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, 2003.         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, including area code:   (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]

  State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was last sold, or the average bid and asked price of such common equity,
as of the last business day of the registrant's most recently completed second
fiscal quarter. As of June 30, 2003, the aggregate market value of the voting
and nonvoting common equity held by nonaffiliates of the registrant was
$86,897,000.

  The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 5, 2004, based on NASDAQ/NMS closing price: $106,259,000.

  The number of shares outstanding of the registrant's common stock as of
March 5, 2004: 4,482,628


                       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.

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                                          INDEX TO FORM 10-K


                                                                                                  PAGE
<S>  <C>       <C>                                                                             <C>
PART I
     Item 1.   Business  .........................................................................  1

     Item 2.   Properties  ......................................................................  12

     Item 3.   Legal Proceedings  ...............................................................  12

     Item 4.   Submission of Matters to a Vote of Security Holders  .............................  12

PART II
     Item 5.   Market for the Registrant's Common Equity and Related Stockholder Matters  .......  13

     Item 6.   Selected Financial Data  .........................................................  14

     Item 7.   Management's Discussion and Analysis of Financial Condition and Results of
                 Operations  ....................................................................  16

     Item 7A.  Quantitative and Qualitative Disclosures about Market Risk  ......................  25

     Item 9.   Changes in and Disagreements with Accountants on Accounting and
                 Financial Disclosure  ..........................................................  26

     Item 9A.  Controls and Procedures  .........................................................  27

PART III
     Item 10.  Directors and Executive Officers of the Registrant  ..............................  28

     Item 13.  Certain Relationships and Related Transactions  ..................................  28


PART IV
     Item 14.  Exhibits, Financial Statements Schedules, and Reports on Form 8-K  ...............  29

Index to Consolidated Financial Statements  ....................................................  F-1


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                                     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 (90) 647-3932. 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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<PAGE>


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:

    - 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.

    - Introduced in 1987, INTRAN was the first disposable 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.

    - 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, a viewport 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. A soft bell-shaped cup
design should be preferred for fetal well-being in low or outlet fetal stations
with occiput anterior presentations, which should represent more than 90% of the
cases where VAD is indicated. 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 VAD operative approach is used for



                                       2
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about 8-10% of all U.S. births, with forceps continuing to lose ground as the
alternative. 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.

Other Obstetrical Tools.
  AROM-COT(TM) is a finger cover with a patented prong design to rupture
maternal membranes with less patient pain and anxiety. MUC-X is an 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 respiratory hood that is used in the NICU to
administer oxygen to neonates and flush CO2 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(TM) 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.


                                       3
<PAGE>


  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 incorporate 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
babies, UTMD has added smaller diameter versions of its URI-CATH(R) and
NUTRI-CATH(R) products. In 2000, UTMD gained FDA premarketing clearance of a new
PICC family of products specifically designed to minimize trauma to the
critically ill neonate, named PICC-NATE(R). The PICC-NATE 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-Nate comes in two diameter sizes, two
types of venipuncture introducers, two hub configurations and the option of an
integral stylet that aides insertion. In early 2003, UTMD added a Tecoflex
polyurethane version 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.

  Other GESCO specialty products include a disposable peritoneal dialysis set
that is a pre-assembled, sterile, closed system, called DIALY-NATE(R); a
patented silicone oral protection device used to prevent palatal soft tissue
injury by orotracheal tubes, called PALA-NATE(R); and a lumbar sampling kit with
a tiny, specially-beveled needle for obtaining cerebral spinal fluid samples,
called MYELO-NATE(R).

  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, and a needleless version.

  In 2004, UTMD will continue to improve and expand its neonatal product line,
seeking to reinforce a reputation as having the most developmentally-friendly
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.

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 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


                                       4
<PAGE>


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 specialty electrodes. For example, the Company
introduced a patented conization electrode for deep endocervical disease called
C-LETZ(R), designed to limit the removal of healthy tissue margins 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.
  UTMD has FDA clearance to market its electrosurgical system and tools for use
in general surgery applications, including dermatology, plastic surgery and
otolaryngology. UTMD recently introduced a new product line of ultra-fine tipped
microdissection needles, called OptiMicro(TM) Needles. The new electrosurgical
needles are 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 a surgical
office setting. Other electrosurgery tools and accessories include disposable
electrosurgical pens, dispersive pads, footswitches, filter packs, speculums,
retractors, forceps, tenacula and hooks. 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, 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.


                                       5
<PAGE>


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 without the need for dilitation, and
without an increase in patient discomfort.

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 and market 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 accuracy, 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
clinical 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 clinical benefits. Access to the clinical
decision-makers is critical to the Company's success.


                                       6
<PAGE>


  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 consolidating marketplace where many suppliers are
trying to degrade product differences.

  For U.S. hospitals, which represent about 60% of UTMD's product sales,
marketing efforts are complicated and fragmented. Although UTMD's focus is with
clinicians who take responsibility for obtaining optimal patient care outcomes,
other people are generally administratively responsible for hospital purchasing
decisions.

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 come 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 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.

  In the United States, UTMD sells its products primarily through 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 2004, the U.S. direct
sales force is comprised of both outside territory representatives operating
remotely geographically, as well as inside representatives who operate by
telephone. Direct representatives are trained to understand the medical
procedures being performed within UTMD's clinical focus. Through the use of its
one-on-one contacts with physicians and other clinicians directly involved in
patient care, the direct sales force positions UTMD to gain market leadership
with solutions to clinical problems. In addition to its direct representatives,
UTMD utilizes third party clinical specialists to augment its training programs.

  When hospital customers request it, UTMD provides its products through
national distribution companies, also known as Med/Surg distributors. Sales to
Med/Surg distributors currently comprise about 10% of total domestic sales. In
contrast, seven years ago, national distributors and independent distributors in
the U.S. represented more than 65% of UTMD's direct domestic Ob/Gyn business.

  In addition to the above traditional distribution methods, UTMD encourages
customers to take advantage of fast and easy direct online ordering at
www.order.utahmed.com. UTMD's website provides all the convenience of e-commerce
expected of other sites. UTMD's experience to date with third party
Internet-based exchanges suggests that they do not warrant a significant
investment of UTMD resources until customers show more interest in their use.

  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



                                       7
<PAGE>


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.

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 or exclusionary contracts of
GPOs.

  UTMD's current product development projects are in three areas of focus: 1)
obstetrics/ fetal monitoring, 2) neonatal intensive care, and 3) specialized
procedures for the assessment and treatment of cervical/uterine disease. UTMD
has had 7 patents issued in the last five years. Internal product development
expenses are expected to be in the range of 1-2% of sales in 2004. In 2003, UTMD
spent $288 (in thousands) on internal product development activities, or 1.1% of
sales. In addition, the Company invested $120 in new technology rights which
have not resulted in a marketable product yet. In 2002 and 2001, internal new
product development expenses were $285 (1.0% of sales) and $364 (1.3% of sales),
respectively.

EMPLOYEES
---------

  At December 31, 2003, the Company had 211 employees. The average tenure of all
of UTMD's employees is about eight 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 wish 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 code of conduct and 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. All employees participate in


                                       8
<PAGE>


performance-based bonus programs. None of the Company's employees is represented
by labor unions or other collective bargaining groups.


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

  The Company owns or exclusively licenses thirty-one unexpired patents, and is
the licensee of certain other technology. There can be no assurance, however,
that patents will be issued with respect to any pending applications, that
marketable products will result from the patents or that issued patents can be
successfully defended in a patent infringement situation.

  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
to the extent that it can afford to do so.

  In January 2002, a jury in the U.S. Federal District Court for the District of
Utah rendered a verdict in favor of UTMD that the Tyco/KendalloLTP Softrans 4000
Intrauterine Pressure Catheter literally infringes UTMD's 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. In September 2002, the
US Federal District Court issued a formal judgment awarding UTMD approximately
$23 million in damages and accrued interest. Additional damages for infringing
product sold by Tyco after the January verdict were to be determined by the
Court at a later date. In addition, the Court issued a permanent injunction
against Tyco prohibiting the manufacturing, marketing, selling and/or otherwise
distributing of the 4000 Softrans IUPC for the duration of UTMD's patent.
Tyco/Kendall filed an appeal to the decision. In December 2003, the United
States Court of Appeals for the Federal Circuit upheld in entirety the District
Court's judgment. In January 2004, UTMD received $31 million from Tyco/Kendall,
including post judgment augmented damages and interest. One other patent
infringement lawsuit where UTMD is plaintiff is 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 2003, ongoing royalties included in cost of
goods sold were $3 (in thousands). Other royalties have been previously paid as
a lump sum, or are incorporated into the cost of supplied components which
practice certain patents of third parties. 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 2003,
the Company received $450 in royalty income, compared to $450 in 2002 and $452
in 2001. Non-operating income remains a significant portion of UTMD's earnings.
UTMD's future financial performance also depends on the marketing ability of
other companies that license UTMD's technology.

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

  UTMD'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 effectiveness of the device that is acceptable in
content to the FDA.



                                       9
<PAGE>

  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 (QSR).

  In 2003 the FDA began withholding export certificates from UTMD, which
action was part of an unresolved disagreement regarding the issuance of a QSR
Warning Letter by FDA to UTMD in September 2001. Export certificates are
non-binding letters assuring other countries that a company is in compliance
with FDA regulations. The export certificates have now been withheld for many
months while UTMD distributes its products in the U.S. without FDA interference.
The Company strongly believes that there is no reasonable basis for this
decision, and has filed two lawsuits in U.S. Federal Court, District of Utah, in
an effort to rectify the situation.

  In 1994, UTMD received certification of its quality system under the ISO
9001/EN 46001 standards ("ISO" stands for "International Organization of
Standardization") which was maintained until December 2003. Because the ISO
standards are in perpetual modification, UTMD has remained on a continuous
periodic audit schedule by its independent notified body in order to stay
abreast of international regulatory standards. In October 2003, UTMD's Utah
facility was certified under the more stringent ISO 13485 standard for medical
devices. UTMD's Ireland facility is now certified under ISO 13488. 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 for conformance to specifications.

EXPORTS
-------

  Revenues from customers outside the U.S. in 2003 were (in thousands) $5,872
(22% of total sales), as compared to $5,735 (21% of total sales) in 2002, and
$5,202 (19% of total sales) in 2001. Blood pressure monitoring products
represented 67% of international sales in 2003, compared to 70% in 2002 and 67%
in 2001. International Ob/Gyn and neonatal product sales were $1,930 in 2003,
compared to $1,743 in 2002 and $1,718 in 2001. For financial information by
geographical area, please see Notes 1,4 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 construction of a 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.


