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, 1997.
                          Commission File No. 1-12575


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

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

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


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


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

       Title of each Class          Name of each Exchange on which Registered
  Common Stock, $.01 par value              New York Stock Exchange
 Preferred Stock Purchase Rights            New York Stock Exchange


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

      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.

      The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 6, 1998, based on NYSE closing price: $58,135,252.

      The number of shares outstanding of the registrant's common stock as of
March 6, 1998: 8,305,036.


                      DOCUMENTS INCORPORATED BY REFERENCE

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

<PAGE>

PART I.


ITEM I - BUSINESS.

      Utah Medical Products, Inc. ("UM" or "the Company") is in the business of
producing cost-effective devices for the health care industry which are
predominantly proprietary, disposable and for hospital use.  Success depends on
1) recognizing needs of clinicians and patients, 2) rapidly designing economical
solutions which gain regulatory approval, 3) reliably producing products that
meet those clinical needs, and then 4) selling through:

 a)  UM'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.

      UM's success in rapidly producing solutions comes from its proven ability
to integrate a number of engineering and technical disciplines in electronics,
software, mechanical packaging, instrumentation, optics and materials.   The
resulting proprietary products represent incremental, but significant
improvements over existing clinical techniques. UM'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 health care.  Historically,
UM has marketed a broad range of medical devices used in the critical care areas
and the labor and delivery department in the hospital, as well as products sold
to outpatient clinics and physician's offices.

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

      UM's products are sold in the U.S. domestic market primarily through the
Company's own direct sales representatives but also through independent
manufacturers' representatives, specialty distributors and other medical device
companies.  Internationally, products are sold through other medical device
companies and through independent medical products distributors.  UM now has
representation in all major global markets with approximately 60 international
distributors.

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

      UM was formed as a Utah corporation in 1978.  In 1995, Utah Medical
Products Ltd., a wholly-owned subsidiary located in Ireland, was formed to
establish an international manufacturing capability.  In July, 1997, UM
purchased Columbia Medical, Inc. (CMI), a Redmond, Oregon company specializing
in manufacturing and marketing vacuum-assisted obstetrical delivery systems.  UM
publicly raised equity capital only one time in 1982.  After trading on the
NASDAQ for 14 years, UM's stock was listed on the NYSE on December 26, 1996 in
conjunction with start of operations in Ireland.  The Company's corporate
offices are located at 7043 South 300 West, Midvale, Utah 84047 USA.  The
corporate telephone number is (801) 566-1200.  European operations are located
at Garrycastle Industrial Estate, Athlone, County Westmeath, Ireland.  The
telephone number in Ireland is (902) 73932.  CMI's mailing address is P.O. Box
1530, Redmond, Oregon 97756.  The phone number in Oregon is (541) 548-7738.
PRODUCTS


Obstetrics Market:

Fetal Monitoring.

      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
Caesarean section procedure, and be prepared for complications following
childbirth.  In addition to products already offered, the Company intends to
continue to develop and introduce tools that enhance fetal monitoring
techniques, a core area of focus.

      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.  UM's intrauterine pressure catheter product line
provides for clinician choices from a traditional fluid-filled system to INTRANR
PLUS, the state-of-the-art transducer-tipped system.  In addition, adjunct FHR
electrodes, leg plates, belly bands and chart paper are offered by UM to
complete a package of fetal monitoring supplies.  UM's intrauterine catheters
include:

    IUP-075 and UM's other custom 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
    waveform is generated through transmission of a signal to the external
    pressure transducer.

    Introduced in 1987, INTRAN was the first intrauterine pressure catheter
    that placed the pressure sensor at the 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 preferred INTRAN PLUS, which is also covered under
    UM'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 re-zero
    feature that allows the clinician to verify the reference of the monitor,
    and a dedicated amnio lumen which provides immediate access to the amniotic
    fluid environment which may be essential in the diagnosis and intervention
    of certain fetal conditions.  In 1996, an enhancement which allows
    physicians to observe amniotic fluid in a closed system was added to INTRAN
    PLUS.  In 1997, UM introduced several new versions designed to address user
    preferences in tip size and zero switch location.

Other Obstetrical Tools.

      UM's purchase of CMI brought the Soft Touch , Tender TouchR and Velvet
TouchR lines of disposable and reusable vacuum-assisted operative delivery
systems into UM's family of obstetric products.  Operative vaginal deliveries
provide knowledgeable physicians with an alternative to C-section intervention.
Although there are risks associated with vaginal operative 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. In operative
vaginal deliveries, either forceps or a vacuum-assisted extraction system are
used to deliver a baby.  UM estimates that vacuum-assisted extraction, now the
preferred approach,  is presently used for about 8-10% of all U.S. births, and
has the potential to continue to improve on its share versus forceps.  Vacuum
extraction may also be used to assist in C-section deliveries.

     CORDGUARD is a unique 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 blood sample for diagnostic or therapeutic purposes, and
assisting in the removal of the placenta.  CORDGUARD's sharpless, closed system
reduces the risk of exposure, and consequently reduces the high cost of hospital
exposure treatment practices when both OSHA and CDC guidelines are properly
implemented.  In addition, neonatal blood is generally hard to obtain safely and
cleanly, while at the same time it is gaining in perceived diagnostic value to
clinicians.


Gynecology /Urology /ES Market:

LETZR System:   FINESSE Generator; Disposable Loop, Ball, and Needle
Electrodes; FILTRESSE Evacuator; Other Specialty Electrodes and Other Supplies.

      The LETZ System is a complete line of products and supplies used to treat
cervical intraepithelial neoplasia (CIN) and other lower genital tract lesions
related to human papilloma virus (HPV) infections.  This procedure of using
electrosurgical excision with hemostasis has widely replaced cold knife scalpel,
laser and cryotherapy procedures because it is economical, safe, effective,
quick and easy to perform, has fewer potential side effects, and requires little
physician training.  In contrast to laser and cryotherapy (freezing of tissue),
LETZ provides an important tissue specimen for a pathological assessment.  In
addition, the procedure may be performed by using only local anesthesia in the
physician's office, eliminating the time and expense of hospital or surgical
center admittance.  The Company's full line of products necessary to perform the
LETZ electrosurgical procedure include the Prendiville disposable loop, the
FINESSE electrosurgical generator, and other miscellaneous components.  The
FINESSE electrosurgical generator is the only generator on the market that
contains an integral smoke evacuator.  The smoke evacuator is required to filter
smoke and vapors which contain potentially hazardous particulate material
produced during electrosurgery.  The disposable loop, the electrode used to
excise the tissue specimen, is a pencil-like tube with a thin tungsten wire loop
attached.  The loop is available in varying sizes and includes a Safe-T-Gauge
that can be positioned so the physician can colposcopically monitor the amount
of tissue being excised more accurately.

