference laboratories. We expect the Galileo Neo will have faster turnaround times and a longer mean time between failure than the current Galileo as well as new features such as STAT functionality. We expect to launch the Galileo Neo during the first calendar quarter of 2010.

FDA Administrative Action – In June 2009, we announced that the FDA, in an administrative action based on a January 2009 inspection, issued a notice of intent to revoke our biologics license with respect to our Reagent Red Blood Cells and Anti-E (Monoclonal) Blood Grouping Reagent products. Under this administrative action, we have the opportunity to demonstrate or achieve compliance before the FDA initiates revocation proceedings or takes other action. The FDA did not order the recall of any of our products or restrict us from selling these products. This administrative action was a follow on to a warning letter that we had received in May 2008. We had been working on a remediation plan, submitted after the warning letter, but had failed to make adequate progress at the time of the FDA’s follow up January 2009 inspection. In early calendar 2009 (during our fiscal third quarter), we formalized efforts to improve our quality systems through the Quality Process Improvement Project, which is discussed in further detail below. In response to the June 2009 administrative action, we submitted a detailed remediation plan that outlines our actions and timelines to correct the FDA’s noted deficiencies from the January 2009 inspection. The Quality Process Improvement Project served as the basis for the detailed remediation plan. We continue to implement the Project and believe that, in addition to addressing the deficiencies noted by the FDA, the Project remediation efforts will provide the foundation for the establishment of a world-class quality system. We are targeting to complete the Project during our third fiscal quarter of 2010.

Quality Process Improvement Project – During our third fiscal quarter of 2009, we formalized our efforts to improve the processes and procedures of our quality department by establishing the Quality Process Improvement Project. The Project expanded the role of consultants hired in April 2008. During fiscal 2009, we spent approximately $2.4 million on the Project, which was primarily reflected in cost of goods sold. During our second fiscal quarter of 2010, we spent approximately $1.8 million on the Project and have incurred approximately $4.1 million on a year-to-date basis in fiscal 2010. We expect to incur a total of $6 million to $7 million of Project-related expenses in fiscal 2010. The Project expenses primarily represent the cost of external consultants who are assisting us with the Project. We are targeting to complete the FDA-remediation efforts associated with the Project during our third fiscal quarter of 2010.  The Project remediation efforts lay the foundation for the longer term goal of the Project, which is to build a world-class quality system.  We will continue to work to ensure we have a world-class quality system for the future.  Project costs after completion of the remediation efforts are not expected to be material.

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The U.S. Department of Justice Subpoena – In April 2009, we announced that we had received a subpoena from the U.S. Department of Justice, Antitrust Division related to an investigation of possible violations of the federal criminal antitrust laws in the blood reagents industry. The subpoena requires us to produce documents for the period beginning September 1, 2000 through the present. We are cooperating fully with the Department of Justice.

Lawsuits – Since May 2009, more than 30 antitrust lawsuits have been filed against Immucor, Ortho-Clinical Diagnostics, Inc. and Johnson & Johnson Health Care Systems, Inc. alleging that those companies conspired to fix blood reagent prices. These cases have been centralized in one jurisdiction. Additionally, in August and September 2009, two lawsuits were filed against Immucor alleging violations of the federal securities laws. These lawsuits are in the preliminary stages.  See Part II, Item 1. Legal Proceedings below.

Performance

	Three Months Ended									Six Months Ended
	November 30,		November 30,			Change				November 30,		November 30,			Change
	2009		2008			Amount		%		2009		2008			Amount		%
	($ in thousands)									($ in thousands)
Net sales	$	82,570	$	73,021		$	9,549		13%	$	165,641	$	146,197		$	19,444		13%
Gross margin		58,139		53,558			4,581		9%		117,828		106,983			10,845		10%
Gross margin percentage		70.4%		73.3%							71.1%		73.2%
Operating expenses		27,477		25,696			1,781		7%		53,824		48,497			5,327		11%
Income from operations		30,662		27,862			2,800		10%		64,004		58,486			5,518		9%
Non-operating income		38		(721	)		759		-105%		253		(473	)		726		-153%
Income before income tax		30,700		27,141			3,559		13%		64,257		58,013			6,244		11%
Provision for income tax		10,998		9,803			1,195		12%		23,222		20,718			2,504		12%
Net income	$	19,702	$	17,338		$	2,364		14%	$	41,035	$	37,295		$	3,740		10%
Earnings per share:
Per common share - basic	$	0.28	$	0.25		$	0.03		12%	$	0.58	$	0.53		$	0.05		9%
Per common share - diluted	$	0.28	$	0.24		$	0.04		17%	$	0.58	$	0.52		$	0.06		12%

During the three months ended November 30, 2009, revenue increased by approximately $9.5 million or approximately 13% compared with revenue in the prior year quarter. This increase was primarily attributable to approximately $5.2 million from price contributions, which included incremental revenue from both contractual and discretionary sources, and approximately $2.4 million from volume contributions, which included incremental revenue from instrument placements. Additionally, revenue was favorably impacted by approximately $1.9 million from fluctuations in foreign currency exchange rates.

