UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2001.         Commission File No. 0-11178
                                                                        --------

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
             (Exact name of registrant as specified in its charter)

                             Utah                        87-0342734
              -------------------------------        ----------------
              (State or other jurisdiction of        (I.R.S. Employer
              incorporation or organization)        Identification No.)

                               7043 South 300 West
                                Midvale, UT 84047
                               -------------------
                    (Address of principal executive offices)



Registrant's telephone number:   (801) 566-1200
                               ------------------


Securities registered pursuant to Section 12(b) of the Act:     None


Securities registered pursuant to Section 12(g) of the Act:

                               Title of each Class
                               -------------------
                          Common Stock, $.01 par value
                         Preferred Stock Purchase Rights


  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and; (2) has been subject to such
filing requirements for the past 90 days. Yes X No

  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. X

  The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 8, 2002, based on NASDAQ/NMS closing price: $73,729,000.

  The number of shares  outstanding  of the  registrant's  common stock as of
March 8, 2002: 5,002,831.


                       DOCUMENTS INCORPORATED BY REFERENCE

  List herein the documents incorporated by reference: The Company's definitive
proxy statement for the Annual Meeting of Shareholders is incorporated by
reference into Part III, Items 10, 11, 12, and 13 of this Form 10-K.



<PAGE>


                                     PART I.
                                     -------


ITEM I - BUSINESS.

  Utah Medical Products, Inc. ("UTMD" or "the Company") is in the business of
producing cost-effective healthcare industry devices that are predominantly
proprietary, disposable and for hospital use. Success depends on 1) recognizing
needs of clinicians and patients, 2) rapidly designing or acquiring economical
solutions that gain regulatory approval, 3) reliably producing products that
meet those clinical needs, and then 4) selling through
  a)    UTMD's own direct channels into markets where the Company enjoys an
        established reputation and has a critical mass of sales and support
        resources, or
  b)    establishing relationships with other medical companies that have the
        proper resources to effectively introduce and support the Company's
        products.

  UTMD's success in providing reliable solutions comes from its proven ability
to integrate a number of engineering and technical disciplines in electronics,
software, mechanical packaging, instrumentation, plastics processing and
materials. The resulting proprietary products represent significant incremental
improvements over preexisting clinical tools. UTMD's experience is that, in the
case of labor-saving devices, the improvement in cost-effectiveness of clinical
procedures also leads to an improvement in overall healthcare including lower
risk of complications. UTMD markets a broad range of medical devices used in
critical care areas, especially the neonatal intensive care unit (NICU) and the
labor and delivery (L&D) department in hospitals, as well as products sold to
outpatient clinics and physician's offices.

  The opportunity to apply solutions to recognized needs results from an
excellent core of practicing clinicians who introduce ideas to the Company, and
key employees who are both clinical applications savvy and development
engineering adept.

  UTMD's products are sold directly to end users in the U.S. domestic market by
the Company's own direct sales representatives and independent manufacturers'
representatives. In addition, some of UTMD's products are sold through specialty
distributors, national hospital distribution companies and other medical device
manufacturers. Internationally, products are sold through other medical device
companies and through independent medical products distributors. UTMD has
representation in all major developed countries with approximately 100
international distributors.

  Negative factors that may adversely impact future performance include managed
care reforms or hospital group buying agreements that may limit physicians'
ability to choose certain products or procedures, new products introduced by
other companies that displace UTMD's products, new product regulatory approval
delays, changes in the Company's relationships with distribution partners, and
loss of key personnel.

  UTMD was formed as a Utah corporation in 1978. UTMD publicly raised equity
capital one time in 1982. In 1995, Utah Medical Products Ltd., a wholly-owned
subsidiary located in Ireland, was formed to establish an international
manufacturing capability. In 1997, UTMD purchased Columbia Medical, Inc. (CMI),
a Redmond, Oregon company specializing in silicone injection molding, assembly
and marketing vacuum- assisted obstetrical delivery systems. In July, 1998 UTMD
acquired the neonatal product line of Gesco International, a subsidiary of Bard
Access Systems and C.R. Bard, Inc. On March 8, 2000, UTMD returned to the Nasdaq
Stock Market after trading on the New York Stock Exchange for about 3 years. The
Company was previously listed on Nasdaq for 14 years. The Company's corporate
offices are located at 7043 South 300 West, Midvale, Utah 84047 USA. The
corporate telephone number is (801) 566-1200. European operations are located at
Garrycastle Industrial Estate, Athlone, County Westmeath, Ireland. The telephone
number in Ireland is (902) 73932. CMI's mailing address is 1830 S.E. 1st,
Redmond, Oregon 97756. The phone number in Oregon is (541) 548-7738.





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PRODUCTS
--------

Labor and Delivery/ Obstetrics:
------------------------------

Fetal Monitoring Accessories.
  About 60% of births are considered "higher risk" due to lack of prenatal care,
among other factors. In many of these births, labor may become complicated and
does not progress normally. The obstetrician must assess progression of labor to
be able to intervene with drug therapy, infuse a solution to augment amniotic
fluid, or ultimately if necessary, perform a Cesarean Section procedure, and be
prepared for complications following childbirth.

  To assist the physician in assessing fetal well-being, changes in fetal heart
rate (FHR) in conjunction with trends in intrauterine pressure are often
electronically monitored. UTMD's intrauterine pressure (IUP) catheter product
line provides for clinician choices from a traditional fluid-filled system to
INTRAN(R) PLUS, the most widely accepted transducer-tipped system. In addition,
adjunct FHR electrodes, leg plates, belly bands and chart paper are offered by
UTMD to complete a package of fetal monitoring supplies. UTMD's IUP catheters
include:

o       IUP-075 and UTMD's other custom fluid-filled catheter kits utilize a
        saline-filled catheter that is placed within the uterine cavity,
        connected to a separate external reusable or disposable transducer. This
        product package, utilizing double lumen catheters, was the traditional
        mode of intrauterine monitoring prior to the introduction of INTRAN. An
        intrauterine pressure change is transmitted through the fluid column to
        the external pressure transducer.

o       Introduced in 1987, INTRAN was the first intrauterine pressure catheter
        that placed the pressure transducer at the pressure source within the
        uterine cavity. This design eliminated the complicated setup of
        fluid-filled systems and provided more accurate pressure waveforms.
        INTRAN I was discontinued in 1995 in favor of the more widely preferred
        INTRAN PLUS, also covered by UTMD's original INTRAN patent.

o       INTRAN PLUS was introduced in 1991. The INTRAN PLUS catheter combines
        the transducer tip concept of INTRAN I with a refined tip design, a zero
        switch that allows the clinician to verify the reference of the monitor,
        and a dedicated amnio lumen which provides immediate access to the
        amniotic fluid environment which may be essential in the diagnosis and
        intervention of certain fetal conditions. In 1996, an enhancement which
        allows physicians to observe amniotic fluid in a closed system was added
        to INTRAN PLUS. In 1997, UTMD introduced several variations to address
        user preferences in tip size and zero switch location.

  UTMD markets disposable electrodes, catheters and accessories as outlined
above, but does not currently market monitors, the electronic capital equipment
that process the electrical signals. In addition to products currently offered,
UTMD intends to continue to investigate and introduce tools that enhance fetal
monitoring techniques, a core area of product development focus.

Vacuum-Assisted Delivery Systems (VAD).
  UTMD's VAD Systems include CMI(R) patented soft silicone bell-shaped birthing
cups and patented hand- held vacuum pumps which UTMD believes are the safest
products available for use in vacuum-assisted operative deliveries. UTMD's
patented soft silicone cup is unique in the industry. Operative vaginal
deliveries using forceps or vacuum-assisted delivery systems provide
knowledgeable physicians with an alternative to C-section intervention. Although
there are risks associated with operative vaginal deliveries which represent
about 15% of all U.S. hospital births, the procedures are generally regarded as
safer for the mother, and at least as safe for the fetus, as abdominal
(Cesarean) delivery in comparable clinical situations. UTMD estimates that the
preferred VAD approach is used for about 8-10% of all U.S. births, and will
continue to seek to increase its share versus forceps. UTMD's patented
bell-shaped soft silicone TENDER TOUCH(R) cups enjoy a low reported complication
rate compared to other vacuum cup designs, as evidenced by the FDA Medical
Device Reporting System which reports specific names of products used in
hospitals.



                                        3

<PAGE>

Other Obstetrical Tools.
  AROM-COT(TM) is a finger cover with a patented design to rupture maternal
membranes with less patient pain and anxiety. MUC-X is a meconium aspiration
device used immediately after birth to clear neonatal respiratory passages and
reduce exposure to potential infections. CORDGUARD(R) is a patented product
which unifies the multiple steps of clamping the neonate's cord close to the
umbilicus, severing the cord without splattering blood, drawing a clean cord
blood sample, and assisting in the removal of the placenta. CORDGUARD's
sharpless, closed system reduces the risk of exposure to potentially infected
blood, and consequently reduces the high cost of exposure treatment under OSHA
and CDC guidelines. In addition, CORDGUARD facilitates obtaining neonatal blood
that is otherwise hard to obtain safely and cleanly.

Neonatal Intensive Care:
-----------------------

DISPOSA-HOOD(TM)
  The DISPOSA-HOOD is an infant oxygen hood that is used in the NICU to
administer oxygen to neonates while maintaining a neutral thermal environment
critical to proper physiologic responses. The DISPOSA- HOOD, placed over the
infant's head, incorporates a round diffusor connection specifically designed to
disperse the incoming gases along the inner surfaces of the hood, rather than
allowing them to blow directly on the infant's head. The design allows more
precise FIO2 (fractional inspired oxygen) control, minimizes convective heat
loss from the head and provides optimum flows for elimination of CO2 (carbon
dioxide) by ventilation. Because it is a disposable product, it allows for
excellent visualization of the underdeveloped infant and prevents
cross-contamination.

DELTRAN(R)PLUS
  UTMD's DELTRAN blood pressure monitoring system has been adapted specifically
for use in the NICU. The new streamlined version eliminates needles used for
blood sampling, avoids the loss of scarce neonatal blood volume and provides a
closed system that reduces the risk of infection. The system features excellent
visualization of clearing volume and one-handed use.

GESCO(R)
  In the third quarter of 1998, UTMD acquired the neonatal product line of Gesco
International, a subsidiary of Bard Access Systems and C.R. Bard, Inc. GESCO,
best known for innovative silicone catheters, gained an early distinctive
reputation for its focus on the special developmental needs of tiny
critically-ill babies.

  A class of catheters called umbilical vessel catheters (UVC's) are specially
designed for administering vital medications and fluids immediately following
birth through the infant's umbilical vessel into the inferior vena cava. Because
of the neonate's small size and lack of vascular development, there is no better
access to vital organs. The catheters are also called umbilical artery catheters
(UAC's) when placed in one of the umbilical arteries to measure blood pressure
or monitor metabolic processes through blood analysis. In developing its
UMBILI-CATH(R) product line, Gesco pioneered the use of soft, biocompatible
silicone catheters, helping to reduce the number of insertions required as well
as other complications associated with invasive applications. UTMD has expanded
the UVC product line to include catheters made from a patented thermosensitive
polyurethane (Tecoflex(R)) that offers many of the flexibility and
biocompatibility advantages of silicone after insertion, with the greater
rigidity of polyurethane preferred by many clinicians for insertion. In
addition, GESCO provides a convenient catheterization procedure tray of
implements and supplies necessary to place UVC catheters, as well as perform
other similar procedures.

    The primary distinction of GESCO products is that they are not just cut-down
or smaller versions of adult devices. For example, in the case of invasive
catheters, the introducer, the soft rounded distal tip, mode of securing to the
patient after insertion to avoid migration, luer locking hub with minimal dead
space, number of lumens, catheter radiopaque striping for visualization,
variations in catheter lengths and diameters and special packaging are all
features specially designed for neonates. UTMD continues to modify product
features to bring the GESCO products up to date relative to current neonatal
nurse practitioner preferences.

    The soft, biocompatible silicone catheter concept had important advantages
in other applications including peripherally inserted central venous catheters
(PICC lines), enteral feeding tubes, urinary drainage catheters, and chest
drainage tubes. GESCO developed and marketed initial versions of all of these
neonatal products. In order to keep pace with the trend of caring for smaller

                                        4
<PAGE>

babies, UTMD has added smaller diameter versions of its URI-CATH(TM) and
NUTRI-CATH(TM) products. In 2000, UTMD gained FDA premarketing clearance of a
new PICC-NATE family of products specifically designed to minimize trauma to the
critically ill neonate. The new PICC product line was designed with the input of
experienced neonatal nurse practitioners for use as a long-term indwelling
catheter system for single-use, therapeutic central venous infusion of drug
solutions, blood products or other fluids and for blood sampling. The soft,
strong silicone PICC comes in two diameter sizes, two types of venipuncture
introducers, two hub configurations and the option of an integral stylet that
aides insertion.

  Other GESCO specialty products include a disposable peritoneal dialysis set
that is a pre-assembled, sterile, closed system, called DIALY-NATE(TM); a
patented silicone oral protection device used to prevent palatal soft tissue
injury by orotracheal tubes, called PALA-NATE(TM); and a lumbar puncture kit
used for obtaining spinal fluid samples, called MYELO-NATE(TM). In 1999, a tiny
needle version with a special bevel was added to the product line.

  GESCO's first patented product, HEMO-NATE(R), is a disposable filter designed
to remove microaggregates from stored blood prior to transfusion into a neonate
where any deficiency can have an overwhelmingly negative impact on a neonate's
chances for survival, given an under-developed vasculature and small total blood
volume. In 2001, UTMD introduced a new filter and an improved blood bag spike
for Hemo-Nate.

  In 2002, UTMD will continue to improve and expand its neonatal product line,
seeking to reinforce a growing reputation as having the most complete
armamentarium of NICU specialty products in the medical device industry. In
addition to products already offered and being developed internally, UTMD will
look to expand sales through distribution arrangements with other manufacturers,
or through selective acquisitions. For example, in 2001 UTMD became the primary
distributor for the Posey infant restraint and support products, including limb
holders, elbow and arm splints, IV armboards and shields, heel protectors and
eye shades, which are necessary to minimize irritation and help neonatal
development.

Gynecology /Urology /Electrosurgery:
-----------------------------------

LETZ(R) System
  The LETZ System is used to excise cervical intraepithelial neoplasia (CIN) and
other lower genital tract lesions related to human papilloma virus (HPV)
infections. The electrosurgery procedure with hemostasis has become the standard
of care for HPV cervical infection treatment, replacing cold knife scalpel,
laser and cryotherapy procedural approaches because it is economical, safe,
effective, quick and easy to perform, has fewer potential side effects, and
requires little physician training. Most importantly, in contrast to laser
(tissue ablation) and cryotherapy (freezing of tissue), LETZ provides a fine
tissue specimen for pathological assessment. Therefore, LETZ is effective both
as a diagnostic and therapeutic procedure. The LETZ procedure may be performed
using local anesthetic in a physician's office, eliminating the time and expense
of hospital or surgical center admittance.