                                       10
<PAGE>


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 both January 1, 2004 and January 1,
2003.

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. 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 25 year history.

  UTMD is self-insured for product liability risk and reserves funds against its
current performance on an ongoing basis to provide for its 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. In the
last ten years, UTMD has been named as a defendant, along with each attending
physician and hospital, in four product liability lawsuits. All four were
related to operative vaginal deliveries where a VAD product was used. The VADS
products did conform to specifications. UTMD was ultimately dismissed as a
defendant in the lawsuits, and legal costs were not material to performance.
During the same period of time, no other UTMD products were the subject of a
product liability lawsuit. There are currently no product lawsuits in which UTMD
is a defendant.

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.


                                       11
<PAGE>


  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.


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 fabrication of 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 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 GOVERNMENT REGULATION section on pages 9-10 for a
description of a legal action UTMD filed beginning in 2003 against the FDA.


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.




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                                       12
<PAGE>

                                    PART II

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

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

                           2003                               2002
                    High          Low                  High          Low
                    ----          ----                 ----          ----
1st Quarter        $19.35        $17.41               $16.36        $12.51
2nd Quarter         20.87         18.10                16.35         14.90
3rd Quarter         24.99         20.05                17.04         13.48
4th Quarter         26.30         21.00                20.07         16.55

Stockholders.
  The approximate number of beneficial stockholders of UTMD's common stock as of
March 5, 2004 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 current cash and investment balances and 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]

                                       13
<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, 2003, are derived from the audited
financial statements and notes 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
included elsewhere in this report.

<TABLE>
<CAPTION>
                                         Year Ended December 31
                                         ----------------------

                                      2003           2002            2001           2000           1999
                                      ----           ----            ----           ----           ----
<S>                                <C>            <C>             <C>            <C>            <C>
Net Sales                          $27,137        $27,361         $26,954        $27,193        $29,444
Net Income                          20,761          7,165           5,934          5,373          5,468
Earnings Per Common Share -
(Diluted)                             4.25           1.36            1.14            .90            .76
Total Assets                        49,694         23,387          23,572         25,423         27,756
Working Capital                     21,405          5,437           5,400          5,418          5,877
Long-term Debt                           0          4,956           2,501         10,000          5,934
Cash Dividends Per Common Share       None           None            None           None           None


                                         Quarterly Data for 2003
                                         -----------------------

                                        First Quarter      Second Quarter     Third Quarter     Fourth Quarter
                                        -------------      --------------     -------------     --------------
Net Sales                                      $6,877              $6,840            $6,761             $6,659
Gross Profit                                    3,977               4,033             3,979              3,902
Net Income                                      1,788               1,837             1,861             15,274
Earnings Per Common Share -
(Diluted)                                         .37                 .38               .38               3.10

                                         Quarterly Data for 2002
                                         -----------------------

                                        First Quarter      Second Quarter     Third Quarter     Fourth Quarter
                                        -------------      --------------     -------------     --------------
Net Sales                                      $6,705              $6,800            $7,005             $6,854
Gross Profit                                    3,816               3,917             4,079              3,951
Net Income                                      1,712               1,785             1,883              1,785
Earnings Per Common
Share (Diluted)                                   .32                 .33               .36                .35


                                                   14
</TABLE>
<PAGE>


EXTRAORDINARY ITEM
------------------

In 4Q 2003, UTMD recognized extraordinary non-operating income of $24,884 from
damages awarded and upheld on appeal as a result of a patent infringement
lawsuit with Tyco International. Associated with this non-operating income were
G&A Expenses (included in Operating Expenses) of $2,208. These expenses were due
to bonuses and additional litigation expenses. The impact of the extraordinary
event on UTMD's 12-31-03 Balance Sheet was $24,884 in receivables (Current
Assets) and $11,458 in accrued liabilities (Current Liabilities) resulting from
accrued income taxes, litigation expense reserve and management bonuses. In
addition, year- end Shareholders' Equity was $13,426 higher than would otherwise
have been the case without the extraordinary event.

In the following tables, financial data on the previous page have been adjusted
to eliminate the extraordinary items. Quarterly data for 2002 is not included
below since there is no adjustment applicable to 2002.

<TABLE>
<CAPTION>
                                    Year Ended December 31 (adjusted)
                                    ---------------------------------

                                      2003           2002            2001           2000           1999
                                      ----           ----            ----           ----           ----
<S>                                <C>            <C>             <C>            <C>            <C>
Net Sales                          $27,137        $27,361         $26,954        $27,193        $29,444
Net Income                           7,335          7,165           5,934          5,373          5,468
Earnings Per Common Share -
(Diluted)                             1.50           1.36            1.14            .90            .76
Total Assets                        24,810         23,387          23,572         25,423         27,756
Working Capital                      7,979          5,437           5,400          5,418          5,877
Long-term Debt                           0          4,956           2,501         10,000          5,934
Cash Dividends Per Common Share       None           None            None           None           None


                                   Quarterly Data for 2003 (adjusted)
                                   ----------------------------------

                                First Quarter      Second Quarter     Third Quarter     Fourth Quarter
                                -------------      --------------     -------------     --------------
Net Sales                              $6,877              $6,840            $6,761             $6,659
Gross Profit                            3,977               4,033             3,979              3,902
Net Income                              1,788               1,837             1,861              1,848
Earnings Per Common Share -
(Diluted)                                 .37                 .38               .38                .38
</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.

In management's opinion, the extraordinarily favorable event in 4Q 2003 of
recognizing the Tyco patent infringement damages award has an impact on the
financial statements that does not allow a meaningful comparison of financial
ratios and other financial measures with prior periods. Consequently, Item 7
(MD&A) adjusts out the following items related to the extraordinary event, prior
to making comparisons:

BALANCE SHEET                                        adjustment
-------------                                        ----------
Litigation receivable                                 (24,884)
Total current assets                                  (24,884)
Total assets                                          (24,884)

Accrued expenses - Income taxes payable                (9,250)
Accrued expenses - Reserve for litigation costs        (1,337)
Accrued expenses - Payroll and payroll taxes             (871)
Total current liabilities                             (11,458)
Total liabilities                                     (11,458)
Stockholders' Equity                                  (13,426)

INCOME STATEMENT
----------------
Extraordinary item - after tax gain from litigation   (13,426)
  Note: Income statement comparisons which follow, including earnings per share,
  are "before extraordinary item".

CASH FLOW STATEMENT                                  adjustment
-------------------                                  ----------
Net income                                            (13,426)
Litigation receivable                                  24,884
Accrued expenses                                      (11,458)

Productivity of Assets and Working Capital.
  a) Assets. Year-end 2003 total assets (adjusted per above) were $24,810,
compared to $23,387 in 2002. Because total assets increased while sales were
slightly lower relative to 2002, UTMD's total asset turns decreased from 1.2 to
1.1. Ending 2003 current assets of $9,018 were higher than 2002 ending current
assets of $7,757 primarily because the elimination of the line of credit balance
in 3Q 2003 allowed a cash and investments build-up in 4Q of about $1,200
compared to the end of 2002, while other current asset categories netted out to
remain about the same. Ending receivables were about $200 higher and ending
inventory was about $200 lower. Net property and equipment (PP&E) increased $114
because of the net increase in dollar-valued Ireland PP&E compared to the end of
2002 of about $750, representing about a 20% change in the U.S. Dollar
(USD)/EURO conversion rate. 2003 total PP&E depreciation of $910 exceeded new
purchases of $272. Net intangible assets increased $47 because amortization was
offset by $121 in new intellectual property investment. After the 2002 adoption
of FASB Rule No. 142, UTMD suspended amortizing goodwill from previous
acquisitions. Year-ending 2003 net intangible assets were 27% of total assets,
compared to 29% at year end 2002. In 2004, asset turns will decrease because of
continued cash build-up, unless UTMD makes a substantial acquisition,
repurchases stock or takes some other action that consumes cash. Depreciation of
fixed assets should continue to exceed new purchases. Net intangible assets may
change as the result of an acquisition or a determination that current goodwill
is impaired, although the latter seems unlikely at this time. 2004 total asset
turns will depend primarily upon what management can achieve in utilizing excess
cash balances.


                                       16
<PAGE>


  Except for the Oregon facility involved as part of the 1997 CMI acquisition
and a portion of UTMD's Midvale parking lot, the Company owns its PP&E assets.
PP&E assets are comprised of Utah and Ireland manufacturing facilities, molds,
production tooling and equipment, test equipment, computer/ communications
equipment and software. Net PP&E in the U.S. decreased $508 due to depreciation
in excess of purchases. In Ireland, PP&E increased $622, despite no significant
new asset purchases and depreciation expense of $153 because of the weaker USD.
With slightly lower consolidated sales and higher PP&E in USD terms, 2003 PP&E
turns decreased to 3.0 from 3.1. The current book value of consolidated PP&E is
38% of acquisition cost. Management believes that PP&E is in good working order
and capable of supporting increased sales activity. Going forward, financial
performance should be enhanced by lower rates of depreciation and continuing
higher PP&E turns.

  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,
2003, the goodwill on the balance sheet has been reduced by 27% from the
acquisition price as a result of UTMD using previous GAAP through 2001 for the
purchase method of acquisition accounting. UTMD's future income statement
performance could be affected in the case of impairment of the existing
goodwill. The acquired 1998 Gesco neonatal products and 1997 CMI products
continue to be viable parts of UTMD's overall business activities, representing
22% of total sales in 2003. Net goodwill on the December 31, 2003 balance sheet
is 23% of 2003 sales. UTMD does not expect its goodwill intangible assets to
become impaired in the foreseeable future.

   Average inventory turns decreased in 2003 to 3.3 from 3.4 because average
inventory balances remained about the same as 2002 while sales declined
slightly. The 2003 ending inventory balance was about $100 below the year's
average. Management continues to target 4.0 average inventory turns as its
objective, and believes inventory turns will improve in 2004. Year-ending 2003
accounts receivable (A/R) balances increased 8%. Calculated average days in A/R
were 45 on December 31, 2003 based on 4Q 2003 shipment activity. This is well
within management's objective of 55 days. A/R over 90 days from invoice date
were about 4% of total A/R at year end, compared to 7% at year-end 2002. The
Company believes these older A/R are collectible or within its reserve balances
for uncollectible accounts.

