IMMUCOR INC - FORM 10-Q - January 7, 2011

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EXCEL - IDEA: XBRL DOCUMENT - IMMUCOR INC	Financial_Report.xls
EX-31.1 - EXHIBIT 31.1 - IMMUCOR INC	ex31-1.htm
EX-32.1 - EXHIBIT 32.1 - IMMUCOR INC	ex32-1.htm
EX-32.2 - EXHIBIT 32.2 - IMMUCOR INC	ex32-2.htm
EX-31.2 - EXHIBIT 31.2 - IMMUCOR INC	ex31-2.htm

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, 2010

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 X 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, 2010: Common Stock, $0.10 Par Value – 70,025,219

IMMUCOR, INC. AND SUBSIDIARIES

FORM 10-Q

INDEX

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of November 30, 2010 (unaudited) and May 31, 2010

	Condensed Consolidated Statements of Income for the three and six months ended November 30, 2010 (unaudited) and November 30, 2009 (unaudited)

	Condensed Consolidated Statement of Shareholders’ Equity and Comprehensive Income for the period June 1, 2010 through November 30, 2010 (unaudited)

	Condensed Consolidated Statements of Cash Flows for the six months ended November 30, 2010 (unaudited) and November 30, 2009 (unaudited)

	Notes to Condensed Consolidated Financial Statements (unaudited)

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

Item 3.	Quantitative and Qualitative Disclosures about Market Risk

Item 4.	Controls and Procedures

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings

Item 1A.	Risk Factors

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

Item 6.	Exhibits

	SIGNATURES

ITEM 1. Financial Statements

IMMUCOR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)

	November 30, 2010		May 31, 2010
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	248,338	$	202,649
Trade accounts receivable, net of allowance for doubtful accounts of $2,470 and $2,122 at November 30, 2010 and May 31, 2010, respectively		62,007		59,578
Inventories		33,531		35,730
Deferred income tax assets, current portion		14,210		14,807
Prepaid expenses and other current assets		4,670		4,832
Total current assets		362,756		317,596

PROPERTY AND EQUIPMENT, Net		52,934		49,169
GOODWILL		95,448		94,336
INTANGIBLE ASSETS, Net		56,069		57,628
DEFERRED INCOME TAX ASSETS		420		540
OTHER ASSETS		633		565
Total assets	$	568,260	$	519,834

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable	$	8,935	$	7,973
Accrued expenses and other current liabilities		16,200		17,378
Income taxes payable		9,363		12,312
Deferred revenue, current portion		7,968		8,994
Total current liabilities		42,466		46,657

DEFERRED REVENUE		6,876		7,687
DEFERRED INCOME TAX LIABILITIES		9,379		7,368
OTHER LONG-TERM LIABILITIES		2,036		1,999
Total liabilities		60,757		63,711
COMMITMENTS AND CONTINGENCIES (Note 9)		-		-
SHAREHOLDERS' EQUITY:
Common stock, $0.10 par value; authorized 120,000,000 shares, issued and outstanding 70,014,939 and 69,912,449 shares at November 30, 2010 and May 31, 2010, respectively		7,001		6,991
Additional paid-in capital		39,624		36,256
Retained earnings		452,307		409,825
Accumulated other comprehensive income		8,571		3,051
Total shareholders' equity		507,503		456,123
Total liabilities and shareholders' equity	$	568,260	$	519,834

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

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,
	2010			2009			2010			2009

NET SALES	$	81,546		$	82,570		$	165,187		$	165,641
COST OF SALES (exclusive of amortization shown separately below)		23,161			24,431			47,135			47,813
GROSS MARGIN		58,385			58,139			118,052			117,828

OPERATING EXPENSES:
Research and development		3,881			3,898			8,306			7,721
Selling and marketing		9,221			9,765			18,363			19,229
Distribution		3,940			3,721			7,972			7,226
General and administrative		8,303			9,020			17,089			17,508
Amortization expense		1,083			1,073			2,163			2,140
Total operating expenses		26,428			27,477			53,893			53,824

INCOME FROM OPERATIONS		31,957			30,662			64,159			64,004

NON-OPERATING INCOME (EXPENSE):
Interest income		133			94			346			284
Interest expense		(5	)		(8	)		(19	)		(13	)
Other, net		(38	)		(48	)		59			(18	)
Total non-operating income		90			38			386			253

INCOME BEFORE INCOME TAXES		32,047			30,700			64,545			64,257
PROVISION FOR INCOME TAXES		10,984			10,998			22,063			23,222
NET INCOME	$	21,063		$	19,702		$	42,482		$	41,035

Earnings per share:
Per common share - basic	$	0.30		$	0.28		$	0.61		$	0.58
Per common share - diluted	$	0.30		$	0.28		$	0.60		$	0.58

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

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, 2010		69,912		$	6,991		$	36,256		$	409,825	$	3,051	$	456,123
Shares issued under employee stock plan		121			12			465			-		-		477
Share-based compensation expense		-			-			3,176			-		-		3,176
Stock repurchases and retirements		(18	)		(2	)		(349	)		-		-		(351	)
Tax benefits related to share-based compensation		-			-			76			-		-		76
Comprehensive income:
Foreign currency translation adjustments		-			-			-			-		5,520		5,520
Net income		-			-			-			42,482		-		42,482
Total comprehensive income															48,002

BALANCE, November 30, 2010		70,015		$	7,001		$	39,624		$	452,307	$	8,571	$	507,503

*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.