      UM has FDA clearance to market its electrosurgical system in general
surgery applications, including dermatology.  FILTRESSE, a stand-alone surgical
smoke filtration system which combines high filtration efficiency, low cost and
convenient use was introduced in 1997.  The Company will continue to develop and
introduce specialty tools for specific electrosurgical procedures.

      EPITOME, introduced in 1996, is a unique electrosurgical scalpel which
delivers precise performance in incision and excision, where minimization of
thermal tissue injury is necessary to ensure accurate histological analysis,
limited morbidity and post-surgical pain, and cosmetically superior results.  A
bendable version of EPITOME with a smaller active electrode is being introduced
in early 1998.  Designed to significantly reduce the chance of tissue burns due
to inadvertent electrode contact and where a smaller, bent scalpel is
preferable, this new bendable EPITOME should be of particular value to thoracic
surgeons in harvesting the internal mammary artery during coronary artery bypass
surgery, as well as in tonsillectomies, among other possible uses.

LIBERTY System.

      LIBERTY, a device for the conservative treatment and effective control of
urinary incontinence in women, was released for marketing by the FDA in 1995.
LIBERTY consists of a battery operated stimulator 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
nerve 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.  In 1997, UM's simplified and lower cost version of Liberty,
intended for home use by patients, replaced UM's prior version, renamed Liberty
Ultra, as the device of choice for most patients.  LIBERTY Ultra is still of
interest to physicians who wish to have a full range of waveform options for
office use.  In addition to its electrostimulation product line, UM intends to
add other products that address various aspects of the very prevalent and
diverse incontinence conditions including a rectal probe, and a model of LIBERTY
that combines its current features with biofeedback therapy that helps the
patient measure muscle tone.  Beginning in 1998, UM has agreed to market the U-
Control Home Trainer, a biofeedback device developed by Thought Technology, Ltd,
which the Company believes will be a complementary product to Liberty.  In 1998,
UM intends to significantly expand its LIBERTY marketing efforts to help
establish the belief in patients and doctors that LIBERTY is the easiest-to-use,
most cost effective incontinence treatment available.  The Company also has
begun to market LIBERTY to urologists and physical therapists in the U.S.
through specialty distributors.

      PATHFINDER , is an endoscopic irrigation device that allows a surgeon to
precisely irrigate with the same hand that controls the endoscope, eliminating
the need for a separate assistant to irrigate without visualization.  PATHFINDER
was acquired in the purchase of CMI.

Tools for Gynecologic Laparoscopy.

      LUMINR is a proprietary tool developed by UM for reliably and safely
manipulating the uterus in gynecological laparoscopic procedures.  The product
was released for marketing by the FDA in 1995.  LUMIN combines the strength,
range of motion and versatility of the higher end reusable instruments with the
lower cost and cleanliness of the cheaper disposable instruments presently on
the market, while at the same time reducing the number of tools needed to move
and secure the uterus.  The EPITOME scalpel is another UM proprietary tool that
can be useful in laparoscopic procedures.


Neonatal Critical Care Market:

DISPOSA-HOOD .

      The DISPOSA-HOOD is an infant oxygen hood that is used in infant intensive
care to administer oxygen to neonates in a neutral thermal environment critical
to maintaining proper physiologic responses.  The Disposa-Hood, which is 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.  The Disposa-Hood is also designed to
prevent cross-contamination, to allow axial rotation of the infant's head
without contact with the Disposa-Hood and to aid in the maintenance of
temperature and humidity conditions that are necessary in the proper respiratory
care of premature infants.

Critical Care Market:

Blood Pressure Monitoring Products.
DeltranR Disposable Transducer.

      A transducer converts one form of energy to another.  In pressure
monitoring, it is used to convert physiological (mechanical) pressure into an
electrical signal that is displayed on electronic monitoring equipment.  In
medical applications, transducers had previously been reusable, fragile, subject
to declining accuracy with repeated use and had a cost of about $1,000. The
development of integrated circuit technology and guided laser technology led to
the introduction of disposable transducers in the medical market approximately
fourteen years ago.

      UM has developed and is now distributing its disposable transducer as a
stand-alone product, and as a component in pressure monitoring kits through its
direct representatives and independent distributors, as well as to other medical
companies in the U.S. and internationally.

      Although several other medical companies manufacture disposable pressure
transducers ("DPTs"), the Company  believes that the Deltran DPT which it
developed sets the standard in terms of reliability and ease of use.  UM has
qualified an automated assembly  line which allows UM to effectively compete
with the largest suppliers on the basis of low manufacturing costs.  In early
1998, UM will begin marketing a new version called DELTRAN PLUS which UM
believes provides the easiest and least risky blood sampling capability
currently available.

Other Products and Components.

      The Company sells products specifically designed for other medical
companies which incorporate UM's proprietary technologies.  In addition, UM
sells plastic molded parts to a number of medical and non-medical companies,
including  competitors.  UM believes that this practice has not affected its
competitive position, and extends the benefit that shareholders realize from
UM's manufacturing capabilities and technologies.


MARKETING.

      UM competes in the marketplace on the basis of its proprietary value-added
technologies and cost effective solutions.  Its future success will depend upon
its ability to innovate and introduce new products into specialized market
niches consistent with cost control pressures under a changing health care
environment.  Speed is a critical success factor in that future performance
depends on UM's ability to innovate, develop, test and commercialize new
products faster than other medical device companies who possess significantly
more resources than UM.  With new products that are unique, the Company must be
prepared for extensive user training and support.

      The Company currently competes within three distinct product/market
arenas, each with differing competitive circumstances from the other:

1)   Obstetrics.

     a) Fetal monitoring. UM markets its intrauterine pressure catheters
("IUPCs"), fetal heart rate electrodes and other monitoring supplies including
electrical cables, external pressure sensing TOCO belts, leg plates and chart
paper, to hospital labor and delivery departments.  Almost exclusively limited
to the United States where electronic monitoring is accepted practice, the
available annual market for UM's full line of fetal monitoring supplies exceeds
$35 million.