  UTMD's LETZ System includes patented disposable loop electrodes, the patented
FINESSE(R) electrosurgical generator, and other miscellaneous components. A
disposable loop electrode used to excise the tissue specimen is a pencil-like
tube with a thin tungsten wire loop attached. The loop is available in varying
sizes and includes a Safe-T-Gauge(R) that can be positioned so the physician can
accurately colposcopically monitor the amount of tissue being excised. UTMD
continues to augment its speciality electrodes. For example, the Company
recently introduced a patented conization electrode for deep endocervical
disease called C-LETZ, designed to limit the removal of healthy tissue that
might compromise adequate cervical function. UTMD also will continue to provide
adapters and other components which allow its market-leading specialty
electrodes to be used with other manufacturers' electrosurgical generators. The
FINESSE electrosurgical generator is the only generator on the market that
contains an integral smoke evacuator, required to filter smoke and vapors that
contain potentially hazardous particulate material produced during
electrosurgery.

FINESSE(R) Generator; Specialty Loop, Ball, and Needle Electrodes; FILTRESSE(R)
Evacuator; Other Specialty Electrodes; Other Supplies and Gynecologic Tools.

                                        5
<PAGE>



  UTMD has FDA clearance to market its electrosurgical system and tools for use
in general surgery applications, including dermatology, plastic surgery and
otolaryngology. In late 2001, UTMD completed development on a new product line
of ultra-fine tipped microdissection needles, called OptiMicro(TM) Needles. The
new electrosurgical needles will be particularly useful in plastic and
reconstructive surgery applications. FILTRESSE is a stand-alone surgical smoke
filtration system that combines high filtration efficiency, low cost and
convenient use in an surgical office setting. Other electrosurgery tools and
accessories include disposable electrosurgical pens, dispersive pads,
footswitches, filter packs, speculums, retractors, forceps, tenacula and hooks.
In 2001, UTMD acquired the distribution rights to a unique reusable four-way
expander system which facilitates access to, and visualization of, the cervix,
eliminating the need for less effective specula and lateral retractors.

EPITOME(R)
  EPITOME is a patented electrosurgical scalpel which delivers precise
performance in incision and excision with hemostasis while minimizing thermal
side effects. Where rapid yet precise dissection of dense tissue is necessary,
such as in mammaplasty or abdominoplasty, UTMD claims EPITOME has no peer. An
independent study concludes that the EPITOME scalpel provides a significant
improvement over older devices in wound healing and patient comfort. EPITOME
allows a rapid incision without countertraction, yielding limited morbidity,
less post-surgical pain and cosmetically superior results. EPITOME is useful
where minimization of thermal tissue injury is important but control of bleeding
needed. A patented bendable version of EPITOME with a smaller active electrode
was introduced in 1998. Designed to significantly reduce the chance of tissue
burns due to inadvertent electrode contact and where a smaller, bent scalpel tip
is needed, the bendable EPITOME is of particular value, e.g., to thoracic
surgeons in harvesting the internal mammary artery during coronary artery bypass
surgery, as well as to otolaryngologists for tonsillectomies.

LIBERTY(R) System
  LIBERTY is a device for the conservative treatment and effective control of
urinary incontinence in women. UTMD believes that LIBERTY is the easiest-to-use,
most cost effective incontinence treatment available that yields a therapeutic
effect, not just a cover-up. LIBERTY consists of a battery operated electrical
stimulation unit and an intravaginal electrode probe. This physiotherapy
technique, which can be done in the privacy of the home, involves passive
strengthening of the periurethral muscles. Pulsed, low voltage, high frequency
current is applied primarily to the pudendal neuromuscular tissue causing the
pelvic area muscles to contract, leading to better muscle tone. Because
electrical stimulation has no known adverse side effects, LIBERTY provides women
suffering from mild to moderate incontinence an effective, lower cost and lower
risk alternative to more traumatic treatments such as surgery and drug therapy.
Since HCFA (Health Care Financing Administration) now called CMS (Center for
Medicaid/ Medicare Services) decided in late 2000 to allow reimbursement for
electrical stimulation devices, adoption of Liberty has substantially increased.

PATHFINDER PLUS(TM)
  PATHFINDER PLUS is a proprietary endoscopic irrigation device that allows a
uro/gyn surgeon to precisely irrigate with the same hand that controls the
endoscope, eliminating the need for a separate assistant to irrigate without
visualization.

ENDOCURETTE(TM)
  In cooperation with Mayo Clinic, UTMD developed an advanced curette for
uterine endometrial tissue sampling in the doctor's office. The sampling
procedure is intended primarily to rule out precancer or cancerous change of the
uterus in premenopausal women with abnormal uterine bleeding, or women with
postmenopausal bleeding. The device is part of a class of catheters designed to
be used without dilitation of the cervix and without general anesthetic. The
inherent weakness of this type of device, which is related to its small size, is
that it may not remove enough tissue of the endometrium for an accurate
histologic assessment. The patented tip of the ENDOCURETTE was designed to
obtain a more thorough tissue specimen. Validating the robustness of the
specimen will require a substantial number of uses. Year 2001 was the first full
year that UTMD marketed the product.



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LUMIN(R)
  LUMIN(R) is a patented tool developed by UTMD for reliably and safely
manipulating the uterus in gynecological laparoscopic procedures. LUMIN combines
the strength, range of motion and versatility of the higher end reusable
instruments with the lower cost and cleanliness of the inexpensive less
functional disposable instruments presently on the market, while at the same
time reducing the number of tools needed to move and secure the uterus.

Blood Pressure Monitoring:
DELTRAN(R)Disposable Pressure Transducer
  In pressure monitoring, a transducer is used to convert physiological
(mechanical) pressure into an electrical signal that is displayed on electronic
monitoring equipment. UTMD developed, patented and is now distributing its
disposable transducer as a stand-alone product, and as a component in sterile
blood pressure monitoring kits through direct representatives and other medical
companies in the U.S., as well as independent distributors and other medical
companies internationally.

  Although other large medical companies manufacture disposable pressure
transducers ("DPTs") under rights to UTMD's technology, the Company believes
that the DELTRAN DPT which it manufactures remains the standard in terms of
reliability and ease of use. UTMD has an automated assembly line which allows
the Company to effectively compete with the largest suppliers on the basis of
consistent quality and low manufacturing costs. Introduced in 1998, the DELTRAN
PLUS provides a closed system for blood sampling, without the use of needles,
reducing the risk of an unwanted infection for both the patient and the
practitioner.

Pressure Monitoring Accessories, Components and Other Molded Parts.
  Components included in blood pressure monitoring kit configurations include
flush devices, stopcocks, fluid administration sets, caps, pressure tubing,
interface cables and organizers. The Company sells similar components designed
for other medical companies which incorporate UTMD's technologies and designs.
DELTA-CAL(TM) is a calibration device used to check proper functioning of an
arterial pressure system. In addition, UTMD sells plastic molded parts on a
subcontract basis to a number of medical and non-medical companies. UTMD
believes that this practice helps better utilize its investment in fixed plant
and equipment.

MARKETING
---------

  UTMD competes on the basis of its value-added technologies and cost effective
solutions. UTMD believes that a number of its products are strong brands because
they are recognized as clinically different. The Company's primary marketing
challenge is to keep its customers focused on those differences and their
important benefits. UTMD's specialty focus, innovation and extensive experience
in its specialty are important marketing attributes which help assure its
ability to successfully compete and survive in a marketplace where many
suppliers are trying to degrade product differences.

  In U.S. hospitals, which represent about 60% of UTMD's sales activity,
marketing efforts are clouded by who in the hospital actually makes decisions to
purchase medical devices. UTMD regards clinicians who take responsibility for
obtaining optimal care outcomes as the focal point of its marketing efforts.
These people are often not the same ones administratively responsible for
hospital purchasing decisions, but are important participants in the
decision-making process.

DISTRIBUTION
------------

  UTMD believes another important success factor in the current healthcare
industry is access to customers. Although the U.S. hospital supplier environment
has been consolidating as a result of group purchasing organizations (GPOs), or
their equivalent, establishing long term contracts with large medical device
suppliers with diverse product lines in recent years, their financial
relationships and true benefits for hospitals has been coming under increased
scrutiny, both by hospitals' managements themselves and by the government. As a
potential positive factor to UTMD's future performance, the increased scrutiny
may lead to an understanding consistent with UTMD's belief that hospitals may
not be currently saving money under

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<PAGE>



many of the GPO contracts, and the longer term overall cost of care will be
substantially higher, with quality of care lower, as innovative suppliers are
excluded from participating in the marketplace.

  The length of time and number of administrative steps required in evaluating
new products for use in hospitals has grown substantially in recent years. As a
potential negative factor to future performance, as UTMD introduces new products
it believes are safer and more effective, it may find itself excluded from
certain customers because of the existence of long term supply agreements for
existing products. UTMD may also be unable to establish viable relationships
with other medical companies that do have access to users but lack an interest
in the Company's approach.

  Historically, UTMD has sold its products, especially those relating to
critical care, through independent distributors and other medical companies in
both domestic and international markets. Since 1991, the Company has developed a
more focused direct sales organization in the United States with its own
directly employed sales force. The current network of direct representatives is
employed to concentrate on select market applications for UTMD products and to
provide proper customer training and support. As of March 2002, the U.S. direct
sales force is comprised of both outside territory representatives operating
remotely geographically, as well as inside representatives who effectively
operate by telephone. Through the use of its one-on-one contacts with
physicians, the direct sales force positions UTMD to gain market leadership with
solutions to clinical problems. UTMD's direct representatives encourage
customers to take advantage of fast and easy direct online ordering at
www.order.utahmed.com.

  When hospital customers request it, UTMD will provide its products through
national distribution companies, also known as Med/Surg distributors. UTMD has
Med/Surg distribution agreements with Owens & Minor and McKesson/HBOC, and as a
fully aligned vendor expects to be part of HealthNexis, an e- commerce business
being established by five of the largest U.S. Med/Surg distributors. Sales to
Med/Surg distributors currently comprise less than 10% of total domestic sales.
Five years ago, national distributors and independent distributors in the U.S.
represented more than 65% of UTMD's direct domestic Ob/Gyn business. In 2001,
all independent U.S. distributors represented less than 20% of UTMD's domestic
business.

  In addition to its own website and participation in the HealthNexis e-commerce
approach, UTMD was one of the first companies to join the Global Healthcare
Exchange (GHX), an independent Internet-based company created originally by five
of the world's largest medical device manufacturers. GHX is a single- source
solution for online purchasing of potentially all medical products needed by
hospitals using their own internal ERP systems, while allowing hospitals to
maintain individual supplier relationships. UTMD was selected by GHX as one of
its first supplier implementation sites, with transactions involving UTMD's
products beginning in early 2001. Although theoretically a powerful tool
providing direct access with hospital ERP systems on a customized basis making
it possible for buyers to interact in real time with UTMD over the Internet,
UTMD's experience to date indicates a very slow adoption rate by hospitals.
GHX's announced agreement with Neoforma in October 2001 to gain access to
Neoforma's hospital clients, and announced merger with HealthNexis in December
2001, represent negative indications to UTMD that GHX can effectively help
increase UTMD's business activity in the near term.

  Additionally, UTMD sells component parts to medical companies for use with
their product lines. This OEM distribution channel effort is simply maximizing
utilization of manufacturing resources that are otherwise needed for UTMD's
primary business, and does not compete with or dilute UTMD's direct distribution
and marketing programs.

  Internationally, the Company sells its products through about 80 regional
distributors and through about 20 OEMs (other medical manufacturers). The
international business is driven by the initiative and resourcefulness of these
distributors. UTMD's Internet website www.utahmed.com is a frequent conduit for
international customer inquiries.


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<PAGE>


NEW PRODUCT DEVELOPMENT
-----------------------

  New product development is a key to UTMD's market identity as an innovator.
Product development takes three interrelated forms: 1) improvements,
enhancements and extensions of current product lines in response to clinical
needs or clinician requests, 2) invention of devices that allow significantly
different methods of performing medical procedures, representing a quantum
improvement in safety, efficacy and/or cost of care, and 3) acquisitions of
products or technology from others.

  Because of UTMD's reputation as a successful innovator, its financial strength
and its established clinician user base, it enjoys a substantial flow of new
product ideas. Internal development, joint development, product acquisitions and
licensing arrangements are all included as viable options in the investigation
of opportunities. Only a small percentage of ideas survive feasibility
screening. For internal development purposes, projects are assigned to a project
manager who assembles an interdisciplinary, cross-functional development team.
The team's objective is to have a clinically proven, manufacturable and FDA
released product ready for marketing by a specific date. Approximately ten
projects on the average, depending on the level of resources required, are
underway at UTMD at any given time. More than 50% of assigned projects do not
succeed in attaining a product that meets all of the Company's criteria. In
particular, this includes a product that is highly reliable, easy to use,
cost-effective, safe, useful and differentiated from the competition. Once a
product is developed, tooled, fully tested and cleared for marketing by the FDA,
there remains a reasonable probability it cannot be successfully marketed for
any number of reasons, not the least of which is being beaten to the market by a
competitor with a better solution, or not having access to users because of
limitations in marketing and distribution resources.

  UTMD's current product development projects are in four areas of focus: 1)
obstetrics/ fetal monitoring, 2) neonatal intensive care, 3) female incontinence
management, and 4) specialized procedures for the assessment and treatment of
cervical/uterine disease. UTMD has filed, had issued, exclusively licensed or
acquired 20 patents in the last five years. Internal product development
expenses are expected to be in the range of 1-2% of sales in 2002.

  Because acquisitions are made to help grow business activity through the
addition of products and technologies, UTMD considers the amortization of
goodwill expense in previous years to be part of its financial cost of new
product development. During 2001, the Company spent $364 (in thousands) on
internal product development activities, or 1.3% of sales. In addition, expense
from amortization of goodwill from previous acquisitions was $569, or 2.1% of
sales, yielding a combined total of expenses related to new product development
equal 3.5% of sales. In 2000, internal new product development expenses and
amortization of goodwill expenses were $568 and $569 respectively (combined 4.2%
of sales). In 1999, the comparable expenses were $719 and $569 respectively
(4.4% of sales). Looking forward, under FASB Statement No. 142, UTMD will not
have amortization of goodwill expenses in 2002 resulting from the 1997 and 1998
acquisitions, resulting in a decrease in reported expenses of $569 compared to
the three prior years.

EMPLOYEES
---------

  At December 31, 2001, the Company had 234 employees, 17 of which are located
in Oregon, and 30 in Ireland. The average tenure of its employees is about seven
years. The Company's continued success will depend to a large extent upon its
ability to retain skilled employees. No assurances can be given that the Company
will be able to retain or attract such employees in the future, although
management is committed to providing an attractive environment in which creative
and high achieving people want to work.

  To the best of the Company's knowledge, none of the Company's officers or
directors is bound by restrictive covenants from prior employers that limit
their ability to contribute to UTMD's programs. All professional employees sign
a confidentiality and non-compete agreement as a condition of employment, and as
consideration for receipt of stock option awards and participation in the
management bonus program. None of the Company's employees is represented by
labor unions or other collective bargaining groups. All employees participate in
performance-based bonus programs.



                                        9

<PAGE>

PATENTS AND TECHNOLOGY LICENSES
-------------------------------

  The Company owns or exclusively licenses forty unexpired patents and patents
pending, and is the licensee of certain other technology. There can be no
assurance, however, that patents will be issued with respect to the pending
applications, that marketable products will result from the patents or that
issued patents can be successfully defended.