IMMUCOR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands)

	Six Months Ended
	November 30,			November 30,
	2010			2009
OPERATING ACTIVITIES:
Net income	$	42,482		$	41,035
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,875			8,024
Loss on retirement of fixed assets		347			192
Provision for doubtful accounts		581			198
Share-based compensation expense		3,176			2,650
Deferred income taxes		2,710			(2,078	)
Excess tax benefit from share-based compensation		(76	)		(166	)
Changes in operating assets and liabilities:
Accounts receivable, trade		(1,190	)		(2,067	)
Income taxes		(3,159	)		1,172
Inventories		(3,558	)		(9,625	)
Other assets		400			325
Accounts payable		804			613
Deferred revenue		(1,991	)		(2,605	)
Accrued expenses and other liabilities		(1,672	)		(3,522	)
Cash provided by operating activities		47,729			34,146

INVESTING ACTIVITIES:
Purchases of property and equipment		(3,629	)		(4,484	)
Cash used in investing activities		(3,629	)		(4,484	)

FINANCING ACTIVITIES:
Repurchase of common stock		(351	)		(11,727	)
Proceeds from exercise of stock options		477			210
Excess tax benefit from share-based compensation		76			166
Cash provided by (used in) financing activities		202			(11,351	)

EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS		1,387			1,294
INCREASE IN CASH AND CASH EQUIVALENTS		45,689			19,605
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		202,649			136,461
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	248,338		$	156,066

SUPPLEMENTAL INFORMATION:
Tax paid	$	22,493		$	24,121
Interest paid		-			-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Movement from inventory to property and equipment of instruments placed on rental agreements		6,461			6,197

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

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, donor centers and reference laboratories in a number of tests performed to detect and identify certain properties of human blood for the purpose of blood transfusion. The Company operates facilities in the United States, Canada, Western 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, 2010, 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, 2010. These results are not necessarily indicative of the results that may be achieved for the year ending May 31, 2011, or any other period.

Basis of Consolidation

The condensed consolidated financial statements include the accounts of Immucor and all its subsidiaries. All significant intercompany 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, 2010		May 31, 2010
	(in thousands)

Raw materials and supplies	$	8,905	$	8,211
Work in process		3,860		4,145
Finished goods		20,766		23,374
	$	33,531	$	35,730

3.	SHAREHOLDERS’ EQUITY

During the first quarter of fiscal 2011, in compliance with statutory tax withholding requirements, the Company reacquired from certain restricted shareholders an aggregate of 18,265 shares valued at $0.4 million. During the first quarter of fiscal 2010, the Company similarly either withheld from certain option exercises or reacquired from certain restricted shareholders an aggregate of 9,481 shares valued at $0.2 million. No shares were reacquired for this purpose during the second quarters of fiscal 2011 and 2010. 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.

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.

No repurchases were made during the three or six months ended November 30, 2010. 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. Shares that are repurchased by the Company are returned to the status of authorized, but unissued shares.

As of November 30, 2010, 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 2011, 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, 2010, awards for 2,580,729 shares have been granted under the 2005 Plan and 1,019,271 shares are still available for future awards, all of which can be awarded as restricted shares. The option exercise price is 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, 2010 and 2009 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,
	2010 (5)	2009	2010	2009
Risk-free interest rate (1)	-	1.93%	1.57%	2.16%
Expected volatility (2)	-	45.78%	43.41%	45.55%
Expected life (years) (3)	-	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 Accounting Standards Codification (“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.

(5)

This column contains no data as no options were granted during the three months ended November 30, 2010.

Stock option activity

The options granted under the 2005 Plan during the six months ended November 30, 2010 have a six-year term with vesting of 25% at each anniversary of the issuance date. The Company has not granted any option awards with market or performance conditions. Compensation costs for stock options with tiered vesting terms are recognized evenly over the vesting period.

The following is a summary of the changes in outstanding options for the six months ended November 30, 2010:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (1)
							(in thousands)
Outstanding at May 31, 2010		2,660,097		$	17.77
Granted (2)		340,963		$	18.96
Exercised (3)		(39,795	)	$	11.98
Forfeited		(36,240	)	$	24.65
Expired		(67,917	)	$	23.48
Outstanding at November 30, 2010		2,857,108		$	17.76	3.7	$	12,947

Exercisable at November 30, 2010		1,885,188		$	15.64	3.7	$	12,481

(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 2011 and 2010 was $7.09 and $6.38, respectively.

(3)

The total intrinsic value of share options exercised during the first six months of fiscal years 2011 and 2010 was $0.3 million and $0.3 million, respectively.

As of November 30, 2010, there was $6.4 million of total unrecognized compensation cost related to nonvested stock option awards. This compensation cost is expected to be recognized through July 2014, based on existing vesting terms with the weighted average remaining expense recognition period being approximately 2.4 years.

Restricted stock activity

The restricted stock granted under the 2005 Plan during the six months ended November 30, 2010 vests 20% at each anniversary of the issuance date. The Company has not granted any share awards with market or performance conditions. Compensation costs for restricted stock with tiered vesting terms are recognized evenly over the vesting period.

The following is a summary of the changes in nonvested restricted stock for the six months ended November 30, 2010:

	Number of Shares			Weighted-Average Grant-Date Fair Value
Nonvested stock outstanding at May 31, 2010		288,168		$	18.54
Granted		211,865		$	19.10
Vested		(80,960	)	$	18.67
Forfeited		(16,716	)	$	18.86
Nonvested stock outstanding at November 30, 2010		402,357		$	18.80

The total fair value of restricted shares vested was $1.7 million and $0.9 million during the six months ended November 30, 2010 and 2009, respectively.

As of November 30, 2010, there was $6.5 million of total unrecognized compensation cost related to nonvested restricted stock awards. This compensation cost is expected to be recognized through June 2015, based on existing vesting terms with the weighted average remaining expense recognition period being approximately 3.7 years.

6.	COMPREHENSIVE INCOME

The components of comprehensive income for the three and six months ended November 30, 2010 and 2009 are as follows (in thousands):

	Three Months Ended				Six Months Ended
	November 30,		November 30,		November 30,		November 30,
	2010		2009		2010		2009

Net income	$	21,063	$	19,702	$	42,482	$	41,035
Net foreign currency translation adjustments		2,494		4,433		5,520		5,687
Comprehensive income	$	23,557	$	24,135	$	48,002	$	46,722

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 is calculated by dividing net income by weighted-average common shares outstanding during the period. Diluted earnings per common share is 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,
	2010		2009		2010		2009

Numerator for basic and diluted earnings per share:
Net Income	$	21,063	$	19,702	$	42,482	$	41,035
Denominator:
For basic earnings per share
- weighted average shares basis		70,005		70,090		69,990		70,244
Effect of dilutive stock options and restricted stock		541		542		547		510
Denominator for diluted earnings per share
-adjusted weighted average shares basis		70,546		70,632		70,537		70,754

Earnings per common share – basic	$	0.30	$	0.28	$	0.61	$	0.58
Earnings per common share – diluted	$	0.30	$	0.28	$	0.60	$	0.58

The effect of 1,895,172 and 1,800,730 out-of-the-money options for the quarters ended November 30, 2010 and 2009, respectively, and 1,864,457 and 1,912,674 out-of-money options for the six months ended November 30, 2010 and 2009, 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. The foreign locations principally function as distributors of products developed and manufactured by the Company in the United States and Canada. 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.