     The Company's IUPC sales control over 45% of total IUPC unit sales with a
mixture of traditional "fluid-filled" catheters together with sensor-tipped
catheters, where five other suppliers compete.  The proven reliability of UM's
INTRAN PLUS IUPC system, educational programs, and breadth of line, have helped
UM secure more than a 75% share of the sensor tipped segment, which represents
about 60% of total IUPC units used.  Because UM's IUPC customers are part of
U.S. hospitals which are experiencing consolidation and group purchasing
pressures, a negative factor which may adversely affect future IUPC sales would
be the acceptance of a new IUPC supplier that could bundle a viable but inferior
and cheaper IUPC with broad product lines as part of a group supplies contract.
UM believes its patents are an important barrier to competition, and is
currently involved with infringement litigation against two competitors.

       b) Vacuum-assisted operative delivery systems.  UM's  vacuum-assisted
operative delivery systems, including both disposable and reusable extraction
cups and a proprietary hand pump, are marketed through the same channels as
fetal monitoring supplies. UM's vacuum-assisted operative delivery systems,
formerly manufactured and marketed under the Columbia Medical, Inc. name,
control about 50% of the market for these devices.  Although vacuum extraction
historically has enjoyed even greater acceptance internationally than in the
U.S., CMI did not have significant sales of these products outside the U.S.  UM
believes its established international distribution channels can spur additional
growth.

     c)  Other Ob products.   Umbilical cord management is a clinical need that
has not been successfully addressed to date with UM's proprietary concept called
CordguardR, or with any other product.  Blood samples are routinely collected in
about 50% of births in the U.S. now, and collections are expected to increase
with the greater emphasis being placed on using neonatal blood for both
diagnostic and therapeutic purposes.  Cordguard is a totally closed system,
designed to conveniently and safely clamp next to the umbilicus, sever the cord,
and draw a clean cord blood sample in a single unified procedure.  In 1998, UM
will continue to work on improving its Cordguard product design and marketing
programs.  Also in 1998, UM has agreed to sell the Umbilicup product designed
and manufactured by MKMI as an alternative cord blood collection device.  The
Umbilicup II device is designed to harvest larger quantities of cord blood.  As
part of the CMI purchase in 1997, UM acquired two other devices used routinely
by obstericians, Amnicot, a device used to assist in the rupture of maternal
membranes, and MUC-X, a neonatal meconium suction device.

     The hospital labor and delivery department will continue to offer an
excellent opportunity where UM's established position in fetal monitoring allows
receptiveness for evaluating new obstetrical product concepts.  An excellent
example is UM's fetal pH device, designed to provide a continuous measure of
fetal scalp tissue pH, which is in the final stages of product development.

2)   Gynecology/Urology/Electrosurgery.

     a) LETZ.  Since 1991, the office and outpatient market for the
electrosurgical cervical loop excision treatment has attracted over ten
competitors offering either electrosurgery generators or disposable loop
electrodes, or both.  UM continues to have a leading market position through
utilizing a direct sales organization to promote educational and clinician
support programs. The Company believes that its products demonstrate superior
cutting and hemostasis capabilities by its FINESSE generators, and an improved
safety and "quality tissue specimen" by its patented disposable loop line.   The
current worldwide annual market exceeds $20 million.  In 1998, UM will introduce
other proprietary electrodes which provide significant advantages for excision
of certain types of CIN.

     b) Other electrosurgery products.  In addition to other applications for
UM's LETZ electrosurgery system, UM has exploited its understanding of
electrosurgery to develop the EPITOME  scalpel.  The major uses of EPITOME are
most likely to be in non-gynecologic specialities such as otolaryngology,
plastic and thoracic surgery where precise incisions and closely controlled
excisions in highly vascular regions, with minimal thermal side effects, are
important, along with the desire to minimize time in the surgical theatre.  In
areas such as these where UM does not have an established market presence,
development of new product sales may  be slow.

     c) Other surgical uses of LETZ equipment and supplies.  The Company
believes that similar  surgical procedures will gain in acceptance in a number
of other specialized areas, including dermatology and family practice, and plans
to develop and introduce products for these areas based on its electrosurgery
expertise.  The ultimate adoption of new specialized products is uncertain
because the products require a high level of user education and require
purchasers to work against the trend of standardized general-purpose tool
acquisitions.  Sales may be limited by UM's lack of access to important
distribution channels.

     d) Endoscopic procedures.  Several of UM's products have utility in rapidly
evolving endoscopic operative techniques.  Examples are Pathfinder, a bulb
irrigation device used to improve visualization at the surgical site; LUMIN, a
disposable instrument to precisely position and retain the uterus during
endoscopic procedures; and Epitome, a unique electrosurgical scalpel that allows
very rapid and precise incisions with minimal thermal side effects.  Because of
the fragmentation of the markets and channels for distribution of these
products, as well as UM's limited resources, methods of reaching users will
continue to be primarily opportunistically driven.

     e)  Incontinence therapy.  Urinary incontinence is an under diagnosed and
under reported but prevalent condition in women, especially physically active
women over the age of forty.  In the United States, at least ten million women
suffer from time to time from some form of urinary incontinence: stress, urge or
mixed.   Clinical studies have shown that chances are good that the problem can
be improved or cured by strengthening and toning the pelvic floor muscles,
especially in women with mild to moderate stress incontinence.  The use of
electrical stimulation to help strengthen muscles is an approach that is
scientifically well understood and is an area of engineering expertise at UM.
Adjunct therapy devices and diagnostic tools will become important to developing
a system of tools for cost-effective urinary incontinence treatment.  The aging
of the population and  increased interest in more conservative and non-surgical
therapeutic approaches to solving health problems are two important U.S. trends
which will help drive patient adoption of Liberty and other conservative
accessory products.  Market acceptance may be limited by a number of negative
factors including the fact that the electrostimulation therapy approach is not a
"quick fix" and requires patient discipline to continue a treatment regimen over
an extended time span, as well as the fact that the treatment may require a
greater time commitment with less revenue dollars than alternative surgical
approaches for gynecologists prescribing it.

     f) Urology.  In addition to UM's female urinary incontinence products and
Pathfinder, of which the most prevalent use to date has been in removal of
calculi in biliary and urinary tracts, UM manufactures the pumps used by several
other medical companies selling vacuum erection devices for male erectile
dysfunction.  In this last area, UM depends on the marketing strengths of its
OEM customers.

3)   Critical Care/Blood Pressure Monitoring.

      This is a large, commodity-oriented intensive care/anesthesia monitoring
market dominated by two major U.S. suppliers which bundle disposable transducers
and accessories with venous and arterial catheters.  The products used in
monitoring human vital signs have features that are practically undifferentiated
among the major competitors.  Consequently, hospital purchasing decisions tend
to be based on price and delivery.  The loss of Baxter as a dominant
distribution partner at the end of 1996 represented a negative factor that
adversely impacted 1997 performance.  UM's strongest market position now is
outside the U.S. where markets are more fragmented.  UM's sales through
distribution partners excluding Baxter, independent U.S. and international
distributors and its limited U.S. direct sales team represented about 4% of the
total annual worldwide end-user market in 1997.  The worldwide market at end-
user price for DPT and accessories exceeds $150 million.


DISTRIBUTION.