  Working capital at year-end 2003 was $7,979 compared to $5,437 at year-end
2002 because in addition to the increase in cash and investment balances of
about $1,200, current liabilities at the end of the year were about $1,300
lower. As a result, UTMD's Current Ratio improved to 8.7 from 3.3. 2004 working
capital balances and current ratio will depend primarily upon the timing and
extent of management's expected utilization of excess cash.

  b) Liabilities. In the years 2002-2003, 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. At the end of 2003,
UTMD's total debt ratio decreased to 7% from 33% at the end of 2002 primarily
because the line-of-credit balance was paid off. In 3Q 2003, UTMD retired the
debt associated with its November 2002 tender offer under which it repurchased
503 thousand shares at a cost of $8.6 million. Total shares repurchased in 2002
including the tender offer were 721 thousand at a cost of $11.8 million. In
2003, in addition to eliminating the debt balance from financing the 2002 share
repurchases, UTMD repurchased 97 thousand shares in the open market at a cost of
$2.2 million. UTMD's total debt ratio in 2004 will depend on any financing
required to continue to repurchase shares or make acquisitions. Without
requirement for any of those financing activities, the total debt ratio due to
normal current liabilities should be in the range of 10%.

Results of Operations.

  a) Revenues. Global consolidated sales decreased about 1% in 2003 compared to
2002. Foreign (international) sales increased 2% and U.S. (domestic) sales
declined 2%.

                                       17
<PAGE>


  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 domestic sales, 2003 direct sales
represented 93% compared to 94% in 2002 and 92% in 2001. The remaining 7% of
domestic sales in 2003 were OEM sales. Domestic direct sales represented 73% of
global consolidated sales in 2003 compared to 74% in both 2002 and 2001.

  International sales in 2003 were 22% of global consolidated sales compared to
21% and 19% in years 2002 and 2001 respectively. In the first half of the year,
international sales had increased 12% primarily helped by a weaker U.S. Dollar.
In the second half, a decision by the FDA to withhold export certificates from
UTMD probably contributed to an international sales decline of 6%. Of the 2003
foreign sales, 58% were made in Europe, the same as in both 2002 and 2001.
Ireland operations shipped 63% of international sales (in USD terms) in 2003
compared to 59% in 2002 and 54% in 2001. Shipments, including intercompany from
UTMD Ltd. (Ireland) were down 2% in Euro terms, and up 16% in USD 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 providing 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, and subcontract molded parts 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 were $11,435 in 2003 compared to $11,977
in 2002 and $12,276 in 2001. Of the $542 decline in total obstetrics sales, $252
was from lower sales of vacuum-assisted delivery systems (VADS), a 15% decline,
and $237 from lower Intran Plus sales, a 2% decline. The lower VADS sales
resulted primarily from a change in obstetrics practice that favors abdominal
operative deliveries over vaginal operative deliveries because of medical
malpractice litigation risk. Lower obstetrics sales in general resulted from
increased competition including product bundling agreements with U.S. hospital
administrators. Despite the decline in utilization, 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 use of the
procedure. Cheaper priced, less clinically-effective products represent
significant competition where hospital administrators are constrained by GPO
contracts or may not take the total cost of care into consideration, including
increased risk of complications and utilization rates. International obstetrics
sales increased to $665 in 2003 from $613 in 2002.

  2. Consolidated global gynecology/ electrosurgery/ urology product sales were
$5,324 in 2003 compared to $5,271 in 2002 and $4,924 in 2001. International
sales in this category increased 19%. A number of UTMD products in this
fragmented category are patented, so sales should continue to grow as physicians
learn more about their advantages.



                                       18
<PAGE>


  3. Consolidated global neonatal product sales were $4,142 in 2003 compared to
$3,852 in 2002 and $3,801 in 2001. International neonatal product sales
decreased 16%.

  4. Worldwide blood pressure monitoring and accessories (BPM) sales were $6,236
in 2003 compared to $6,261 in 2002 and $5,953 in 2001. Domestic OEM sales in
this category, which includes plastic molded components used in other industries
affected by the weak U.S. economy, increased 2%.

  Looking forward to 2004, UTMD expects to maintain or modestly increase sales
for its established products even though markets for its products will remain
intensely competitive; despite the fact that administrative barriers in the U.S.
that prevent smaller companies from fairly competing for hospital sales have not
been significantly diminished; and despite disappointment in U.S. FDA
administrators who we believe have inappropriately withheld export certificates
to foreign governments since 2003.

  b) Gross Profit. UTMD's average 2003 gross profit margin (GPM), the surplus
after costs of manufacturing, inspecting, packaging, sterilizing, and shipping
products (COGS) are subtracted from net revenues, was a Company record 58.6%
compared to 57.6% in 2002 and 57.1% in 2001. UTMD continued to experience a
favorable shift from lower margin products to higher margin products as a
percentage of sales, lower depreciation expense on fixed assets and improved
efficiencies in overhead costs.

  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 significant expenses of sales and marketing.
Because of UTMD's small size and period-to-period fluctuations in OEM business
activity, allocations of 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 medical device marketplace. Management expects
to achieve its GPM target again in 2004. 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 and processes to reduce costs.
Expected unfavorable influences are continued competitive pressure on pricing
and higher wage rates.

  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. 2003 operating
profit increased 2% to $10,722 compared to $10,542 in 2002, and $9,278 in 2001.
UTMD's operating profit margin (operating profits divided by total sales) was
also a Company record in 2003. The 2003 operating profit margin of 39.5%
compared to 38.5% in 2002 and 34.4% in 2001. Operating expenses as a percentage
of sales were 19.1% in 2003 and 2002, compared to 22.7% in 2001. A major portion
of the decrease in 2002 from 2001 was due to UTMD's required GAAP adoption of
SFAS Statement No. 142, under which the Company recognized no goodwill
amortization expense (GWA) in 2003 or 2002. GWA was $569 in 2001. For
comparison, $569 represents 2.1% of 2003 and 2002 sales. Looking forward to
2004, UTMD expects to continue an outstanding operating margin similar to 2003,
primarily as a result of an increase in sales coupled with holding operating
expenses about the same. In order to hold operating expenses the same, UTMD
expects to be able to offset an increase in S&M expenses with a decrease in
litigation expenses (G&A expenses).



                                       19
<PAGE>


        i) S&M expenses: 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, processing orders and funding
GPO fees. Because UTMD sells internationally through third party distributors,
its S&M expenses are predominantly needed for U.S. business activity where it
sells directly to clinical users. The largest component of S&M expenses is the
cost of directly employing representatives that provide coverage across the U.S.
Year 2003 S&M expenses decreased to $2,364 from $2,472 in 2002 and $2,773 in
2001, as UTMD continued to improve the productivity of its direct sales force.
As a percent of total sales, S&M operating expenses were 8.7% in 2003, 9.0% in
2002 and 10.3% in 2001. Looking forward, UTMD plans higher S&M expenses during
2004 due to Group Purchasing Organization fees, increased advertising expenses
and new marketing initiatives, but intends to manage S&M expenses to remain less
than 10% of total sales.

        ii) R&D expenses: R&D expenses include the costs of investigating
clinical needs, developing innovative concepts, testing concepts for viability,
validating methods of manufacture, completing regulatory documentation and other
activities required for design control, responding to customer requests for
product enhancements, and assisting manufacturing engineering on an ongoing
basis in developing new processes or improving existing processes. Internal R&D
expenses were $288 in 2003, $285 in 2002 and $364 in 2001. As a percent of
sales, 2003 and 2002 R&D expenses were 1.0% compared to 1.3% in 2001. In 2003,
the efforts of R&D aided UTMD's continued GPM improvements. In addition to new
products still being developed, a number of existing products were enhanced or
updated. In 2004, UTMD will opportunistically employ R&D resources to invest
where management anticipates it can get a significant return with future new
product sales. 2004 R&D expenses are again likely to be in the range of 1%-2% of
sales.

     iii) G&A expenses: G&A expenses include the "front office" functional costs
of executive management, finance and accounting, corporate information systems,
human resources, shareholder relations, legal, risk management and protection of
intellectual property. In addition to employing the personnel required to
coordinate or manage the preceding functions, G&A expenses include outside
director costs, outside legal counsel, independent accounting audit fees, 401(k)
administration, NASDAQ exchange fees, write-offs of uncollectible receivables,
business insurance costs and corporate contributions to charitable
organizations. Prior to 2002, G&A expenses also included GWA. G&A expenses were
$2,517 in 2003, $2,464 in 2002 and $2,978 in 2001. As a percent of sales, G&A
expenses were 9.3% in 2003, 9.0% in 2002 and 11.1% in 2001. All three years
included considerable litigation expenses relating to the patent infringement
lawsuit with Tyco/Kendallo LTP. In addition, 2002 and 2003 include increased
G&A expenses to comply with required governance activities mandated by the
Sarbanes Oxley Act of 2002.

  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 from investing the
Company's excess cash, and gains or losses from the sale of assets, offset by
non-operating expenses which includes interest expenses and bank fees.
Non-operating income was $454 in 2003, $453 in 2002 and $202 in 2001. Royalties
received were $450 in all three years. Future royalties may vary depending on
the success of other companies in selling products licensed by UTMD, and the
remaining life of the applicable patents. Interest expense associated with the
line-of-credit which reduced non-operating income was $47 in 2003, $36 in 2002
and $370 in 2001. Interest costs in 2003 and 2002 were lower compared to 2001
because of significantly lower average LOC debt balances, and because interest
rates were lower after 2001. UTMD expects non-operating income in 2004 to be
higher than 2003 because of interest income on excess cash balances, but this
will depend on the timing of utilization of the excess cash as well as
prevailing interest rates.

  Earnings before income taxes (EBT) result from adding UTMD's non-operating
income to its operating profits. EBT were $11,176 in 2003, $10,996 in 2002 and
$9,480 in 2001. EBT in 2003 were 2% higher than in 2002 although sales were 1%
lower because of record gross profit margins. Given the projections noted above,
management is targeting 2004 EBT about the same as 2003 EBT (excluding the
extraordinary non-operating income and operating expenses associated with the
Tyco patent infringement lawsuit).



