UTMD Reports Financial Performance for Third Quarter and Nine Months of Year 2019 Contact: Crystal Rios (801) 566-1200

UTMD Reports Financial Performance for Third Quarter and Nine Months of Year 2019

Salt Lake City, Utah - In the third calendar quarter (3Q) and first nine months (9M) of 2019, Utah Medical Products, Inc. (Nasdaq: UTMD) attained results

which reflect that the Company is likely to exceed its overall revenue growth goal, but fall somewhat short of its gross profit and therefore bottom line goal for the calendar year as a whole.

Currencies in this release are denoted as $ or USD = U.S. Dollars; AUD = Australia Dollars; or GBP = UK Pound Sterling; C$ or CAD = Canadian Dollars; and

or EUR = Euros. Currency amounts throughout this report are in thousands, except per share amounts and where noted.

A comparison of 3Q and 9M 2019 results with the results in the same periods of 2018, according to U.S. Generally Accepted Accounting Principles (US GAAP),

are masked by the 3Q 2018 favorable adjustment to UTMD's initial provisional estimate of its "one time" U.S. repatriation (REPAT) tax liability resulting from the "Tax Cuts and Jobs Act" (TCJA) enacted in December 2017. UTMD's initial estimate of

the combined Federal and Utah State REPAT tax was $6,288, recorded in 4Q 2017 financial results, the period in which the TCJA was enacted by Congress. In 3Q 2018, after more IRS information became available and when UTMD's independent tax advisors

completed the 2017 income tax return, it became known to the Company that the REPAT tax liability was $3,058, resulting in a favorable $3,230 adjustment to UTMD's 3Q 2018 income tax provision. UTMD management believes that the presentation of results

excluding the favorable REPAT tax liability adjustment to its 3Q 2018 and 9M 2018 income tax provision provides meaningful supplemental information to both management and investors that is more clearly indicative of UTMD's operating results in 2019

compared to 2018. The exclusion only affects Net Income and Earnings Per Share.

Summary of Financial Results

In USD terms, changes in 3Q and 9M 2019 consolidated US GAAP income statement results compared to the same time periods in the prior calendar year were as

Excluding the 3Q 2018 REPAT tax provision adjustment, the resulting non-GAAP Net Income and Earnings Per Share follow:

Financial results in 3Q 2019 continued to be hampered on the top line by a stronger USD, although to a lesser degree than in the first six months of the

year. The improvement in 3Q 2019 Sales was essentially due to a conversion from selling the Filshie Clip System to a third-party distributor in the U.S. in 2018 to selling directly to U.S. medical facilities in 3Q 2019, and an increase in U.S. OEM

sales. The Gross Profit increase was due to the U.S. direct sales of the Filshie Clip System (Filshie devices), which was offset on the Operating Income line by new identifiable intangible asset (IIA) amortization expense resulting from UTMD's

February 2019 purchase of the remaining U.S. exclusive distribution rights from Cooper Surgical Inc (CSI).

Because 23.6% of 3Q 2019 consolidated Sales and 27.2% of 9M 2019 consolidated Sales were in foreign currencies, the volatility of foreign currency exchange

(FX) rates for sales and expenses outside the U.S. (OUS) continued to have an impact on period-to-period relative financial results. FX rates for income statement purposes are transaction-weighted averages. The average rates from the applicable

foreign currency to USD during 3Q 2019 and 9M 2019 compared to the same periods in 2018 follow:

UTMD's 3Q 2018 and 9M 2018 revenues invoiced in the above foreign currencies represented 33.3% and 32.6% of total consolidated USD sales respectively. The

weighted average negative impact on all foreign currency sales from the change in FX rates was 5.2% in 3Q 2019 and 5.7% in 9M 2019, reducing reported USD sales in 3Q 2019 by $145 relative to the same FX rates in 3Q 2018 and by $576 in 9M 2019

relative to the same FX rates in 9M 2018. In constant currency terms, i.e. using the same FX rates as in the applicable periods in 2018, total consolidated 3Q 2019 sales were up $2,248 (+21.6%), and 9M 2019 total consolidated constant currency sales

were up $3,407 (10.6%).