      Another important success factor in a changing health care industry  is
"access" to customers.  In particular, the U.S. hospital supplier environment
has been consolidating as a result of group purchasing decisions and product
bundling by large suppliers with diverse product lines. The number of channels
and length of time required in evaluating new products for use in hospitals has
grown dramatically in recent years.  As a potential negative factor to future
performance, as UM introduces new products, it may find itself limited with its
current distribution channels, or unable to establish viable relationships with
other medical companies who have adequate access to users.

      Historically, UM has sold its products, especially those relating to
critical care, through independent distributors and other medical companies in
both domestic and international markets.  However, since 1991, the Company has
developed a more focused direct sales organization in the United States with
specialized distributors and its own directly employed sales force.  The network
of direct representatives and specialty distributors is employed to concentrate
on select market applications for UM products and to provide proper customer
training and support.  In March 1998, the U.S. direct sales force consisted of
25 territory representatives and sales managers.  Through the use of
closely-controlled clinical education programs, the direct sales force positions
UM to gain market leadership with its value-added products.  UM's products serve
niche market applications in obstetrics and gynecological procedures which are
trending toward outpatient clinics and physician offices.  Just three years ago,
independent distributors in the U.S. represented more than half of UM's domestic
Ob/Gyn business.  In 1998, UM expects that U.S. distributors will represent less
than 10% of its domestic business.

      The Company also sells products into commodity markets, or for
applications which do not generate enough business to justify a direct selling
effort, directly to other medical companies.  Additionally, the Company sells
component parts to medical companies for use in their product lines.  This
effort is simply an optimal utilization of manufacturing resources that are
needed for UM's main businesses and does not affect the Company's marketing
programs.

      Internationally, the Company sells its products through distributors or
through OEM (other medical manufacturers) relationships.

RESEARCH AND NEW PRODUCT DEVELOPMENT.

     New product development is a key to UM's growth plans.  UM's current new
product development projects are in three areas of focus: 1) obstetrics/ fetal
monitoring, 2) female incontinence management, and 3) specialized procedures for
the assessment and treatment of cervical/uterine disease.  In terms of R&D
output, UM has acquired or filed 18 new patent applications in the last five
years.  In the medical device industry, FDA premarketing approval submissions
are an indicator of new product development activities for a given company.  In
that regard, in the last five years, 21 FDA premarketing approval submissions
have been completed.

     Because of UM'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 twelve projects on the average, depending on the level of
resources required,  are underway at UM at any given time.  More than 50% of
assigned projects do not succeed in attaining a product which 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.

     During 1997, the Company spent $958,166 on new product development, which
was 4.0% of sales.  Included in these expenses were amounts paid to outside
entities for activities required for the conduct of clinical evaluations.
During 1996 and 1995, new product development expenses were $1,387,088 (3.6% of
sales) and $1,789,167 (4.3% of sales), respectively.  Expenditures for R&D
projects are expected to continue at approximately 4% of sales, limited more by
the Company's ability to process new ideas, as well as organize and integrate
the speciality skills necessary to develop innovative products, than by the
availability of funds or new product ideas.

EMPLOYEES.

     At December 31, 1997, the Company had 290 employees, 42 of which are
located in Oregon, and 32 in Ireland.  The Company's continued success will
depend to a large extent upon its ability to retain its skilled employees.  No
assurances can be given that the Company will be able to retain or attract such
employees in the future, although management is committed to providing an
attractive environment in which creative and high achieving people want to work.

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

PATENTS AND TECHNOLOGY LICENSES.

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

     The ability of the Company to achieve critical mass in the marketplace
depends in large part on the protection afforded by its patents.  In cases where
competitors introduce products that may infringe on UM's technology, the Company
has an obligation to its shareholders to defend its intangible property.
Although the cost of patent litigation reduces the Company's current
performance, a successful defense of a core market franchise as represented by
INTRAN, for example, represents many orders of magnitude of return in
shareholder value.  In addition, UM's practice of aggressively pursuing those
who infringe its patents tends to discourage others from unfairly using UM's
innovation.  Patent infringement lawsuits are currently pending against two
companies whom UM believes have infringed its INTRAN patents.

     Because of the Company's reliance on certain proprietary information, it
obtains a confidentiality and non-compete agreement from its technical and sales
employees, key management and consultants.

     As a matter of policy, UM has acquired and will continue to acquire the use
of technology from third parties that can be synergistically combined with UM
proprietary product ideas.  During 1997, royalty expenses were $64,970.
Royalties are included in cost of goods sold.

     Also as a matter of policy, UM licenses its proprietary technology to
others in circumstances where that licensing does not directly compete with UM's
own marketing direction.  During 1997, the Company received $732,267 in royalty
income, compared to $703,352 in 1996, and $652,894 in 1995.  This income remains
a material portion of UM's earnings and therefore UM's future performance also
depends on the performance of other companies who license its technology.

GOVERNMENT REGULATION.

     The Company's products are subject to regulation by  the U.S. Food & Drug
Administration ("FDA"), as well as other regulatory bodies globally.  The FDA
has authority to regulate the marketing, manufacturing, labeling, packaging and
distribution of medical products in the U.S.  In addition, requirements exist
under other federal laws and under state, local and foreign statutes that may
apply to the manufacturing and marketing of the Company's products.  The Medical
Device Amendments of 1976 (the "Amendments") significantly extended the
jurisdiction of the FDA to regulate medical devices.  Until the adoption of the
Amendments, medical devices were subject only to general labeling and purity
requirements.  The Amendments established three classifications of medical
devices, Class I, Class II, and Class III.

     All manufacturers of medical devices must register with the FDA and, with
their initial registration, list all medical devices produced by them.  This
listing must be updated annually.  In addition, prior to commercial distribution
of devices for human use, the manufacturer must file a notice with the FDA,
setting forth certain information about the device, including the classification
into which the manufacturer believes it falls.

     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 performance
standards as well as good manufacturing practices, record keeping and reporting.

     In 1994, UM received certification of its quality system under the ISO
9001/EN 46001 standards ("ISO" stands for "International Organization of
Standardization").  EN 46001 is the European Community's effort to harmonize
different national regulatory requirements for the development, sale, and
manufacture of medical products.  Because the ISO standards are in perpetual
modification, UM remains on a continuous periodic audit schedule by its
independent notified body in order to stay abreast of international regulatory
standards.  In early 1997, UM received ISO 9001/EN 46001 certification for its
Ireland facility.  UM has now received formal product certification allowing the
use of the CE Mark (demonstrates proof of compliance with the European
Community's product standards) for its blood pressure monitoring kits,
electrosurgical generators, disposable loop and blade electrodes, and
intrauterine catheters, representing most of its current product sales
internationally.  As of early 1998, UM is seeking additional CE Mark
authorization on products with about $250,000 in international sales in 1997.

SOURCES AND AVAILABILITY OF RAW MATERIALS.