                                       20
<PAGE>


  e) Net Income, EPS and ROE. Net income is EBT minus income taxes. Net income
increased 2% to $7,335 in 2003 from $7,165 in 2002. 2001 net income was $5,934.
The growth rate in Net Income was slightly higher than EBT because UTMD's 2003
effective tax rate was lower than in 2002. The (adjusted) effective income tax
rate in 2003 was 34.4% compared to 34.8% in 2002 and 37.4% in 2001. Tax on the
extraordinary item was 40.8%, resulting in a combined rate of 38.7%. Year to
year fluctuations in the tax rate have resulted from 1) the use of a foreign
sales corporation, 2) differences in distribution of state income taxes, 3)
differences in profits of the Ireland subsidiary which is taxed at a 10% rate on
exported manufactured products, 4) increases in marginal tax rates for EBT above
$10 million, and 5) other factors such as R&D tax credits and the timing of
actual versus accrued litigation expenses. The Company eliminated its foreign
sales corporation in 2002. Management expects that UTMD's consolidated income
tax rate may be higher in 2004 compared to 2003, but this is difficult to
predict.

  UTMD's normal net income expressed as a percentage of sales ranks in the top
performance tier of all U.S. publicly-traded companies at 27.0%, 26.2% and 22.0%
for years 2003, 2002 and 2001, respectively. This profitability performance
factor 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 into consideration stock option awards which
are "in the money" - have exercise prices below the current period's weighted
average market value). Diluted 2003 EPS were $1.50, up 10% from $1.36 in 2002.
In 2001, EPS were $1.14 with sales about the same as 2003. The combination of
higher profitability and fewer outstanding shares accounted for the substantial
increase in EPS. UTMD management believes shareholder value is improved by
consistently increasing EPS. In the last six year period since 1997, UTMD has
increased EPS at an annually compounded rate of 20% per year. The end of 2003
weighted average number of diluted common shares (the number used to calculate
diluted EPS) were 4,885 (in thousands) compared to 5,263 shares in 2002 and
5,210 shares in 2001. Dilution for "in the money" unexercised options for the
year 2003 was 359 (in thousands) shares compared to 350 in 2002, and 191 in
2001. The total number of unexercised options outstanding declined about 23% in
2003, following a 9% decline in the prior year. Dilution has increased despite
much fewer outstanding option shares due to UTMD's higher share price in the
stock market. Actual outstanding common shares as of December 31, 2003 were
4,544,000.

  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 applicable period. ROE in 2003 was 38% compared
to 42% in 2002 and 39% in 2001. 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 was primarily
responsible for continued outstanding ROE result in 2003. 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 31% per year over the last 18 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 2004 primarily by accomplishing
another record year in profitability, assuming UTMD effectively deploys its
excess cash resulting from the extraordinary event.


Liquidity and Capital Resources.
  Cash flows. Cash (and investment) balances were $1,484 at the end of 2003,
compared to $285 at the end of 2002.


                                       21
<PAGE>


  Net cash provided by operating activities, including adjustments for
depreciation and other non-cash operating expenses, along with changes in
working capital, totaled $8,335 in 2003 compared to $8,656 in 2002 and $7,860 in
2001. Cash provided by operating activities demonstrates the company's continued
control of operating performance aided by a $1,108 tax benefit attributable to
exercise of employee options in 2003, compared to the same benefit in 2002 of
$354 and in 2001 of $60.

  The increase in the Company's use of cash for investing activities was from
purchases of short term investments, in an effort to make prudent use of excess
cash. The Company realized $41 in gains from the sale of investments.

  In 2003, UTMD received $882 and issued 197,432 shares of stock upon the
exercise of employee and director stock options. Employees and directors
exercised a total of 298,852 option shares in 2003, with 101,420 shares
immediately being retired as a result of the individuals trading the shares in
payment of the exercise price of the options and related tax withholding
requirements. UTMD paid $555 to meet those tax withholding requirements. UTMD
repurchased 96,900 shares of stock in the open market at a cost of $2,240 during
2003. Option exercises in 2003 were at an average price of $8.26 per share.
Share repurchases in the open market were at an average cost of $23.12 per
share, including commissions and fees. In 2002, the Company received a net
$1,082 from issuing 135,362 shares of stock on the exercise of employee stock
options, including 1,727 shares retired upon an employee trading those shares in
payment of the stock option exercise price.

  During 2003, UTMD made repayments of $4,956 on its note payable, which was the
remaining balance at the end of 2002, while receiving $0 in proceeds from the
note (line of credit). In 2002, UTMD made loan repayments of $2,501 and received
$4,956 in proceeds from the note to finance the November 2002 tender offer. The
2002 loan proceeds were used to pay for UTMD share repurchases as the result of
a tender offer.

  Management believes that future income from operations and effective
management of working capital will provide the liquidity needed to finance
growth plans. Planned 2004 capital expenditures are expected to be approximately
$600 to keep facilities, equipment and tooling in good working order. In
addition to capital expenditures, UTMD plans to use cash in 2004 for selective
infusions of technological, marketing or product manufacturing rights to broaden
the Company's product offerings; for continued share repurchases if the price of
the stock remains undervalued; and if available for a reasonable price,
acquisitions that may strategically fit UTMD's business and are accretive to
performance. The revolving credit line will continue to be available for
liquidity when the timing of acquisitions or repurchases of stock require a
large amount of cash in a short period of time in excess of existing cash and
investment balances.

  Management plans to use the cash from the Tyco damages in one or a combination
of the following: 1) to make investments in new technology, 2) to acquire a
product line that will help spur revenue growth and better utilize UTMDs
infrastructure, and/or 3) to buy back UTMD shares in the open marketplace.


                  [Remainder of Page Intentionally Left Blank]

                                       22
<PAGE>


Contractual Obligations and Contingent Liabilities and Commitments
   The following is a summary of UTMD's significant contractual obligations and
commitments as of December 31, 2003 (in thousands):


     Contractual Obligations and              Less                        More
             Commitments                     than 1     1-3     3-5      than 5
             -----------            Total     year     years    years    years
                                   -------   -------   ------   ------  ------
  Long-term debt obligations ..... $    -    $     -   $   -    $   -   $    -
  Operating lease obligations.....   1,065        66      111      111     777
  Purchase obligations (1)........   2,720     2,720       -        -        -
                                   -------   -------   ------   ------  ------
        Total..................... $ 3,785   $ 2,786   $  111   $  111  $  777
                                   =======   =======   ======   ======  ======

  (1) The majority of UTMD's purchase obligations constitute raw materials for
use in its manufacturing operations. UTMD has the right to make changes in,
among other things, purchase quantities, delivery schedules and order
acceptance.

Off-Balance Sheet Arrangements
   UTMD's only off-balance sheet arrangements are operating leases on its Oregon
manufacturing facility and on a portion of the parking lot adjacent to its Utah
facilities. Details on those arrangements are provided above and in Note 6 on
page F-17.

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
from normal operations in 2003 was $12.2 million, or 45% as a ratio of sales.
UTMD's EBITDA has averaged 40% of sales over the last five years. The
extraordinarily strong cash generation performance resulted from a combination
of outstanding operating profit performance and royalty income from others' use
of UTMD's technology. With sales and other performance factors approximately the
same as in 2003, management projects EBITDA about the same in 2004.

  Please note that EBITDA is not defined or described by Generally Accepted
Accounting Principles (GAAP). 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 2004 UTMD plans to
  1) clear up its apparently unresolved QSR status with the U.S. FDA that has
hindered international sales, slowed new product development, stymied business
development and consumed an inordinate amount of human capital since 2002;
  2)  continue outstanding operating performance;
  3) actively look for new acquisitions to facilitate sales growth; and
  4) utilize current excess cash balances in shareholders' best long term
interest.


  The following factors provide optimism that 2004 will demonstrate better top
line growth:

                                       23
<PAGE>


1) the continued scrutiny by government agencies into the anti-competition,
anti-innovation and anti-good healthcare effects of bundling agreements and
exclusive agreements for physician preference products by hospital
administrators.
2) recent supply agreements with five of the top seven hospital GPOs.
3) continued improvements in a maturing U.S. direct sales force.
4) improvement in general economic conditions that have negatively affected U.S.
OEM activity.
5) elimination of unfavorable regulatory interference affecting export sales.

  UTMD will continue to focus on differentiating itself, especially from
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, without understanding the total picture
including complications and other less obvious costs.

  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 2003, UTMD again demonstrated a high positive cash flow reflected by
achieving record EBITDA performance of 45% of sales, managing working capital
effectively and keeping new capital expenditures below its rate of depreciation
of existing assets. UTMD's balance sheet is strong enough to finance an
acquisition in 2004 without issuing stock. In considering acquisitions, UTMD
looks to acquire successful companies that will enhance its specialist focus.
When UTMD acquires a company, it probably will be for cash, and with the idea
that it will be able to retain key resources that helped make the acquired
entity previously successful.

  Over the last six years, UTMD has made some significant accomplishments:
1) compounded EPS growth of 20% per year (not including receipt of patent
infringement damages); 2) two accretive acquisitions which now represent about
22% of the Company's business activity; 3) repurchase of 45% of the ownership of
the Company (including dilution of options) for $36 million (3.7 million net
shares at an average cost of $9.75 per share including commissions, other
repurchase costs and the difference between option exercise price and market
price for option shares exercised); and 4) a successful effort defending the
patent rights of UTMD's flagship product technology and core franchise of UTMD's
market identity, resulting in a $31 million damages award.

  Looking back, UTMD's EPS were up 10% in 2003, and the $26.14 ending share
price was up 37% relative to the end of 2002. The NASDAQ Composite, S&P 500
Index and DJIA were up, 50%, 29% and 25% respectively in 2003. With 2003 EPS of
$1.50 (excluding Tyco damages award), UTMD's year-end price to trailing earnings
ratio (PER) was 17, suggesting that a combination of PER expansion closer to the
medical device industry average and continued increases in EPS performance could
again provide excellent shareholder returns in 2004.

Accounting Policy Changes.
  In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." This new
statement changes the accounting for certain financial instruments that, under



                                       24
<PAGE>


previous guidance, issuers could account for as equity or classifications
between liabilities and equity in a section that has been known as "mezzanine
capital." It requires that those certain instruments be classified as
liabilities in balance sheets. Most of the guidance in SFAS 150 is effective for
all financial instruments entered into or modified after May 31, 2003. The
adoption of SFAS 150 did not have any impact on the Company's consolidated
financial statements.

  In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS 149 amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities under SFAS 133, "Accounting for
Derivative Instruments and Hedging Activities". This Statement is effective for
contracts entered into or modified after June 30, 2003, with certain exceptions,
and for hedging relationships designated after June 30, 2003, with certain
exceptions. The adoption of SFAS 149 did not have any effect on the Company's
consolidated financial statements.