Other significant revenue changes in 3Q and 9M 2019 as compared to the same periods in 2018 are described later in this report: a substantial increase in

2019 U.S. OEM sales; an early shipment, at the China distributor's request, of a scheduled 4Q 2019 blood pressure transducer kit order; and a continued pause in U.S. neonatal device exports due to regulatory re-registrations by UTMD's third-party

distributor in China.

UTMD US GAAP profit margins in 3Q 2019 and 9M 2019 compared to 3Q 2018 and 9M 2018 follow:

Excluding the 3Q 2018 REPAT tax provision adjustment, the resulting non-GAAP Net Income Margin follows:

The 2019 dilution in Gross Profit Margin (GPM) was due to product mix, more specifically, much higher (lower than average GPM) OEM sales along with

substantially higher low GPM sales of pressure transducer kits to UTMD's China distributor as a result of the distributor's uneven requested shipment pattern. As UTMD stockholders likely already understand, the GPM obtained from sales of products

manufactured by UTMD for other companies, and of UTMD devices sold through third-party distributors, are inherently lower because the costs of marketing the products reside with UTMD's customer. Primarily because of the mix shift, UTMD now expects

that its GPM for the year as a whole may be three percentage points lower than projected at the beginning of the year.

UTMD's 2019 GPM has not yet benefited from the early 2019 acquisition of distribution rights of its Filshie devices in the U.S. from CSI because of the

substantial remaining inventory which was repurchased by UTMD at CSI's cost. Although UTMD has picked up the distributor margin on higher U.S. Filshie device direct sales, it has not realized any Gross Profit contribution from Femcare sales of

Filshie devices to the U.S. yet. Another way to explain this is that approximately $2 million in UTMD's consolidated Gross Profit was recorded in 9M 2018 from Femcare's 9M 2018 sales of Filshie devices to the third-party U.S. distributor, whereas

Femcare's Gross Profit contribution from sales of Filshie devices to the U.S. (to intercompany distributor UTMD) has been zero in 9M 2019 because the Gross Profit in inventory from intercompany sales is eliminated when consolidating financial results

(i.e. not recognized until the devices are sold to a third-party). The fact that the CSI repurchased inventory lasted longer than expected has helped lower GPM results relative to the increase expected at the beginning of the year.

UTMD's Operating Income Margin was diluted further (in addition to the lower GPM) by a $1,105 3Q 2019 expense, and in 9M 2019 by a $2,947 expense, from

straight-line amortization of the $21,000 purchase price that UTMD paid CSI to acquire the remaining 4.75 years' exclusive U.S. Filshie device distribution rights because the purchase price of CSI's remaining exclusive distribution rights was

recognized as an IIA. UTMD's Operating Income Margin from the acquisition is expected to ramp up as a result of an estimated additional $500 Gross Profit which will be achieved quarterly at the same Filshie device sales rate as 3Q 2019 after the CSI

inventory has been depleted, disregarding UTMD's potential to grow Filshie device sales in the U.S.

Femcare-related IIA amortization expense in total, including the CSI distribution agreement purchase and that remaining from the 2011 Femcare Group

acquisition, comprises a significant portion of General & Administrative (G&A) operating expenses. IIA amortization expense was 12.8% of 3Q 2019 consolidated sales and 12.7% of 9M 2019 consolidated sales compared to 5.0% in both 3Q 2018 and

9M 2018. In other words, UTMD's Operating Income Margin excluding Femcare-related IIA amortization expense was consistent at 47.8% in 3Q 2019 and 49.7% in 9M 2019 compared to 47.4% in 3Q 2018 and 49.8% in 9M 2018.

In addition to the period-to-period differences in Operating Income, an additional difference in Income Before Tax (EBT) was due to the $450 Non-operating

Income from the sale of unneeded assets in 9M 2018 that did not repeat in 9M 2019. Net Non-operating Income was $76 in 3Q 2019 compared to $79 in 3Q 2018, and $180 in 9M 2019 compared to $617 in 9M 2018.

UTMD's US GAAP Net Income Margins in 3Q and 9M 2019 were substantially lower than in the same periods of 2018 because of the $3,230 favorable adjustment to

UTMD's initial estimate of the combined one-time Federal and Utah State REPAT tax which occurred in 3Q 2018.