  The ability of the Company to achieve critical mass in the marketplace depends
in large part on the protection afforded by its patents. In cases where
competitors introduce products that may infringe on UTMD's technology, the
Company has an obligation to its shareholders to defend its intangible property.
Although the cost of patent litigation is substantial and reduces the Company's
current performance, a successful defense of a core market franchise as
represented by INTRAN, for example, may potentially represent many orders of
magnitude of return in shareholder value.

  On January 16, 2002, in the United States Federal District Court for the
District of Utah, a twelve member jury rendered a verdict in favor of UTMD that
the Tyco/Kendallo LTP Softrans 4000 Intrauterine Pressure Catheter infringes
UTMD's United States Letters Patent No. 4,785,822 for inventions relating to a
"Disposable Intracompartmental Pressure Transducer." UTMD markets the Intran(R)
Plus which practices this patent. The patent infringement lawsuit had been filed
in early 1997. The jury awarded UTMD $20 million in damages. Entry of the final
judgment is dependent upon the resolution of certain limited issues remaining to
be decided by the court, expected to be decided in the near future. As part of
any final judgment that may be entered in favor of UTMD, the Company intends to
seek an injunction against the further marketing of Kendallo LTP's infringing
product, Softrans. Kendall has indicated its intention to appeal the decision.
If appealed, UTMD expects resolution by the end of 2003. No other patent
infringement cases are currently pending.

  As a matter of policy, UTMD has acquired and will continue to acquire the use
of technology from third parties that can be synergistically combined with UTMD
proprietary product ideas. During 2001, royalty expenses included in cost of
goods sold were (in thousands) $3. Also as a matter of policy, UTMD licenses its
proprietary technology to others in circumstances where licensing does not
directly compete with UTMD's own marketing initiatives. During 2001, the Company
received $450 in royalty income, compared to $452 in 2000 and $529 in 1999.
Non-operating income has been a significant portion of UTMD's past earnings.
Therefore, the Company's future financial performance also depends on the
performance of other companies that license UTMD's technology.

GOVERNMENT REGULATION
---------------------

  The Company's products are subject to regulation by the U.S. Food & Drug
Administration ("FDA"), as well as other regulatory bodies globally. The FDA has
authority to regulate the marketing, manufacturing, labeling, packaging and
distribution of medical products in the U.S. In addition, requirements exist
under other federal laws and under state, local and foreign statutes that may
apply to the manufacturing and marketing of the Company's products.

  All manufacturers of medical devices must register with the FDA and list all
medical devices produced by them. The listing must be updated annually. In
addition, prior to commercial distribution of devices for human use, a
manufacturer must file a notice with the FDA, setting forth certain information
regarding the safety and efficacy of the device that is acceptable in content to
the FDA.

  Devices which are classified in Class I are subject only to the general
controls concerning adulteration, misbranding, good manufacturing practices,
record keeping and reporting requirements. Devices classified in Class II must,
in addition, comply with performance standards promulgated by the FDA. The
Company believes all of its present products are Class I or Class II products
and that the Company is in full compliance with all applicable material
performance standards as well as FDA quality standards, record keeping and
reporting.

  In 1994, UTMD received certification of its quality system under the ISO
9001/EN 46001 standards ("ISO" stands for "International Organization of
Standardization"). EN 46001 is the European Union's effort to harmonize
different national regulatory requirements for the development, sale, and
manufacture of medical

                                       10
<PAGE>


products. Because the ISO standards are in perpetual modification, UTMD remains
on a continuous periodic audit schedule by its independent notified body in
order to stay abreast of international regulatory standards. In early 1997, UTMD
received ISO 9001/EN 46001 certification for its Ireland facility. UTMD has
received formal product certification allowing the use of the CE Mark
(demonstrates proof of compliance with the European Community's product
standards) for essentially all of its products.

SOURCES AND AVAILABILITY OF RAW MATERIALS
-----------------------------------------

  Most of the components which the Company purchases from various vendors are
readily available from a number of sources. Alternate sourcing of various
components is continually underway. Vendors are qualified by Corporate Quality
Assurance. The Company has a vendor quality monitoring program that routinely
checks all incoming material.

EXPORTS
-------

  Revenues from foreign customers in 2001 were (in thousands) $5,202 (19% of
total sales), as compared to $5,425 (20% of total sales) in 2000, and $5,550
(19% of total sales) in 1999. Blood pressure monitoring products represented 67%
of international sales in 2001, compared to 72% in 2000 and 77% in 1999. Ob/Gyn
and neonatal product foreign sales were $1,718 in 2001, compared to $1,506 in
2000 and $1,290 in 1999. For financial information by geographical area, please
see Notes 1,3 and 9 to the Consolidated Financial Statements.

  UTMD sees the international marketplace as one of the important elements of
its growth strategy. UTMD is keenly aware that not only are international
markets different from the U.S. market, but also that each country has its own
set of driving influences that affects the dynamics of the nature of care given
and medical devices used. In 1996, UTMD completed a new manufacturing facility
in Athlone, Ireland. The facility offers a number of advantages: 1) from a
marketing point of view, faster response to European Union customers, including
a better understanding of customized needs, less costly distribution and
duty-free access to over 350 million patients; 2) from a regulatory point of
view, faster new product introductions; and 3) from a manufacturing point of
view, reduced dependence on one manufacturing site and increased capacity at
existing U.S. facilities.

BACKLOG
-------

  As a supplier of primarily disposable products, the nature of UTMD's business
necessitates being very responsive to customer orders and delivering products
quickly. Virtually all direct shipments to end users are accomplished within one
week of receipt of customer purchase order. Backlog shippable in less than 60
days was approximately $0.3 million as of January 1, 2001 and 2000.

SEASONAL ASPECTS
----------------

  The Company's business is generally not affected by seasonal factors.

PRODUCT LIABILITY RISK MANAGEMENT
---------------------------------

  The risk of product liability lawsuits is a negative factor in UTMD's business
because UTMD's products are frequently used in inherently life threatening
situations to help physicians achieve a more positive outcome than what might
otherwise be the case. Although UTMD's products are approved by the U.S. FDA as
safe and effective, and have been used safely throughout the products' lives, in
several cases in millions of uses to date, positive outcomes cannot always occur
in the situations where UTMD's products are used. In litigious cultures (such as
the U.S.) which are often driven by attorneys looking for contingency fee
windfalls, patients may look at manufacturers of excellent medical products as
possible scapegoats. The strength of UTMD's balance sheet may be an inducement
for some attorneys to file a claim against UTMD. In any lawsuit against a
company where an individual plaintiff suffers a permanent physical injury, a
possibility of a large award for damages exists whether or not a causal
relationship exists. However, no such damages have been awarded against UTMD in
its 23 year history.

                                       11

<PAGE>



  UTMD is self-insured for product liability risk and reserves funds against its
current performance on an ongoing basis to provide for its future defense should
any lawsuits be filed. The best defense the Company has is the consistent
conformance of its proven safe and effective products to specifications. Except
where released by the courts for not being a properly designated defendant, no
product liability lawsuits involving a significant injury have been filed
against the Company for any of its products in the past nine years. UTMD's total
product liability legal cost over the last nine years has been $21 (in
thousands). UTMD is currently named in one lawsuit in which it feels it has been
inappropriately named as a defendant, the cost of which should not be material
to future performance.

FORWARD LOOKING INFORMATION
---------------------------

  This report contains certain forward-looking statements and information
relating to the Company that are based on the beliefs of management as well as
assumptions made by management based on information currently available. When
used in this document, the words "anticipate," "believe," "project," "estimate,"
"expect," "intend" and similar expressions, as they relate to the Company or its
management, are intended to identify forward-looking statements. Such statements
reflect the current view of the Company respecting future events and are subject
to certain risks, uncertainties and assumptions, including the risks and
uncertainties stated throughout the document. Although the Company has attempted
to identify important factors that could cause the actual results to differ
materially, there may be other factors that cause the forward statement not to
come true as anticipated, believed, projected, expected, or intended. Should one
or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may differ materially from those
described herein as anticipated, believed, projected, estimated, expected, or
intended.

  General risk factors that may impact the Company's revenues include the market
acceptance of competitive products, administrative practices of group purchasing
organizations, obsolescence caused by new technologies, the possible
introduction by competitors of new products that claim to have many of the
advantages of UTMD's products at lower prices, the timing and market acceptance
of UTMD's own new product introductions, UTMD's ability to efficiently and
responsively manufacture its products including the possible effects of lack of
performance of suppliers, success in gaining access to important global
distribution channels, budgetary constraints, the timing of regulatory approvals
for newly introduced products, regulatory intervention in current operations and
third party reimbursement of health care costs of customers.

  Risk factors, in addition to the risks outlined in the previous paragraph and
elsewhere in this report that may impact the Company's assets and liabilities,
as well as cash flows, include risks inherent to companies manufacturing
products used in healthcare including claims resulting from the improper use of
devices and other product liability claims, defense of the Company's
intellectual property, productive use of assets in generating revenues,
management of working capital including inventory levels required to meet
delivery commitments at a minimum cost and timely collection of accounts
receivable.

  Additional risk factors that may affect non-operating income include the
continuing viability of the Company's technology license agreements, actual cash
and investment balances, asset dispositions and acquisition activities that may
require external funding agreements.



                                       12

<PAGE>



ITEM 2 - PROPERTIES

Office and Manufacturing Facilities.
  The Company's current operations are located in an 100,000 square foot
facility in Midvale, Utah, a suburb of Salt Lake City, a 20,000 square foot
facility in Redmond, Oregon, and a 77,000 square foot facility in Athlone,
Ireland. UTMD owns its property and facilities in Utah and Ireland, with the
exception of a long-term lease on one section of its Midvale parking lot. The
Oregon facility is leased.

  UTMD is a vertically-integrated manufacturing company. Capabilities include
silicone and plastics- forming operations including injection molding, insert
and over-molding, thermoforming and extrusion; sensor production; manual and
automated assembly of mechanical, electrical and electronic components; parts
printing; various testing modalities; advanced packaging in clean room
conditions; and a machine shop for mold-making and building assembly tools and
fixtures. Capabilities also include an R&D laboratory for both electronic and
chemical processes, software development resources, communications and computer
systems networked real time internationally, and administrative offices.

ITEM 3 - LEGAL PROCEEDINGS

  The Company may be a party from time to time in ordinary routine litigation
incidental to its business. The outcomes of lawsuits which are currently pending
are not projected to have a materially adverse effect on UTMD's financial
condition or results of operations.

  Please refer to the PATENTS AND TECHNOLOGY LICENSES section on page 10 for a
description of the status of the patent infringement lawsuit filed by UTMD in
1997 against Graphic Controls, now Kendallo LTP/Tyco International, which UTMD
believes continues to not have a materially adverse effect on the Company's
financial condition or results of operations.

ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  No matter was submitted to a vote of security holders through the solicitation
of proxies or otherwise during the fourth quarter of the fiscal year covered by
this report.







                  [Remainder of Page Intentionally Left Blank]


                                       13

<PAGE>


                                    PART II.
                                    --------

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.

Market Information.
  UTMD's common stock began trading on the Nasdaq National Market (symbol:UTMD)
on March 8, 2000. Between December 26, 1996 and March 7, 2000, it traded on the
New York Stock Exchange (symbol: UM). It previously traded on the Nasdaq
National Market, also under the UTMD symbol. The following table sets forth the
high and low sales price information as reported by Nasdaq and NYSE for the
periods indicated:

                          2001                           2000

                     High        Low               High       Low
                     ----        ---               ----       ---
1st Quarter       $  10.50     $ 7.03            $ 8.00     $ 6.19
2nd Quarter          12.40       8.80              7.69       6.50
3rd Quarter          14.00       9.40              8.06       6.81
4th Quarter          13.64       9.80              8.56       6.00

Stockholders.
  The approximate number of beneficial stockholders of UTMD's common stock as of
March 8, 2002 was 3,300.

Dividends.
  The Company does not currently intend to pay cash dividends on its common
stock in the foreseeable future. It is the present intention of the Company to
use earnings to finance future growth, for selective infusions of technological,
marketing or product manufacturing rights to broaden the Company's product
offerings, and for continued share repurchases when the price of the stock
remains undervalued.




                  [Remainder of Page Intentionally Left Blank]


                                       14

<PAGE>

ITEM 6 - SELECTED FINANCIAL DATA.
         (in thousands, except per share data)

The following selected consolidated financial data of UTMD and its subsidiaries
for the five years ended December 31, 2001, are derived from the audited
financial statements and notes thereto of UTMD and its subsidiaries, certain of
which are included in this report. The selected consolidated financial data
should be read in conjunction with UTMD's Consolidated Financial Statements and
the Notes thereto included elsewhere in this report.

<TABLE>
<CAPTION>

                                          Year Ended December 31
                                          ----------------------

                                   2001            2000           1999             1998            1997
                                   ----            ----           ----             ----            ----
<S>                            <C>             <C>             <C>             <C>            <C>
Net Sales                      $   26,954      $   27,193      $   29,444      $   27,677     $   24,272

Net Income                          5,934           5,373           5,468           4,585          4,322

Diluted Earnings Per Share           1.14             .90             .76             .59            .51

Total Assets                       23,572          25,423          27,756          31,968         31,459

Long-term Debt                      2,501          10,000           5,934           3,098          5,571

Cash Dividends
Per Common Share                     None            None            None            None           None
</TABLE>
<TABLE>
<CAPTION>

                                             Quarterly Data for 2001
                                             -----------------------

                                     First Quarter      Second Quarter       Third Quarter      Fourth Quarter
                                     -------------      --------------       -------------      --------------
<S>                                  <C>                <C>                  <C>                <C>
  Net Sales                             $    6,567          $    6,794          $    6,791          $    6,802

  Gross Profit                               3,763               3,921               3,896               3,812

  Net Income                                 1,391               1,481               1,532               1,531

  Earnings Per Share - Diluted                 .27                 .29                 .29                 .29



                                             Quarterly Data for 2000
                                             -----------------------

                                     First Quarter      Second Quarter       Third Quarter       Fourth Quarter
                                     -------------      --------------       -------------       --------------

  Net Sales                             $    6,666          $    6,956          $    6,882          $    6,690

  Gross Profit                               3,671               3,873               3,829               3,752

  Net Income                                 1,226               1,383               1,410               1,354

  Earnings Per Share - Diluted                 .19                 .22                 .23                 .27

</TABLE>



                                       15

<PAGE>



ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

The following comments should be read in conjunction with accompanying financial
statements. Dollar amounts are in thousands except per-share amounts and where
noted.

Productivity of Assets and Working Capital.
  a) Assets. Year-ending total assets were 7% lower ($1,851 in thousands)
primarily as a result of depreciation of fixed assets that exceeded purchases of
new assets and amortization of intangible assets. Current assets declined $191
as a result of reduced sales activity to slower-paying international customers,
offset by slightly higher ending inventories. As a result, UTMD continued to
increase its total asset turns which had a favorable impact on return on equity
(ROE). Net fixed assets declined $912 because depreciation exceeded new
purchases; and net intangible assets declined $748 because of the amortization
of goodwill and intellectual property. Year-ending 2001 net intangible assets
represented 29% of total assets compared to 30% at the end of 2000. In 2002,
asset turns are expected to benefit from projected sales growth while working
capital remains about the same, excluding cash. Depreciation of fixed assets
should continue to exceed purchases. Net intangible assets will not materially
change, absent a new acquisition, because of adoption of FASB Rule No. 142
(discussed below). Cash accumulation which results after eliminating the line of
credit balance in early 2002, may reduce asset turns in the absence of a new
acquisition or share repurchases. Management targets 2002 total asset turns at
or higher than 2001 in order to not negatively affect ROE.