Segment information for the three and six months ended November 30, 2010 and 2009 is summarized below (in thousands).

	For the Three Months Ended November 30, 2010
	U.S.		Europe		Canada		Japan		Elims			Consolidated
Traditional reagent revenues:
Unaffiliated customers	$	37,640	$	7,155	$	2,499	$	2,353	$	-		$	49,647
Affiliates		1,152		1,068		109		-		(2,329	)		-
Total		38,792		8,223		2,608		2,353		(2,329	)		49,647
Capture revenues:
Unaffiliated customers		11,312		5,876		1,326		515		-			19,029
Affiliates		1,547		771		-		-		(2,318	)		-
Total		12,859		6,647		1,326		515		(2,318	)		19,029
Net instrument revenues:
Unaffiliated customers		6,948		3,662		643		312		-			11,565
Affiliates		1,387		2,082		-		-		(3,469	)		-
Total		8,335		5,744		643		312		(3,469	)		11,565
Net molecular immunohematology revenues:
Unaffiliated customers		790		515		-		-		-			1,305
Affiliates		215		263		-		-		(478	)		-
Total		1,005		778		-		-		(478	)		1,305

Net Sales		60,991		21,392		4,577		3,180		(8,594	)		81,546

Income (loss) from operations		26,087		2,991		2,123		766		(10	)		31,957

Depreciation		2,215		1,071		83		40		-			3,409
Amortization		1,020		40		-		23		-			1,083
Income tax (benefit) expense		9,157		1,029		725		77		(4	)		10,984
Capital expenditures		1,764		69		421		156		-			2,410

	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 Six Months Ended November 30, 2010
	U.S.		Europe		Canada		Japan		Elims			Consolidated
Traditional reagent revenues:
Unaffiliated customers	$	75,537	$	14,006	$	5,034	$	4,691	$	-		$	99,268
Affiliates		2,196		2,252		169		-		(4,617	)		-
Total		77,733		16,258		5,203		4,691		(4,617	)		99,268
Capture revenues:
Unaffiliated customers		25,727		11,459		2,599		888		-			40,673
Affiliates		3,319		1,529		-		-		(4,848	)		-
Total		29,046		12,988		2,599		888		(4,848	)		40,673
Net instrument revenues:
Unaffiliated customers		13,553		6,976		1,393		589		-			22,511
Affiliates		1,958		4,196		-		-		(6,154	)		-
Total		15,511		11,172		1,393		589		(6,154	)		22,511
Net molecular immunohematology revenues:
Unaffiliated customers		1,674		1,061		-		-		-			2,735
Affiliates		472		547		-		-		(1,019	)		-
Total		2,146		1,608		-		-		(1,019	)		2,735

Net Sales		124,436		42,026		9,195		6,168		(16,638	)		165,187

Income (loss) from operations		52,756		5,644		4,293		1,490		(24	)		64,159

Depreciation		4,370		2,100		170		72		-			6,712
Amortization		2,040		79		-		44		-			2,163
Income tax (benefit) expense		18,528		1,917		1,469		151		(2	)		22,063
Capital expenditures		2,820		102		477		230		-			3,629
Property & equipment, net		37,735		12,634		2,086		479		-			52,934
Total assets at period end		635,071		81,711		34,147		23,272		(205,941	)		568,260

	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

Net export sales to unaffiliated customers (in thousands):

	Three Months Ended				Six Months Ended
	November 30,		November 30,		November 30,		November 30,
	2010		2009		2010		2009

United States	$	1,769	$	1,327	$	3,277	$	2,663
Europe		1,714		1,977		3,383		3,368
Canada		531		576		1,130		1,167
Total net export sales	$	4,014	$	3,880	$	7,790	$	7,198

9.	COMMITMENTS AND CONTINGENCIES

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 the Company’s 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. The FTC has also required that the documents the Company provided to the Department of Justice also be provided to the FTC (see below). The Company has been cooperating with the FTC and intends to continue cooperating, and the Company has been assured that the issuance of a formal CID does not indicate any dissatisfaction with its cooperation. As was previously the case, at this time the Company cannot reasonably assess the timing or outcome of the investigation or its effect, if any, on its business.

In November 2010, the United States Department of Justice, Antitrust Division (“DOJ”) informed the Company that its investigation of the Company had been closed. The Company had learned in April 2009 that the Company was being investigated for possible violations of the federal criminal antitrust laws in the blood reagents industry. Immucor cooperated fully with the investigation which was closed with no further action taken on the part of the DOJ.

Beginning in May 2009, a series of class action lawsuits was filed 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. The cases have been consolidated in the United States District Court for the Eastern District of Pennsylvania. The defendants’ motions to dismiss were denied and discovery began in December 2010. No determination has been made 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.

Private securities litigation in the United States District Court for the Northern District of Georgia against the Company and certain of its current and former directors and officers asserts federal securities fraud claims on behalf of a putative class of purchasers of the Company's Common Stock between October 19, 2005 and June 25, 2009. The case alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, by failing to disclose that Immucor had violated the antitrust laws, and challenges the sufficiency of the Company’s disclosures about the results of FDA inspections and the Company’s quality control efforts. There has been no discovery and no determination has been made whether any of the plaintiffs’ claims have merit or should be allowed to proceed as a class action. The Company will defend the case vigorously. 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, the Company is not currently subject to any material legal proceedings, nor, to its knowledge, is any material legal proceeding threatened against it. However, from time to time, the Company may become a party to certain legal proceedings in the ordinary course of business.