During the six months ended November 30, 2009, revenue increased by approximately $19.4 million or approximately 13% compared with revenue in the prior year. This increase was primarily attributable to approximately $11.6 million from price contributions, which included incremental revenue from both contractual and discretionary sources, and approximately $7.6 million from volume contributions, which included incremental revenue from instrument placements. Additionally, revenue was favorably impacted by approximately $0.2 million from fluctuations in foreign currency exchange rates.

For the second quarter of fiscal 2010, our consolidated gross margin decreased to 70.4% from 73.3% achieved in the second quarter of fiscal 2009, primarily due to approximately $1.8 million of costs related to our Quality Process Improvement Project, which was reflected in cost of sales. Operating expenses increased approximately 7% over the prior year quarter. The increase was primarily attributable to increased research and development expenses related to the next generation automated instrument for molecular immunohematology and increased legal expenses. Net income increased approximately 14% in the second quarter of fiscal 2010 over the prior year quarter.

For the first six months of fiscal 2010, our consolidated gross margin decreased to 71.1% from 73.2% achieved in the first six months of fiscal 2009, primarily due to approximately $4.1 million of costs related to our Quality Process Improvement Project, which was reflected in cost of sales. Operating expenses increased approximately 11% over the prior year period primarily due to our acquisition of BioArray. Net income increased approximately 10% in the first six months of fiscal 2010 over the prior year period.

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As of November 30, 2009, we had received orders for a total of 720 Echo instruments worldwide (an increase of 77 instruments in the second quarter of fiscal 2010), including 155 in Europe, including distributors, 548 in the U.S. and Canada and 17 in Japan, and approximately 498 of these Echo instruments were generating reagent revenues at the expected annualized run rate. For Galileo, as of November 30, 2009, we had received orders for a total of 678 Galileo instruments worldwide (an increase of 27 instruments in the second quarter of fiscal 2010), including 402 in Europe, including distributors, 269 in the U.S. and Canada and 7 in Japan, and approximately 634 of these Galileo instruments were generating reagent revenues at the expected annualized run rate.

Results of Operations

Net Sales

	Three Months Ended								Six Months Ended
	November 30,		November 30,		Change				November 30,		November 30,		Change
	2009		2008		Amount		%		2009		2008		Amount		%
	($ in thousands)								($ in thousands)
Traditional reagents	$	51,361	$	47,229	$	4,132		9%	$	106,080	$	96,502	$	9,578		10%
Capture products		20,005		16,524		3,481		21%		38,308		31,697		6,611		21%
Instruments		10,025		8,609		1,416		16%		19,317		17,188		2,129		12%
Molecular immunohematology		1,179		659		520		79%		1,936		810		1,126		139%
	$	82,570	$	73,021	$	9,549		13%	$	165,641	$	146,197	$	19,444		13%

Traditional reagent revenue increased by approximately 9% and 10% during the three and six months ended November 30, 2009, respectively, compared with revenue earned in the corresponding periods of fiscal 2009. Revenue increased in the current year periods primarily due to price contributions, which included incremental revenue from both contractual and discretionary sources. Traditional reagent sales, which accounted for more than 60% of total revenue in the current year periods, have historically been a significant portion of our revenue. We expect our revenue mix to change over time as we place more instruments in the market, which results in increased sales of our Capture reagents.

Capture revenue increased by approximately 21% in both the three and six months ended November 30, 2009 compared with revenue earned in the corresponding periods of fiscal 2009. Revenue increased in the current year periods primarily due to increased volume. Sales of Capture reagents are largely dependent on the number of installed instruments requiring the use of our proprietary Capture technology. As we continue to place more instruments in the market, we expect revenue from Capture reagents to continue to increase.

Revenue from instruments increased by approximately 16% and 12% during the three and six months ended November 30, 2009, respectively, compared with revenue earned in the corresponding periods of fiscal 2009. Revenue increased in the current year periods primarily due to increased instrument placements. Historically, revenue from instrument sales in the United States has been recognized over the life of the underlying reagent contract when the reagent contract includes a price guarantee. We continued to have a significant proportion of instruments that were acquired as rentals in the current year quarter, which resulted in revenue being recognized over the term of the contract as earned, versus deferred and amortized as in the case of the instrument being sold.In the second fiscal quarter of 2010, approximately $2.1 million of deferred revenue was recognized from previously placed instruments compared to $2.8 million recognized in the prior year quarter. We deferred approximately $1.0 million of instrument revenues related to instrument placements in the current year quarter, compared to $2.6 million in the prior year quarter.In the first six months of fiscal 2010, approximately $4.4 million of deferred revenue was recognized from previously placed instruments compared to $5.7 million recognized in the prior year period. We deferred approximately $1.8 million of instrument revenues related to instrument placements in the current year period, compared to $4.7 million in the prior year period. As of November 30, 2009 and 2008, deferred instrument and service revenues totaled approximately $19.6 million and $23.0 million, respectively.