  The trends in Net Property, Plant and Equipment (PP&E) and Net PP&E turns
explain the trends in total assets. Net PP&E (after accumulated depreciation) in
the U.S. decreased $557, while Ireland decreased $355. The current book value of
consolidated PP&E is 40% of its purchase price. Management believes PP&E to be
in good working order and capable of supporting increased sales activity. As a
result, going forward, reported performance should be enhanced by slowing rates
of depreciation expense and continuing higher PP&E turns.

  In June 2001, the FASB (Financial Accounting Standards Board) changed the
accounting for business combinations, goodwill and intangible assets. Companies
are required to adopt Statement No. 142 in their fiscal year beginning after
December 15, 2001. Under FASB Statement No. 142, goodwill and indefinite lived
intangible assets are no longer amortized but are reviewed annually, or more
frequently if impairment indicators arise, for impairment. Income statement
performance would only be affected in the case of impairment. The amount of
goodwill associated with an acquisition depends on the price paid for the
acquisition. Large, actively acquisitive companies that use their stock as
acquisition currency tend to pay higher valuations for acquisitions.

  The goodwill on UTMD's balance sheet is the result of two acquisitions in 1997
and 1998 which were made in cash at conservative valuations. As of December 31,
2001, the goodwill on the balance sheet resulting from the two acquisitions had
been reduced by 27% from the acquisition price, as a result of UTMD using
previous GAAP for the purchase method of acquisition accounting. The Gesco
neonatal products and CMI business acquired continue to be viable, and a vibrant
part of UTMD's overall business activities, representing 24% of total sales
activity in 2001. Therefore, UTMD does not expect its goodwill intangible assets
to become impaired in the foreseeable future.

  Average inventory turns, although excellent at 3.7, decreased slightly in 2001
because of slightly lower sales and modestly higher average inventories compared
to 2000. Management expects to achieve its targeted 4.0 average inventory turns
in 2002 because sales should increase without the need for an increase in
inventories. Year-ending 2001 accounts receivable (A/R) balances declined 10%.
Calculated average days in A/R at 49 based on 4Q 2001 shipment activity were
within management's objective. Aged A/R over 90 days from invoice date were
about 6% of total A/R at year end, consistent with year-end 2000. The Company
believes these older A/R are collectible or within its reserve balances for
uncollectible accounts.

  Working capital at year-end 2001 was unchanged from year-end 2000 because
sales activity remained about the same as the prior year, cash generated from
operations went to repay long term debt and the

                                       16

<PAGE>



Company consistently and effectively managed its other current assets and
liabilities. Excluding the possibility of a new acquisition or additional share
repurchases, UTMD expects that 2002 working capital will increase as a result of
cash generated from operations after bank debt is repaid.

  b) Liabilities. In the three years 1999-2001, UTMD's total liabilities and
total debt ratio have been driven by the timing of debt incurred for financing
share repurchases, not in providing cash to operate its business. Except for the
Oregon building inherited as part of the 1997 CMI acquisition and a portion of
its Utah parking lot, UTMD generally owns its PP&E assets, dominated by its Utah
and Ireland facilities, molds, manufacturing tooling and equipment, test
equipment, computer/ communications equipment and software. At the end of 2001,
UTMD's total debt ratio declined to 23% from 51% at the end of 2000 as UTMD
reduced its line-of-credit balance by $7.5 million. The Company had previously
borrowed $9.3 million in July 1999 to complete a tender offer repurchase of 1.2
million shares and another $9.2 million in September 2000 to complete a tender
offer repurchase of another 1.1 million shares. The cost of those repurchases
including fees and transaction costs was $8.13/ share. Without additional
significant share repurchases or a new acquisition, UTMD will be able to
eliminate its remaining bank debt in 2002, yielding a total debt ratio less than
15% by the end of the year.

Results of Operations.
     a) Revenues.  Total annual U.S.  (domestic) sales were essentially the same
in 2001 as  2000,  while  foreign  (international)  sales  declined  4%.  Global
consolidated sales declined 1%.

  UTMD divides its domestic sales into two primary distribution channels:
"direct sales" which are sales to end user customers by UTMD's direct sales
force, independent commissioned sales reps, specialty distributors and national
hospital distribution companies, and "OEM sales" which are sales to other
companies where products are packaged and resold as part another company's
product offerings. As a percentage of total 2001 domestic sales, direct sales
represented 92% compared to 92% and 91% in 2000 and 1999 respectively. In each
of the three years 1999-2001, U.S. direct sales represented 74% of global
consolidated sales.

  Foreign sales in 2001 were 19% of global consolidated sales compared to 20%
and 19% in years 2000 and 1999 respectively. Of the 2001 foreign sales, 58% were
made in Europe compared to 56% and 54% in 2000 and 1999. Ireland operations
shipped 54% of foreign sales (in U.S. dollar terms) in 2001 compared to 64% in
2000 and 61% in 1999. Shipments from UTMD Ltd. (Ireland) were down 17% in Irish
pound terms and down 19% in U.S. dollar terms compared to the prior year.

  UTMD groups its sales into four product-line categories: 1) obstetrics,
comprised of labor and delivery management tools for monitoring fetal and
maternal well-being, for reducing risk in performing difficult delivery
procedures and for improving clinician safety; 2)
gynecology/electrosurgery/urology, comprised of tools for gynecological
procedures associated primarily with cervical/uterine disease, including LETZ,
endometrial sampling, diagnostic laparoscopy, and other MIS procedures;
specialty excision and incision tools; conservative urinary incontinence therapy
devices; and urology tools; 3) neonatal care, comprised of devices that provide
developmentally-friendly care to the most critically ill babies, including
gaining vascular access, administering vital fluids, maintaining a neutral
thermal environment, providing protection and assisting in specialized
applications; and 4) blood pressure monitoring/accessories/other, comprised of
specialized components for invasively monitoring blood pressure on a continuous
basis with pressure transducer systems, along with other components and products
sold on an OEM basis to other companies. In these four categories, UTMD's
primary revenue contributors often enjoy a dominant market share and typically
have differentiated product features protected by patents.

  Revenues by product category:
  1. Worldwide obstetrics product sales decreased 2% and represented 46% of
total sales in 2001. Obstetrics sales dollars were $12,276 in 2001 compared to
$12,499 in 2000 and $13,929 in 1999. Of the $223 decline in total obstetrics
sales, $125 was from decreased utilization of vacuum-assisted delivery systems
(VADS) by U.S. hospital customers. Despite hospital concern, UTMD agrees with
ACOG (The American College of Obstetricians & Gynecologists) that using VADS
remains the trained physician's best choice in many operative deliveries, and
will continue its educational programs regarding appropriate indications and
proper

                                       17

<PAGE>



use of the procedure. Direct sales of the market-leading IUP catheter, Intran(R)
Plus, declined 2% under active competition from Tyco/Kendallo LTP with its GPO
contracts and Softrans imitation of Intran Plus. On January 16, 2002, in the
United States Federal District Court for the District of Utah, a twelve member
jury rendered a verdict in favor of UTMD that the Tyco/Kendallo LTP Softrans
4000 Intrauterine Pressure Catheter infringes UTMD's Intran patent. As part of
any final judgment that may be entered in favor of UTMD, the Company intends to
seek an injunction against the further marketing of Kendallo LTP's infringing
product. In addition, cheaper, less clinically-effective products continue to
represent significant competition where administrators have primary say-so in
purchase decisions. Foreign obstetrics sales increased 18% even though UTMD's
largest foreign distributor of obstetrics products went out of business early in
the year.

  2. Worldwide gynecology/ electrosurgery/ urology product sales increased 8%
overall in 2001, and represented 18% of total revenues. Gyn/ES/Uro sales dollars
were $4,924 in 2001 compared to $4,552 in 2000 and $4,454 in 1999.
Electrosurgery product sales increased 4%, direct urology product sales
increased 32%, OEM urology product sales decreased 7% and sales of gynecology
tools and instruments, including the EndoCurette, increased 76%. Foreign sales
in this category increased 10%. A number of UTMD products in this fragmented
category are differentiated, so sales should continue to grow as physicians
learn more about them.

  3. Worldwide neonatal product sales increased 1%, and represented 14% of total
sales. Neonatal product sales were $3,801 in 2001 compared to $3,781 in 2000 and
$3,807 in 1999. In 2001, UTMD stopped distributing the Bard Access Systems'
Per-Q-Cath(R) neonatal PICC, replacing it with UTMD's newly developed
PICC-Nate(TM). UTMD sales of Per-Q-Cath were $12, $119 and $232 in 2001, 2000
and 1999 respectively. Excluding Per-Q-Cath, global neonatal product sales
increased 3%. Foreign neonatal product sales excluding Per-Q-Cath increased 30%.

  4. Worldwide blood pressure monitoring and accessories (BPM) sales declined
6%, and represented 22% of total revenues. Sales of BPM and accessories products
were $5,953 in 2001 compared to $6,360 in 2000 and $7,258 in 1999. The primary
factor causing the overall $407 decline was a $678 decline in foreign Deltran
DPT sales. UTMD depends on the marketing efforts of its foreign distribution
partners to differentiate Deltran from other BPM products. The decline in
foreign sales of Deltran DPT also explains the decline in UTMD Ltd. sales
activity since the Ireland facility is responsible for manufacturing the product
for foreign customers. Domestic OEM sales in this category excluding sales to
Baxter increased 10%. UTMD expects to be able continue to increase U.S. OEM
sales of BPM products in 2002, and is working with its foreign distributors to
identify how it can help improve sales activity.

  Foreign sales of Ob/Gyn and neonatal products increased 14% and totaled $1,718
for 2001. As a result of this increase and the decline in dominant foreign BPM
sales, the share of Ob/Gyn and neonatal product sales increased to 33% of 2001
foreign sales compared to 28% in 2000 and 23% in 1999.

  b) Gross Profit. UTMD's average 2001 gross profit margin (GPM), the surplus
after costs of manufacturing, sterilizing, packaging, inspecting and shipping
products (COGS) are subtracted from net revenues, was a Company record 57.1%
compared to 55.6% in 2000 and 53.6% in 1999. Royalties paid to others are also
included in COGS. UTMD experienced a decline in lower margin foreign BPM product
sales and an increase in higher margin domestic direct Ob/Gyn sales, resulting
in a favorable product mix. Manufacturing efficiencies for the year were
excellent and certain license agreements expired reducing royalties paid to
others.

  With respect to gross profits in UTMD's sales channels, OEM sales are sales of
UTMD products that are marketed by other companies in conjunction with their
product offerings, and are not sold under UTMD's label. UTMD utilizes "OEM
sales" as a means to help maximize utilization of its capabilities established
to satisfy its "direct sales" business. As a general rule, prices for "OEM
product sales" expressed as a multiple of direct variable manufacturing expenses
are lower than for "direct sales" because in the OEM and international channels,
UTMD's business partners incur the significant expenses of sales and marketing.
Because of UTMD's small size and period-to-period fluctuations in OEM business
activity, allocations of

                                       18

<PAGE>

fixed manufacturing overheads cannot be meaningfully allocated between direct
and OEM sales. Therefore, UTMD does not report GPM by sales channels.

  UTMD targets an average GPM greater than or equal to 55%, which it believes is
necessary to successfully support the significant operating expenses required in
a highly complex and competitive marketplace. Management expects to achieve its
GPM target again in 2002. Expected favorable influences include growth in sales
volume without a similar increase in manufacturing overhead expenses, a larger
percentage of total sales from higher margin products and a continued emphasis
on reengineering products to reduce costs. Expected unfavorable influences are
continued competitive pressure on pricing, especially in foreign BPM sales, and
higher wage rates. UTMD expects to retain average GPMs in 2002 consistent with
2001.

  c) Operating Profit. Operating profit, or income from operations, is the
surplus after operating expenses are subtracted from gross profits. Operating
expenses include sales and marketing (S&M) expenses, research and development
(R&D) expenses and general and administrative (G&A) expenses. Operating profit
increased 11% compared to the prior year. In 2001, operating profit was $9,278,
compared to $8,367 in 2000 and $8,282 in 1999. UTMD was able to substantially
decrease operating expenses as a percentage of sales to 22.7% in 2001 from 24.9%
in 2000 and 25.5% in 1999. UTMD's operating profit margin, operating profits
divided by total sales, was a Company record in 2001. The operating profit
margin was 34.4% in 2001, compared to 30.8% in 2000 and 28.1% in 1999. Looking
forward to 2002, assuming consistent GPMs, holding R&D and S&M expenses
consistent as a ratio of sales, UTMD expects to achieve an even higher operating
margin as a result of the changes in G&A expenses described below.

  Because UTMD sells internationally through third party distributors, its S&M
expenses are predominantly for U.S. business activity. S&M expenses are the
costs of communicating UTMD's differences and product advantages, providing
training and other customer service in support of the use of UTMD's solutions
and processing orders. Contract administration fees paid to GPOs are also
included in S&M expenses. Although revenues and GPMs increase when the same unit
sales are made by directly employed sales representatives in lieu of independent
distributors or OEM customers, S&M operating expenses increase as an offset.
Year 2001 S&M expenses decreased to $2.8 million from $3.2 million in 2000 and
$3.8 million in 1999. As a percent of total sales, S&M operating expenses were
10.3% in 2001, 12.0% in 2000 and 12.8% in 1999. UTMD management began to
actively monitor and in detail address the productivity of its direct sales
people in 2000 when direct domestic sales declined 7%. UTMD was able to stop the
domestic sales decline in 2001 with $1,005 lower S&M expense compared to 1999.
Because of the time lag in realizing increased sales from better trained, more
productive sales people, UTMD expects some of the benefits of the changes made
in 2001 to accrue to 2002 sales activity. Without including consideration for
the impact of an ultimate favorable outcome to its patent infringement lawsuit
with Tyco/Kendallo LTP, UTMD expects to achieve an increase in its domestic
sales in 2002 for the first time since 1999. Looking forward, UTMD plans higher
S&M expenses during 2002 due to Group Purchasing Organization fees, increased
advertising expenses and new marketing initiatives, but intends to manage S&M
expenses to remain less than 11% of total sales.

  R&D expenses in 2001 were 1.3% of sales compared to 2.1% of sales in 2000 and
2.4% in 1999. In dollar terms, internal R&D expenses were $364 in 2001, $568 in
2000 and $719 in 1999. New products developed in 2001 included an alternative
break-away introducer for PICC-Nate, a PICC repair kit, a new electrosurgical
pen, a family of specialized microdissection needles named OptiMicro(TM), and a
family of PiCCO catheters developed in collaboration with Pulsion Medical
Systems to be used in Pulsion's proprietary semi-invasive cardiac output
monitoring systems. The OptiMicro electrosurgery needles will be introduced to
the marketplace in 1Q 2002. In addition, a number of improvements to existing
Gesco neonatal products were completed, and continued collaborative work with
manufacturing engineering led to improvements in manufacturing costs and
techniques. The manufacturing improvements are evident in UTMD's substantially
improved GPMs. In 2002, UTMD will opportunistically employ R&D resources and
invest R&D expenditures where management anticipates it can get a significant
return on its investments with future new product sales. Those expenses are most
likely to be in the range of 1%-2% of 2002 sales.