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

     Revenues from foreign customers in 1997 were about $5,218,000 (21% of total
sales), as compared to $9,739,000 (25% of total sales) in 1996, and $10,343,000
(25% of total sales) in 1995.  Critical care products represented 85% of
international sales in 1997, compared to 91% in 1996 and 96% in 1995.   Non-
Baxter international sales were about $5,010,000 in 1997 compared to $4,805,000
in 1996 and $4,315,000 in 1995.

     UM sees the international marketplace as one of the cornerstones of its
growth strategy.   UM 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, UM completed a new manufacturing facility in
Athlone, Ireland.  The facility offers a number of advantages: 1) from a
marketing point of view, faster response to European Union customers, including
a better understanding of customized needs, less costly distribution and duty-
free access to over 350 million patients; 2) from a regulatory point of view,
faster new product introductions; and  3) from a manufacturing point of view,
reduced dependence on one manufacturing site and increased capacity at existing
U.S. facilities.

BACKLOG.

     As a marketer of primarily disposable products, the nature of UM's business
necessitates being very responsive to customer orders and delivering products
quickly.  Thus an objective of UM is to minimize its shippable backlog.  Backlog
shippable in less than 60 days as of January 1, 1998, was approximately $0.6
million compared to $0.5 million as of January 1, 1997.


SEASONAL ASPECTS.

     The Company's business is generally not affected by seasonal factors.
PRODUCT LIABILITY RISK MANAGEMENT.

     No product liability lawsuits involving a significant injury have been
filed against the Company for any of its products in the past six years, despite
the substantially higher product usage rates over that time.  The risk of
product liability lawsuits is a negative factor in UM's business because UM's
products are frequently used in inherently life threatening procedures to help
physicians manage higher risk patients.  Although UM's products are proven to be
safe and efficacious over millions of uses, positive outcomes cannot always
occur in the procedures where UM's products are used.  In litigious cultures
(such as the U.S.) frequently driven by attorneys looking for windfalls,
patients may look for scapegoats.  In any lawsuit against a company where an
individual plaintiff  has a permanent physical injury, a small probability of a
large award always exists whether or not a causal relationship exists.  UM is
self-insured for product liability risk and reserves funds against its current
performance on an ongoing basis to provide for its future defense should any
lawsuits be filed.


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, and information currently available to, management.  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 noted 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, obsolescence caused by new
technologies, the possible introduction by competitors of new products that
claim to have many of the advantages of UM's products at lower prices, the
timing and market acceptance of UM's own new product introductions, UM's ability
to efficiently manufacture its products, including the reliability of suppliers,
success in gaining access to important global distribution channels, budgetary
constraints, the timing of regulatory approvals for newly introduced products,
and third party reimbursement.

     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 health care 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 one 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.  UM 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 facilities are leased.  The Ireland facility operates as a wholly-owned
subsidiary under the name Utah Medical Products Ltd.  The Company recently sold
a building it previously owned in Lehi, Utah to an unrelated party.

     UM is a vertically-integrated manufacturing company.  Capabilities include
a machine shop for mold-making and building assembly tools and fixtures;
plastics-forming including thermoplastic forming, injection molding and
extrusion; sensor production; assembly of mechanical, electrical and electronic
components; testing; and advanced packaging in clean room conditions.
Facilities also include a well-equipped R&D lab, communications and information
systems networked internationally, and administrative offices.

ITEM 3 - LEGAL PROCEEDINGS.

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

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

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

                                    PART II.

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

Market Information.

      UM's common stock began trading on the New York Stock Exchange (symbol:
UM) on December 26, 1996.  It previously traded on the National Market System of
the National Association of Securities Dealers Automated Quotation System
(symbol UTMD). The following table sets forth the high and low sales price
information as reported by NASDAQ and NYSE for the periods indicated:

                           1997                      1996
                   ------------------        --------------------
                   High           Low        High            Low


 1st Quarter    $    13        $   10       $ 23-1/2     $    13
 2nd Quarter     11-1/2             6             18      11-1/2
 3rd Quarter     10-1/2             7             13          11
 4th Quarter          9         6 1/2         14-1/2      11-1/2

Stockholders.

      The approximate number of beneficial stockholders of UM's common stock as
of March 6, 1998 was 7,000.

Dividends.

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


ITEM 6 - SELECTED FINANCIAL DATA.



                                   Year Ended December 31
                -------------------------------------------------------------
                   1997        1996         1995         1994         1993
                ----------  ----------   ----------   ----------   ----------
Net Sales      $24,271,640 $38,672,632  $42,038,082  $39,644,684  $36,999,059

Net Income       4,321,704   8,753,891    8,353,738    7,109,360    7,012,285

Diluted Earnings
 Per Share             .51         .93          .83          .68          .60

Total Assets    31,459,236  28,915,685   33,330,379   27,365,183   28,344,113

Long-term Debt   5,562,933      None         None         None         None
Cash Dividends
Per Common Share     None       None         None         None           $.06



                                      Quarterly Data for 1997
                 ------------------------------------------------------------
                 First Quarter  Second Quarter   Third Quarter  Fourth Quarter


 Net Sales          $5,173,394      $5,100,577      $7,018,810     $6,978,859

 Gross Profit        2,707,600       2,671,207       3,678,705      3,548,921

 Net Income          1,039,985         895,385       1,152,849      1,233,485

 Earnings Per Share
 - Diluted                 .12             .10             .14            .15


                                     Quarterly Data for 1996
                 ------------------------------------------------------------
                 First Quarter  Second Quarter   Third Quarter Fourth Quarter


 Net Sales          $9,967,590     $10,089,176      $9,993,639     $8,622,227

 Gross Profit        4,595,059       5,005,227       4,989,655      4,533,439

 Net Income          2,483,535       2,170,856       2,190,399      1,909,101

 Earnings Per Share
 - Diluted                 .25             .23             .24            .21



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.

Productivity of Assets and Working Capital.

     a)  Assets.  UM's 1997 year ending total assets increased by $2.5 million
relative to the end of 1996 as a result of the mid-year acquisition of Columbia
Medical, Inc (CMI).  Year ending assets attributable to CMI were about $7.1
million including working capital, net (after accumulated depreciation) property
and equipment, and net (after accumulated amortization) intangible assets of
about $1.0 million, $1.0 million and $5.1 million, respectively.  UM's total
asset turns (ratio of sales to total assets) declined in 1997 because average
total assets declined only 3%, while sales decreased 37%, both relative to 1996.
Total asset productivity is important as a factor to help maintain return on
shareholders' equity (ROE) at levels which will finance significant future
growth.  1997 total asset turns of 0.8 were below management's targeted long
term turn rate of 1.4.