UTMD's FX rates for balance sheet purposes are the applicable rates at the end of each reporting period. The FX rates from the applicable foreign

currency to USD for assets and liabilities at the end of September 2019 and the end of September 2018 follow:

UTMD's September 30, 2019 Balance Sheet, in the absence of debt, remained strong. Ending Cash and Investments were $37.4 million on September 30, 2019

compared to $51.1 million on December 31, 2018, after investing $23.1 million acquiring CSI's Filshie device distribution rights and remaining inventory, paying $3.1 million in cash dividends to stockholders and repurchasing $0.4 million in UTMD

stock during 9M 2019. Stockholders' Equity was up $6.0 million in the nine month period from December 31, 2018, after netting the combined $3.5 million in dividends and stock repurchases which reduced Stockholders' Equity.

Total consolidated 3Q 2019 UTMD sales were $2,104 (+20.2%) higher than in 3Q 2018. Constant currency sales were $2,248 (+21.6%) higher. Total consolidated

9M 2019 UTMD sales were $2,831 (+8.8%) higher than in 9M 2018. Constant currency sales in 9M 2019 were $3,407 (+10.6%) higher than in 9M 2018.

In 3Q 2019 compared to 3Q 2018, U.S. domestic sales were 44% higher and outside the U.S. (OUS) sales were 4% lower. Because of the relatively short span

of time, results for any given three month period in comparison with a previous three month period may not be indicative of comparative results for the year as a whole. In 9M 2019 compared to 9M 2018, U.S. domestic sales were 27% higher and outside

the U.S. (OUS) sales were 9% lower than in 9M 2018.

Domestic sales in 3Q 2019 were $7,575 compared to $5,270 in 3Q 2018. Domestic sales in 9M 2019 were $20,366 compared to $16,005 in 9M 2018. The

components of domestic sales include 1) "direct sales" of UTMD's medical devices to user facilities (and med/surg stocking distributors for hospitals), excluding Filshie sales, 2) "OEM sales" of components and other products manufactured by UTMD for

other medical device and non-medical device companies, and 3) Filshie device sales, which in 2018 were by UTMD's UK subsidiary, Femcare Ltd (Femcare), to CSI for distribution in the U.S., and in 2019 were by UTMD direct to U.S. clinical users after

February 1. Domestic direct sales in 3Q 2019 excluding Filshie devices, representing 48% of total domestic sales, were $76 (2%) lower than in 3Q 2018. This was a good example of "results for any given three month period in comparison with a

previous three month period may not be indicative of comparative results for the year as a whole" because domestic direct sales in 9M 2019 excluding Filshie devices, representing 53% of total domestic sales, were $441 (+4%) higher than in 9M 2018.

OEM sales in 3Q 2019, representing 25% of total domestic sales, were $877 (+83%) higher than in 3Q 2018. OEM sales in 9M 2019, representing 23% of total domestic sales, were $1,848 (+64%) higher than in 9M 2018. As expected, Filshie device sales

direct to U.S. domestic end-user facilities were $1,504 (+299%) higher in 3Q 2019 compared to Filshie device sales to CSI in 3Q 2018. As previously reported, UTMD expects that 4Q 2019 U.S. Filshie device sales will also experience a similar 300%

increase when compared to 4Q 2018 sales to CSI. Filshie device sales direct to U.S. domestic end-user facilities were $2,072 (+73%) higher in 9M 2019 compared to Filshie device sales to CSI in 9M 2018.

OUS sales in 3Q 2019 were $4,919 compared to $5,121 in 3Q 2018. OUS sales in 9M 2019 were $14,707 compared to $16,237 in 9M 2018. OUS sales invoiced in

GBP, EUR, AUD and CAD currencies were $145 lower in 3Q 2019 and $576 lower in 9M 2019 as a result of changes in FX rates. In other words, 72% of the lower 3Q 2019 OUS sales and 38% of the lower 9M 2019 OUS sales were due to a stronger USD. The

foreign currency OUS sales in 3Q 2019 were $2,944, which was 60% of all OUS sales and 24% of total consolidated sales. In comparison, foreign currency OUS sales in 3Q 2018 were $3,454, which was 67% of all OUS sales and 33% of total consolidated

The foreign currency OUS sales in 9M 2019 were $9,534, which was 65% of all OUS sales and 27% of total consolidated sales. In comparison, foreign currency

OUS sales in 9M 2018 were $10,497, which was 65% of all OUS sales and 33% of total consolidated sales. The $576 negative impact of a stronger USD in 9M 2019 explains 38% of the lower OUS sales. Lower U.S. export sales of neonatal devices to its

China distributor (invoiced in USD) were $579 lower, explaining another 38%. The remaining 24% was due predominantly to lower Filshie device sales in Canada.