  G&A operating expenses include the "front office" functional costs of
executive management, finance and accounting, corporate information systems,
human resources, shareholder relations, risk management and protection of
intellectual property. In addition to employing the personnel required to manage
the preceding

                                       19

<PAGE>

functions, G&A expenses include outside legal counsel, independent accounting
audit fees, 401(k) administration, NASDAQ exchange fees, write-offs of
uncollectible receivables, business insurance costs, corporate contributions to
charitable organizations, and goodwill amortization associated with acquisitions
(GWA). G&A expenses were $2,978 in 2001, $2,940 in 2000 and $3,017 in 1999. As a
percent of sales, G&A operating expenses were 11.0% in 2001, 10.8% in 2000 and
10.2% in 1999. GWA was $569 in each of the three years 2001-1999, or about 2% of
sales. Because of the new FASB accounting rules regarding intangible assets, GWA
will be zero in 2002. In addition, all three years included considerable
litigation expenses relating to the patent infringement lawsuit with
Tyco/Kendallo LTP. Although additional 2002 litigation expense is required,
including the actual trial in January 2002 and later responding to a probable
Tyco/Kendallo LTP appeal, UTMD anticipates lower litigation expenses in 2002.
Taking these changes into consideration, UTMD expects G&A expenses in 2002 will
be less than 9% of total sales.

  d) Non-operating Income, Non-operating Expense and EBT. Non-operating income
includes royalties from licensing UTMD's technology to other companies, rent
from leasing unutilized property to others, interest earned and capital gains
from investing the Company's cash, and gains or losses from the sale of assets
offset by non-operating expenses like interest expenses and bank fees on the
revolving line-of-credit. Non-operating income was $202 in 2001, $53 in 2000 and
$263 in 1999. Royalties received were $450 in 2001, $452 in 2000 and $529 in
1999. Royalties vary from period to period depending on the success of other
companies in selling products licensed by UTMD, and the remaining life of the
applicable patents. Interest expenses and bank fees associated with the
line-of-credit which reduce non-operating income were $370 in 2001, $499 in 2000
and $307 in 1999. Interest costs in 2001 were lower when compared to 2000
because both interest rates and the average loan balance were lower. Assuming
current interest rates remain about the average for the whole year of 2002 and
no new borrowing for acquisitions or share repurchases, management expects total
non-operating income to be about $200 higher in 2002 than 2001.

  Earnings before income taxes (EBT) result from adding UTMD's non-operating
income to its operating profits. EBT were $9,480 in 2001, $8,420 in 2000 and
$8,545 in 1999. EBT in 2001 were 12.6% higher than in 2000 because of a record
operating profit margin on only slightly lower sales combined with $149 higher
non-operating income. Given the projections noted above including a new record
operating profit margin year in 2002 on higher sales than in 2001, and an
increase in non-operating income, management expects higher EBT in 2002.

  e) Net Income, EPS and ROE. Net income is EBT minus income taxes. Net income
increased 10.4% to $5,934 in 2001, from $5,373 in 2000 and $5,468 in 1999. Net
income did not increase in the same proportion as EBT or operating profit
increased because UTMD's 2001 effective tax rate increased. The effective income
tax rate in 2001 was 37.4% compared to 36.2% in 2000 and 36.0% in 1999. Year to
year fluctuations in the tax rate have resulted from 1) the use of a foreign
sales corporation, 2) amount of exercised employee options which result in a tax
benefit to the Company, 3) differences in distribution of state income taxes, 4)
differences in profitability of the Ireland subsidiary which is taxed at a 10%
rate on exported manufactured products, and 5) other factors such as R&D tax
credits and actual litigation costs versus accrued expenses. The GWA associated
with the 1997 Columbia Medical, Inc. acquisition is not tax deductible. In 2002,
since GWA will not be an expense, there will be a favorable impact on the
average tax rate. However, an offsetting unfavorable factor results from the
fact that marginal tax rates increase by 5% for EBT above $10 million. UTMD
expects its 2002 income tax rate to be about the same as 2001, excluding
consideration for a large damages award in the Tyco/ Kendallo LTP patent
infringement lawsuit. UTMD is proud that its net income expressed as a
percentage of sales ranks in the top performance tier of all U.S.
publicly-traded companies at 22.0%, 19.8% and 18.6% for years 2001, 2000 and
1999, respectively. This profitability performance is the primary driver for
UTMD's return on shareholders' equity (ROE).

  Earnings per share (EPS) is net income divided by the number of shares of
stock outstanding (diluted to take effect for stock options awarded which have
exercise prices below the period's weighted average market value). Diluted 2001
EPS were a Company record, up 27% to $1.14 from $.90 in 2000. EPS in 1999 were
$.76 when total sales were 8% higher. Since 1999, the combination of higher
profitability and substantially fewer shares have created a substantial
improvement in shareholder value in the form of higher EPS. In the four years
since 1997, UTMD has increased EPS at a rate of 22% per year. UTMD management
believes shareholder value is improved primarily by consistently increasing EPS.
The end of 2001 weighted average

                                       20
<PAGE>

number of diluted common shares (the number used to calculate diluted EPS) were
5,210 (in thousands) compared to 5,978 and 7,197 shares in 2000 and 1999,
respectively. Actual outstanding common shares as of December 31, 2001 were
5,029.

  Return on shareholders' equity (ROE) is the portion of net income retained by
UTMD to internally finance its growth, divided by the average accumulated
shareholders' equity during the period. ROE in 2001 was 39% compared to 34% in
2000 and 24% in 1999. This ratio determines how fast the Company can afford to
grow without adding external financing that would dilute shareholder interests.
For example, a 20% ROE will financially support 20% growth in revenues without
issuing more stock. Record profitability and higher utilization of assets offset
reduced financial leverage in creating an outstanding 2001 ROE result. In UTMD's
opinion, achieving growth in revenues and EPS without diluting shareholder
interests maximizes shareholders' value. Management's goal is to consistently
achieve ROE in excess of 25%. UTMD's ROE has averaged 30% per year over the last
16 years. Although the accumulation of cash in the absence of share repurchases
or acquisitions could reduce total asset turns, and the elimination of long term
debt would reduce financial leverage that enhances ROE, management expects to be
able to achieve its ROE objective again in 2002 primarily by accomplishing
another record year in profitability.

Liquidity and Capital Resources.
  a) Cash flows. Cash (and equivalent) balances were $370 at the end of 2001.
UTMD effectively maintains zero-balance "sweep" cash account balances that
minimize the line-of-credit balance, except for amounts held to meet operating
requirements in Ireland and separate physical reserves set aside for litigation
expenses and other contractual commitments where cash has been committed.

  Net cash provided by operating activities, including adjustments for
depreciation and other non-cash operating expenses, along with changes in
working capital, totaled $7,860 in 2001 compared to $7,825 in 2000 and $9,101 in
1999. The reason that the cash provided was about the same in 2001 as 2000 was
that the increase in net income in 2001 when working capital remained consistent
with the prior year, was about the same in magnitude as the working capital
decrease in the prior year when net income was lower. In 1999, UTMD's net income
was comparable with 2000, so the $1.3 million higher amount of cash provided in
1999 compared to 2000 resulted essentially from a $1.3 million reduction in
receivables and inventories.

  The Company expended $524 during 2001 for investing activities, comprised
entirely of purchases of property and equipment. During 2000, the Company used a
total of $611 to purchase property and equipment and intangible assets, offset
by $11 that UTMD received for selling used equipment it had replaced or no
longer needed. Essentially all of the $685 UTMD used in 1999 for investing
activities was for purchases of property and equipment.

  In 2001, UTMD received $316 from issuing 44,500 shares of stock upon the
exercise of employee stock options and repurchased 18,500 shares of stock at a
cost of $193. Employee option exercises were at an average price of $7.11 per
share. Share repurchases in the open market were at an average cost of $10.45
per share, including commissions. In 2000, the Company received $85 from issuing
12,524 shares of stock on the exercise of employee stock options and paid
$11,598 to repurchase 1,463,032 shares. In 1999, UTMD received $98 from issuing
13,950 shares of stock on the exercise of employee stock options and paid
$12,058 to repurchase 1,606,375 shares.

  During 2001, UTMD made repayments of $7,499 on its note payable while
receiving $0 in proceeds from the note. In 2000, UTMD made loan repayments of
$4,884 and received $8,950 in proceeds from the note. In 1999 the Company made
loan repayments of $6,231 and received $9,071 in proceeds from the note. The
2000 and 1999 loan proceeds were used to pay for UTMD share repurchases as the
result of tender offers through which UTMD bought a combined 2.3 million of its
shares at a total cost of $18,475.

  Management believes that future income from operations and effective
management of working capital will allow the liquidity needed to finance growth
plans and repay debt. Planned 2002 capital expenditures are expected to be in
the range of $600 to keep facilities, equipment and tooling in good working
order. In addition to the capital expenditures, UTMD plans to use cash in 2002
for selective infusions of technological, marketing or product manufacturing
rights to broaden the Company's product offerings, for continued share

                                       21

<PAGE>

repurchases if the price of the stock remains undervalued, and if available for
a reasonable price, acquisitions that strategically fit UTMD's business and are
accretive to performance. UTMD plans to use any cash not needed for the above
pursuits during 2002 to eliminate the line-of-credit balance. The revolving
credit line will continue to be used for liquidity when the timing of
acquisitions or repurchases of stock require a large amount of cash in a short
period of time.

Other Financial Measures
  EBITDA (= EBT, plus depreciation and amortization expenses, plus interest
expense) is a term used for measuring a company's ability to generate cash from
its operations without regard for changes in working capital, cash consumed for
fixed asset purchases, its cost of borrowing or income tax burden. UTMD's EBITDA
in 2001 was $11.8 million, or 44% as a ratio of sales. UTMD's EBITDA has
averaged 39% of sales over the last five years. The extraordinarily strong cash
generation performance resulted from a combination of outstanding operating
profit performance, a substantial non-cash charge to earnings from amortization
of goodwill and royalty income from others' use of UTMD's technology. Management
projects performance factors will remain intact for 2002 that will allow
approximately $12 million again in EBITDA.

  Please note that EBITDA is not defined or described by Generally Accepted
Accounting Principles. As such, it is not prepared in accordance with GAAP, is
not a measure of liquidity, and is not a measure of operating results. However,
the components of EBITDA are prepared in accordance with GAAP, and UTMD believes
that EBITDA is an important measure of the Company's operating performance and
financial well-being.

Management's Outlook.
     In summary, in 2002 UTMD plans to
     1)   realize  improved  results  from  2001  initiatives  to  expand  sales
          activity;
     2)   continue  outstanding  operating  performance,  and  set  new  Company
          records for profitability as a percent of sales;
     3)   sustain the patent infringement verdict and recover damages; and
     4)   actively look for new  acquisitions  to build a platform for continued
          growth.

  As a first indication of improving sales activity, 4Q01 was the first quarter
in eight consecutive calendar quarters that UTMD achieved positive revenue
growth relative to the same quarter in the prior year. The following factors
provide optimism that 2002 will demonstrate renewed top line growth:
  1) The direct U.S. sales team has been revitalized as a resource for achieving
UTMD's objectives to help clarify clinician needs, responsively provide valuable
solutions for those needs and assure timely support for clinical customers' use
of UTMD's solutions.
  2) Key U.S. hospital accounts that were converted back to UTMD's flagship
products during 2001 will add significant business activity simply by virtue of
being back purchasing products during a full year.
  3) UTMD terminated its last speciality distributor, on which it relied for
promotional sales activities, effective 12-31-01 (not including national JIT
distributors that continue on request of hospital customers to perform inventory
functions). The terminated distributor was responsible for 6% of total domestic
direct sales in 2001. If UTMD can retain the prior business activity, sales will
increase because direct customer prices for the same products will be higher
than UTMD's previous wholesale prices to the distributor. Historically, UTMD's
direct sales representatives have consistently been able not only to retain
prior business activity but substantially increase it after the termination of a
regional distributor.
  4) UTMD expects that new products that did not materially contribute to 2001
performance will make a more material contribution in 2002, e.g., PICC-Nate,
EndoCurette and OptiMicro needles. All offer important clinical benefits.
  5) Internationally, specialty Ob/Gyn product sales grew rapidly in 2001 and
should continue the momentum in 2002. The new Pulsion PiCCO catheter should
materially add to foreign sales if Pulsion and its marketing partners prove
successful in gaining broader acceptance of the advanced method of measuring
cardiac output.
  6) UTMD achieved some success in 2001 in gaining more OEM interest in
utilizing its capabilities, and expects some of those projects may begin to come
to fruition in 2002.


                                       22

<PAGE>


  Of course, UTMD feels strongly about the merits of its infringement claims
regarding its patented flagship product, Intran Plus. The lawsuit has been in
process for five years, and has required a huge commitment of limited UTMD
resources, which negatively affected past performance. In UTMD's opinion,
copying strategies work as a business approach for large commodity-oriented (not
innovative) companies because small specialized "single-product" companies do
not command the financial resources to fight a protracted complex legal battle
in the courts to defend their technologies. UTMD's employees are gratified that
the Utah Federal District Court jury found that UTMD's patent was valid and that
Graphic Controls, now Tyco/Kendallo LTP, infringed it. Since Tyco/Kendallo LTP
introduced Softrans (their copy of Intran Plus) in 1996, which was found to have
infringed the UTMD patent, they have significantly diminished UTMD's market
share aided by their GPO contracts for broad commodity product lines and greater
sales and marketing resources. Tyco/Kendallo LTP appears to have taken about 40%
of UTMD's previous IUPC business. The jury awarded UTMD $20 million in damages,
representing an estimate of the profits that UTMD has lost to date. If Tyco
appeals as they have indicated they will, UTMD will work to protect the verdict,
although we expect a significant struggle based on the last five years'
experience with the amount of money and lawyers that Tyco will deploy. Given the
uncertainty of a complex legal process, UTMD will reserve its projection of the
significant impact that an ultimate victory would have on its business until the
case is finally closed. However, the appeal process will not require new
discovery or new testimony by witnesses, and therefore should be completed
before the end of 2003.

  UTMD will continue to focus on differentiating itself, especially from large
commodity-oriented competitors. UTMD is small, but its employees are experienced
and diligent in their work. Our passion is in providing innovative clinical
solutions that will help reduce health risks for women and their babies. The
Company has a defined focus, and does not seek to become big as a primary
motivation. We just want to do an excellent job in meeting our customers' needs,
and provide our shareholders with excellent returns. The reliability and
performance of UTMD's products is high and represents significant clinical
benefits as well as minimal total cost of care. Physicians do care about the
well-being of their patients, but their time is limited to evaluate choices, and
they have hospital administrators to deal with who often look at the initial
price of a product, period. UTMD is hopeful that recent Federal congressional
attention on the activities of GPO's will begin to shine a brighter light on
their anti-competitive practices that are not in the best interest of U.S.
patients or their physicians. In the U.S., UTMD will continue to leverage its
reputation as an innovator which will responsively take on challenges to work
with physicians who use its products in specialty hospital areas, or outside the
hospital in their office practices. Internationally, where UTMD must depend on
the knowledge, focus, relationships and energy of independent distributors,
management will continue to closely monitor performance and recruit needed new
business partners. In 2002, UTMD expects its Ireland subsidiary, which shipped
only 54% of foreign sales in 2001 because of weak BPM product sales, to improve
from its 2001 performance and make a more important contribution to UTMD's
overall performance. We expect the Oregon operation to continue the excellent
OEM performance it demonstrated in 2001.