Molecular immunohematology revenue was $1.2 million in the second quarter of 2010 compared with $0.7 million in the prior year quarter. The revenue increase of $0.5 million is primarily due the introduction of our molecular offering to markets outside the U.S. For the first six months of fiscal 2010, molecular immunohematology revenue was $1.9 million compared with $0.8 million in the prior year period. Our molecular immunohematology products are a result of our August 4, 2008 BioArray acquisition.

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Gross Margins (1)

	Three Months Ended
	November 30,				November 30,
	2009				2008				Change
	Amount		Margin %		Amount		Margin %		Amount
	(in '000)				(in '000)				(in '000)
Traditional reagents (1)	$	39,434		76.8%	$	38,169		80.8%	$	1,265
Capture products (1)		16,320		81.6%		13,987		84.6%		2,333
Instruments (1)		2,203		22.0%		1,118		13.0%		1,085
Molecular immunohematology (1)		182		15.4%		284		43.1%		(102	)
	$	58,139		70.4%	$	53,558		73.3%	$	4,581

	Six Months Ended
	November 30,				November 30,
	2009				2008				Change
	Amount		Margin %		Amount		Margin %		Amount
	(in '000)				(in '000)				(in '000)
Traditional reagents (1)	$	81,080		76.4%	$	76,939		79.7%	$	4,141
Capture products (1)		31,565		82.4%		27,144		85.6%		4,421
Instruments (1)		5,180		26.8%		2,607		15.2%		2,573
Molecular immunohematology (1)		3		0.2%		293		36.2%		(290	)
	$	117,828		71.1%	$	106,983		73.2%	$	10,845

(1)  The determination of gross margin is exclusive of amortization expense which is presented separately as an operating expense in the income statement.

For the three months ended November 30, 2009, gross margins on traditional reagents decreased to 76.8% from 80.8% in the prior year quarter, primarily due to approximately $1.8 million in costs related to our Quality Process Improvement Project. These costs were reflected in traditional reagent cost of sales.

On a year-to-date basis for the six months ended November 30, 2009, gross margins on traditional reagents decreased to 76.4% from 79.7% in the prior year period primarily due to approximately $4.1 million in costs related to our Quality Process Improvement Project.

For the three months ended November 30, 2009, Capture product gross margins decreased to 81.6% from 84.6% in the prior year quarter. On a year-to-date basis in fiscal 2010, Capture product gross margins decreased to 82.4% from 85.6% in the prior year period. Gross margin decreased in both the three-month and six-month periods primarily due to manufacturing variances.

For the three and six months ended November 30, 2009, gross margins on instruments were 22.0% and 26.8%, respectively, compared with 13.0% and 15.2%, respectively, for the corresponding periods of fiscal 2009. The gross margin improvement in both current year periods was primarily due to sales mix. In the current year periods, more instruments were rented (versus sold) as compared to the prior year periods. Where sales contracts have reagent price guarantee clauses (which our automation contracts typically do), instrument costs are expensed when the sale is made, but the related instrument revenue is deferred and recorded as income over the term of the contract. When an instrument is rented, revenue and expenses for the transaction are recognized evenly over the life of the contract. Additionally, current year margins benefited from the recognition of revenue deferred from prior periods with approximately $2.1 million of deferred revenue recognized in the second quarter of fiscal 2010 and approximately $4.4 million of deferred revenue recognized on a year-to-date basis in fiscal 2010.

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Operating Expenses

	Three Months Ended									Six Months Ended
	November 30,		November 30,		Change					November 30,		November 30,		Change
	2009		2008 (1)		Amount			%		2009		2008 (1)		Amount			%
	($ in thousands)									($ in thousands)
Research and development	$	3,898	$	2,896	$	1,002			35%	$	7,721	$	4,777	$	2,944			62%
Selling and marketing		9,765		10,538		(773	)		-7%		19,229		19,732		(503	)		-3%
Distribution		3,721		3,549		172			5%		7,226		7,017		209			3%
General and administrative		9,020		7,642		1,378			18%		17,508		15,375		2,133			14%
Amortization expense		1,073		1,071		2			0%		2,140		1,596		544			34%
Total operating expenses	$	27,477	$	25,696	$	1,781			7%	$	53,824	$	48,497	$	5,327			11%

(1)  Certain prior year operating expenses have been reclassified to conform with current year presentation.

