Salt Lake City, Utah - In the second calendar quarter (2Q) and first half (1H) of 2009, Utah Medical Products, Inc.'s (Nasdaq: UTMD) changes in financial results compared to the same time period in the prior calendar yea

City, Utah - In the second calendar quarter (2Q) and first half (1H) of 2009,

Utah Medical Products, Inc.'s (Nasdaq: UTMD) changes in financial results

compared to the same time period in the prior calendar year were as

2009 and 1H 2009, UTMD achieved the following profit margins:

by UTMD's CEO Kevin Cornwell:

2Q 2009 results were rather poor compared to past periods, I believe that UTMD's

excellent long-term outlook remains intact. Many of our devices are not

discretionary and well-recognized as market leaders. However, several of the

negative events discussed in recent SEC disclosures and, in particular, my March

2009 letter to shareholders in the 2008 Annual Report, hit UTMD hard in the 2Q.

Although we generally saw this coming, there wasn't much that we could do to

prevent it because of the confluence of events including the loss of $880,000 in

1H 2008 sales to UTMD's largest international customer. Without that loss, 1H

2009 sales would have been down only 3%, much of which could be explained by an

unfavorable foreign exchange rate compared to 1H 2008. Profits were down more

than sales on a relative basis because, as UTMD had advised shareholders, we did

not wish to reduce the number of our experienced employees. Manufacturing

operations in Ireland remain an important longer term strategic advantage for

previously undesired adjustments are being made now to improve productivity

going forward. I don't believe the performance in 2Q 2009 and 1H 2009 will be

indicative of the year 2009 as a whole. I expect that sales, gross profits and

earnings per share (eps) will show a decline of about 7-8% for the year of 2009

compared to 2008 as a whole, despite the double-digit declines shown above for

2Q and 1H 2009. Our current projection for 2009 eps is in the range of $1.71 -

2009, domestic sales, comprised of direct sales to finished device end-users and

sales of OEM components to other companies, were each down 3% compared to 1H

2008. Domestic direct sales of obstetric devices, the product

category most affected by restrictive GPO agreements, declined $347,000. On the

other hand, domestic direct sales of Gesco neonatal devices increased $50,000,

and domestic direct electrosurgery sales increased $29,000. U.S. OEM

sales by UTMD's Oregon molding facility declined $52,000 (22%), while OEM sales

from UTMD's Utah facility increased $33,000, a 7% increase.

1H 2009 to 1H 2008 global sales in product categories, blood pressure

monitoring/ components (BPM) sales were down 27%, neonatal device sales were up

2%, gynecology/ electrosurgery device sales were up 2% and obstetrics device

sales were down 11%. The loss of 1H sales to UTMD's largest international

customer were all in the BPM category and were all manufactured in UTMD's

Ireland facility. UTMD Ireland trade shipments were 33% lower in US

Dollar terms and 23% lower in Euro terms (i.e., about 30% of the lower Ireland

sales resulted from a stronger US Dollar in 1H 2009 compared to 1H

average 1H 2009 gross profit margin (GPM) was about 1.2 percentage points lower

than in 1H 2008. Less absorption of overhead costs on lower sales

volume, higher raw material costs and lower average unit selling prices in a

very competitive U.S. hospital market, all contributed about equally to the

lower GPM. UTMD believes GPM for the 2H 2009 will be about the same

operating expenses were $270,000 lower in 1H 2009 than in 1H 2008, the lower 1H

sales resulted in an operating profit margin about 0.8 percentage points lower

than in 1H 2008. Management expects an operating profit margin for the year

consistent with 1H 2009.

$305,000 lower non-operating income in 1H 2009 was due to three differences from

2009, lower net income relative to 1H 2008 was leveraged by a substantially

higher income tax provision rate of 35.0% compared to the tax provision rate of

32.4% of EBT in 1H 2008. The difference was due to one-time refunds in 1H 2008

on amended 2004-2006 income tax returns for Ireland, and the fact that Ireland

earnings before taxes (EBT), taxed at a much lower rate than U.S. EBT, were down

substantially more than U.S. EBT. However, the tax provision rate in

1H 2009 was more comparable to an expected income tax rate for the amount of

profits typically generated by UTMD. For example, the tax provision rate in 1H

declined less than net income because diluted shares used to calculate EPS

declined 7.8% from 3,920,984 for 1H 2008 to 3,617,048 for 1H 2009, primarily as

a result of share repurchases in 4Q 2008 when UTMD's stock price declined

substantially. UTMD's most recent closing price on July 22 is 25% higher than

the average cost of share repurchases in 4Q 2008.

June 30, 2009 balance sheet remained strong. Cash and investments balances

decreased by $1 million from the end of the 1Q 2009 primarily because UTMD

increased its WIP/FG inventories substantially and increased capital

expenditures for facilities and equipment, as well as new technology, that will

aid future performance. An increased rate of capital investment will continue

for the remainder of 2009. Compared to the end of 2008, cash and investments

balances as of June 30 are $1 million higher primarily because the Company has

only repurchased $115,800 worth of its stock in the open market to date in 2009.

This compares to $1,350,600 used to repurchase shares in 1H

balances increased substantially compared to the end of 2008 as a result of the

1Q 2009 one-time annual purchases of certain raw materials to take advantage of

discounts offered by vendors for purchasing in bulk, and an increase in WIP/FG

inventory resulting from keeping excess labor capacity productive during the

soft demand first half. The June 30, 2009 Ireland loan principal

balance increased slightly in U.S. Dollars, even though the principal balance

was reduced from 1,321,900 EURO on March 31 to 1,252,600 EURO on June 30, 2009,

because of a weaker U.S. Dollar exchange rate (more dollars per EURO) applied to

the June ending EURO loan balance. The 2Q 2009 slower rate of principal

reduction in EURO terms relative to previous reporting periods was due to a

lower amount of cash generated by Ireland operations.

Ratio (including the current portion of Ireland loan) = 10.6

in Receivables (based on 2Q sales activity) = 43

Average Inventory Turns (based on 2Q CGS) = 3.0

Year-to-Date ROE = 17% (prior to dividend payments)

(after payment of shareholder dividends)

from unexercised option shares added to actual weighted average outstanding

shares for purposes of calculating eps was 11,000 in 2Q 2009 compared to 36,700

in 2Q 2008, and 12,200 in 1H 2009 compared to 39,600 in 1H 2008. The

actual number of outstanding shares at the end of 2Q 2009 was 3,606,400 which

included 2Q employee option exercises of 5,500 shares and 2Q share repurchases

of 5,400 shares. The total number of outstanding unexercised options

at June 30, 2009 was about 249,900 shares at an average exercise price of

$23.86/ share, including shares awarded but not vested. This compares to 218,800

option shares outstanding at the end of 2Q 2008 at an average exercise price of