UTMD segments sales into the following general product categories: gynecology, labor & delivery, neonatal, and miscellaneous including blood pressure

monitoring kits and accessories as well as related OEM products. Worldwide sales in both 3Q 2019 and 9M 2019 were up in all product categories except neonatal. In 9M 2019, worldwide gynecology device sales were up 5%, worldwide labor & delivery

device sales were up 18%, worldwide neonatal device sales were down 15% and worldwide blood pressure monitoring and related OEM product sales were up 35%.

Gross Profit results from subtracting the costs of manufacturing and shipping products to customers. Until the Filshie device inventory purchased from CSI

is depleted, the Gross Profit on sales of Filshie Clip System devices in the U.S. is UTMD's direct end user price minus the former distributor's (CSI's) purchase price of the inventory, i.e. a distributor margin. Gross Profit was $1,085 (+17.2%)

higher in 3Q 2019 than in 3Q 2018, and $1,452 (+7.2%) higher in 9M 2019 than in 9M 2018. The $1,085 higher Gross Profit in 3Q 2019 was due to the higher Filshie device sales in the U.S. at the distributor margin, which practically offset the $1,105

IIA amortization expense resulting from the purchase of CSI's U.S. exclusive distribution rights, which was the basic plan. With respect to all UTMD manufactured devices, to date in 2019 the company has been able to maintain the productivity of its

direct labor and manufacturing overhead costs consistent with the prior year's periods.

Operating Income results from subtracting Operating Expenses from Gross Profit. Operating Expenses, comprised of G&A expenses, sales and marketing

(S&M) expenses and product development (R&D) expenses, were $3,008 in 3Q 2019 (24.1% of sales) compared to $1,892 in 3Q 2018 (18.2% of sales). Operating Expenses were $8,698 in 9M 2019 (24.8% of sales) compared to $5,771 in 9M 2018 (17.9% of

sales). The higher Operating Expenses in 2019 were essentially the result of the new IIA amortization expense included in G&A expenses.

Consolidated G&A expenses were $2,457 (19.7% of sales) in 3Q 2019 compared to $1,332 (12.8% of sales) in 3Q 2018. The G&A expenses in 3Q 2019

included $492 (3.9% of sales) of non-cash expense from the amortization of IIA resulting from the 2011 Femcare acquisition, which were $520 (5.0% of sales) in 3Q 2018. The lower USD amortization expense was the result of the stronger USD, as the

Femcare amortization expense in GBP was 399 in both periods. In addition, 3Q 2019 G&A expenses included a new $1,105 (8.8% of sales) IIA amortization expense resulting from the purchase of the CSI U.S. exclusive Filshie devices distribution

rights. Excluding both the Filshie-related non-cash IIA amortization expenses, G&A expenses were $859 (6.9% of sales) in 3Q 2019 compared to $812 (7.8% of sales) in 3Q 2018. The change in FX rates reduced 3Q 2019 OUS G&A expenses excluding

IIA amortization expense by $15.

Consolidated G&A expenses were $7,037 (20.1% of sales) in 9M 2019 compared to $4,142 (12.8% of sales) in 9M 2018. The G&A expenses in 9M 2019

included $1,524 (4.3% of sales) of non-cash expense from the amortization of IIA resulting from the 2011 Femcare acquisition, which were $1,617 (5.0% of sales) in 9M 2018. The lower USD amortization expense was the result of the stronger USD, as the

Femcare amortization expense in GBP was 1,196 in both periods. In addition, 9M 2019 G&A expenses included a new $2,947 (8.4% of sales) IIA amortization expense resulting from the purchase of the CSI U.S. exclusive Filshie devices distribution

rights. In constant currency and excluding the Filshie-related non-cash IIA amortization expenses, G&A expenses were $2,627 (7.5% of sales) in 9M 2019 compared to $2,525 (7.8% of sales) in 9M 2018. The change in FX rates reduced 9M 2019 OUS