Research and development expenses for the three and six months ended November 30, 2009 increased by approximately $1.0 million and $2.9 million, respectively, compared with the prior year periods. The current year quarter increase is primarily attributable to expenses related to the next generation automated instrument for molecular immunohematology. The year-to-date increase is attributable to expenses related to the next generation molecular immunohematology instrument as well as recognizing a full six months of BioArray expenses, which was acquired on August 4, 2008.

Selling and marketing expenses for the three and six months ended November 30, 2009 decreased approximately $0.8 million and $0.5 million, respectively, compared with the prior year periods primarily due to lower marketing expenses and lower sales commissions.

Distribution expenses for the three and six months ended November 30, 2009 were generally in line with the prior year periods.

General and administrative expenses for the three and six months ended November 30, 2009 increased by approximately $1.4 million and $2.1 million, respectively, compared with the prior year periods. The current year quarter increase was primarily due to increased legal fees while the year-to-date increase was primarily due to increased legal fees and the addition of BioArray.  Legal expenses related to the DOJ investigation and the related lawsuits were approximately $1.2 million in the second quarter of fiscal 2010 and approximately $2.0 million on a year-to-date basis in fiscal 2010.

Amortization expense for the second fiscal quarter of 2010 was generally in line with the prior year quarter. Amortization expense on a year-to-date basis in fiscal 2010 increased by approximately $0.5 million compared with the prior year period primarily due to recognizing a full six months of amortization of finite-lived intangibles that were recorded upon the acquisition of BioArray.

Non-Operating Income

	Three Months Ended								Six Months Ended
	November 30,		November 30,			Change			November 30,		November 30,			Change
	2009		2008			Amount			2009		2008			Amount
	($ in thousands)								($ in thousands)
Non-operating income (expense)	$	38	$	(721	)	$	759	-105%	$	253	$	(473	)	$	726

Non-operating income increased by approximately $0.8 million and $0.7 million, respectively for the three and six months ended November 30, 2009 compared with the prior year periods primarily due to prior year foreign exchange losses that did not recur in the current year offset by lower interest income due to lower interest rates.

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Income Taxes

The provision for income taxes increased $1.2 million for the three months ended November 30, 2009 and increased $2.5 million on a year-to-date basis compared with the corresponding period in fiscal 2009 primarily due to changes in pre-tax income. The effective income tax rate was 35.9% and 36.2% in the three-month and six-month periods ended November 30, 2009, respectively, compared with 36.1% and 35.7% in the three-month and six-month periods ended November 30, 2008, respectively.

As a result of using compensation cost deductions arising from the exercise of nonqualified employee stock options for federal and state income tax purposes, we realized excess income tax benefits of approximately $0.2 million and $2.9 million in the six-month periods ended November 30, 2009 and 2008, respectively.  The exercises that contribute to the tax benefit are exercises of options that were granted prior to the adoption of ASC 718, which required compensation expense arising from share-based payments to be recognized in the income statement for financial reporting purposes.  Therefore, as required by U.S. generally accepted accounting principles, these income tax benefits are recognized in our financial statements as additions to additional paid-in capital rather than as reductions of the respective income tax provisions in the consolidated financial statements because the related compensation deductions were not recognized as compensation expense for financial reporting purposes. Our income tax liability is reduced by these amounts.

Liquidity and Capital Resources

	For the Six Months Ended
	November 30, 2009			November 30, 2008
	(in thousands)
Net cash provided by operating activities	$	34,146		$	32,308
Net cash used in investing activities		(4,484	)		(112,139	)
Net cash used in financing activities		(11,351	)		(541	)
Effect of exchange rate changes on cash and cash equivalents		1,294			(2,382	)
Increase (decrease) in cash and cash equivalents	$	19,605		$	(82,754	)

Our cash and cash equivalents were $156.1 million at November 30, 2009, as compared with $136.5 million at May 31, 2009.  The increase in our cash position primarily resulted from operating cash flow in the first half of fiscal 2010.

Operating Activities – Net cash generated by operating activities was $34.1 million for the six months ended November 30, 2009, compared with $32.3 million generated in the six months ended November 30, 2008. The year-over-year increase was primarily due to increased profitability.

Investing Activities – For the first six months of fiscal 2010, $4.5 million of net cash was used in investing activities compared with $112.1 million in the corresponding period of the prior year. During fiscal 2009, we paid $108.5 million for the acquisitions of BioArray and our U.K. distributor. For the purchase of property and equipment, we spent $4.5 million in the current year period compared with $3.6 million spent in the prior year period.