  In January 2003, the FASB issued Interpretation 46, "Consolidation of Variable
Interest Entities" (FIN 46), which addresses consolidation by business
enterprises of variable interest entities. FIN 46 clarifies the application of
Accounting Research Bulletin No. 51, "Consolidated Financial Statements", to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 applies immediately to variable interest
entities created after January 31, 2003, and to variable interest entities in
which an enterprise obtains an interest after that date. It applies in the first
fiscal year or interim period beginning after June 15, 2003, to variable
interest entities in which an enterprise holds a variable interest that it
acquired before February 1, 2003. The Company has not identified and does not
expect to identify any variable interest entities that must be consolidated.

  In December 2002, the Financial Accounting Standards Board issued SFAS 148
"Accounting for Stock-Based Compensation - Transition and Disclosure - an
amendment of FASB Statement 123," which is effective for all fiscal years ending
after December 15, 2002. SFAS 148 provides alternative methods of transition for
a voluntary change to fair value based method of accounting for stock-based
employee compensation under SFAS 123 from intrinsic value based method of
accounting prescribed by Accounting Principles Board Opinion 25. SFAS 148 also
changes the disclosure requirement of SFAS 123, requiring a more prominent
disclosure of the pro-forma effect of the fair value based method of accounting
for stock-based compensation. The adoption of SFAS 148 by the Company did not
have any impact on the Company's consolidated financial statements and is not
expected to have any impact on future operations.


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. 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. The EURO, Irish Pound and other currencies have
been and are subject to exchange rate fluctuations that are beyond the control
of UTMD. The exchange rate for the EURO was .7958 and .9551 per U.S. Dollar as
of December 31, 2003 and 2002, respectively. The exchange rate for the Irish
Pound was .8869 per U.S. Dollar as of December 31, 2001. Please see Note 1, page
F-9. UTMD manages its foreign currency risk without separate hedging
transactions by converting currencies as transactions occur.



                                       25
<PAGE>


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.

   On November 2, 2003, the Audit Committee of the Board of Directors of UTMD
decided to engage Jones Simkins, P.C., Logan, Utah as independent accountant and
auditor to report on UTMD's financial statements for the year ended December 31,
2003, and to complete quarterly reviews in 2004.

   In conjunction with the new engagement, UTMD discontinued the services of
Tanner + Co., Salt Lake City, Utah as the Company's principal accountant to
audit and report on the Company's financial statements. Tanner + Co. had served
UTMD as external auditor for the last six years. Under SEC Regulation S-K, Reg
ss.229.304, the reason for the auditor change was dismissal, not resignation for
declining to stand for re-election.

   The report of Tanner + Co. on UTMD's financial statements consisting of
consolidated balance sheets as of December 31, 2002 and 2001, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the three years in the period ended December 31, 2002, did not contain an
adverse opinion or disclaimer of opinion and was not qualified or modified as to
audit scope or accounting principles. In addition to acting as UTMD's principal
accountant, Tanner + Co. prepared UTMD's tax filings for the prior nine years
and its quarterly reviews since such reviews have been required by SEC policies.
Russell Brennan Keane, Athlone, Ireland has audited UTMD's Ireland subsidiary,
Utah Medical Products Ltd., for the prior five years.

   In connection with the Company's two most recent fiscal year audits and any
subsequent interim period preceding the disengagement of Tanner + Co., there
were no disagreements with Tanner + Co. or reportable events on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreement, if not resolved to the satisfaction of
the former accountant, would have caused it to make reference to the subject
matter of the disagreement in connection with its report. In connection with its
audit of UTMD's 2002 financial statements, Tanner + Co. noted no matters
involving the internal control structure and operations that they considered to
be material weaknesses.

   The Audit Committee, comprised of UTMD's outside directors, believed a change
in auditors would be beneficial to executing its oversight responsibilities by
providing a fresh look at the Company's records and financial controls. The
Audit Committee believes Jones Simkins has an experienced staff and partners
well suited to serve the needs of UTMD.

   No consultations occurred between UTMD and Jones Simkins during the two most
recent fiscal years and any subsequent interim period prior to Jones Simkins'
appointment regarding either (i) the application of accounting principles to a
specific completed or contemplated transaction, the type of audit opinion that
might be rendered on UTMD's financial statements, or other information provided
that was considered by the Company in reaching a decision as to an accounting,
auditing, or financial reporting issue, or (ii) any matter that was the subject
of disagreement or a reportable event requiring disclosure under Item
304(a)(1)(v) of Regulation S-K.



                                       26
<PAGE>


ITEM 9A - CONTROLS AND PROCEDURES.

  UTMD maintains a system of internal controls and procedures designed to
provide reasonable assurance as to the reliability of its consolidated condensed
financial statements and other disclosures included in this report. UTMD's Board
of Directors, operating through its audit committee, provides oversight to its
financial reporting process.

  Within the 90-day period prior to the date of this report, UTMD evaluated the
effectiveness of the design and operation of its disclosure controls and
procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. Based
on that evaluation, UTMD's Chief Executive Officer and Chief Financial Officer
concluded that its disclosure controls and procedures are effective in alerting
them in a timely manner to material information relating to UTMD required to be
included in this annual report on Form 10-K.

  There have been no significant changes in UTMD's internal controls or in other
factors that could significantly affect internal controls subsequent to the date
that it carried out its evaluation and there were no corrective actions
regarding significant deficiencies or material weaknesses.



                  [Remainder of Page Intentionally Left Blank]

                                       27
<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."

  UTMD adopted a Code of Ethics for its executive officers, including the Chief
Executive Officer, and outside directors in October 2003. The Code of Ethics,
along with UTMD's Code of Conduct, which covers all exempt employees (including
all officers and outside directors) and certain non-exempt employees, is posted
on UTMD's web site at www.utahmed.com. UTMD intends to post on its website any
waivers of or amendments to its Code of Ethics.


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.





                                       28
<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 Incorporation           Incorporated by
                                                                                          Reference (1)
  2          3         Bylaws                                                             Incorporated by
                                                                                          Reference (1)
  3          4         Rights Agreement dated as of October 28, 1994, between Utah        Incorporated by
                       Medical Products, Inc., and Registrar and Transfer Company         Reference (1)
  4          4         Designation of Rights, Privileges, and Preferences of Series "A"   Incorporated by
                       Preferred Stock                                                    Reference (1)
  5         10         Employment Agreement dated December 21, 1992 with Kevin L.         This Filing
                       Cornwell*
  6         10         Amendment, effective May 15, 1998, to Employment Agreement dated   This Filing
                       December 21, 1992 with Kevin L. Cornwell*
  7         10         Utah Medical Products, Inc., 2003 Employees' and Directors'        Incorporated by
                       Incentive Plan*                                                    Reference (2)
  8         10         Utah Medical Products, Inc., 1994 Employee Incentive Stock         Incorporated by
                       Option Plan*                                                       Reference (1)
  9         10         Loan Agreement, dated 3 July, 2002 between Utah Medical            Incorporated by
                       Products, Inc and U.S. Bank National Association                   Reference (3)
 10         10         Revolving Promissory Note, dated July 3, 2002 by Utah Medical      Incorporated by
                       Products, Inc. to U.S. Bank National Association                   Reference (3)
 11         10         First Amendment to Loan Agreement, dated 21 May 2003 between       Incorporated by
                       Utah Medical Products, Inc. and U.S. Bank National Association     Reference (4)
 12         21         Subsidiaries of Utah Medical Products, Inc.                        Incorporated by
                                                                                          Reference (5)
 13         23         Consent of Jones Simkins, P.C., Company's independent auditors     This Filing
                       for the year ending December 31, 2003


                                       29
<PAGE>


               SEC
Exhibit #  Reference #    Title of Document                                                  Location
---------  -----------    -----------------                                                  --------
   14          23         Consent of Tanner + Co., Company's independent                     This Filing
                          Auditors for the years ending December 31, 2002 and
                          December 31, 2001
   15          31         Certification of CEO pursuant to Rule 13a-14(a) as adopted         This Filing
                          pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
   16          31         Certification of Principal Financial Officer pursuant to Rule      This Filing
                          13a-14(a) as adopted pursuant to Section 302 of the
                          Sarbanes-Oxley Act of 2002
   17          32         Certification of CEO pursuant to 18 U.S.C. ss.1350, as Adopted     This Filing
                          Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
   18          32         Certification of Principal Financial Officer pursuant to 18        This Filing
                          U.S.C. ss.1350, as Adopted Pursuant to Section 906 of the
                             Sarbanes-Oxley Act of 2002
</TABLE>

* Management contract of 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, 2002.

      (3) Incorporated by reference from the Company's quarterly report on form
          10-Q filed with the Commission for the quarter ended June 30, 2002.

      (4) Incorporated by reference from the Company's quarterly report on form
          10-Q filed with the Commission for the quarter ended June 30, 2003.

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


(b)   Reports on Form 8-K.
      On October 21, 2003, UTMD filed a report on Form 8-K, Item 12, Results of
Operations and Financial Condition, reporting financial results for third
quarter 2003.

      On November 7, 2003, UTMD filed a report on Form 8-K, Item 4, Changes in
Registrant's Certifying Accountant, reporting the audit committee's decision to
change UTMD's certifying accountant from Tanner + Co. to Jones Simkins, P.C.

      On December 5, 2003, UTMD filed a report on Form 8-K, Item 5, Other Items,
reporting that the U.S. Court of Appeals affirmed a 2002 judgment by the Federal
District Court awarding UTMD approximately $23 million in damages and accrued
interest from Tyco International for patent infringement.


                                       30
<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 15th day of March, 2004.

                           UTAH MEDICAL PRODUCTS, INC.


                          By: /s/ Kevin L. Cornwell
                             --------------------------------
                             Kevin L. Cornwell
                             CEO
                             Chief Executive Officer


                          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 15th day of March, 2004.


                          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


                                       31



<PAGE>









                           UTAH MEDICAL PRODUCTS, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2003, 2002 and 2001







<PAGE>



                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   Index to Consolidated Financial Statements
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------



                                                                           Page

Report of Jones Simkins, P.C.                                               F-2

Report of  Tanner + Co.                                                     F-3

Consolidated balance sheet                                                  F-4

Consolidated statement of income and comprehensive income                   F-5

Consolidated statement of cash flows                                        F-6

Consolidated statement of stockholders' equity                              F-7

Notes to consolidated financial statements                                  F-8




                                       F-1



<PAGE>



                          INDEPENDENT AUDITORS' REPORT



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

We have audited the accompanying consolidated balance sheet of Utah Medical
Products, Inc. as of December 31, 2003 and the related consolidated statements
of income and comprehensive income, stockholders' equity, and cash flows for the
year ended December 31, 2003. 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 audit.