     Although total 1997 year ending net property, plant and equipment assets
(PP&E) remained about the same as at year-end 1996, PP&E in Utah and Ireland
decreased $0.4 million and $0.6 million, respectively, to offset the $1.0
million increase by the CMI acquisition.  The decreases resulted from the fact
that in Utah depreciation of assets already in service exceeded purchases of new
or replacement PP&E assets, and in Ireland from currency translation adjustments
decreasing the U.S. dollar value of those assets.  Since UM has in place the
physical plant to support significant growth without major capital investment,
the trend of depreciation exceeding new PP&E purchases should continue in 1998
for the businesses in which UM currently participates.

     Working capital declined by $1.6 million because of the changes in UM's
business, including the CMI acquisition, but UM's current ratio improved to 4.4.
Cash and investments declined $3.5 million as a result of tying UM's daily cash
receipts and disbursements directly into its line of credit, in order to
minimize the credit line balance.  Inventories increased by $1.0 million, about
two-thirds of which came from the CMI acquisition.  The remaining inventory
increase was significant in light of the substantial decrease in business
activity.  After the termination of the Baxter agreement, UM honored longer term
purchase commitments with its vendors and sought to smooth the decline in its
workforce.  As a result, 1997 year ending average inventory turns declined to
2.2 times.  In 1998, the Company plans to reduce its inventories substantially
while increasing sales activity. 1997 year-ending accounts receivable (A/R)
balances increased $0.3 million relative to the end of 1996, and, at an average
aging of 54 days based on 4Q 1997 shipment activity, remained within
management's aging target.  A/R over 90 days from invoice date were less than 1%
of total A/R.  As UM continues to increase the share of its business invoiced
directly to end users, particularly hospitals, in contrast to distributors or
OEM's, maintaining A/R at current aging levels will become increasingly
difficult.  In 1998, the planned reduction in inventory by itself should be
sufficient to finance the increase in A/R resulting from increased sales
activity.

     b)  Liabilities.  Current liabilities (C/L) at year end 1997 were down 41%
from the prior year end, excluding the reserve for litigation expenses.  This
reflects 19% lower sales activity in 4Q 1997 relative to 4Q 1996, and also lower
raw material purchasing activity at the end of 1997 as a result of inventory
reduction programs.  The litigation reserve is an accumulated accrual against
the Company's income performance, anticipating the costs of future product
liability lawsuits, patent infringement litigation and other litigation that is
an inherent consequence of doing business in our society.  The reserve increased
$0.1 million in 1997 because UM accrued that much more against its 1997
performance than it experienced in actual litigation expenses.  Management
believes that the current accrual rate plus the $762,000 reserve balance will be
sufficient to fund known pending or planned litigation.

     UM established a credit line in the form of a long-term revolving
promissory note with its bank on April 4, 1997.  Under the note, the Company may
borrow up to $10 million at a floating interest rate tied to LIBOR or the Prime
Rate at UM's election.  Amounts borrowed under the note are unsecured.  The note
terminates on March 25, 1999.  At March 6, 1998, the balance on the note is
about $4.6 million at a current interest rate of approximately 7.13% per annum.
Other than the credit line, UM has no long term debt obligations.  UM's total
debt ratio (including both current and long-term liabilities as a percentage of
total assets) at the end of 1997 was 28%.

Results of Operations.
     a)  Revenues.  In 1997 as a whole, revenues were down 37% from 1996.  The
decline in business with Baxter represented 68% of the decline.  In the first
half (1H) of 1997, sales were down 49% relative to the 1H 1996.  For the 2H
1997, sales were down 25% from the 2H 1996.  The decline in Baxter revenues
represented 85% of the 2H decline.

     UM divides revenues into three categories: 1)  obstetrics, comprised of a
full line of equipment and supplies used in hospitals' labor & delivery
departments for fetal monitoring, operative vacuum delivery, umbilical cord
management, and meconium aspiration, as well as other needs;  2) gynecology
/urology /electrosurgery (ES) equipment and tools used especially for a
gynecologic electrosurgical procedure called LETZR, but also other
electrosurgical procedures including endoscopic procedures, and other non-
gynecological procedures such as tonsillectomies by otolaryngologists, abdominal
reconstructions and breast reductions by plastic surgeons, mammary artery grafts
by thoracic surgeons, nevus excision by dermatologists, and tumor excisions by
all surgeons; other tools used in other minimally invasive surgical procedures
including diagnostic laparoscopies; urinary incontinence management devices; and
urology pumps; and 3) disposable components used in critical care applications,
especially invasive blood pressure and ICP monitoring, but also disposable
respiratory products.  Revenues from contract molding are also included in this
"critical care" revenue category.

     UM achieves critical marketing mass through innovation in developing and
commercializing proprietary products that become the most recognized cost-
effective solution for certain clinical needs.  UM's primary revenue
contributors generally enjoy a dominant market share and have important product
features protected by patents.  In obstetrics, the Company owns eight fetal
monitoring patents with two others pending, five vacuum extraction patents and
four umbilical cord management patents.  In gynecology /urology /ES, the Company
owns four patents with four others pending.  In critical care applications, the
Company owns 14 patents, several of which are licensed to other medical
companies.

     Sales of obstetrics products in 1997 were $11,823,000 compared to
$15,802,000 in 1996, and $16,228,000 in 1995.  In 1997, obstetrics product
revenues declined $4.0 million relative to 1996 due to two competitors taking a
lower pricing strategy against INTRAN, with new products UM believes are
infringing the Company's patents.  In 1H 1997, the INTRAN sales decline was
amplified by depletion of inventory by terminated distributors and UM
repurchases of distributor inventory.  In 1997, sales of INTRAN represented 85%
of obstetrics sales, compared to 98% in 1996.  In the 2H 1997, due to the
acquisition of CMI, sales of INTRAN represented 77% of obstetrics sales.  Also,
beginning in 3Q 1997, UM introduced several versions of INTRAN PLUS designed to
address user preferences in tip size, zero switch location and amniotic fluid
visualization.  Obstetrics product sales in 2H 1997 were $7.4 million, compared
to $4.4 million in 1H 1997.  As a percentage of total UM sales, obstetrics
product revenues represented 49% in 1997 compared to 41% in 1996.

     Gynecology /urology /ES product sales were $3,859,000 in 1997 compared to
$3,534,000 in 1996 and $2,982,000 in 1995.  Several new products aided the
growth in 1997 including Epitome, a unique ES scalpel, Liberty, a conservative
therapy for female urinary incontinence, Pathfinder Plus , an irrigation device
for endoscopic procedures, and CMI's urology pumps.  In 1997, this category of
revenues represented 16% of total UM sales compared to 9% in 1996.  In contrast
to UM's other two product categories, a number of the products in this category
are designed for use in physicians' offices or outpatient clinics, and therefore
represent important diversification for UM's business.