10.	RECENT ACCOUNTING PRONOUNCEMENTS

Adopted by the Company in fiscal 2011

In June 2009, the Financial Accounting Standards Board (“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 is effective at the start of a reporting entity’s first fiscal year beginning after November 15, 2009. The adoption of this update to ASC 810 during the first quarter of fiscal 2011 did not have an impact on the Company’s consolidated financial statements.

In December 2009, the FASB issued ASU 2009-16, “Accounting for Transfers of Financial Assets” (“ASU 2009-16”), which is an amendment of ASC 860, “Transfers and Servicing.” This update requires more information about the transfer of financial assets. More specifically, ASU 2009-16 eliminates the concept of a “qualified special purpose entity”, changes the requirements for derecognizing financial assets, and enhances the information reported to users of financial statements. This update is effective for fiscal years beginning on or after November 15, 2009. The adoption of ASU 2009-16 during the first quarter of fiscal 2011 did not have an impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued ASU 2010-13, “Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades” (“ASU 2010-13”), which is an amendment of ASC 718, “Compensation—Stock Compensation. This update clarifies that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. This update is effective for fiscal years and interim periods beginning on or after December 15, 2010, however, early application is permitted. The adoption of ASU 2010-13 during the first quarter of fiscal 2011 did not have an impact on the Company’s consolidated financial statements.

Not yet adopted by the Company

In October 2009, the FASB issued ASU 2009-13, “Multiple Deliverables Revenue Arrangements” (“ASU 2009-13”), 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, (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, however, the Company does not intend to adopt early. The Company is currently evaluating the impact of the adoption of this update to ASC 605-25 on its 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: lower industry blood demand and the subsequent impact on the business; lower than expected demand for the Company’s instruments, including the new NEO; the decision of customers to defer capital spending; 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; 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 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 next generation automated instrument for the molecular immunohematology products; regulatory obstacles including obstacles in securing regulatory approval of molecular immunohematology products; the inability to hire and retain, and the unexpected loss of, key managers; changes in interest rates; the inability of the Company’s Japanese subsidiary 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 investigation by the Federal Trade Commission; customer and shareholder class action 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, 2010 as filed with the SEC on July 23, 2010 as such risk factors may be revised or expanded in this report.

Overview

Our Business

We develop, manufacture, and sell a complete line of reagents and automated systems used primarily by hospitals, donor centers and reference laboratories for testing to detect and identify certain properties of human blood for the purpose of blood transfusion. We have manufacturing facilities in the United States (“U.S.”) and Canada and sell our products through our direct sales networks in the U.S., Canada, 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. Additionally, we are subject to government legislation that governs the delivery of healthcare. For example, in the U.S. the Patient Protection and Affordable Care Act was signed into law in March 2010 and contains elements that could meaningfully change the way healthcare is developed, delivered and paid for in the U.S. Included in the legislation is a 2.3% excise tax on medical device makers beginning in 2013.

In the markets of Western Europe, the testing of donor and patient blood for the purpose of transfusion is primarily automated. However, in the U.S., we estimate approximately 60% of laboratories perform this testing manually today. These laboratories are primarily in the small- to medium-sized hospital segment.

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 continually innovate to ensure our automation offerings are competitive. We offer two fully automated instruments for serology testing – NEO® and Echo® – to meet the different needs of our customers depending upon the volume in their laboratory and the complexity of the testing required. All of our serology instrumentation uses Capture® technology, our proprietary reagents, as well as traditional reagents to perform automated testing.

In late fiscal 2010, we began the worldwide introduction of our fourth generation automated instrument, NEO. Targeted at large hospitals, donor centers and reference laboratories, NEO replaces our previous high volume serology instrument, Galileo®, and due to added functionality, we believe NEO is a more attractive instrument for the hospital market. We believe that NEO delivers the market’s highest type-and-screen throughput and broadest test menu as well as new STAT priority functionality for improved workflow.

Launched worldwide in 2007, Echo, our third generation automated instrument, is a compact bench top, fully-automated walk-away serology 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 laboratories. Echo offers an extensive test menu and significant labor reduction while increasing productivity and patient safety. Echo features STAT functionality, exceptional mean time between failures and what we believe is the fastest turnaround time in the industry.

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 believe that our molecular technology allows testing to prevent alloimmunization for better patient care.

In late fiscal 2010, we received CE (“Conformité Européenne”) Mark approval in the European Union (“EU”) for the Human Platelet Antigen (“HPA”) molecular immunohematology product as well as our current semi-automated molecular immunohematology instrument, the Array Imaging System and BASIS™ database. While the testing itself is primarily manual today, the current instrument automates the reading and interpretation of test results. In June 2010, we received CE Mark approval in the EU for our Human Erythrocyte Antigen (“HEA”) molecular immunohematology product. Our molecular offering is currently available for Research Use Only in the U.S.

We are currently working on the next generation automated instrument, which we believe will allow for the further commercialization of our molecular immunohematology technology by automating the testing. Our current timeline is to have a Research Use Only instrument available towards the end of the first half of calendar 2011.

Business Highlights

A significant business highlight is the development of the next generation automated molecular instrument to facilitate the full scale commercialization of our acquired molecular immunohematology offering, which is discussed above under “Our Business.” The following discusses other highlights in our business.

Lower Industry Demand in the U.S. Market – Beginning early in our fiscal year 2010, we believe the U.S. market began experiencing lower demand for blood because of the macroeconomic environment. Lower blood demand negatively impacts our reagent revenue as fewer blood transfusions result in lower testing volume. We believe industry demand in the U.S. market declined approximately 3.5% in our fiscal year 2010 and we are currently expecting a decline of between 3% and 4% in industry demand during our fiscal year 2011.

U.S. Department of Justice Closes its Investigation – In November 2010, the United States Department of Justice, Antitrust Division (“DOJ”) informed us that its investigation of the Company had been closed. We had learned in April 2009 that we were being investigated for possible violations of the federal criminal antitrust laws in the blood reagents industry. We cooperated fully with the investigation, which was closed with no further action taken on the part of the DOJ.