We conducted our audit 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 audit provides 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, 2003 and the results of its operations and its
cash flows for the year ended December 31, 2003 in conformity with accounting
principles generally accepted in the United States of America.



/s/ Jones Simkins, P.C.

JONES SIMKINS, P.C.
Logan, Utah
January 20, 2004






                                      F-2
<PAGE>



                          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, 2002, and the related consolidated statements of income and
other comprehensive income, stockholders' equity, and cash flows for the years
ended December 31, 2002 and 2001. 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, 2002, and the results of their operations and
their cash flows for the years ended December 31, 2002 and 2001 in conformity
with accounting principles generally accepted in the United States of America.




/s/ Tanner + Company

Salt Lake City, Utah
January 21, 2003



                                      F-3
<PAGE>
                           UTAH MEDICAL PRODUCTS, INC.
                           CONSOLIDATED BALANCE SHEET
                           December 31, 2003 and 2002
                                 (In thousands)

                        ASSETS                             2003        2002
                        ------                           --------    --------
Current assets:
  Cash                                                   $    762           285
  Investments, available-for-sale (note 3)                    722          --
  Accounts receivable, net (note 2)                         3,326         3,093
  Inventories (note 2)                                      3,268         3,478
  Prepaid expenses and other current assets                   219           502
  Litigation receivable (note 13)                          24,884          --
  Deferred income taxes (note 7)                              721           399
                                                         --------      --------
    Total current assets                                   33,902         7,757

Property and equipment, net (note 4)                        9,005         8,890
Other assets, net (note 2)                                  6,787         6,740
                                                         --------      --------
    Total assets                                         $ 49,694        23,387
                                                         ========      ========

         LIABILITIES AND STOCKHOLDERS' EQUITY
         ------------------------------------


Current liabilities:
  Accounts payable                                       $    368           631
  Accrued expenses (note 2)                                12,129         1,688
                                                         --------      --------
    Total current liabilities                              12,497         2,319

Note payable (note 5)                                        --           4,956
Deferred income taxes (note 7)                                665           390
                                                         --------      --------
    Total liabilities                                      13,162         7,665
                                                         --------      --------

Commitments and contingencies (notes 6 and 10)               --            --

Stockholders' equity:
  Preferred stock, $.01 par value; 5,000 shares
  authorized, no shares issued and outstanding               --            --
  Common stock, $.01 par value; 50,000 shares
  authorized, issued 4,544 shares in 2003 and
  4,443 shares in 2002                                         45            44
  Accumulated other comprehensive income                     (260)       (1,115)
  Retained earnings                                        36,747        16,793
                                                         --------      --------
    Total stockholders' equity                             36,532        15,722
                                                         --------      --------
    Total liabilities and stockholders' equity           $ 49,694        23,387
                                                         ========      ========



                 See accompanying notes to financial statements.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                              UTAH MEDICAL PRODUCTS, INC.
                              ---------------------------
                           CONSOLIDATED STATEMENT OF INCOME
                           --------------------------------
                               AND COMPREHENSIVE INCOME
                               ------------------------
                     Years Ended December 31, 2003, 2002 and 2001
                     --------------------------------------------
                       (In thousands, except per share amounts)
                       ----------------------------------------

                                                         2003        2002        2001
                                                       --------    --------    --------
<S>                                                    <C>         <C>         <C>
Sales, net (note 9)                                    $ 27,137    $ 27,361    $ 26,954

Cost of goods sold (notes 9 and 10)                      11,245      11,598      11,561
                                                       --------    --------    --------
  Gross margin                                           15,892      15,763      15,393

Operating expenses:
  Sales and marketing                                     2,364       2,472       2,773
  Research and development                                  288         285         364
  General and administrative                              2,518       2,464       2,978
                                                       --------    --------    --------
    Income from operations                               10,722      10,542       9,278

Other income (expense):
  Dividend and interest income                                5           6           9
  Royalty income                                            450         450         450
  Interest expense                                          (47)        (36)       (370)
  Other, net                                                 46          34         113
                                                       --------    --------    --------

  Income before provision for income taxes
    and extraordinary item                               11,176      10,996       9,480

Provision for income taxes (note 7)                       3,841       3,831       3,546
                                                       --------    --------    --------
  Income before extraordinary item                        7,335       7,165       5,934

Extraordinary item - gain from litigation, net of
  income taxes of $9,250 (note 13)                       13,426        --          --
                                                       --------    --------    --------
    Net income                                         $ 20,761    $  7,165    $  5,934
                                                       ========    ========    ========

Earnings per common share (basic) (notes 1 and 2):
  Before extraordinary item                            $   1.62    $   1.46    $   1.18
  Extraordinary item                                       2.97        --          --
                                                       --------    --------    --------
    Total                                              $   4.59    $   1.46    $   1.18
                                                       ========    ========    ========

Earnings per common share (diluted) (notes 1 and 2):
  Before extraordinary item                            $   1.50    $   1.36    $   1.14
  Extraordinary item                                       2.75        --          --
                                                       --------    --------    --------
    Total                                              $   4.25    $   1.36    $   1.14
                                                       ========    ========    ========

Other comprehensive income:
  Foreign currency translation net of taxes of
      $288, $244, and $(87)                            $    548    $    457    $   (170)
  Unrealized gain on investments net of taxes of
      $12, $0, and $0                                        19        --          --
                                                       --------    --------    --------
Total comprehensive income                             $ 21,328    $  7,622    $  5,764
                                                       ========    ========    ========


                   See accompanying notes to financial statements.


</TABLE>
                                         F-5
<PAGE>
<TABLE>
<CAPTION>
                                  UTAH MEDICAL PRODUCTS, INC.
                                  ---------------------------
                              CONSOLIDATED STATEMENT OF CASH FLOW
                              -----------------------------------
                         Years Ended December 31, 2003, 2002 and 2001
                         --------------------------------------------
                                        (In thousands)
                                        --------------

                                                                   2003        2002        2001
                                                                 --------    --------    --------
<S>                                                             <C>         <C>         <C>
Cash flows from operating activities:
-------------------------------------
Net income                                                       $ 20,761    $  7,165    $  5,934
  Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and amortization                                     984       1,172       1,933
    Gain on investments                                               (11)       --          --
    Provision for (recovery of) losses on accounts receivable         (93)         18          70
    Loss on disposal of assets                                          4        --             6
    Deferred income taxes                                             (47)        108         (26)
    Tax benefit attributable to exercise of stock options           1,108         354          60
    (Increase) decrease in:
      Accounts receivable                                              36         577         164
      Accrued interest and other receivables                          257        (316)        121
      Inventories                                                     174        (168)       (239)
      Prepaid expenses and other current assets                       (32)        (31)        (20)
      Litigation receivable                                       (24,884)       --          --
    Increase (decrease) in:
      Accounts payable                                               (291)        154        (208)
      Accrued expenses                                             10,369        (377)         65
                                                                 --------    --------    --------
                Net cash provided by operating activities           8,335       8,656       7,860
                                                                 --------    --------    --------
Cash flows from investing activities:
-------------------------------------
  Capital expenditures for:
    Property and equipment                                           (272)       (517)       (524)
    Intangible assets                                                (122)       --          --
  Purchase of investments                                            (737)       --          --
  Proceeds from sale of investments                                    98        --          --
                                                                 --------    --------    --------
                Net cash used in investing activities              (1,033)       (517)       (524)
                                                                 --------    --------    --------
Cash flows from financing activities:
-------------------------------------
  Proceeds from issuance of common stock - options                    882       1,113         316
  Common stock purchased and retired                               (2,240)    (11,787)       (193)
  Common stock purchased and retired - options                       (555)        (31)       --
  Proceeds from note payable                                         --         4,956        --
  Repayments of note payable                                       (4,956)     (2,501)     (7,499)
                                                                 --------    --------    --------
                Net cash used in financing activities              (6,869)     (8,250)     (7,376)
                                                                 --------    --------    --------
Effect of exchange rate changes on cash                                44          26          (4)
                                                                 --------    --------    --------
                Net increase (decrease) in cash and
                   cash equivalents                                   477         (85)        (44)
Cash at beginning year                                                285         370         414
                                                                 --------    --------    --------
Cash at end of year                                              $    762    $    285    $    370
                                                                 ========    ========    ========
Supplemental  disclosures of cash flow information:
---------------------------------------------------
  Cash paid during the year for:
    Income taxes                                                 $  2,628    $  3,568    $  3,399
                                                                 ========    ========    ========
    Interest                                                     $     47    $     25    $    370
                                                                 ========    ========    ========


                        See accompanying notes to financial statements.

                                              F-6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                    UTAH MEDICAL PRODUCTS, INC.
                                                    ---------------------------
                                          CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                          ----------------------------------------------
                                           Years Ended December 31, 2003, 2002 and 2001
                                           --------------------------------------------
                                                          (In thousands)
                                                          --------------


                                                                                         Accumulated
                                                     Common Stock           Additional       Other                        Total
                                                 ---------------------       Paid-In     Comprehensive   Retained     Stockholders'
                                                  Shares        Amount       Capital        Income       Earnings        Equity
                                                 --------      --------      --------      --------      --------      --------
<S>                                              <C>           <C>           <C>           <C>          <C>           <C>
Balance at January 1, 2001                          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 at December 31, 2001                        5,029      $     50      $   --        $ (1,816)     $ 19,973      $ 18,207

   Shares issued upon exercise of employee
      stock options for cash                          137             1         1,112          --            --           1,113

   Shares received and retired upon exercise
      of stock options                                 (2)         --             (31)         --            --             (31)

   Tax benefit attributable to appreciation
      of stock options                               --            --             354          --            --             354

   Common stock purchased and retired                (721)           (7)       (1,435)         --         (10,345)      (11,787)

   Foreign currency translation adjustment           --            --            --             701          --             701

   Net income                                        --            --            --            --           7,165         7,165
                                                 --------      --------      --------      --------      --------      --------
Balance at December 31, 2002                        4,443      $     44      $   --        $ (1,115)     $ 16,793      $ 15,722

   Shares issued upon exercise of employee
      stock options for cash                          299             3         2,465          --            --           2,468

   Shares received and retired upon exercise
      of stock options                               (101)           (1)       (2,141)         --            --          (2,142)

   Tax benefit attributable to appreciation
      of stock options                               --            --           1,108          --            --           1,108

   Common stock purchased and retired                 (97)           (1)       (1,432)         --            (807)       (2,240)

   Foreign currency translation adjustment           --            --            --             836          --             836

   Unrealized holding gain from investments,
      available-for-sale, net of tax                 --            --            --              19          --              19

   Net income                                        --            --            --            --          20,761        20,761
                                                 --------      --------      --------      --------      --------      --------
Balance at December 31, 2003                        4,544      $     45      $   --        $   (260)     $ 36,747      $ 36,532
                                                 ========      ========      ========      ========      ========      ========





                   See accompanying notes to financial statements.

