Salt Lake City, Utah - Utah Medical Products, Inc. (Nasdaq:UTMD) achieved its targeted profit margins for First Quarter (1Q) 2009, compared to the prior quarter (4Q 2008) and same quarter in the prior year (1Q 2008): 1Q

City, Utah - Utah Medical Products, Inc. (Nasdaq:UTMD) achieved its targeted

profit margins for First Quarter (1Q) 2009, compared to the prior quarter (4Q

2008) and same quarter in the prior year (1Q 2008):

2009 profitability demonstrated marked improvement over the most recent prior

quarter, and comparable profitability compared to 1Q 2008, despite 6% lower

sales and $194,000 lower non-operating income. EPS in 1Q 2009 were $.44 compared

to $.42 in 4Q 2008, and $.48 in 1Q 2008.

2009 sales were down $444,000 compared to 1Q 2008. The primary reason for the

lower sales was the loss of $478,000 in combined sales to UTMD's largest and

third largest international customers. After several years of rapid growth,

total international sales in 1Q 2009 were down 17%. Part of the

change appears temporary, which applies to UTMD's third largest international

customer. This portion has to do with inventory adjustments made as a result of

the worldwide economic downturn. The loss of sales of custom blood pressure

monitoring (BPM) kits to UTMD's largest international customer, however, may not

be temporary. Sales of BPM kits to that customer in the full year of 2008 were

$1.7 million. After more than 10 years using UTMD's BPM kits, that international

OEM customer may be finally implementing its plan to bring production in-house,

as UTMD has yet to see an order in 2009.

sales, direct sales to finished device end-users and sales of OEM components to

other companies, were each down 1%. Domestic direct sales of obstetric devices,

the product category most affected by restrictive GPO agreements, declined

$151,000. On the other hand, domestic direct sales of Gesco neonatal

devices increased $96,000.

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

monitoring/ components (BPM) sales were down 24%, neonatal device sales were up

6%, gynecology/ electrosurgery device sales were up 2% and obstetrics device

sales were down 8%. The loss of 1Q sales to the two large international

distributors were all in the BPM category and are all manufactured in UTMD's

the lower revenue which allows less absorption of fixed overhead costs, UTMD

achieved a 1Q 2009 GPM approximately the same as in 1Q 2008. This was primarily

due to the fact that the loss of sales came from the portion of UTMD's business

with the lowest GPMs. International sales of devices from UTMD's Ireland

facility dropped from 48% of total sales in 1Q 2008 to 39% of 1Q 2009 sales.

Sales in Ireland were 33% lower in US Dollar terms and 22% lower in Euro terms

(i.e., about a third of the lower Ireland sales resulted from a stronger US

Dollar). Sales of international devices are at lower prices because other

entities provide the direct sales and marketing efforts. UTMD anticipates a

weaker US Dollar as the year progresses that may enhance UTMD's international

sales (but also dilute GPM). Raw materials and labor costs were about 4% higher

in 1Q 2009 than in 1Q 2008, but remained stable compared to 4Q

operating profit margin improved because operating expenses were about $169,000

lower in 1Q 2009 than in 1Q 2008. About 37% of the lower expenses were in sales

& marketing (S&M) because of fewer direct sales representatives. The

rest was essentially lower general and administrative (G&A) expenses, which

declined $103,000. A third of the decline in G&A expenses were in Ireland,

diluted by a stronger US Dollar. The balance was essentially due to lower legal

expenses and a lower accrual of projected 2009-ending management

$194,000 lower non-operating income in 1Q 2009 was due to four differences from

cash balances decline substantially as a result of significant share repurchases

or alternative investment such as an acquisition, UTMD expects its non-operating

income will improve during the remaining quarters of 2009. This would

be as a result of continued lower interest expense on the Ireland bank loan, a

return of rental income from Ireland's excess warehouse capacity and the absence

of any other late filing fees.

2009, lower net income was leveraged by a substantially higher income tax rate

of 35.5% compared to the tax provision rate of 31.1% of EBT in 1Q 2008. Although

a portion of the difference was due to the non-deductible non-operating expense

noted above and lower portion of income before tax (EBT) from Ireland as a

percentage of total consolidated EBT (the effective income tax rate on Ireland

EBT is about 12%), the tax provision rate in 1Q 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 1Q 2007 was 35.0%. The lower 1Q 2008

income tax provision rate resulted primarily from one-time refunds on amended

2004-2006 income tax returns for Ireland.

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

declined from 3,929,501 in 1Q 2008 to 3,618,937 in 1Q 2009, as a result of both

continuing share repurchases and a lower average stock price. UTMD

previously targeted 2009 EPS about equal to the $1.86 achieved in 2008.

Incorporating the view that UTMD has lost the BPM kit business of its previously

largest international customer for the full year, a 2009 EPS projection in the

range of $1.76 - $1.80 currently appears more likely.

March 31, 2009 balance sheet remained strong. Cash balances increased by $2

million from the end of the prior quarter primarily because UTMD did not use

cash to repurchase its shares or pay a dividend to shareholders during 1Q 2009.

The dividend that would normally have been paid in January 2009 was paid in

December 2008. The principal balance on the note in Ireland, UTMD's

only debt, was reduced by $342,000 in 1Q 2009 to $1,751,000. Although 1Q 2009

depreciation exceeded new capital expenditures by $52,000, the net book value of

total property, plant and equipment (PP&E) decreased by $316,000 because of

the decrease in USD terms of existing Ireland PP&E.

balances increased substantially as a result of 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 a soft demand quarter. The increase in

1Q 2009 accrued liabilities resulted from the fact that in the 1Q, unlike other

calendar quarters, estimated income tax payments are due after the end of the

quarter. In addition, the dividend declared in 4Q 2008 was paid out in 4Q 2008

rather than early 1Q 2009, whereas the dividend declared in 1Q 2009 was part of

accrued liabilities on March 31.

Ratio (including the current portion of Ireland loan) = 7.4

in Receivables (based on 1Q sales activity) = 43

Inventory Turns (based on 1Q CGS) = 3.4

from unexercised option shares added to actual weighted average outstanding

shares for purposes of calculating eps was 12,500 in 1Q 2009 compared to 42,700

in 1Q 2008. The actual number of outstanding shares at the end of 1Q

2009 was 3,607,900 which included 1Q employee option exercises of 5,700 shares

and no 1Q share repurchases. The total number of outstanding

unexercised options at March 31, 2009 was about 257,600 shares at an average