Worldwide Launch of NEO – In late fiscal 2010, we began the worldwide introduction of our fourth generation automated instrument for serology testing, NEO, which replaces our current high volume instrument, Galileo. We believe Galileo, which was launched in Western Europe in 2002 and in the U.S. in 2004, has reached its natural replacement cycle of five to seven years. Like Galileo, NEO is targeted at high volume customers: large hospitals, donor centers and reference laboratories. We believe NEO will have broader market appeal in the hospital segment than Galileo due to added functionality and faster turnaround times. We have received regulatory approval in all our direct markets for NEO. In the European Union, NEO received CE Mark approval in February 2010, and in the U.S., NEO received FDA clearance in April 2010.

Continued market penetration of the Echo instrument – We launched our third generation automated instrument for serology testing, Echo, in the first quarter of fiscal 2008. Echo features STAT functionality, exceptional mean time between failures and what we believe is the fastest turnaround time in the industry. Echo is targeted at small- to medium-sized hospitals, the largest segment of our market, as well as at integrated delivery networks, in combination with NEO, to facilitate standardization across facilities.

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 (“NOIR”) 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 up to a warning letter that we received in May 2008. We had been working on an FDA-approved remediation plan, submitted after the warning letter, but had failed to make adequate progress at the time of the FDA’s follow up inspection in January 2009. In early calendar 2009 (during our third quarter of fiscal 2009), we formalized efforts to improve our quality system through the Quality Process Improvement Project, which is discussed in further detail below. In August 2009, in response to the June 2009 administrative action, we submitted a detailed remediation plan that outlined 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. During our third fiscal quarter of 2010, we completed the portion of the Project designed to remediate the deficiencies from the January 2009 inspection as well as other high-risk compliance areas. During June 2010, the FDA conducted an inspection of our facilities. During September 2010, we were notified by the FDA that while the June 2010 inspection “disclosed that substantive corrections have been made, some deviations continue.” Therefore, the FDA stated that the conditions outlined in the June 2009 NOIR administrative action remain in effect. The FDA stated it will evaluate our overall compliance status at its next inspection.

Quality Process Improvement Project – During our third quarter of fiscal 2009, we formalized our efforts to improve the processes and procedures of our quality system through the establishment of the Quality Process Improvement Project. The Project expanded the role of consultants hired in April 2008. The Project’s objective is to both remediate the deficiencies noted by FDA and to deliver on our commitment of maintaining a world-class quality system. During fiscal 2010 and fiscal 2009, we spent approximately $5.9 million and $2.4 million, respectively, on the Project. These costs were reflected in cost of sales and primarily represent the cost of external consultants who were assisting us with the Project. During our third fiscal quarter of 2010, we completed the first phase of the Project, which was designed to remediate the deficiencies from the January 2009 inspection as well as other high-risk compliance areas. The second phase of the Project continues with a focus on lower and medium risk compliance areas as well as the deficiencies noted in the FDA’s June 2010 inspection. We will use primarily internal resources on the Project going forward.

Performance

	Three Months Ended										Six Months Ended
	November 30,			November 30,			Change				November 30,			November 30,			Change
	2010			2009			Amount			%	2010			2009			Amount			%
	($ in thousands)										($ in thousands)
Net sales	$	81,546		$	82,570		$	(1,024	)	-1%	$	165,187		$	165,641		$	(454	)	0%
Gross margin		58,385			58,139			246		0%		118,052			117,828			224		0%
Gross margin percentage		71.6	%		70.4	%						71.5	%		71.1	%
Operating expenses		26,428			27,477			(1,049	)	-4%		53,893			53,824			69		0%
Income from operations		31,957			30,662			1,295		4%		64,159			64,004			155		0%
Non-operating income		90			38			52		137%		386			253			133		53%
Income before income tax		32,047			30,700			1,347		4%		64,545			64,257			288		0%
Provision for income tax		10,984			10,998			(14	)	0%		22,063			23,222			(1,159	)	-5%
Net income	$	21,063		$	19,702		$	1,361		7%	$	42,482		$	41,035		$	1,447		4%

Earnings per share:
Per common share - basic	$	0.30		$	0.28		$	0.02		7%	$	0.61		$	0.58		$	0.03		5%
Per common share - diluted	$	0.30		$	0.28		$	0.02		7%	$	0.60		$	0.58		$	0.02		3%

During the three months ended November 30, 2010, revenue decreased by approximately $1.0 million or 1% compared with revenue in the prior year quarter. Revenue in the current year quarter was negatively impacted by approximately $1.0 million from fluctuations in foreign currency exchange rates. Additionally, there was an increase in revenue of approximately $0.9 million related to price contribution in the current year quarter that was offset by a decrease of approximately $0.9 million from volume contribution, which included incremental revenue from instrument placements. Volume contribution was negatively impacted in the current year quarter compared with the second quarter of fiscal 2010 due to lower sales volume of reagents because of weaker industry demand in the U.S. market as well as fewer ship cycles.

During the six months ended November 30, 2010, revenue decreased by approximately $0.5 million or less than 1% when compared with revenue in the prior year period. This decrease was primarily attributable to the negative impact from fluctuations in foreign currency exchange rates of approximately $2.4 million offset by the positive impact of approximately $1.9 million from price contribution during the current year period. Volume contribution was flat on a year-over-year basis for the first six months of fiscal 2011 with incremental revenue generated from instrument placements being offset by lower sales volume of reagents in the U.S. market due to weaker industry demand and fewer ship cycles.

For the second quarter of fiscal 2011, our consolidated gross margin increased to 71.6% from 70.4% achieved in the second quarter of fiscal 2010. Gross margins in the prior year quarter included costs related to the Quality Process Improvement Project of approximately $1.8 million, primarily for external consultants. There were no material external costs related to the Project in the current year quarter. Gross margins in the current year quarter were negatively impacted by costs related to unfavorable manufacturing variances and the negative impact of foreign currency exchange rate fluctuations. Operating expenses in the second quarter of fiscal 2011 decreased approximately 4% from the prior year quarter, primarily due to lower sales and marketing expenses, lower general and administrative expenses and the impact of foreign currency exchange rate fluctuations. Net income in the second quarter of fiscal 2011 increased approximately 7% when compared with the prior year quarter.