                                         F-7
</TABLE>
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


Note 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 its 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.

Investments
-----------

The Company classifies its investments as "available for sale." Securities
classified as "available for sale" are carried in the financial statements at
fair value. Realized gains and losses, determined using the specific
identification method, are included in operations; unrealized holding gains and
losses are reported as a separate component of accumulated other comprehensive
income. Declines in fair value below cost that are other than temporary are
included in operations.


                                      F-8
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------

Note 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, 2003.

The Company maintains its cash in bank deposit accounts, which at times, may
exceed federally insured limits in addition to Fidelity Investments' accounts.
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.

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

Long-Lived Assets
-----------------

The Company evaluates its long-lived assets in accordance with SFAS No. 144,
"Accounting for the Impairment of Long-Lived Assets". Long-lived assets held and
used by the Company are reviewed for impairment whenever events or changes in
circumstances indicate that their net book value may not be recoverable. When
such factors and circumstances exist, the Company compares the projected
undiscounted future cash flows associated with the related asset or group of
assets over their estimated useful lives against their respective carrying
amounts. Impairment, if any, is based on the excess of the carrying amount over
the fair value of those assets and is recorded in the period in which the
determination was made.


                                      F-9
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


Note 1 - Summary of Significant Accounting Policies (continued)
---------------------------------------------------

Intangible Assets
-----------------

Costs associated with the acquisition of patents, trademarks, license rights,
and non-compete agreements are capitalized and are being amortized using the
straight-line method over periods ranging from 5 to 17 years. On January 1,
2002, the Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets".
SFAS No. 142 changes the accounting for goodwill and intangible assets with
indefinite lives from an amortization method to an impairment approach. Other
intangible assets will continue to be amortized over their estimated useful
lives. Amortization of goodwill which relates to the Company's 1997 and 1998
acquisitions ceased on January 1, 2002. Goodwill amortization expense in 2001was
(in thousands) $569.

The Company has completed its annual impairment test of goodwill required by
SFAS No. 142 and no impairment was indicated.

Loans to Related Parties
------------------------

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

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 Staff Accounting
Bulletin 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.

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.

Legal Costs
-----------

The Company has been and continues to be involved in lawsuits, which are an
expected and at times unexpected consequence of its operations, and in the
ordinary course of business. The Company maintains a reserve for legal costs
consistent with its previous experience and anticipated costs. The reserve for
legal costs at December 31, 2003 and 2002 was (in thousands) $1,050 and $125,
respectively (see Note 2).


                                      F-10
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


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

The shares (in thousands) used in the computation of the Company's basic and
diluted earnings per share are reconciled as follows:

                                               2003      2002       2001
                                              ------    ------     ------
Weighted average number of shares
     outstanding - basic                       4,526     4,913      5,019
Dilutive effect of stock options                 359       350        191
                                              ------    ------     ------

Weighted average number of shares
     outstanding, assuming dilution            4,885     5,263      5,210
                                               =====     =====      =====


Stock-Based Compensation
------------------------

At December 31, 2003, the Company has stock-based employee compensation plans,
which are described more fully in Note 8. The Company accounts for those plans
under the recognition and measurement principles of APB Opinion 25, "Accounting
for Stock Issued to Employees", and related Interpretations, and has adopted the
disclosure-only provisions of SFAS 123, "Accounting for Stock-Based
Compensation." Accordingly, no compensation cost has been recognized in the
financial statements, as all options granted under those plans had an exercise
price equal to or greater than the market value of the underlying common stock
on the date of grant. 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 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):


                                      F-11
<PAGE>


                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


Note 1 - Summary of Significant Accounting Policies (continued)
----------------------------------------------------

Stock-Based Compensation (continued)
-------------------------

<TABLE>
<CAPTION>
                                                               Years ended December 31,
                                                        -----------------------------------
                                                           2003         2002        2001
                                                        ----------   ----------   ---------
<S>                                                     <C>          <C>          <C>
Net income as reported                                  $   20,761   $    7,165   $   5,934
Deduct:
     Total stock-based employee compensation expense
     determined under fair value based method for all
     awards, net of related tax effects                       (178)        (175)       (248)
                                                        ----------   ----------   ---------

Net income pro forma                                    $   20,583   $    6,990   $   5,686
                                                        ==========   ==========   =========

Earnings per shared:
     Basic - as reported                                $     4.59   $     1.46   $    1.18
                                                        ==========   ==========   =========
     Basic - pro forma                                  $     4.55   $     1.42   $    1.13
                                                        ==========   ==========   =========

     Diluted - as reported                              $     4.25   $     1.36   $    1.14
                                                        ==========   ==========   =========
     Diluted - pro forma                                $     4.21   $     1.33   $    1.09
                                                        ==========   ==========   =========
</TABLE>

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 average rate of exchange
(based on when transactions actually occurred) during the year.



                                      F-12
<PAGE>


                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


Note 2 - Detail of Certain Balance Sheet Accounts
-------------------------------------------------
                                                              December 31,
                                                        ------------------------
                                                          2003           2002
                                                        --------       --------
Account receivable (in thousands):
     Receivables                                        $  3,373       $  3,252
     Accrued interest and other                               27              8
     Less allowance for doubtful accounts                    (74)          (167)
                                                        --------       --------
                                                        $  3,326       $  3,093
                                                        ========       ========

Inventories (in thousands):
     Finished products                                  $  1,495       $  1,236
     Work-in-process                                         631            907
     Raw materials                                         1,142          1,335
                                                        --------       --------
                                                        $  3,268       $  3,478
                                                        ========       ========

Other assets (in thousands):
     Goodwill                                           $  8,533       $  8,533
     Patents                                               2,015          1,893
     License rights                                          293            293
     Trademarks                                              224            224
     Non-compete agreements                             $    175            175
                                                        --------       --------
                                                          11,240         11,118
     Accumulated amortization                             (4,453)        (4,378)
                                                        --------       --------
                                                        $  6,787       $  6,740
                                                        ========       ========

Accrued expenses (in thousands):
     Income taxes payable                               $  9,270       $   --
     Payroll and payroll taxes                             1,479          1,019
     Reserve for litigation costs                          1,050            125
     Other                                                   330            544
                                                        --------       --------
                                                        $ 12,129       $  1,688
                                                        ========       ========


The following table reflects a comparison of net income and net income per share
for each of the three years ended December 31, adjusted to give effect to the
adoption of SFAS 142 (in thousands, except per share amounts):



                                      F-13
<PAGE>


                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


Note 2 - Detail of Certain Balance Sheet Accounts (continued)
-------------------------------------------------

                                                2003         2002         2001
                                                ----         ----         ----

Reported net income                           $ 20,761    $   7,165    $   5,934
Add-back goodwill amortization, net of taxes       -            -           484
                                              --------    ---------    ---------
  484
Adjusted net income                           $ 20,761    $   7,165    $   6,418
                                              ========    =========    =========

Reported earnings per share - basic           $   4.59    $    1.46    $    1.18
Add-back goodwill amortization                      -            -           .10
                                              --------    ---------    ---------
Adjusted earnings per share - basic           $   4.59    $    1.46    $    1.28
                                              ========    =========    =========

Reported earnings per share - diluted         $   4.25    $    1.36    $    1.14
Add-back goodwill amortization                     -            -            .09
                                              --------    ---------    ---------
Adjusted net income per share - diluted       $   4.25    $    1.36   $     1.23
                                              ========    =========    =========


During the years ended December 31, 2003 and 2002, the carrying amount of
goodwill remained unchanged at (in thousands) $8,533


Note 3 - Investments

The Company's investments, classified as available-for-sale consist of the
following (in thousands):
                                                              December 31,
                                                              ------------
                                                         2003             2002
                                                         ----             ----
           Investments, aT
              cost                              $          691       $      -
           Unrealized holding gain                          31              -
                                                      --------          -------
           Investments, at fair value           $          722       $      -
                                                      ========          =======

Changes in the unrealized holding gain on investment securities
available-for-sale and reported as a separate component of accumulated other
comprehensive income are as follows (in thousands):

                                                              December 31,
                                                        2003              2002
                                                        ----              ----

           Balance, beginning of year                $     -           $    -
           Unrealized holding gain                          31              -
           Deferred income taxes on
              unrealized holding gain                      (12)             -
                                                     ---------         -------

           Balance, end of year                      $      19         $    -
                                                     =========         =======


                                      F-14
<PAGE>


                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


Note 4 - Property and Equipment
-------------------------------

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

                                                          2003          2002
                                                        -------       --------

Land                                                   $  1,052      $    980
Buildings and improvements                                8,738         7,816
Furniture, equipment, and tooling                        13,966        14,113
Construction-in-progress                                    111           190
                                                       --------      --------
                                                         23,867        23,099

Accumulated depreciation and amortization               (14,862)      (14,209)
                                                        -------       --------

                                                       $  9,005      $  8,890
                                                       ========      ========

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, 2003
                                                      -----------------

                                            Utah     Oregon    Ireland     Total
                                         ---------  --------   -------   --------
<S>                                      <C>        <C>       <C>       <C>
Land                                     $     621  $    -    $    431  $   1,052
Building and improvements                    4,082        32     4,624      8,738
Furniture, equipment, and tooling           11,901     1,245       820     13,966
Construction-in-progress                       111       -          -         111
                                         ---------  --------   -------   --------
Total                                       16,715     1,277     5,875     23,867

Accumulated depreciation and amortization  (12,221)   (1,267)   (1,374)   (14,862)
                                         ---------  --------   -------   --------

Property and equipment, net              $   4,494  $     10   $ 4,501   $  9,005
                                         =========  ========   =======   ========


