Atrion Reports Third Quarter Results; Diluted EPS Increased by 21% ALLEN, Texas--(BUSINESS WIRE)

Atrion Reports Third Quarter Results; Diluted EPS Increased by 21%

ALLEN, Texas--(BUSINESS WIRE)--Oct. 27, 2005--Atrion Corporation

(Nasdaq:ATRI) today announced that for the third quarter of 2005 diluted

earnings per share were up 21% compared to the results for the third quarter of

2004. Revenues in the third quarter increased by 10% from the same prior-year

Commenting on the Company's results, Emile A. Battat, Chairman and CEO,

said, "We are very pleased with the continuation of our double-digit percentage

increase in sales compared to our previous-year period. Increased sales, coupled

with continued favorable product mix and lower operating expenses, led to a 40%

increase in operating income in the third quarter over the comparable prior-year

period. Our effective income tax rate was substantially higher in the current

period. In fact, had we been subjected to the same rate as last year, our

earnings per share would have shown a 33% increase rather than the reported

Mr. Battat added, "As we approach the year end, it is clear that our

earnings per share from continuing operations will, for the seventh consecutive

year, exceed our annual growth target of 15%. While it is too early to venture a

forecast for 2006, we anticipate that the year as a whole will show further

growth, albeit at a more modest pace than we are experiencing in the current

year. Furthermore, the anticipated growth in quarterly earnings next year is

likely to show variability, with the results of any given period not necessarily

indicative of the growth for the year. This may be especially true in the first

quarter which will be compared to the 2005 period in which an unusual confluence

of positive events led to a robust 76% increase over the first quarter of the

Atrion's revenues for the quarter ended September 30, 2005 were $18,338,000

compared with $16,704,000 for the same period in 2004. On a diluted per share

basis, net income for the period increased to $1.15 as compared to $.95 in the

same quarter of last year.

Revenues for the first nine months of 2005 increased 10% to $55,085,000

from $49,910,000 for the same period in 2004. Net income for the first nine

months of 2005 was $3.56 per diluted share versus $2.52 in 2004, a 41% increase,

with gains from discontinued operations of $.09 per share in both periods.

Atrion Corporation designs, develops, manufactures, sells and distributes

products and components primarily to medical markets worldwide.

The statements in this press release that are forward-looking are based

upon current expectations and actual results or future events may differ

materially. Such statements include, but are not limited to, Atrion's

expectations regarding earnings per share for 2005 and earnings growth in 2006.

Words such as "expects," "believes," "anticipates," "intends," "will," and

"should" and variations of such words and similar expressions are intended to

identify such forward-looking statements. These statements involve risks and

uncertainties. The following are some of the factors that could cause actual

results or future events to differ materially from those expressed in or

underlying our forward-looking statements: changing economic, market and

business conditions; acts of war or terrorism; the effects of governmental

regulation; competition and new technologies; slower-than-anticipated

introduction of new products or implementation of marketing strategies; the

Company's ability to protect its intellectual property; changes in the prices of

raw materials; changes in product mix; and intellectual property and product

liability claims and product recalls. The foregoing list of factors is not

exclusive, and other factors are set forth in the Company's filings with the

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

Three Months Ended Nine Months Ended

September 30, September 30,

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

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

Revenues $18,338 $16,704 $55,085 $49,910

Cost of goods sold 11,377 10,506 33,297 31,691

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

Gross profit 6,961 6,198 21,788 18,219

Operating expenses 3,850 3,981 12,127 12,037

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

Operating income 3,111 2,217 9,661 6,182

Interest expense, net (11) (12) (29) (33)

Other income, net 2 -- 10 45

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

Income from continuing

operations before provision for

income taxes 3,102 2,205 9,642 6,194

Income tax provision (861) (449) (2,999) (1,708)

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

Income from continuing

operations 2,241 1,756 6,643 4,486

Gain on disposal of discontinued

operations -- -- 165 165

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

Net income $2,241 $1,756 $6,808 $4,651

========== ======== ======== ========

Income per basic share:

Income from continuing

operations $1.23 $1.02 $3.73 $2.62

discontinued operations -- -- .09 .10

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

Net income per basic share $1.23 $1.02 $3.82 $2.72

========== ======== ======== ========

Weighted average basic shares

outstanding 1,829 1,716 1,781 1,710

========== ======== ======== ========

Income per diluted share:

Income from continuing

operations $1.15 $.95 $3.47 $2.43

discontinued operations -- -- .09 .09

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

Net income per diluted share $1.15 $.95 $3.56 $2.52

========== ======== ======== ========

Weighted average diluted shares

outstanding 1,953 1,854 1,915 1,849

========== ======== ======== ========

CONSOLIDATED BALANCE SHEETS

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