For the first six months of fiscal 2011, our consolidated gross margin increased to 71.5% from 71.1% achieved in the prior year period. Gross margins in the prior year period included costs related to the Quality Process Improvement Project of approximately $4.1 million, primarily for external consultants. There were no material external costs related to the Project in the current year period. Gross margins in the current year period were negatively impacted by costs related to unfavorable manufacturing variances and the negative impact of foreign currency exchange rate fluctuations. Operating expenses were essentially in line with the prior year period. Net income in the first six months of fiscal 2011 increased approximately 4% when compared with the first six months of fiscal 2010.

During the second quarter of fiscal 2011, we received 29 orders worldwide for our medium- to low-volume instrument, Echo, including 16 in the U.S. and Canada and 13 in the rest of the world, including distributors. We received 26 orders worldwide for our high volume instrument, NEO, during the second quarter of fiscal 2011, including 9 in the U.S. and Canada and 17 in the rest of the world, including distributors. On a year-to-date basis, we have received 55 Echo orders worldwide and 44 NEO orders worldwide. As of November 30, 2010, we had an instrument backlog of 106 Echos and 51 Galileo/NEOs worldwide. This backlog represents orders where either the instruments have not been installed or the customer validation process has not been completed so the instruments were not generating recurring revenue at the expected annualized run rate at the end of the current fiscal quarter. As of November 30, 2010, we had 798 Echos and 680 high volume instruments 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
	2010		2009		Amount			%	2010		2009		Amount			%
	($ in thousands)								($ in thousands)
Traditional reagents	$	49,647	$	51,361	$	(1,714	)	-3%	$	99,268	$	106,080	$	(6,812	)	-6%
Capture reagents		19,029		20,005		(976	)	-5%		40,673		38,308		2,365		6%
Instruments		11,565		10,025		1,540		15%		22,511		19,317		3,194		17%
Molecular immunohematology		1,305		1,179		126		11%		2,735		1,936		799		41%
	$	81,546	$	82,570	$	(1,024	)	-1%	$	165,187	$	165,641	$	(454	)	0%

Traditional reagent revenue decreased by approximately $1.7 million or 3% during the three months ended November 30, 2010 compared with revenue in the prior year quarter, primarily due to lower sales volume because of weaker industry demand in the U.S. market. Traditional reagent revenue decreased by approximately $6.8 million or 6% during the first six months of fiscal 2011 compared with the first six months of fiscal 2010 primarily due to lower sales volume because of weaker industry demand in the U.S. market as well as fewer ship cycles in the current year period compared with the prior year period. Traditional reagent sales, which accounted for roughly 60% of total revenue in the current year period, 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, which are used on our instruments, and decreased sales of our traditional reagents to a lesser extent.

Capture reagent revenue decreased by approximately $1.0 million or 5% during the second quarter of fiscal 2011 compared with the prior year quarter, primarily due to fewer ship cycles in the current year period partially offset by incremental revenue from instrument placements. Capture revenue increased by approximately $2.4 million or 6% in the first six months of fiscal 2011 when compared with the prior year period primarily from incremental revenue from instrument placements partially offset by fewer ship cycles in the current year period compared with the prior year period. Capture revenue in both the three- and six-month periods in the current year was negatively impacted by weaker industry demand in the U.S. market. 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 as a percent of our total revenue.

Instrument revenue increased by approximately $1.5 million or 15% and by approximately $3.2 million or 17% during the three and six months ended November 30, 2010, respectively, compared with the prior year periods due to increased instrument placements. Currency fluctuations negatively impacted revenue in both the three- and six-month periods in the current year. Instrument revenue is typically recognized over the life of either the instrument rental period or the underlying reagent contract period dependent upon how the instrument was acquired. Historically, when instruments are sold (versus rented) revenue is deferred and recognized over the life of the underlying reagent contract period when the contract includes a price guarantee (which our contracts typically do). Since the launch of the Echo in the first quarter of fiscal 2008, the proportion of instruments rented (versus sold) has increased. In the second fiscal quarter of 2011, approximately $3.8 million of deferred revenue was recognized from previously placed instruments and the related service compared with $4.2 million recognized in the prior year quarter. We deferred approximately $2.6 million of instrument revenues related to instrument placements and the related service in the current year quarter, compared with $2.7 million in the prior year quarter. In the first six months of fiscal 2011, approximately $7.7 million of deferred revenue was recognized from previously placed instruments and the related service compared with $8.4 million recognized in the prior year quarter. We deferred approximately $5.7 million of instrument revenues related to instrument placements and the related service in the current year period, compared with $5.8 million in the prior year period. As of November 30, 2010 and 2009, deferred instrument and service revenues totaled approximately $14.8 million and $19.6 million, respectively. The decrease in the deferred revenue balance is due to the proportional increase in rentals as an acquisition option.

Molecular immunohematology revenue was $1.3 million and $2.7 million during the three and six months ended November 30, 2010, respectively, compared with $1.2 million and $1.9 million, respectively, in the prior year periods. The revenue increase in both periods is primarily due to the increase in sales of our molecular immunohematology offering outside the U.S.