     Critical care revenues were $8,589,000 in 1997 compared to $19,337,000 in
1996 and $22,828,000 in 1995.  Included in this category are transducers and
other components used in blood pressure monitoring sold to Baxter, which sales
in 1997 were $1,286,000 compared to $11,132,000 in 1996 and $14,996,000 in 1995.
The decline in sales to Baxter represented 92% of the decline from 1996 critical
care sales, and 96% of the decline from 1995 critical care sales.  The silver
lining in this cloud is the fact that UM no longer has one customer that
represents more than 37% of its total sales.  Sales to Baxter, still the largest
UM customer, represented 5% of UM's total sales in 1997.  Because of UM's
automated assembly capabilities, and established overseas customer base,
management expects to be able to sustain a reasonable base of business for its
critical care products that will continue to contribute to UM's profitability.

     UM divides its distribution channels into "direct" and "OEM" channels.
"Direct sales" are sales of UM's products by its own employed sales
representatives, by independent commissioned representatives, or by stocking
distributors in a particular geographic region.  Increasing direct sales are an
indication of the Company's ability to build its own marketing franchise. "OEM
sales" are sales of UM products by other medical device manufacturers either as
a component of a kit, or as a repackaged stand-alone product into markets not
served by UM's own direct sales resources.  In 1997, global direct sales
represented about 80% of total sales compared to about 63% in 1996, and 58% in
1995.  In the U.S., direct sales represented 86% of sales in 1997 compared to
73% in 1996 and 68% in 1995.  By product line category, dividing global sales
into the two distribution channels of direct and OEM, yields the following: 1)
obstetrics; 98% direct and 2% OEM in 1997, and 100% direct in both 1996 and
1995; 2) gynecology /urology /ES; 90% direct and 10% OEM in 1997, 95% direct and
5% OEM in 1996; and 96% direct and 4% OEM in 1995; and 3) critical care; 52%
direct and 48% OEM in 1997, 27% direct and 73% OEM in 1996; and 23% direct and
77% OEM in 1995.  Sales to Baxter are part of critical care OEM sales.

     Previous years' foreign sales included a substantial portion to Baxter
divisions overseas.  Including Baxter sales, foreign sales were $5,218,000 in
1997, compared to $9,739,000 in 1996 and $10,343,000 in 1995.  Excluding Baxter
sales, foreign sales were $5,009,000 in 1997, compared to $4,804,000 in 1996 and
$4,315,000 in 1995.  Foreign sales comprised 22% of total non-Baxter sales in
1997, compared to 17% in 1996 and 15% in 1995.  Excluding sales to Baxter,
critical care products represented 84% of foreign sales in 1997 compared to 83%
in 1996 and 92% in 1995.

     In 1998, UM sales should increase due to having the benefit of CMI sales
for the entire year compared to one half year in 1997.  UM intends to continue
marketing programs to expand sales of its newer products Epitome, Liberty,
Cordguard, and Filtresse, as well as introduce other Ob/Gyn niche products
currently in development and, if affordable, acquire synergistic products from
other companies.  UM continues to believe it has substantial sales potential for
its existing products in international markets, and therefore plans to continue
to commit resources for international business expansion.

     b)  Gross profits.  Gross profit margins (profit after subtracting costs of
manufacturing products from revenues) in 1997 were 51.9% compared to 49.4% in
1996 and 46.4% in 1995.  The 1997 improvement in average gross profit margin was
achieved from changes in the product mix and distribution mix.  In terms of
product mix, sales of UM's Ob/Gyn products increased to 65% of total sales in
1997 from 50% of total sales in 1996, and 46% of sales in 1995.  In terms of
distribution mix, sales in the U.S. by the Company's directly employed
representatives increased to about 81% of total domestic direct sales in 1997,
compared to 58% in 1996 and about 50% in 1995.  The distribution mix change is a
result of terminating stocking distributors, and replacing them with employed
sales representatives.  Average selling prices increase because fewer products
are sold to distributors at a discount, and therefore gross margins increase as
long as manufacturing costs do not increase in the same proportion.  Working
against gross margin improvements in 1997 was the fact that manufacturing
overhead (manufacturing costs excluding the costs of direct materials and direct
labor, e.g. depreciation of PP&E, utilities, engineering, QA and supervision)
were not reduced in proportion to the decline in sales.  If UM had reduced
manufacturing overhead costs in proportion to its decline in sales, that is, had
1997 manufacturing overhead expenses as a percentage of sales remained at 1995
and 1996 levels, average gross margins for 1997 would have been 56%.  UM has
improved its gross margins as a percentage of sales every year for the last
twelve years.  Additional gross margin improvements can be achieved if UM can
increase sales activity to better absorb its overhead expenses.  On the other
hand, management expects continued competitive pressure for its established
products that may reduce average selling prices and therefore put additional
pressure on gross margins in 1998.

     c)  Operating Profits.  Operating profits, or income from operations, are
the profits achieved after subtracting operating expenses from gross profits.
Operating profits in 1997 were $5,559,000 compared to $11,809,000 in 1996 and
$11,693,000 in 1995.  Even though 1997 gross margins were up as a percentage of
sales, operating profits were down 53% (compared to sales down 37%).  UM did not
decrease operating expenses in proportion to the sales decline in 1997 because
of management's belief that certain spending levels were necessary to increase
revenues in future years.  Although 1997 expenses in dollars decreased by $0.3
million relative to 1996 and by $0.7 million relative to 1995, operating
expenses increased to 29.0 % as a percentage of revenues in 1997 compared to
18.9% of revenues in 1996 and 18.5% of revenues in 1995.

     Operating expenses are subdivided into sales, general and administrative
expenses (SG&A) and research and development expenses (R&D).  UM further divides
SG&A into the two categories of sales and marketing expenses (S&M) and general
and administrative expenses (G&A).

     SG&A expenses in 1997 increased to 25.1% of revenues compared to 15.3% in
1996 and 14.3% in 1995.  There were three primary causes for the substantial
increase in SG&A expenses as a percentage of sales: 1) a substantial increase in
the proportion of UM's business that is direct versus OEM, combined with the
distribution mix change from distributors to directly-employed representatives
in UM's direct portion of its business;  2) amortization of goodwill associated
with the July CMI acquisition, and 3) spreading relatively fixed expenses over
fewer revenue dollars, for example, spending on new product marketing programs,
outside legal and accounting fees, and costs associated with being a publicly-
traded company, among others.  Because of the first two fundamental changes to
UM's business expenses, management expects future SG&A expenses as a percentage
of sales to remain closer to the 1997 rate than the earlier 1996 and 1995 rates,
even as sales volume increases.