  In 2001, UTMD again demonstrated a high positive cash flow reflected by record
EBITDA performance of 44% of sales, managing its working capital effectively and
keeping new capital expenditures substantially below its rate of depreciation of
existing assets. Enough time has passed allowing reduction of debt that UTMD's
balance sheet is back in shape for another acquisition without diluting
shareholders interest by issuing more stock. In considering acquisitions, UTMD
looks to acquire successful companies that will enhance its specialist focus.
When we acquire a company, it probably will be for cash, with the idea that we
will be able to retain key resources that helped make it successful, and not gut
the acquired company simply to gain financial benefits. Because current market
values seem closer to acquisition values that will allow realistic accretive
results, UTMD intends to increase its acquisition search activity in 2002.

  UTMD's technologies are current, and ideas often leading, but we believe in
the "old-fashioned" approach of building a long term stable business that will
achieve predictable future results allowing job security for our employees who
are diligent in their work, consistent returns for our shareholders and
continued excellent services for customers who depend on us. Rather than
devoting limited resources to a large public relations effort promoting the
Company's stock, we focus our resources on Company business.


                                       23

<PAGE>

  Over the last four years, UTMD has achieved some significant accomplishments:
1) compounded EPS growth of 22% per year; 2) repurchase of 40% of the ownership
of the Company (net of all option exercises) for $25 million (3.3 million net
shares at an average cost of $7.63 per share including commissions and other
repurchase costs); 3) two acquisitions costing $11.5 million which accounted for
24% of total sales in 2001; and, 4) an apparent successful effort defending the
patent rights of UTMD's flagship product technology and core franchise of UTMD's
market identity, plus a $20 million lost profits award.

  Looking back, UTMD's EPS were up 27% in 2001, and the $13.61 ending share
price was up 81% relative to the end of 2000. The NASDAQ Composite, S&P 500
Index and DJIA were all down, 21%, 13% and 7% respectively. With 2001 EPS of
$1.14, UTMD's year-end price to earnings ratio (PER) was still only 11.9,
suggesting that a combination of PER expansion to closer to the market average
and continued increase in EPS performance could again provide exceptional
shareholder returns in 2002.


Accounting Policy Changes.
  In July 2001, SFAS No. 141, "Business Combinations" and SFAS No. 142,
"Goodwill and Other Intangible Assets" were issued. SFAS 142 addresses financial
accounting and reporting for acquired goodwill and other intangible assets. It
requires, among other things, that companies no longer amortize goodwill, but
instead test goodwill for impairment at least annually. SFAS 142 is required to
be applied for fiscal years beginning after December 15, 2001. According to the
requirements of SFAS 142, the Company will no longer amortize the goodwill
associated with its 1997 and 1998 acquisitions and will begin to regularly
assess its goodwill for impairment. The book value of goodwill related to these
acquisitions at December 31, 2001 was (in thousands) $6,245.

  The FASB recently issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." This Statement, which amends SFAS No. 19, establishes accounting
standards for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. This Statement requires all
entities with a legal obligation to retire tangible, long-lived assets to record
the retirement costs as a liability on an entity's balance sheet. The effective
date for this Statement is June 15, 2002. Management does not believe the
adoption of Statement 143 will have any material effect on its financial
statements since the Company does not hold title to any tangible assets which
would have to be retired under a legal obligation.

  The FASB recently issued FASB Statement No. 144, "Accounting for the
Impairment or Disposal of Long- Lived Assets". The new guidance resolves
implementation issues related to FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of".
Statement 144 is effective for fiscal years beginning after December 15, 2001.
Management does not believe the adoption of Statement 144 will have any material
effect on its financial statements since goodwill is no longer required to be
allocated to long-lived assets when testing for impairment.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Prior to January 1, 2002, the Company had manufacturing operations, including
related assets, in Ireland denominated in Irish Pounds, and sold products under
agreements denominated in various Western European currencies. The Irish Pound
and other currencies are subject to exchange rate fluctuations that are beyond
the control of UTMD. The exchange rate for the Irish Pound was .8869, .8354 and
..7828 per U.S. Dollar as of December 31, 2001, 2000 and 1999, respectively.
Please see Note 1, page F-9. On January 1, 2002, UTMD converted its Irish
operations and assets to the Euro currency, consistent with conversion of
Ireland and many other Western European countries to the new common Euro
currency. UTMD manages its foreign currency risk without separate hedging
transactions by converting currencies as transactions occur.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See index to financial statements and financial statement schedule at page F-1.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

None.


                                       24
<PAGE>


                                    PART III.
                                    --------

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information from the definitive proxy statement of the registrant under the
caption, "PROPOSAL NO. 1. ELECTION OF DIRECTORS: General," "Directors and
Nominees," "Executive Officers," and "Compliance with Exchange Act
Requirements," is incorporated herein by reference, expressly excluding the
material set forth under the subcaptions "Report of the Compensation and Option
Committee" and "Stock Performance Chart."

ITEM 11 - EXECUTIVE COMPENSATION.

The information from the definitive proxy statement of the registrant under the
caption, "PROPOSAL NO. 1. ELECTION OF DIRECTORS: Executive Compensation,"
"Compensation and Option Committee Interlocks and Insider Participation,"
"Employment Agreements, Termination of Employment, and Change in Control," and
"Director's Compensation" is incorporated herein by reference, expressly
excluding the material set forth under the subcaptions "Report of the
Compensation and Option Committee" and "Stock Performance Chart."

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information from the definitive proxy statement of the registrant under the
caption, "PROPOSAL NO. 1. ELECTION OF DIRECTORS: Security Ownership of
Management and Certain Persons" is incorporated herein by reference.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

None.



                  [Remainder of Page Intentionally Left Blank]


                                       25

<PAGE>


                                    PART IV.
                                    --------

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)  The following documents are filed as part of this report or incorporated
     herein by reference.

     1.   Financial Statements.
          (See Index to Consolidated Financial Statements at page F-1.)

     2.   Supplemental Schedule.
          Financial Statement Schedules are omitted because they are
     inapplicable or the required information is otherwise included in the
     accompanying Financial Statements and the notes thereto.


     3.   Exhibits.
<TABLE>
<CAPTION>

                SEC
Exhibit #   Reference #     Title of Document                                    Location
---------   -----------     -----------------                                    --------
<S>         <C>             <C>                                                  <C>
    1           3           Articles of Restatement of the Articles of           Incorporated by
                            Incorporation                                        Reference(1)

    2           3           Bylaws                                               Incorporated by
                                                                                 Reference(1)

    3           4           Rights Agreement dated as of October 28, 1994,       Incorporated by
                            between Utah Medical Products, Inc., and             Reference(1)
                            Registrar and Transfer Company

    4           4           Designation of Rights, Privileges, and Preferences   Incorporated by
                            of Series "A" Preferred Stock                        Reference(1)

    5          10           Employment Agreement dated December 21, 1992         Incorporated by
                            with Kevin L. Cornwell*                              Reference(2)

    6          10           Amendment, effective May 15, 1998, to Employment     Incorporated by
                            Agreement dated December 21, 1992 with Kevin L.      Reference(3)
                            Cornwell*

    7          10           Utah Medical Products, Inc., 1994 Employee           Incorporated by
                            Incentive Stock Option Plan*                         Reference(1)

    8          10           Utah Medical Products, Inc., 1993 Directors'         Incorporated by
                            Stock Option Plan                                    Reference(1)

    9          10           Utah Medical Products, Inc., Performance             Incorporated by
                            Option Plan*                                         Reference(1)

   10          10           Business Loan Agreement, dated April 14, 2000        Incorporated by
                            Between Utah Medical Products, Inc and Key Bank      Reference(4)
                            National Association

   11          10           Promissory Note, dated March 27, 2001 to             Incorporated by
                            Key Bank National Association                        Reference(5)


                                       26

<PAGE>



                            SEC
Exhibit #   Reference #     Title of Document                                    Location
---------   -----------     -----------------                                    --------

   12          21           Subsidiaries of Utah Medical Products, Inc.          Incorporated by
                                                                                 Reference(6)

   13          23           Consent of Tanner + Co., Company's independent       This Filing
                            auditors for the years ending December 31, 2001,
                            December 31, 2000, and December 31, 1999

* Management contract or compensatory plan or arrangement required to be filed
  pursuant to Item 14(c).

      (1) Incorporated by reference from the Company's registration statement on
          form S-8 filed with the Commission effective February 10, 1995.

      (2) Incorporated by reference from the Company's annual report on form
          10-K filed with the Commission for the year ended December 31, 1992.

      (3) Incorporated by reference from the Company's annual report on form
          10-K filed with the Commission for the year ended December 31, 1998.

      (4) Incorporated by reference from the Company's quarterly report on form
          10-Q filed with the Commission for the quarter ended March 31, 2000.

      (5) Incorporated by reference from the Company's quarterly report on form
          10-Q filed with the Commission for the quarter ended March 31, 2001.

      (6) Incorporated by reference from the Company's annual report on form
          10-K filed with the Commission for the year ended December 31, 1999.

</TABLE>

(b)  Reports on Form 8-K.

      On January 30, 2002, UTMD filed a report on Form 8-K, Item 5, Other
Events, providing additional financial information prior to the filing of this
Form 10-K.
      On January 18, 2001, UTMD filed a report on Form 8-K, Item 5, Other
Events, reporting that it received a favorable jury verdict on 1/16/02 in its
patent infringement action against Kendallo LTP, and that UTMD was awarded $20
million in lost profits by the jury.




                                       27

<PAGE>



                                   SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned this 29th day of March, 2002.

                           UTAH MEDICAL PRODUCTS, INC.



                          By:         /s/ Kevin L. Cornwell
                             -------------------------------------------
                             Kevin L. Cornwell
                             Chairman and CEO



                          By:         /s/ Greg A. LeClaire
                             -------------------------------------------
                             Greg A. LeClaire
                             Chief Financial Officer


   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on this 29th day of March, 2002.




                          By:         /s/ Stephen W. Bennett
                             --------------------------------------------
                             Stephen W. Bennett, Director



                          By:         /s/ Kevin L. Cornwell
                             --------------------------------------------
                             Kevin L. Cornwell, Director



                          By:         /s/ Ernst G. Hoyer
                             --------------------------------------------
                             Ernst G. Hoyer, Director



                          By:         /s/ Barbara A. Payne
                             --------------------------------------------
                             Barbara A. Payne, Director



                          By:         /s/ Paul O. Richins
                             --------------------------------------------
                             Paul O. Richins, Director



                                       28

<PAGE>
[GRAPHIC OMITTED]

UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
December 31, 2001 and 2000
Consolidated Financial Statements



<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Index to Consolidated Financial Statements


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





                                                                       Page
                                                                       ----


Independent Auditors' Report                                            F-2


Consolidated balance sheet                                              F-3


Consolidated statement of income and other comprehensive income         F-4


Consolidated statement of stockholders' equity                          F-5


Consolidated statement of cash flows                                    F-6


Notes to consolidated financial statements                              F-8

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






                                       F-1

<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                                    INDEPENDENT AUDITORS' REPORT







To the Board of Directors and Stockholders
of Utah Medical Products, Inc.


We have audited the consolidated balance sheet of Utah Medical Products, Inc. as
of December 31, 2001 and 2000, and the related consolidated statements of income
and other comprehensive income, stockholders' equity, and cash flows for the
years ended December 31, 2001, 2000 and 1999. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Utah Medical
Products, Inc. as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for the years ended December 31, 2001, 2000 and
1999 in conformity with accounting principles generally accepted in the United
States of America.




                                                                /s/ TANNER + CO.




Salt Lake City, Utah
January 15, 2002




                                          F-2

<PAGE>

<TABLE>
<CAPTION>
                                                  UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                                                    Consolidated Balance Sheet
                                                                                (In Thousands)

                                                                                  December 31,
----------------------------------------------------------------------------------------------

              Assets
              ------                                               2001            2000
                                                             --------------------------------
<S>                                                          <C>                  <C>
Current assets:
     Cash                                                    $            370     $       414
     Accounts receivable, net (note 2)                                  3,585           3,979
     Inventories (note 2)                                               3,248           3,005
     Prepaid expenses and other current assets                            155             137
     Deferred income taxes (note 6)                                       515             529
                                                             --------------------------------

                  Total current assets                                  7,873           8,064

Property and equipment, net (note 3)                                    8,877           9,789

Other assets, net (note 2)                                              6,822           7,570
                                                             --------------------------------

                  Total                                      $         23,572     $    25,423
                                                             --------------------------------

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

              Liabilities and Stockholders' Equity
              ------------------------------------

Current liabilities:
     Accounts payable                                        $            457     $       683
     Accrued expenses (note 2)                                          2,017           1,963
                                                             --------------------------------

                  Total current liabilities                             2,474           2,646

Note payable (note 4)                                                   2,501          10,000
Deferred income taxes (note 6)                                            390             430
                                                             --------------------------------

                  Total liabilities                                     5,365          13,076
                                                             --------------------------------

Commitments and contingencies (notes 5 and 10)                              -               -

Stockholders' equity:
     Preferred stock $.01 par value; authorized 5,000
       shares; no shares issued or outstanding                              -               -
     Common stock $.01 par value; authorized 50,000
       shares; issued 5,029 shares in 2001 and
       5,003 shares in 2000                                                50              50
     Cumulative foreign currency translation adjustment                (1,816)         (1,559)
     Retained earnings                                                 19,973          13,856
                                                             --------------------------------

                  Total stockholders' equity                           18,207          12,347
                                                             --------------------------------

                  Total                                      $         23,572     $    25,423
                                                             --------------------------------

---------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.

                                       F-3
<PAGE>
<TABLE>
<CAPTION>

                                            UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                         Consolidated Statement of Income and Other Comprehensive Income
                                                (In Thousands, Except Per Share Amounts)

                                                                Years Ended December 31,
----------------------------------------------------------------------------------------


                                                      2001         2000         1999
                                                  -------------------------------------
<S>                                               <C>            <C>         <C>
Net sales (notes 9 and 10)                        $     26,954   $  27,193   $   29,444

Cost of sales (note 10)                                 11,561      12,068       13,648
                                                  -------------------------------------

              Gross margin                              15,393      15,125       15,796

Expenses:
      Sales and marketing                                2,773       3,250        3,778
      Research and development                             364         568          719
      General and administrative                         2,978       2,940        3,017
                                                  -------------------------------------

              Income from operations                     9,278       8,367        8,282

Other income (expense):
     Dividend and interest income                            9          39           34
     Royalty income                                        450         452          529
     Interest expense                                     (370)       (496)        (296)
     Other, net                                            113          58           (4)
                                                  -------------------------------------

              Income before income tax expense           9,480       8,420        8,545

Income tax expense (note 6)                             (3,546)     (3,047)      (3,077)
                                                  -------------------------------------

              Net income                          $      5,934   $   5,373   $    5,468
                                                  -------------------------------------

Earnings per common share (basic)                 $        1.18  $     .90   $      .76
 (notes 7 and 8)                                  -------------------------------------

Earnings per common share (diluted)               $        1.14  $     .90   $      .76
  (notes 7 and 8)                                 -------------------------------------

Other comprehensive income - foreign
  currency translation net of taxes of
  $(87), $(109) and $(252)                                (170)       (200)        (489)
                                                  -------------------------------------

              Total comprehensive income          $      5,764   $   5,173   $    4,979
                                                  -------------------------------------



---------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.