Gross Margins (1)

	Three Months Ended
	November 30,				November 30,
	2010				2009				Change
	Amount		Margin %		Amount		Margin %		Amount
	(in '000)				(in '000)				(in '000)
Traditional reagents (1)	$	40,190		81.0%	$	39,434		76.8%	$	756
Capture reagents (1)		15,044		79.1%		16,320		81.6%		(1,276	)
Instruments (1)		2,611		22.6%		2,203		22.0%		408
Molecular immunohematology (1)		540		41.4%		182		15.4%		358
	$	58,385		71.6%	$	58,139		70.4%	$	246

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

	Six Months Ended
	November 30,				November 30,
	2010				2009				Change
	Amount		Margin %		Amount		Margin %		Amount
	(in '000)				(in '000)				(in '000)
Traditional reagents (1)	$	80,014		80.6%	$	81,080		76.4%	$	(1,066	)
Capture reagents (1)		32,434		79.7%		31,565		82.4%		869
Instruments (1)		4,426		19.7%		5,180		26.8%		(754	)
Molecular immunohematology (1)		1,178		43.1%		3		0.2%		1,175
	$	118,052		71.5%	$	117,828		71.1%	$	224

(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, 2010, gross margins on traditional reagents increased to 81.0% from 76.8% in the prior year quarter. For the six months ended November 30, 2010, gross margins on traditional reagents increased to 80.6% from 76.4% in the prior year period. Gross margins in the prior year periods included expenses related to the remediation portion of our Quality Process Improvement Project, which was completed in the third quarter of fiscal 2010, of approximately $1.8 million for the second quarter of fiscal 2010 and approximately $4.1 for the first six months of fiscal 2010. These Project costs were primarily for external consultants. There were no material external costs related to the Project in the current year periods. Gross margins in the current year periods were negatively impacted by unfavorable manufacturing variances due to lower revenue as well as the allocation of revenue from traditional reagents to instruments, which is explained below in the Capture gross margins discussion.

For the three months ended November 30, 2010, Capture gross margins decreased to 79.1% from 81.6% in the prior year quarter. For the six months ended November 30, 2010, Capture gross margins decreased to 79.7% from 82.4% in the prior year period. Gross margins decreased in both the three- and six- month periods primarily due to unfavorable manufacturing variances and the allocation of revenue from Capture reagents to instruments related to reagent rentals. In a reagent rental, the reagent revenue stream is used to fund all components of the customer’s acquisition, including the reagents themselves as well as the instrument and instrument-related items, such as training. Reagent gross margin is negatively impacted as a portion of reagent revenue is allocated to instruments over the life of the contract but none of the costs associated with the reagents are allocated.

Gross margins on instruments increased to 22.6% in the second quarter of fiscal 2011 from 22.0% in the prior year quarter, primarily due to the mix of instrument placements with more rentals (versus sales) in the current year period offset by the negative impact of currency. Instrument gross margins decreased to 19.7% from 26.8% in the first six months of fiscal 2011 compared with the prior year period primarily due to the negative impact of currency as well as an increase in the number of instruments expensed during the current year. In the prior year period, more instruments were rented (versus sold). 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. We recognized approximately $3.8 million and $7.7 million of revenue deferred from prior periods in the three and six months ended November 30, 2010, respectively, compared with approximately $4.2 million and $8.4 million of deferred revenue recognized in the three and six months ended November 30, 2009, respectively.

Operating Expenses

	Three Months Ended								Six Months Ended
	November 30,		November 30,		Change				November 30,		November 30,		Change
	2010		2009		Amount			%	2010		2009		Amount			%
	($ in thousands)								($ in thousands)
Research and development	$	3,881	$	3,898	$	(17	)	0%	$	8,306	$	7,721	$	585		8%
Selling and marketing		9,221		9,765		(544	)	-6%		18,363		19,229		(866	)	-5%
Distribution		3,940		3,721		219		6%		7,972		7,226		746		10%
General and administrative		8,303		9,020		(717	)	-8%		17,089		17,508		(419	)	-2%
Amortization expense		1,083		1,073		10		1%		2,163		2,140		23		1%
Total operating expenses	$	26,428	$	27,477	$	(1,049	)	-4%	$	53,893	$	53,824	$	69		0%

Research and development expenses for the three months ended November 30, 2010 were essentially in line with the prior year quarter. Research and development expenses increased by approximately $0.6 million for the first six months of fiscal 2011 when compared with the prior year period primarily due to expenses related to projects.

Selling and marketing expenses for the three and six months ended November 30, 2010 decreased by approximately $0.5 million and approximately $0.9 million when compared with the prior year periods. The decreases are primarily due to lower salary expense in the current year periods compared with the prior year periods.

Distribution expenses for the three and six months ended November 30, 2010 increased by approximately $0.2 million and by approximately $0.7 million when compared with the prior year periods. The increases are primarily related to increased shipping supplies and freight costs.

General and administrative expenses for the three and six months ended November 30, 2010 decreased approximately $0.7 million and $0.4 million when compared with the prior year period, primarily due to lower legal expenses. Legal expenses related to the DOJ investigation, which was closed in early November 2010, and the related lawsuits were approximately $0.2 million in the second quarter of fiscal 2011 compared with approximately $1.2 million in the second quarter of fiscal 2010.

Amortization expense for the three and six months ended November 30, 2010 was generally in line with the prior year periods.

Non-Operating Income

	Three Months Ended						Six Months Ended
	November 30,		November 30,		Change		November 30,		November 30,		Change
	2010		2009		Amount		2010		2009		Amount
	($ in thousands)						($ in thousands)
Non-operating income	$	90	$	38	$	52	$	386	$	253	$	133

Non-operating income for the three and six months ended November 30, 2010 was generally in line with the prior year periods.

Income Taxes

The provision for income taxes for the three months ended November 30, 2010 was generally in line when compared with the corresponding period in fiscal 2010. For the six month period ended November 30, 2010, the provision for income taxes decreased approximately $1.1 million primarily due to a lower effective tax rate. The effective income tax rate was 34.3% and 35.9% in the three months ended November 30, 2010 and 2009, respectively. For the six months ended November 30, 2010 and 2009, the effective tax rate was 34.2% and 36.1%, respectively. In the current year quarter, the most significant item that resulted in the lower effective tax rate related to the increased utilization of net operating loss carryforwards. In the six months ended November 30, 2010, the most significant items that resulted in the lower effective tax rate were an increase in allowable manufacturing deductions as well as increased utilization of net operating loss carryforwards. In the first half of the prior year, the effective tax rate included a deferred tax true-up adjustment that increased the rate.