Financing Activities – Net cash used in financing activities was $11.4 million during the first six months of fiscal 2010, compared with $0.5 million in the corresponding period of the prior year. For the repurchase of shares of our common stock, we spent $11.6 million in the current year compared with $4.7 million spent in the corresponding period of the prior fiscal year. During the current year period, we had a cash outflow of $0.2 million for payment of withholding taxes in compliance with the statutory tax withholding requirements on exercise of options and vesting of restricted shares in exchange for surrender of the Company’s shares of equal value, compared with a cash outflow of $1.0 million in the prior year quarter. The value of these reacquired shares is disclosed as ‘Repurchase of common stock’ under financing activities in the condensed consolidated statement of cash flows. During the first six months of fiscal 2010, we received $0.2 million cash from the exercise of employee stock options compared with $2.5 million in the same period of the prior year. We received $0.2 million and $2.9 million of excess tax benefits from the exercise of nonqualified employee stock options for the six months ended November 30, 2009 and 2008, respectively.

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Stock Repurchase Program

The Company instituted a stock repurchase program in June 1998. In August 2009, the Board of Directors authorized the Company to repurchase an additional 2,000,000 shares of the Company’s common stock under this repurchase program, bringing the total authorized shares to 11,375,000.

During the three and six months ended November 30, 2009, approximately 300,000 and 650,000 shares were repurchased in the open market under the 1998 repurchase plan for $5.5 million and $11.6 million, respectively.  The Company repurchased 200,000 shares for $4.7 million during the three and six months ended November 30, 2008.  Shares that are repurchased by the Company are returned to the status of authorized but unissued.

As of November 30, 2009, 9,178,356 shares had been repurchased under the program, leaving 2,196,644 shares available for repurchase.  The Company’s stock repurchase program does not have an expiration date.

Contingent Liabilities

We record contingent liabilities resulting from asserted and unasserted claims against us when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. We disclose contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimating probable losses requires analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. We currently are involved in certain legal proceedings. We do not believe any of these proceedings will have a material adverse effect on our consolidated financial position. It is possible, however, that future results of operations for any particular quarterly or annual period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings. Contingent liabilities are described in Note 9 to the condensed consolidated financial statements.

Future Cash Requirements and Restrictions

We expect that cash and cash equivalents and cash flows from operations will be sufficient to support our operations and planned capital expenditures for at least the next 12 months. There are no restrictions on our subsidiaries with respect to sending dividends, or making loans or advances to Immucor.

Critical Accounting Policies

General

We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact and any associated risks related to these policies on our business operations are discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations where such policies affect our reported and expected financial results.  For a detailed discussion on the application of these and other accounting policies, see the notes to the condensed consolidated financial statements of this quarterly report on Form 10-Q and the notes to the consolidated financial statements and the Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended May 31, 2009, as filed with the SEC on July 24, 2009. Senior management has discussed the development and selection of critical accounting estimates and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure with the Audit Committee of our Board of Directors. We believe that our most critical accounting policies and estimates relate to the following:

i.  Revenue recognition

ii.  Trade accounts receivable and allowance for doubtful accounts

iii.  Inventories

iv.  Goodwill

v.  Income taxes

vi.  Share-based compensation

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i) Revenue Recognition

In accordance with ASC 605-10-S25, “Revenue Recognition: Overall: Recognition”, we recognize revenue when the following four basic criteria have been met:  (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services are rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured.  Should changes in conditions cause management to determine these criteria are not met for certain future transactions, revenue recognized for any reporting period could be adversely affected.

·      Reagent sales

Revenue from the sale of our reagents to end users is primarily recognized upon shipment when both title and risk of loss transfer to the customer, unless there are specific contractual terms to the contrary.  Revenue from the sale of our reagents to distributors is recognized FOB customs clearance when both title and risk of loss transfer to the customer.

·      Medical instrument sales

Revenue from the sale of our medical instruments without multiple deliverables is generally recognized upon shipment and completion of contractual obligations.  Revenue from rentals of our medical instruments is recognized over the term of the rental agreement.  Instrument service contract revenue is recognized over the term of the contract.