                                       F-4

<PAGE>
<TABLE>
<CAPTION>


                                                                                   UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                                                                 Consolidated Statement of Stockholders' Equity
                                                                                                                 (In Thousands)

                                                                                  Years Ended December 31, 2001, 2000, and 1999
-------------------------------------------------------------------------------------------------------------------------------




                                                                                         Cumulative
                                                                                           Foreign
                                                    Common Stock          Additional      Currency
                                            ----------------------------    Paid-In     Translation     Retained
                                                 Shares       Amount        Capital      Adjustment     Earnings          Total
                                            ----------------------------------------------------------------------------------
<S>                                         <C>             <C>           <C>           <C>            <C>           <C>
Balance, January 1, 1999                           8,046      $     80      $   --        $   (509)     $ 26,446      $ 26,017

Shares issued upon exercise of
employee stock options for cash                       13          --              98          --            --              98

Tax benefit attributable to appreciation of
stock options                                       --            --               5          --            --               5

Common stock purchased and retired                (1,606)          (16)         (103)         --         (11,939)      (12,058)

Foreign currency translation adjustment             --            --            --            (741)         --            (741)

Net Income                                          --            --            --            --           5,468         5,468
                                            ----------------------------------------------------------------------------------

Balance, December 31, 1999                         6,453            64          --          (1,250)       19,975        18,789

Shares issued upon exercise of
employee stock options for cash                       13          --              85          --            --              85

Tax benefit attributable to appreciation of
stock options                                       --            --               7          --            --               7

Common stock purchased and retired                (1,463)          (14)          (92)         --         (11,492)      (11,598)

Foreign currency translation
  adjustment                                        --            --            --            (309)         --            (309)

Net income                                          --            --            --            --           5,373         5,373
                                            ----------------------------------------------------------------------------------

Balance, December 31, 2000                         5,003            50          --          (1,559)       13,856        12,347

Shares issued upon exercise of
employee stock options for cash                       45          --             316          --            --             316

Tax benefit attributable to appreciation of
stock options                                       --            --              60          --            --              60

Common stock purchased and retired                   (19)         --            (376)         --             183          (193)

Foreign currency translation adjustment             --            --            --            (257)         --            (257)

Net income                                          --            --            --            --           5,934         5,934
                                            ----------------------------------------------------------------------------------

Balance, December 31, 2001                         5,029   $        50      $   --       $  (1,816)  $    19,973    $   18,207
                                            ----------------------------------------------------------------------------------




See accompanying notes to consolidated financial statements.

                                       F-5

<PAGE>

                                                         UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                                                 Consolidated Statement of Cash Flows
                                                                                       (In Thousands)

                                                                             Years Ended December 31,
-----------------------------------------------------------------------------------------------------



                                                                2001            2000         1999
                                                           -----------------------------------------

Cash flows from operating activities:
  Net income                                               $      5,934     $     5,373    $   5,468
  Adjustments to reconcile net income to
    net cash provided by operating activities:
   Depreciation and amortization                                  1,933           2,191        2,192
   Provision for recovery of losses on accounts
     receivable                                                      70              27          (16)
   Gain (loss) on disposal of assets                                  6               1           (1)
   Deferred income taxes                                            (26)            (13)         (81)
   Tax benefit attributable to exercise
     of stock options                                                60               7            5
   (Increase) decrease in:
     Accounts receivable                                            164              57            1
     Accrued interest, grant claims, and other
       receivables                                                  121             (12)         404
     Inventories                                                   (239)            165          903
     Prepaid expenses and other current assets                      (20)             27          (14)
   Increase (decrease) in:
     Accounts payable                                              (208)            149           21
     Accrued expenses                                                65            (147)         221
     Deferred revenue                                                 -               -           (2)
                                                           -----------------------------------------
           Net cash provided by
           operating activities                                   7,860           7,825        9,101
                                                           -----------------------------------------

Cash flows from investing activities:
  Capital expenditures for:
    Property and equipment                                         (524)           (361)        (684)
    Intangible assets                                                 -            (250)          (2)
  Proceeds from sale of property and equipment                        -              11            1
                                                           -----------------------------------------
           Net cash used in
           investing activities                                    (524)           (600)        (685)
                                                           -----------------------------------------

Cash flows from financing activities:
  Proceeds from issuance of common stock                            316              85           98
  Common stock purchased and retired                               (193)        (11,598)     (12,058)
  Proceeds from note payable                                          -           8,950        9,071
  Repayments of note payable                                     (7,499)         (4,884)      (6,231)
                                                           -----------------------------------------
           Net cash (used in)
           financing activities                                  (7,376)         (7,447)      (9,120)
                                                           -----------------------------------------

Effect of exchange rate changes on cash                              (4)            (11)         (16)
                                                           -----------------------------------------

Net decrease in cash                                                (44)           (233)        (720)

Cash at beginning of year                                           414             647        1,367
                                                           -----------------------------------------

Cash at end of year                                        $        370     $       414   $      647
                                                           -----------------------------------------

----------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                       F-6
<PAGE>
<TABLE>
<CAPTION>


                                             UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                                      Consolidated Statement of Cash Flow
                                                                           (In Thousands)
                                                                                Continued

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


Supplemental disclosures of cash flow information:


                                                         Years Ended
                                                        December 31,
                                    -----------------------------------------------------
                                           2001             2000              1999
                                    -----------------------------------------------------
  <S>                               <C>                <C>               <C>
  Cash paid during the year for:

         Income taxes               $        3,399     $       3,308     $      2,972
                                    -----------------------------------------------------

         Interest                   $          370     $         496     $        296
                                    -----------------------------------------------------
</TABLE>






See accompanying notes to consolidated financial statements.



                                       F-7

<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
                                      Notes to Consolidated Financial Statements

                                   Years Ended December 31, 2001, 2000, and 1999
--------------------------------------------------------------------------------

1. Summary of
   Significant
   Accounting
   Policies
               Organization
               Utah Medical Products, Inc. and its wholly owned subsidiaries,
               principally Utah Medical Products Ltd., which operates a
               manufacturing facility in Ireland, and Columbia Medical, Inc.
               (the Company) are in the business of producing specialized
               devices for the health care industry. The Company's broad range
               of products includes those used in critical care areas and the
               labor and delivery departments of hospitals, as well as
               outpatient clinics and physician's offices. Products are sold in
               both domestic U.S. and international markets.


               Use of Estimates in the Preparation of Financial Statements
               The preparation of financial statements in conformity with
               accounting principles generally accepted in the United States of
               America requires management to make estimates and assumptions
               that affect the reported amounts of assets and liabilities and
               disclosure of contingent assets and liabilities at the date of
               the financial statements and the reported amounts of revenues and
               expenses during the reporting period. Although actual results
               could differ from those estimates, management believes it has
               considered and disclosed all relevant information in making it's
               estimates that affect reported performance and current values.

               Principles of Consolidation
               The consolidated financial statements include those of the
               Company and its subsidiaries. All intercompany accounts and
               transactions have been eliminated in consolidation.

               Cash and Cash Equivalents
               For purposes of the consolidated statement of cash flows, the
               Company considers cash on deposit and short-term investments with
               original maturities of three months or less to be cash and cash
               equivalents.

               Grant Claims Receivable
               Grant claims receivable consists of amounts due from the
               Industrial Development Agency (Ireland) under capital and
               employment grant agreements for the construction and operation of
               the Company's Ireland manufacturing facility.


                                       F-8

<PAGE>

                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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



 1. Summary of
    Significant
    Accounting
    Policies
   (Continued)

               Inventories
               Finished products, work-in-process, and raw materials and
               supplies inventories are stated at the lower of cost (computed on
               a first-in, first-out method) or market (see Note 2).

               Property and Equipment
               Property  and  equipment  are  stated at cost.  Depreciation  and
               amortization are computed using the  straight-line  and units-of-
               production methods over estimated useful lives as follows:

               Building and improvements             30-40 years
               Furniture, equipment, and tooling      3-10 years

               Revenue Recognition
               Revenue from product sales is generally recognized at the time
               the product is shipped and invoiced and collectibility is
               reasonably assured. The Company also provides for the estimated
               cost that may be incurred for product warranties and unforeseen
               uncollectible accounts. The Company believes that revenue should
               be recognized at the time of shipment as title generally passes
               to the customer at the time of shipment. This policy meets the
               criteria of SAB 101 in that there is persuasive evidence of an
               existing contract or arrangement, delivery has occurred, the
               price is fixed and determinable and the collectibility is
               reasonably assured.

               Intangible Assets
               Costs associated with the acquisition of patents, trademarks,
               goodwill, license rights, and non-compete agreements are
               capitalized and have been amortized using the straight-line
               method over periods ranging from 5 to 17 years. In the future per
               SFAS No. 142, the Company will no longer amortize the remaining
               goodwill associated with its 1997 and 1998 acquisitions.

               Income Taxes
               The Company accounts for income taxes under SFAS No. 109,
               "Accounting for Income Taxes," whereby deferred taxes are
               computed under the asset and liability method.




                                       F-9

<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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

1. Summary of
   Significant
   Accounting
   Policies
  (Continued)

               Earnings per Share
               The computation of basic earnings per common share is based on
               the weighted average number of shares outstanding during each
               year.

               The computation of diluted earnings per common share is based on
               the weighted average number of shares outstanding during the year
               plus the common stock equivalents which would arise from the
               exercise of stock options and warrants outstanding using the
               treasury stock method and the average market price per share
               during the year.

               Translation of Foreign Currencies
               Assets and liabilities of the Company's foreign subsidiary are
               translated into U.S. dollars at the applicable exchange rates at
               year-end. Net gains or losses resulting from the translation of
               the Company's assets and liabilities are reflected as a separate
               component of stockholders' equity. A negative translation impact
               on stockholders' equity reflects a current relative U.S. Dollar
               value higher than at the point in time that assets were actually
               acquired in a foreign currency. A positive translation impact
               would result from a U.S. Dollar weaker in value than at the point
               in time foreign assets were acquired.

               Income and expense items are translated at the weighted (based on
               when transactions actually occurred) average rate of exchange
               during the year.

               Loans to Related Parties
               Except as listed below or further disclosed in these notes, the
               Company has not made material loans to related entities including
               employees, directors, shareholders, suppliers or customers, nor
               does it guarantee the debt of related entities.



                                       F-10

<PAGE>

                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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

1. Summary of
   Significant
   Accounting
   Policies
  (Continued)

               Concentration of Credit Risk
               The primary concentration of credit risk consists of trade
               receivables. In the normal course of business, the Company
               provides credit terms to its customers. Accordingly, the Company
               performs ongoing credit evaluations of its customers and
               maintains allowances for possible losses which, when realized,
               have been within the range of management's expectations as
               reflected by its reserves.

               The Company's customer base consists primarily of hospitals,
               medical product distributors, physician practices and others
               directly related to healthcare providers. Although the Company is
               affected by the well- being of the global healthcare industry,
               management does not believe significant trade receivable credit
               risk exists at December 31, 2001.

               The Company maintains its cash in bank deposit accounts which, at
               times, may exceed federally insured limits. The Company has not
               experienced any losses in such accounts and believes it is not
               exposed to a significant credit risk on cash and cash equivalent
               balances.
















                                      F-11

<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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

2. Detail of
   Certain
   Balance
   Sheet
   Accounts
                                                   December 31,
                                       ------------------------------------
                                              2001              2000
                                       ------------------------------------
Accounts receivable (in thousands):
     Trade receivables                 $            3,776   $         3,979
     Grant claim receivables                          (50)               42
     Accrued interest and other                         9                38
     Less allowance for
       doubtful accounts                             (150)              (80)
                                       ------------------------------------

                                       $            3,585   $         3,979
                                       ------------------------------------


Inventories (in thousands):
     Finished products                 $            1,142  $            882
     Work-in-process                                  835               764
     Raw materials                                  1,271             1,359
                                       ------------------------------------

                                       $            3,248  $          3,005
                                       ------------------------------------


Other assets (in thousands):
     Goodwill                          $            8,533  $          8,533
     Patents                                        1,893             1,893
     License rights                                   293               293
     Trademarks                                       224               224
     Non-compete agreements                           175               175
                                       ------------------------------------

                                                   11,118            11,118
     Accumulated amortization                      (4,296)           (3,548)
                                       ------------------------------------

                                       $            6,822   $         7,570
                                       ------------------------------------



Accrued expenses (in thousands):
     Payroll and payroll taxes         $            1,021   $           858
     Reserve for litigation costs                     538               662
     Other                                            458               443
                                       ------------------------------------

                                       $            2,017   $         1,963
                                       ------------------------------------




                                      F-12

<PAGE>

                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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

3. Property
   and
   Equipment

               Property and equipment consists of the following (in thousands):


                                                       December 31,
                                                  ----------------------
                                                      2001        2000
                                                  ----------------------

               Land                               $      927   $     945
               Buildings and improvements              7,199       7,328
               Furniture, equipment, and tooling      13,683      13,548
               Construction-in-progress                  202          54
                                                  ----------------------
                                                      22,011      21,875

               Accumulated depreciation and
                 amortization                        (13,134)    (12,086)
                                                  ----------------------
                                                  $    8,877   $   9,789
                                                  ----------------------


               Included in the Company's consolidated balance sheet are the
               assets of its manufacturing facilities in Utah, Oregon and
               Ireland. Property and equipment, by location are as follows (in
               thousands):

<TABLE>
<CAPTION>


                                                             December 31, 2001
                                             -----------------------------------------------
                                               Utah       Oregon        Ireland      Total
                                             -----------------------------------------------
               <S>                           <C>          <C>          <C>          <C>
               Land                          $    621     $   --       $    306     $    927
               Building and improvements        3,900           32        3,267        7,199
               Furniture, equipment,  and
                 tooling                       11,793        1,251          639       13,683
               Construction-in-progress           202         --           --            202
                                             -----------------------------------------------

               Total                           16,516        1,283        4,212       22,011

               Accumulated depreciation
                 and amortization             (11,200)      (1,136)        (798)     (13,134)
                                             -----------------------------------------------
               Property and equipment,
                 net                         $  5,316     $    147     $  3,414     $  8,877
                                             -----------------------------------------------
</TABLE>










                                      F-13

<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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


3. Property
   and
   Equipment
  (Continued)

<TABLE>
<CAPTION>

                                                          December 31, 2000
                                             -----------------------------------------------
                                                Utah        Oregon      Ireland       Total
                                             -----------------------------------------------
               <S>                           <C>          <C>          <C>          <C>
               Land                          $    621     $   --       $    324     $    945
               Building and improvements        3,827           32        3,469        7,328
               Furniture, equipment,  and
                tooling                        11,611        1,262          675       13,548
               Construction-in-progress            54         --           --             54
                                             -----------------------------------------------

               Total                           16,113        1,294        4,468       21,875

               Accumulated depreciation
                and amortization              (10,428)        (959)        (699)     (12,086)
                                             -----------------------------------------------

               Property and equipment,
                net                          $  5,685     $    335     $  3,769     $  9,789
                                             -----------------------------------------------
</TABLE>


4. Note
   Payable

               The Company has an unsecured bank line-of-credit agreement which
               allows the Company to borrow up to a fixed maximum amount (in
               thousands) of $14,500 at an interest rate equal to either the
               bank's LIBOR rate plus 1.35%, or the bank's prime rate. The
               line-of-credit- balance matures on April 14, 2003 and had
               outstanding balances of (in thousands) $2,501 and $10,000 on
               December 31, 2001 and 2000, respectively. The principal financial
               loan covenants are a restriction on the total amount available
               for borrowing to 2.5 times the last twelve months' EBITDA, which
               as of December 31, 2001 was equal to (in thousands) $29,500, and
               a requirement to maintain a current ratio in excess of 2.0 for
               each quarter which in 2001 ranged from 2.6 to 3.4.