Liquidity and Capital Resources

	For the Six Months Ended
	November 30, 2010			November 30, 2009
	(in thousands)
Net cash provided by operating activities	$	47,729		$	34,146
Net cash used in investing activities		(3,629	)		(4,484	)
Net cash provided by (used in) financing activities		202			(11,351	)
Effect of exchange rate changes on cash and cash equivalents		1,387			1,294
Increase in cash and cash equivalents	$	45,689		$	19,605

Our cash and cash equivalents were $248.3 million at November 30, 2010, as compared with $202.6 million at May 31, 2010. The increase in our cash position primarily resulted from operating cash flow in the first half of fiscal 2011.

Operating Activities – Net cash generated by operating activities was $47.7 million for the six months ended November 30, 2010, compared with $34.1 million generated in the six months ended November 30, 2009. The year-over-year increase was primarily due to an improvement in working capital.

Investing Activities – For the first six months of fiscal 2011, $3.6 million of net cash was used in investing activities for the purchase of property and equipment compared with $4.5 million in the corresponding period of the prior year.

Financing Activities – Net cash provided by financing activities was $0.2 million during the first six months of fiscal 2011, compared with $11.4 million used in financing activities in the corresponding period of the prior year. We did not repurchase shares of our common stock in the open market during the current period; however, we spent $11.6 million to repurchase shares of our common stock in the corresponding period of the prior fiscal year. During the current year period, we had a cash outflow of $0.4 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 $0.2 million in the prior year period. The value of these reacquired shares is disclosed as ‘Repurchase of common stock’ under financing activities in the condensed consolidated statement of cash flows. We received less than $0.1 million and approximately $0.2 million of excess tax benefits from the exercise of nonqualified employee stock options for the six months ended November, 2010 and 2009, respectively.

Stock Repurchase Program

During the six months ended November 30, 2010, no repurchases were made in the open market under the 1998 repurchase program. During the six months ended November 30, 2009, approximately 650,000 shares were repurchased for $11.6 million. Shares that are repurchased by the Company are returned to the status of authorized, but unissued shares.

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. (See Part II, Item 1 – Legal Proceedings for further discussion.) Although we believe we have meritorious defenses to the claims and other issues asserted in such matters, one or more of such matters or any future legal matters may have an adverse effect on the Company or our financial position. 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 legal 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, 2010, as filed with the SEC on July 23, 2010. Senior management has discussed our critical accounting policies 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

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, 2010, totaling $62.0 million, and at May 31, 2010, totaling $59.6 million, are net of allowances for doubtful accounts of $2.5 million and $2.1 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 2011.

iv) Goodwill

Consistent with ASC 350, “Intangibles – Goodwill and Other,” goodwill and intangible assets with indefinite lives 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 after the end of the third 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 an update to ASC 740, “Income Taxes,” which we adopted at the beginning of fiscal 2008, provides further clarification on the accounting for uncertainty in income taxes recognized in the financial statements, the 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

Consistent with the provisions of ASC 718, “Compensation – Stock Compensation,” compensation cost for grants of all share-based payments is based on the estimated grant date fair value. We attribute the value of share-based compensation to expense using the straight-line method.

We estimate the fair value of our share-based payment awards using the Black-Scholes option-pricing model (the “Black-Scholes model”). 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.

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

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, 2010 as filed with the SEC on July 23, 2010. 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, 2010.

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, 2010. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of November 30, 2010, 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, 2010 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

Since the filing on July 23, 2010 of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2010:

In November 2010, the United States Department of Justice, Antitrust Division (“DOJ”) informed us that its investigation of the Company had been closed. We had learned in April 2009 that we were being investigated for possible violations of the federal criminal antitrust laws in the blood reagents industry. Immucor cooperated fully with the investigation. The investigation was closed with no further action taken on the part of the DOJ.

There have been no material developments concerning the investigation of the Company by the Federal Trade Commission.

In August 2010 the United States District Court for the Eastern District of Pennsylvania denied Motions to Dismiss for failure to state a cause of action and a Motion to Stay Discovery filed by the Company and co-defendant Ortho-Clinical Diagnostics, Inc. The defendants filed a Motion for Reconsideration or for Certification for Interlocutory Appeal with respect to the Court’s order, and that motion was denied in December 2010. Discovery has now commenced in this litigation.

In the private securities litigation pending in the United States District Court for the Northern District of Georgia, In re Immucor, Inc. Securities Litigation, Civil Action No. 1:09-CV-2351-TWT (N.D.Ga.), in June 2010, the Company and those current and former officers and directors named as defendants have moved the Court to dismiss the case. Discovery in the case is stayed until the motion is resolved. There have been no material developments in this case.

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, 2010, as filed with the SEC on July 23, 2010, 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, 2010, as filed with the SEC on July 23, 2010. 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.

Lower blood demand could negatively impact our financial results.

Our products are used to test blood prior to transfusion. Lower demand for blood in the markets in which we operate could result in lower testing volumes. Lower blood demand could result from a variety of factors, such as fewer elective surgeries and more efficient blood utilization by hospitals. Blood is a large expense for hospital laboratories and pressure on hospital budgets due to macroeconomic factors and healthcare reform could force changes in the ways in which blood is used. Lower blood demand could negatively impact our revenue and profitability.

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

During the quarter ended November 30, 2010 the Company did not sell any unregistered securities and did not repurchase any shares of its common stock under its stock repurchase program.

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 Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema *
101.CAL	XBRL Taxonomy Extension Calculation *
101.DEF	XBRL Taxonomy Extension Definition *
101.LAB	XBRL Taxonomy Extension Label *
101.PRE	XBRL Taxonomy Extension Presentation *

* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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)

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 Sarbanes-Oxley Act of 2002.

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

101.INS	XBRL Instance Document *

101.SCH	XBRL Taxonomy Extension Schema *

101.CAL	XBRL Taxonomy Extension Calculation *

101.DEF	XBRL Taxonomy Extension Definition *

101.LAB	XBRL Taxonomy Extension Label *

101.PRE	XBRL Taxonomy Extension Presentation *

IMMUCOR INC - FORM 10-Q - January 7, 2011

Attached files

IMMUCOR INC Reports