</TABLE>


                                      F-15
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


Note 4 - Property and Equipment (continued)
--------------------------------
<TABLE>
<CAPTION>
                                                            December 31, 2002
                                                            -----------------

                                             Utah        Oregon      Ireland       Total
                                           ---------   ----------  -----------   ----------
<S>                                        <C>         <C>         <C>           <C>
Land                                       $     621   $    -      $       359   $      980
Building and improvements                      3,931           32        3,853        7,816
Furniture, equipment, and tooling             12,111        1,244          758       14,113
Construction-in-progress                         190        -            -              190
                                           ---------   ----------  -----------   ----------
Total                                         16,853        1,276        4,970       23,099

Accumulated depreciation and amortization    (11,862)      (1,256)      (1,091)     (14,209)
                                           ---------   ----------  -----------   ----------

Property and equipment, net                $   4,991   $       20  $     3,879   $    8,890
                                           =========   ==========  ===========   ==========
</TABLE>


Note 5 - 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 $15,000 at an
interest rate equal to either the bank's LIBOR rate plus 1.25%, the bank's prime
rate less 1.00%, or a daily rate based on LIBOR plus 1.35%. The
line-of-credit-balance matures on May 31, 2005 and has an outstanding balance of
(in thousands) $0 and $4,956 at December 31, 2003 and 2002, respectively. The
principal financial loan covenants are a restriction on the total amount
available for borrowing to 1.25 times the last twelve months' EBITDA, which as
of December 31, 2003 and 2002 was equal to (in thousands) $43,506 and $15,255,
respectively, and a requirement to maintain a net worth in excess of $10
million, which at the end of 2003 and 2002 was (in thousands) $36,532 and
$15,722, respectively.





                                      F-16
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


Note 6 - 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 was and 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) $105, $104, and $101 for the years ended December
31, 2003, 2002 and 2001, respectively.

Future minimum lease payments under its lease obligations as of December 31,
2003 were as follows (in thousands):

         Years ending December 31:                    Amount
         -------------------------                    ------

                      2004                          $     66
                      2005                                37
                      2006                                37
                      2007                                37
                      2008                                37
                   Thereafter                            851
                                                    --------

         Total future minimum lease payments        $  1,065
                                                    ========

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 its 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 has been 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 material adverse effect on its financial
condition or results of operations.


                                      F-17
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------



Note 6 - Commitments and Contingencies (continued)
--------------------------------------

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.


Note 7 - Income Taxes
---------------------

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

<TABLE>
<CAPTION>
                                                            December 31,
                                                            ------------
                                                2003                       2002
                                                ----                       ----
                                        Current      Long-term      Current     Long-term
                                        --------     ----------     -------     ---------
<S>                                     <C>          <C>            <C>         <C>
Inventory write-downs and differences
     due to UNICAP                      $    169     $       -      $   178     $   -
Allowance for doubtful accounts               29             -           57         -
Accrued liabilities and reserves             523            12          164         -
Other                                          -            22         -            -
Depreciation and amortization                  -           164         -             162
Earnings from subsidiary                       -          (863)        -            (552)
                                        --------     ----------     -------     ---------

Deferred income taxes, net              $    721     $    (665)     $   399     $   (390)
                                        ========     =========      =======     ========

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

                                               Years ended December 31,
                                               ------------------------
                                           2003          2002         2001
                                           ----          ----         ----

Current                                 $  3,888       $  3,715     $  3,520
Deferred                                     (47)           116           26
                                          -------        ------       ------

Total                                   $  3,841       $  3,831     $  3,546
                                           =====          =====        =====

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


</TABLE>

                                      F-18
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


Note 7 - Income Taxes (continued)
---------------------

                                            Years ended December 31,
                                            ------------------------
                                         2003          2002           2001
                                      ---------     ----------    ----------

Federal income tax expense at the
     statutory rate                   $  3,716     $    3,738    $    3,062
State income taxes                         559            482           474
ETI, foreign sales corporation, and
     tax credits                           (68)          (182)          (60)
Other                                     (366)          (207)           70
                                      ---------     ----------    ----------

Total                                 $   3,841     $    3,831    $    3,546
                                      =========     ==========    ==========


Note 8 - 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 of 2,200,000 shares of common stock, of which 759,101 are outstanding
as of December 31, 2003. 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:

                                                            Price Range
2003                                    Shares               Per Share
                                        ------               ---------

Granted                                  82,200        $  17.71 -   $  24.02
Expired or canceled                      12,562            6.75 -      17.71
Exercised                               298,852            6.50 -      15.01
Total outstanding at December 31        759,101            6.50 -      24.02
Total exercisable at December 31        625,859            6.50 -      14.60

                                                            Price Range
2002                                    Shares               Per Share
                                        ------               ---------

Granted                                  74,100        $  14.60 -   $  15.01
Expired or canceled                      31,574            6.50 -      15.01
Exercised                               137,089            6.50 -      14.25
Total outstanding at December 31        988,315            6.50 -      15.01
Total exercisable at December 31        870,414            6.50 -      14.25


                                                            Price Range
2001                                    Shares               Per Share
                                        ------               ---------

Granted                                  81,400        $   9.13 -   $  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


                                      F-19
<PAGE>
                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------

Note 8 - Options (continued)
----------------

For the years ended December 31, 2003, 2002 and 2001, the Company reduced
current income taxes payable and increased additional paid-in capital by (in
thousands) $1,109, $354 and $60, respectively, for the income tax benefit
attributable to sale by optionees of common stock received upon the exercise of
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,"
as described in Note 1.

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,
                                                 ------------------------
                                               2003         2002          2001
                                               ----         ----          ----

Expected dividend yield                         -               -          -
Expected stock price volatility               40.5%         41.7%        44.6%
Risk-free interest rate (weighted average)     3.5%          4.3%         4.9%
Expected life of options                   5.9 years     5.2 years    5.0 years

The per-share weighted average fair value of options granted during 2003, 2002
and 2001 is $8.89, $6.52, and $4.27, respectively.

                                      F-20
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------




Note 8 - Options (continued)
----------------

Stock-Based Compensation (continued)
------------------------

The following table summarizes information about stock options outstanding at
December 31, 2003:

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

$ 6.50   -   7.75     307,634       4.70     $  6.84        304,870      $  6.84
  9.125  -  24.02     451,467       4.71       13.68        320,989        12.20
  ---------------     -------       ----       -----        -------        -----

$ 6.50   -  24.02     759,101       4.70     $ 10.91        625,859      $  9.59
  ===============     =======       ====       =====        =======         ====


Note 9 - Geographic Sales Information

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

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

       2003               $      21,266     $      3,376      $      2,495
       2002               $      21,626     $      3,337      $      2,398
       2001               $      21,752     $      3,012      $      2,190


Note 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.

                                      F-21
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------

Note 11 - Employee Benefit Plan
-------------------------------

The Company has a contributory 401(k) savings plan for employees, who are at
least 21 years of age, work 30 hours or more each week, and have a minimum of
one year of service with the Company. The Company's contribution is determined
annually by the board of directors. Company contributions were approximately (in
thousands) $95, $94 and $85 for the years ended December 31, 2003, 2002 and
2001, respectively.


Note 12 - Fair Value 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, 2003, does not differ materially from the aggregate carrying value of its
financial instruments recorded in the accompanying consolidated balance sheet.


Note 13 - Extraordinary Item
----------------------------

In December 2003, the Company recognized extraordinary non-operating income of
(in thousands) $24,884 including damages and interest resulting from the 2002
District Federal Court judgment relating to the Company's patent infringement
litigation against Tyco/Kendall-LTP, which was upheld by appellate court
decision. After subtraction of additional expenses of (in thousands) $2,208 and
income taxes of (in thousands) $9,250, the extraordinary income adds (in
thousands) $13,426 to 2003 net income.

The actual payment from Tyco, which was received on January 20, 2004, included
an additional approximately (in thousands) $6,000 in augmented damages and
interest which will be recognized as an extraordinary gain in the first quarter
2004.

Note 14 - Recent Accounting Pronouncements
------------------------------------------

In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." This new
statement changes the accounting for certain financial instruments that, under
previous guidance, issuers could account for as equity or classifications
between liabilities and equity in a section that has been known as "mezzanine
capital." It requires that those certain instruments be classified as
liabilities in balance sheets. Most of the guidance in SFAS 150 is effective for
all financial instruments entered into or modified after May 31, 2003. The
adoption of SFAS 150 did not have any impact on the Company's consolidated
financial statements.


                                      F-22
<PAGE>

                           UTAH MEDICAL PRODUCTS, INC.
                           ---------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                        December 31, 2003, 2002 and 2001
                        --------------------------------


Note 14 - Recent Accounting Pronouncements (continued)
------------------------------------------

In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS 149 amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities under SFAS 133, "Accounting for
Derivative Instruments and Hedging Activities". This Statement is effective for
contracts entered into or modified after June 30, 2003, with certain exceptions,
and for hedging relationships designated after June 30, 2003, with certain
exceptions. The adoption of SFAS 149 did not have any effect on the Company's
consolidated financial statements.

In January 2003, the FASB issued Interpretation 46, "Consolidation of Variable
Interest Entities" (FIN 46), which addresses consolidation by business
enterprises of variable interest entities. FIN 46 clarifies the application of
Accounting Research Bulletin No. 51, "Consolidated Financial Statements", to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 applies immediately to variable interest
entities created after January 31, 2003, and to variable interest entities in
which an enterprise obtains an interest after that date. It applies in the first
fiscal year or interim period beginning after June 15, 2003, to variable
interest entities in which an enterprise holds a variable interest that it
acquired before February 1, 2003. The Company has not identified and does not
expect to identify any variable interest entities that must be consolidated.

In December 2002, the Financial Accounting Standards Board issued SFAS 148
"Accounting for Stock-Based Compensation - Transition and Disclosure - an
amendment of FASB Statement 123," which is effective for all fiscal years ending
after December 15, 2002. SFAS 148 provides alternative methods of transition for
a voluntary change to fair value based method of accounting for stock-based
employee compensation under SFAS 123 from intrinsic value based method of
accounting prescribed by Accounting Principles Board Opinion 25. SFAS 148 also
changes the disclosure requirement of SFAS 123, requiring a more prominent
disclosure of the pro-forma effect of the fair value based method of accounting
for stock-based compensation. The adoption of SFAS 148 by the Company did not
have any impact on the Company's consolidated financial statements and is not
expected to have any impact on future operations.


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