In cases of sales or rentals of instruments with multiple deliverables, we recognize revenue on the sale of medical instruments in accordance with ASC 605-25 “Revenue Recognition: Multiple-Element Arrangements.” Our medical instrument sales contracts with multiple deliverables include the sale or rental of an instrument (including delivery, installation and training), the servicing of the instrument during the first year, and, in many cases, price guarantees for reagents and consumables purchased during the contract period.  We have determined the fair value of certain of these elements, such as training and first year service.  If the agreement does not include any price guarantees, the sales price in excess of the fair values of training and service is allocated to the instrument itself and recognized upon shipment and completion of contractual obligations relating to training and/or installation.  The fair value of a training session is recognized as revenue when services are provided.  The fair value of first year service is recognized over the first year of the contract.  If the agreement contains price guarantees, the entire arrangement consideration is deferred and recognized over the related guarantee period due to the fair value of the price guarantee not being determinable at the point of sale.  The allocation of the total consideration, which is based on the estimated fair value of the units of accounting, requires judgment by management.

ii) Trade Accounts Receivable and Allowance for Doubtful Accounts

Trade receivables at November 30, 2009, totaling $60.8 million, and at May 31, 2009, totaling $57.0 million, are net of allowances for doubtful accounts of $2.4 million and $2.2 million, respectively. The allowance for doubtful accounts represents a reserve for estimated losses resulting from the inability of our customers to pay their debts. The collectability of trade receivable balances is regularly evaluated based on a combination of factors such as customer credit-worthiness, past transaction history with the customer, current economic industry trends and changes in customer payment patterns.  If it is determined that a customer will be unable to fully meet its financial obligation, such as in the case of a bankruptcy filing or other material events impacting its business, a specific allowance for doubtful accounts is recorded to reduce the related receivable to the amount expected to be recovered.

iii) Inventories

Inventories are stated at the lower of cost (first-in, first-out basis) or market (net realizable value).  Cost includes material, labor and manufacturing overhead.  We use a standard cost system as a tool to monitor production efficiency. The standard cost system applies estimated labor and manufacturing overhead factors to inventory based on budgeted production and efficiency levels, staffing levels and costs of operation, based on the experience and judgment of management. Actual costs and production levels may vary from the standard established and such variances are charged to the consolidated statement of income as a component of cost of sales.  Since U.S. generally accepted accounting principles require that the standard cost approximate actual cost, periodic adjustments are made to the standard rates to approximate actual costs.  No material changes have been made to the inventory policy during the second quarter of fiscal 2010.

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iv) Goodwill

On adoption of ASC 350, “Intangibles – Goodwill and Other”, goodwill and indefinite lived intangible assets are no longer amortized but are tested for impairment annually or more frequently if impairment indicators arise.  Intangible assets that have finite lives continue to be amortized over their useful lives.

We evaluate the carrying value of goodwill in the fourth quarter of each fiscal year and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to: (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, we compare the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill.  The fair value of the reporting unit is estimated using primarily the income, or discounted cash flows, approach. If the carrying amount of a reporting unit exceeds its fair value, then the amount of the impairment loss must be measured.  The impairment loss would be calculated by comparing the implied fair value of the reporting unit’s goodwill to its carrying amount.  In calculating the implied fair value of the reporting unit’s goodwill, the fair value of the reporting unit is allocated to all of the other assets and liabilities of that unit based on their fair values.  The excess of the fair value of a reporting unit over the amount assigned to its other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value.

v) Income Taxes

Our income tax policy records the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well as operating loss and tax credit carry-forwards. The value of our deferred tax assets assumes that we will be able to generate sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions. If these estimates and related assumptions change in the future, we may be required to record additional valuation allowances against our deferred tax assets resulting in additional income tax expense in our consolidated statements of income. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized, and we consider the scheduled reversal of deferred tax liabilities, projected future taxable income, carry-back opportunities, and tax-planning strategies in making this assessment.  We assess the need for additional valuation allowances quarterly.

The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. Although updates to ASC 740, “Income Taxes”, which we adopted at the beginning of fiscal 2008, provide further clarification on the accounting for uncertainty in income taxes recognized in the financial statements, the new threshold and measurement attribute prescribed by the FASB will continue to require significant judgment by management. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations.

vi) Share-based Employee Compensation

We adopted the provisions of ASC 718, “Compensation – Stock Compensation”, on June 1, 2006, using the modified prospective transition method, which requires that (i) compensation costs be recorded as earned for all unvested stock options outstanding at the beginning of the first fiscal year of adoption based on the grant date fair value, and (ii) compensation costs for all share-based payments granted or modified subsequent to the adoption be recorded, based on the grant date fair value estimated in accordance with the provisions of ASC 718.  On adoption, we elected to attribute the value of share-based compensation to expense using the straight-line method, which was the method previously used for disclosing our required pro forma information.

We elected to estimate the fair value of our share-based payment awards using the Black-Scholes option-pricing model (the “Black-Scholes model”), which was previously used for disclosing our pro forma information. The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable.  The Black-Scholes model requires the input of certain assumptions. Our stock options have characteristics significantly different from those of traded options, and changes in the assumptions can materially affect the fair value estimates.

