Salt Lake City, Utah - Utah Medical Products, Inc.'s (Nasdaq: UTMD) financial results for fourth quarter 2008 (4Q08) were negatively affected by the downward economic pressure that is also being reported by other compani

City, Utah - Utah Medical Products, Inc.'s (Nasdaq: UTMD) financial results for

fourth quarter 2008 (4Q08) were negatively affected by the downward economic

pressure that is also being reported by other companies in the medical device

quarter (4Q08), both domestic direct sales to clinical users or their stocking

distributors, as well as sales to international customers, were down 8% compared

to 4Q07. Dragged down by the weak 4Q, domestic direct sales for the

year of 2008 as a whole were down 6% while international sales, after several

years of excellent growth, were up only 1%. International sales had

grown at an annually compounded rate of 10% for the prior four years. Part of

the decline in 4Q08 international sales was due to a stronger U.S. dollar. The

EURO lost about 11% of its value in 4Q08 compared to the average exchange rate

for the prior three quarters of 2008. In 4Q08, trade sales from Ireland were

only 42% of total international sales. In recent years, more than half of

international sales were made from UTMD's Ireland subsidiary.

exception to the negative sales results above, 4Q08 U.S. OEM sales, which are

sales of components to other U.S. manufacturers, were up 20% compared to

4Q07. Domestic OEM sales were up 22% for the year, but domestic OEM

sales still represented less than 6% of total sales.

to CEO Kevin Cornwell, "In contrast to its international and U.S. OEM businesses

where distributors and other suppliers tend to purchase in larger quantities on

a less frequent basis, UTMD's domestic direct business can be generally

characterized as a "quick turnaround" business where small frequent orders are

placed by customers and are shipped within a day or two after receipt of

order. We call orders which are received and shipped within the same

calendar quarter "turn." UTMD's turn in 4Q08 was 7% lower than the

average turn for the prior three quarters in 2008, which was also the lowest

quarterly turn in at least five years. In the first three weeks of 2009, UTMD's

turn has returned to the pre-4Q08 rate. Although this is a very short period of

time, at the beginning of the quarter when turn is easier than at the end of a

quarter, and may reflect some wishful thinking on my part, it suggests that at

least some of the decline in 4Q08 was due to one-time tightening of inventories

by domestic direct customers. UTMD's international business, on the other hand,

looks as if it may continue to weaken. UTMD's largest international customer and

largest customer overall, representing about $400,000 in purchases per calendar

quarter, has given notice that it will not be purchasing product from us for at

least the first quarter of 2009, if not longer. This customer did purchase its

normal amount of product in 4Q08."

measures compared to the same time periods in the prior calendar year were as

to CEO Cornwell, "Since both sales and inventories declined in 4Q08 without a

similar decline in the work force including manufacturing support functions, the

result was a decline in overall UTMD productivity. However, UTMD has not

announced a layoff, and doesn't expect to unless demand for our devices gets

much worse. We believe that there is a good reason for this. Our experienced,

well-trained work force averages eleven years' tenure with the

Company. This human resource is valuable, and may be hard to replace

when things get better. We may have some people painting walls and

doing other things that will be non-productive financially in the shorter term.

To keep people busy, we will also shift some work to Ireland that would have

been more profitably built in the U.S. We will also continue to

support sales and marketing and product development resources at a level

consistent with the recent past so that our critical mass of capabilities will

not be compromised. This level of "fixed" operating overhead may continue to

dilute operating profit margins until sales volumes improve. The goods news is

that despite UTMD's lower profitability relative to the past, its performance is

still excellent on an absolute basis. It should allow the Company to

continue its programs which have provided excellent shareholder returns,

including dividends and share purchases when the share price appears

weakness in the stock market during 4Q08 provided the Company the opportunity to

increase share repurchases. UTMD repurchased 254,100 shares at an average price

including commissions of $23.15 in 4Q 2008. This represented more than 6% of

outstanding shares. Outstanding shares at the end of 2008 were

3,602,800. For the entire year of 2008, UTMD repurchased 320,900

shares at an average price of $24.28 including commissions.

number of shares used for calculating earnings per share was higher than ending

shares because of a time-weighted calculation of average outstanding shares plus

dilution from unexercised employee and director options. The total

number of outstanding unexercised employee and outside director options at

December 31, 2008 was 208,300 shares at an average exercise price of $23.03/

share, including shares awarded but not vested. This compares to 212,200

unexercised option shares outstanding at the end of 2007. UTMD=s dilution

from unexercised option shares added to actual weighted average outstanding

shares for purposes of calculating eps was 20,700 in 4Q 2008 compared to 54,000

in 4Q 2007, and 34,800 in 2008 compared to 61,900 in 2007.

regarding changes in UTMD's Balance Sheet during 2008 include:

and investments balances decreased by $6.3 million. The Company spent $4.3

million paying dividends to shareholders and $7.8 million repurchasing shares in

the open market. UTMD made five dividend payments in 2008 because it

accelerated payment of the last dividend into late December that normally would

have been paid in early January 2009.

Ireland loan balance declined $2.0 million or 49% in U.S. Dollar terms. The loan

obligation is held in EURO currency. In EURO terms, 47% of the

12-31-07 loan balance was repaid in 2008.

ratios as of December 31, 2008 which may be of interest to shareholders

in Receivables (based on 4Q sales activity) = 46

Inventory Turns (based on 2008 CGS) = 4.0

ROE = 8% (after subtracting five dividends); 20% (prior to payment of

to CEO Kevin Cornwell,

missing its consolidated eps goal, UTMD's 2008 financial results demonstrated

continued excellent overall performance. UTMD's $1.86 eps in 2008 allowed

significant reduction in debt, increased shareholder dividends and substantial

share repurchases, setting up renewed growth in eps as sales activity improves

to former levels. Our target for 2009 is to repeat at least the same eps in the

face of negative economic pressures. There is a good possibility that things

could get worse, particularly if financially-constrained U.S. hospitals opt for

cheaper devices or using no devices in certain critical care procedures. That

practice would inherently increase risk of complications. We hope that this

myopic view of lower out-of-pocket costs at the expense of patient safety does

not further negatively impact UTMD's business. UTMD's competitive advantage is

based on providing devices that improve patient safety and lower the total cost