5. Commitments
   and
   Contingencies

               Operating Leases
               The Company has a lease agreement for land adjoining the
               Company's Utah facility for a term of forty years commencing on
               September 1, 1991. On September 1, 2001 and subsequent to each
               fifth lease year, the basic rental will be adjusted for published
               changes in a price index. The Company also leases its CMI
               building in Oregon under a short term noncancelable operating
               lease. Rent expense charged to operations under these operating
               lease agreements was approximately (in thousands) $101, $98 and
               $103 for the years ended December 31, 2001, 2000 and 1999,
               respectively.



                                      F-14

<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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



5. Commitments
   and
   Contingencies
  (Continued)

               Future minimum lease  payments under its lease  obligations as of
               December 31, 2001 were as follows (in thousands):


               Year's ending December 31:                     Amount
               --------------------------                -----------------

               2002                                      $              62
               2003                                                     37
               2004                                                     37
               2005                                                     37
               2006                                                     37
               Thereafter                                              962
                                                         -----------------

               Total future minimum lease payments       $           1,172
                                                         -----------------

               Product Liability
               The Company is self-insured for product liability risk. "Product
               liability" is an insurance industry term for the cost of legal
               defense and possible eventual damages awarded as a result of use
               of a company's product during a procedure that results in an
               injury of a patient. The Company maintains a reserve for product
               liability litigation and damages consistent with it's previous
               long-term experience. Actual product liability litigation costs
               and damages during the last three reporting years have been
               immaterial which is consistent with the Company's overall
               history.

               The Company absorbs the costs of clinical training,
               trouble-shooting and product warranties in its on-going operating
               expenses.


               Litigation
               The Company is involved in lawsuits which are an expected
               consequence of its operations and in the ordinary course of
               business. The Company believes that pending litigation will not
               have a materially adverse effect on its financial condition or
               results of operations.

               Irish Development Agency
               In order to satisfy requirements of the Irish Development Agency
               in assisting the start-up of its Ireland subsidiary, the Company
               agreed to invest certain amounts and maintain a certain capital
               structure in its Ireland subsidiary. The effect of these
               financial relationships and commitments are reflected in the
               consolidated financial statements and do not represent any
               significant credit risk that would affect future liquidity.

                                      F-15

<PAGE>

                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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

6. Income Taxes


               Deferred tax assets (liabilities) consist of the following
               temporary differences (in thousands):

<TABLE>
<CAPTION>

                                                                 December 31,
                                                  ----------------------------------------
                                                          2001                2000
                                                  ----------------------------------------
                                                               Long-               Long-
                                                   Current     term    Current     term
                                                  ----------------------------------------
               <S>                                <C>       <C>        <C>       <C>
               Inventory write-down and unicap      $ 184   $  --      $   153   $  --
               Allowance for doubtful accounts         51      --           27      --
               Accrued liabilities and reserves       264      --          278      --
               Other                                   16       183         71      --
                                                  ----------------------------------------

               Depreciation and amortization         --         (60)      --        (196)
               Earnings from subsidiary              --        (513)      --        (234)
                                                  ----------------------------------------

               Deferred income taxes, net           $ 515    $ (390)     $ 529    $ (430)
                                                  ----------------------------------------
</TABLE>

               The   components  of  income  tax  expense  are  as  follows  (in
               thousands):

                                                          Years Ended
                                                          December 31,
                                                -------------------------------
                                                  2001        2000        1999
                                                -------------------------------

               Current                          $ 3,520     $ 3,039     $ 3,158
               Deferred                              26           8         (81)
                                                -------------------------------

               Total                            $ 3,546     $ 3,047     $ 3,077
                                                -------------------------------

               Income tax expense differed from amounts computed by applying the
               statutory federal rate to pretax income as follows (in
               thousands):

                                                         Years Ended
                                                         December 31,
                                             -----------------------------------
                                               2001          2000         1999
                                             -----------------------------------

               Federal income tax expense at
                 the statutory rate          $ 3,062      $ 2,863      $ 2,905
               State income taxes                474          436          427
               Foreign sales corporation         (60)         (79)         (75)
               Other                              70         (173)        (180)
                                             -----------------------------------

               Total                         $ 3,546      $ 3,047      $ 3,077
                                             -----------------------------------


                                      F-16
<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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

7. Options


               The Company has stock option plans which authorize the grant of
               stock options to eligible employees, directors, and other
               individuals to purchase up to an aggregate 2,800,000 shares of
               common stock. All options granted under the plans are granted at
               current market value at date of grant, and may be exercised
               between six months and ten years following the date of grant. The
               plans are intended to advance the interest of the Company by
               attracting and ensuring retention of competent directors,
               employees, and executive personnel, and to provide incentives to
               those individuals to devote their utmost efforts to the
               advancement of the Company.

               Changes in stock options were as follows:
<TABLE>
<CAPTION>


                                                                    Price Range
                                                    Shares           Per Share
                                                 --------------------------------------
               <S>                               <C>           <C>           <C>
               2001
               Granted                               81,400    $   9.125  -  $   12.00
               Expired or canceled                   28,855         6.50  -      14.25
               Exercised                             44,500         6.50  -      11.50
               Total outstanding at December 31   1,082,878         6.50  -      14.25
               Total exercisable at December 31     912,185         6.50  -      14.25

               2000
               Granted                               96,200    $    6.63  -   $   7.75
               Expired or canceled                  107,500         6.50  -      14.25
               Exercised                             12,524         6.50  -       7.75
               Total outstanding at December 31   1,074,833         6.50  -      14.25
               Total exercisable at December 31     821,462         6.50  -      14.25

               1999
               Granted                              267,000    $    6.50  -  $    7.75
               Expired or canceled                  147,174         6.50  -      14.25
               Exercised                             13,950         6.75  -       7.25
               Total outstanding at December 31   1,098,657         6.50  -      14.25
               Total exercisable at December 31     665,533         6.50  -      14.25
</TABLE>



                                      F-17

<PAGE>

                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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

7. Options
  (Continued)

               For the years ended December 31, 2001, 2000 and 1999, the Company
               reduced current income taxes payable and increased additional
               paid-in capital by (in thousands) $60, $7 and $5, respectively,
               for the income tax benefit attributable to appreciation of common
               stock related to stock options.

               Stock-Based Compensation

               The Company has adopted the disclosure-only provisions of
               Statement of Financial Accounting Standards (SFAS) No. 123,
               "Accounting for Stock-Based Compensation." Accordingly, no
               compensation cost has been recognized in the financial
               statements. Had compensation cost for the Company's stock option
               plans been determined based on the fair value at the grant date
               for awards starting in 1995 consistent with the provisions of
               SFAS No. 123, the Company's net earnings and earnings per share
               would have been reduced to the pro forma amounts indicated below
               (in thousands, except per share amounts):


                                                        Years Ended
                                                         December 31,
                                             ----------------------------------
                                                  2001        2000       1999
                                             ----------------------------------

               Net income as reported        $   5,934   $    5,373   $   5,468
               Net income pro forma          $   5,686   $    4,970   $   4,888
               Earnings per share assuming
                 dilution as reported        $    1.14   $      .90   $     .76
               Earnings per share assuming
                 dilution pro forma          $    1.09   $      .83   $     .68

               The fair value of each option grant is estimated on the date of
               grant using the Black-Scholes option pricing model with the
               following assumptions:

                                                          Years Ended
                                                           December 31,
                                               --------------------------------
                                                  2001        2000       1999
                                               --------------------------------

               Expected dividend yield         $     --    $    --    $     --
               Expected stock price volatility     44.6%      45.9%      47.5%
               Risk-free interest rate
                (weighted average)                  4.9%       6.6%       4.7%
               Expected life of options        5.0 years  4.5 years  3.5 years
                                               --------------------------------

               The  per-share  weighted  average  fair value of options  granted
               during   2001,   2000  and  1999  is  $4.27,   $3.09  and  $2.56,
               respectively.


                                      F-18

<PAGE>

                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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

7. Options
  (Continued)

               The following table summarizes information about stock options
               outstanding at December 31, 2001:

<TABLE>
<CAPTION>

                                       Options Outstanding             Options Exercisable
                              ------------------------------------  -------------------------
                                             Weighted
                                             Average
                                             Remaining   Weighted                Weighted
                  Range of                  Contractual   Average                Average
                  Exercise       Number        Life      Exercise    Number      Exercise
                   Prices      Outstanding    (Years)     Price    Exercisable    Price
               ------------------------------------------------------------------------------
               <C>             <C>          <C>         <C>        <C>          <C>
               $6.50 -  8.00      604,209      5.76      $  6.96    505,716      $  7.00
               9.125 - 14.25      478,669      4.72      $ 11.38    406,469      $ 11.74
               ------------------------------------------------------------------------------

               $6.50 - 14.25    1,082,878      5.30      $ 8.91     912,185      $  9.11
               ------------------------------------------------------------------------------
</TABLE>

8.  Earnings Per
    Share

               Financial accounting standards require companies to present basic
               and diluted earnings per share (EPS) along with additional
               informational disclosures. Information related to EPS is as
               follows (in thousands, except per share amounts):


                                                             Years Ended
                                                             December 31,
                                                    ----------------------------
                                                     2001       2000       1999
                                                    ----------------------------
               Basic EPS:
                 Net income available to common
                   stockholders                     $5,934     $5,373     $5,468
                                                    ----------------------------

                 Weighted average common shares      5,019      5,954      7,187
                                                    ----------------------------

                 Net income per share               $ 1.18     $  .90     $  .76
                                                    ----------------------------


               Diluted EPS:
                 Net income available to common
                    stockholders                    $5,934     $5,373    $5,468
                                                    ----------------------------

                 Weighted average common shares      5,210      5,978      7,197
                                                    ----------------------------

                 Net income per share               $ 1.14     $  .90    $   .76
                                                    ----------------------------

                                      F-19
<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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

9. Geographic
   Sales
   Information

               The  Company  had  sales in the  following  geographic  areas (in
               thousands):


               Year             United States    Europe        Other
               ----             --------------------------------------

               2001             $    21,752    $   3,012    $   2,190
               2000             $    21,768    $   3,043    $   2,382
               1999             $    23,894    $   2,971    $   2,579



10. Product Sale
    and Purchase
    Commitments

               The Company has license agreements for the rights to develop and
               market certain products or technologies owned by unrelated
               parties. The confidential terms of such agreements are unique and
               varied, depending on many factors relating to the value and stage
               of development of the technology licensed. Royalties on future
               product sales are a normal component of such agreements and are
               included in the Company's cost of goods sold on an ongoing basis.


               The Company has in the past received and continues to receive
               royalties as a result of license agreements with unrelated
               companies that allow exclusive or nonexclusive rights to the
               Company's technology.


11. Employee
    Benefit Plan

               The Company has a contributory 401(k) savings plan for employees
               who work 30 hours or more each week, who are at least 21 years of
               age, and have a minimum of one year of service with the Company.
               The Company's contribution is determined annually by the Board of
               Directors and was approximately (in thousands) $85, $87 and $94
               for the years ended December 31, 2001, 2000 and 1999,
               respectively.

12. Fair Value of
    Financial
    Instruments

               None of the Company's financial instruments, which are current
               assets and liabilities that could be readily traded, are held for
               trading purposes. The Company estimates that the fair value of
               all financial instruments at December 31, 2001, does not differ
               materially from the aggregate carrying values of its financial
               instruments recorded in the accompanying balance sheet.




                                      F-20

<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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


13. Recent
    Accounting
    Pronounce-
    ments

               In July 2001, SFAS No. 141, "Business Combinations" and SFAS No.
               142, "Goodwill and Other Intangible Assets" were issued. SFAS 142
               addresses financial accounting and reporting for acquired
               goodwill and other intangible assets. It requires, among other
               things, that companies no longer amortize goodwill, but instead
               test goodwill for impairment at least annually. SFAS 142 is
               required to be applied for fiscal years beginning after December
               15, 2001. According to the requirements of SFAS 142, the Company
               will no longer amortize the goodwill associated with its 1997 and
               1998 acquisitions and will begin to regularly assess its goodwill
               for impairment. The book value of goodwill related to these
               acquisitions at December 31, 2001 was (in thousands) $6,245.


               The FASB recently issued SFAS No. 143, "Accounting for Asset
               Retirement Obligations." This Statement, which amends SFAS No.
               19, establishes accounting standards for obligations associated
               with the retirement of tangible long-lived assets and the
               associated asset retirement costs. This Statement requires all
               entities with a legal obligation to retire tangible, long-lived
               assets to record the retirement costs as a liability on an
               entity's balance sheet. The effective date for this Statement is
               June 15, 2002. Management does not believe the adoption of
               Statement 143 will have any material effect on its financial
               statements since the Company does not hold title to any tangible
               assets which would have to be retired under a legal obligation.


               The FASB recently issued FASB Statement No. 144, "Accounting for
               the Impairment or Disposal of Long-Lived Assets". The new
               guidance resolves implementation issues related to FASB Statement
               No. 121, "Accounting for the Impairment of Long-Lived Assets and
               for Long-Lived Assets to be Disposed of". Statement 144 is
               effective for fiscal years beginning after December 15, 2001.
               Management does not believe the adoption of Statement 144 will
               have any material effect on its financial statements since
               goodwill is no longer required to be allocated to long- lived
               assets when testing for impairment.



                                      F-21

<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                      Notes to Consolidated Financial Statements
                                                                       Continued

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

14. Subsequent
    Event

               On January 16, 2002, in the United States Federal District Court
               for the District of Utah, a twelve member jury rendered a verdict
               that the KendalloLTP Softrans 4000 Intrauterine Pressure Catheter
               infringes the Company's United States Letters Patent No.
               4,785,822 for inventions relating to a "Disposable
               Intracompartmental Pressure Transducer." The jury awarded the
               Company $20,000,000 in damages. Entry of the final judgement is
               dependent upon the resolution of certain limited issues remaining
               to be decided by the court. As part of any final judgement that
               may be entered in the Company's favor, the Company intends to
               seek an injunction against the further marketing of KendalloLTP's
               infringing product, Softrans. The Company has received indication
               that KendalloLTP may appeal the decision.



                                      F-22