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We have calculated our additional paid in capital pool (“APIC pool”) based on the actual income tax benefits received from exercises of stock options granted after the effective date of ASC 718 using the long method. The APIC pool is available to absorb any tax deficiencies subsequent to the adoption of ASC 718.

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk

Except as noted below in Part II, Item 1A, there have been no material changes regarding the Company’s market risk position since the filing of its Annual Report on Form 10-K for the fiscal year ended May 31, 2009 as filed with the SEC on July 24, 2009.  For further details regarding the quantitative and qualitative disclosures about market risk, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2009.

ITEM 4.  Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, an evaluation was carried out under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of November 30, 2009.  Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of November 30, 2009, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting during the quarter ended November 30, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. Legal Proceedings

In April 2009, Immucor, Inc. received a subpoena from the United States Department of Justice, Antitrust Division (“DOJ”), requiring it to produce documents for the period beginning September 1, 2000 through the present, pertaining to an investigation of possible violations of the federal criminal antitrust laws in the blood reagents industry. The Company has been cooperating with the DOJ and intends to continue cooperating. At this time the Company cannot reasonably assess the timing or outcome of the investigation or its effect, if any, on its business.

In October 2007, the Company reported that the Federal Trade Commission (“FTC”) was investigating whether Immucor violated federal antitrust laws or engaged in unfair methods of competition through three acquisitions made in the period from 1996 through 1999, and whether Immucor or others engaged in unfair methods of competition by restricting price competition.  The FTC letter requested that the Company provide certain documents and information to the FTC concerning those acquisitions and concerning its product pricing activities since then.  In July 2008, the FTC formalized its document and information requests into a Civil Investigative Demand (“CID”) and also required the Company to provide certain additional information within the same general scope of its previous requests. Most recently, the FTC has served a CID which requires that it be provided with copies of documents provided to the DOJ in the DOJ’s investigation described above.  The Company has been cooperating with the FTC and intends to continue cooperating. At this time the Company cannot reasonably assess the timing or outcome of the investigation or its effect, if any, on its business.

Beginning in May 2009, more than 30 lawsuits were filed in 10 different United States District Courts against the Company, Ortho-Clinical Diagnostics, Inc. and Johnson & Johnson Health Care Systems, Inc. alleging that the defendants conspired to fix prices at which blood reagents are sold, asserting claims under Section 1 of the Sherman Act, and seeking declaratory and injunctive relief, treble damages, costs, and attorneys’ fees. These cases are identified in Exhibit 99.1, which is hereby incorporated herein by reference.  All of these complaints make substantially the same allegations and seek to certify a class of persons and entities who purchased blood reagents from any of the defendants between January 1, 2000 and the present. Most of the complaints limit the proposed class to persons and entities in the United States, but some do not contain that limitation.  In August 2009, these cases were ordered to be centralized in the United States District Court for the Eastern District of Pennsylvania.  That court now has before it motions to appoint interim lead counsel for plaintiffs.  There has been no discovery in any of these cases, and no court has made a determination whether any of the plaintiffs’ claims have merit or should be allowed to proceed as a class action. The Company intends to vigorously defend against these cases. At this time the Company cannot reasonably assess the timing or outcome of this litigation or its effect, if any, on its business.

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In August 2009, the City of Pontiac General Employees’ Retirement System filed a class action lawsuit in the United States District Court for the Northern District of Georgia against the Company and nine of its current and former directors and officers, alleging that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (City of Pontiac General Employees’ Retirement System v. Immucor, Inc., et al., Civil Action No. 1:09-CV-2351-TWT (N.D. Ga.)).   The plaintiff seeks to certify a class of purchasers of the Company’s Common Stock between October 19, 2005 and April 23, 2009.  The complaint alleges that the defendants failed to disclose that the Company was operating in violation of United States antitrust laws.   In September 2009, Thomas Schlenker filed a similar class action lawsuit in the United States District Court for the Eastern District of Pennsylvania against the Company and ten of its current and former directors and officers, also alleging that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (Schlenker v. Immucor, Inc., et al., Civil Action No. 2:09-CV-04297-JD (E.D. Pa.)).  This plaintiff also seeks to certify a class of purchasers of the Company’s securities for the same class period.  The Company has not yet responded to either complaint, but intends to vigorously defend these lawsuits.  At this time, the Company cannot reasonably assess the timing or outcome of this litigation or its effect, if any, on its business.

Other than as set forth above or as previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2009, as filed with the SEC on July 24, 2009, we are not currently subject to any additional material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us.  However, from time to time, we may become a party to certain legal proceedings in the ordinary course of business.

ITEM 1A.  Risk Factors

Except as noted below, there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended May 31, 2009, as filed with the SEC on July 24, 2009. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may have a material adverse effect on our business, financial condition and/or operating results.

On-going antitrust investigations and litigation could have a material and adverse effect on our business.

As noted in Item 1, Legal Proceedings above, we are under investigation by the Department of Justice ("DOJ") concerning possible criminal violations of the antitrust laws, and we are also the subject of a number of private civil actions alleging price fixing and seeking class certification, as well as a shareholder action alleging a failure to disclose antitrust violations and also seeking class certification. The DOJ could seek an indictment and conviction against us, which could result in the imposition of substantial fines, among other remedies. Were plaintiffs to prevail in one or more of the pending civil actions, we also could have to pay significant amounts, including treble damages and attorneys’ fees in certain cases. Also as noted in Item 1 above, the Federal Trade Commission (“FTC”) is investigating whether Immucor violated federal antitrust laws or engaged in unfair methods of competition, through three acquisitions made in the period from 1996 through 1999 or by restricting price competition. The FTC could decide to commence administrative and possibly federal court proceedings for purposes of determining whether there has been a violation and might seek to impose a variety of remedies for any violation including injunctive relief, divestiture of assets and/or disgorgement of profits. The imposition of any of the above remedies could have a materially adverse impact on our business, financial condition and results of operations. In addition, regardless of the ultimate outcome in the above matters, we expect to incur significant expenses, including attorneys’ fees, in responding to and defending against issues raised in the above matters.

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ITEM 2.     Unregistered Sales of Equity Securities and Use of Proceeds

The Company did not sell unregistered securities during the period covered by this report.

The Company repurchased shares of its Common Stock under the Company’s stock repurchase program during the quarter ended November 30, 2009:

Period	Shares Purchased		Average Price Per Share		Shares Purchased to Date as Part of Publicly Announced Plan		Maximum # of Shares Available to Purchase Under the Plan
September 1-30, 2009		-	$	-		8,878,356		2,496,644
October 1-31, 2009		-	$	-		8,878,356		2,496,644
November 1-30, 2009		300,000	$	18.44		9,178,356		2,196,644

The Company instituted a stock repurchase program in June 1998.  During the quarter ended August 31, 2009, the Board of Directors authorized the Company to repurchase an additional 2,000,000 shares of the Company’s common stock under this repurchase program bringing the total authorized shares to 11,375,000.  As of November 30, 2009, 9,178,356 shares had been repurchased under the program, leaving 2,196,644 shares available for repurchase.  The Company’s stock repurchase program does not have an expiration date.

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

The Company held its Annual Meeting of Shareholders on November 12, 2009. The following is a summary of the matters voted on at that meeting:

The shareholders voted on the election of seven directors, all incumbent directors of the Company, to serve until the Company’s next Annual Meeting of Shareholders or until their successors are duly elected and have qualified. Each of these directors was elected by the affirmative vote of a plurality of the votes cast at the Annual Meeting. The number of shares cast for and the number of shares withheld, with respect to each of these persons, were as follows:

Name	Votes For	Votes Withheld
James F. Clouser	65,273,317	534,407
Dr. Gioacchino DeChirico	63,605,712	2,202,012
Ralph A. Eatz	63,489,999	2,317,725
Dr. Paul V. Holland	65,225,482	582,242
Ronny B. Lancaster	65,275,720	532,004
Chris E. Perkins	65,275,601	532,123
Joseph E. Rosen	63,591,351	2,216,373

The shareholders also voted to ratify the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the fiscal year ending May 31, 2010. The number of shares cast for and against, abstentions and broker non-votes, with respect to this matter, were as follows:

Votes For	65,666,664
Votes Against	69,372
Abstentions	71,688
Broker Non-votes	0

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Finally, the shareholders voted to approve the amendment to the Amended and Restated Rights Agreement between the Company and Computershare Trust Company N.A. as rights agent.  The number of shares cast for and against, abstentions and broker non-votes, with respect to this matter, were as follows:

Votes For	35,129,519
Votes Against	24,300,664
Abstentions	11,708
Broker Non-votes	6,265,833

ITEM 6.  Exhibits

31.1    Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

31.2    Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

32.1    Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2    Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1     Summary of Lawsuits

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 thereunto duly authorized.

IMMUCOR, INC.

(Registrant)

Date:   January 7, 2010	By:	/s/ Dr. Gioacchino De Chirico
		Dr. Gioacchino De Chirico, Chief Executive Officer (on behalf of Registrant and as Principal Executive Officer)
Date:   January 7, 2010	By:	/s/ Richard A. Flynt
		Richard A. Flynt, Chief Financial Officer (Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Number  Description

31.1  Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

31.2  Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

32.1  Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2  Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1  Summary of Lawsuits (incorporated by reference to Exhibit 99.1 to Immucor, Inc.’s quarterly report on Form 10-Q filed on October 2, 2009).

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