     UM's S&M expenses are driven primarily by the direct sales portion of its
business.  Although UM desires to increase its OEM customers, particularly for
its blood pressure monitoring products and other products which serve markets
that are outside UM's sales focus, management expects that the direct portion of
UM's business will grow faster than the OEM portion, which represented about 20%
of total sales in 1997.  The distribution mix changes that had a positive impact
on gross margins in 1997 had a negative effect on selling expenses.  In 1997, UM
increased its direct sales force headcount by 20%.  Management believes that
achieving closer contact with end-users of its specialty products, as well as
having closer control of how its sales resources spend limited time, are key
elements to implementing its value-added niche marketing strategies.  In 1998,
UM has terminated an additional distributor, which should yield sales to
stocking distributors as a percentage of total direct U.S. sales less than 10%
in 1998.

     Although G&A expenses declined $0.1 million in 1997 relative to 1996, they
did so under greater requirements.  Included in the G&A expenses were
amortization of goodwill related to the CMI acquisition of $148,300, plus other
G&A expenses in Ireland and Oregon of $0.4 million that were not present in
1996.  In 1998, UM plans to hold its G&A dollar expenses in Utah and Ireland
consistent with 1997, but the addition of G&A expenses related to CMI for a
whole year added together with amortization of goodwill at an annual rate of
about $340,000 will result in G&A expenses as a percentage of sales
approximately the same in 1998 as in 1997.

     R&D expenses were 3.9% of sales in 1997 compared to 3.6% of sales in 1996
and 4.3% of sales in 1995.  UM's consistent investment of about 4% of annual
sales in R&D has yielded twenty-one 510(k) premarketing submissions to the FDA
over the last five years, a reasonable indicator of new product development
efforts.  In 1997, UM submitted four new 510(k) applications to the FDA.  In
addition, UM has filed or acquired twenty product patent applications over the
last five years, including nine in 1997.  The Company employs specialist R&D
resources not only to internally develop its own new product ideas, but also,
through joint development agreements, licensing of technology, acquisitions and
other arrangements, to enhance and complete to commercialization projects
initiated by others.  For example, UM began working in cooperation with Mayo
Clinic in May 1997 to develop and commercialize an advanced endometrial tissue
sampling approach designed by R. Stuart Fowler, M.D., Mayo Clinic, Scottsdale,
Arizona. UM expects to maintain its commitment to R&D in 1998 consistent with
the past as a percentage of sales.

     d)  Non-operating income.  Non-operating income includes royalties from
licensing UM's technology to other companies, interest and capital gains from
investing the Company's cash (offset by interest on UM's debt obligations), and
gains or losses from the sale of assets.  Non-operating income of $1.2 million
made a substantial contribution to 1997 performance.  Non-operating income in
1997 represented about 18% of pretax income, compared to 13% in 1996 and 9% in
1995.  Non-operating income in 1997 was about $0.6 million less than 1996
because of an extraordinary payment in 1996 relating to the use of UM's
technology.  Non-operating income in 1997 was slightly higher than in 1995.
Items in 1997 which were different from recent prior years included interest
expense of $250,000 from UM's use of a credit line to finance the purchase of
CMI, and a $196,000 gain from the sale of a small property in Lehi, Utah.
Royalties from other medical device companies continue to constitute a majority
of the non-operating income.  Royalties received vary from year to year
depending on the interest in UM's patents and/or success of other companies in
selling licensed product concepts.  Barring new technology licensing or other
extraordinary transactions, UM's management estimates that non-operating income
in 1998 will be lower than in 1997, due primarily to continued interest expense
on debt balances and no anticipated sales of property similar to 1997.

     e)  Earnings before income taxes.  Earnings before income taxes (EBT)
result from adding UM's non-operating income to its operating profits.  EBT, as
a percentage of sales, were 27.9% in 1997 compared to 35.3% and 30.6% in 1996
and 1995, respectively.  Despite much lower sales volume, UM was able to
maintain very high before tax profitability when compared with other publicly-
traded companies' performance.  Continued gross margin improvements, tight
controls on operating expenses and excellent non-operating income were the keys.
Except for the extraordinary year of 1996, UM's historical best year of
profitability, the Company achieved profitability consistent with previous years
in terms of earnings before taxes as a percentage of sales in the range of 28-
30%.

     f)  Net income.  Net income is EBT minus income taxes.  UM's effective
income tax rate was 36.2% in 1997 compared to 35.8% in 1996 and 35.0% in 1995.
UM's effective rate includes federal and state income taxes in the U.S., as well
as taxes overseas.  The increased tax rate in 1997 reflects the non-
deductibility of goodwill for tax purposes associated with the CMI acquisition,
a difference in the distribution of state taxes, a smaller amount of non-
operating income coming from tax-exempt securities, and other fluctuations
associated with the use of a foreign sales corporation and R&D tax credits.  The
Ireland operation did not generate enough profits at a lower income tax rate to
help reduce the overall effective rate in 1997.

     Net income of $4.3 million in 1997 on $24.3 million in sales ranks in the
top profitability tier of U.S. publicly-traded companies.  UM generates profits
equivalent in magnitude to profitable companies three times its size in
revenues.  Net income in 1997 was $4,322,000, compared to $8,754,000 in 1996 and
$8,354,000 in 1995.  Although an unfavorable comparison, the two years of 1996
and 1995 were by far the most profitable in UM's history, together representing
one-half of the cumulative profits generated over UM's prior 16 years of
business.  As further perspective, in the four years of 1993-1996, UM generated
$31.2 million in net profits in comparison to $20.3 million generated in the
fourteen years of 1979-1992.  Management believes net profits will grow in 1998.

     g)  Earnings per share (EPS).  EPS is net income divided by the number of
shares of stock outstanding (diluted to take effect for stock options awarded
which have exercise prices below the current market value).  Diluted EPS for
1997 were $.51 compared to $.93 for 1996 and $.82 for 1995.  Ending weighted
average common shares in 1997 assuming dilution (the number used to calculate
diluted EPS) were 8,495,415 compared to 9,451,581 and 10,042,430 shares in 1996
and 1995, respectively.  Actual outstanding common shares as of December 31,
1997 were 8,305,036.   The dilution calculation added about 51,000 shares to
basic shares outstanding in 1997, compared to about 181,000 in 1996 and 190,000
in 1995.

     h)  Return on shareholders' equity  (ROE).  ROE is the portion of net
income retained by UM  to internally finance its growth, divided by average
accumulated shareholders' equity during the period.  This ratio determines how
fast the Company can afford to grow without external financing that would dilute
shareholder interests.  For example, a 30% ROE will support 30% growth in
revenues.  ROE in 1997 at 18% was below management's target of 25%.  The primary
factor that lowered ROE in 1997 was the low number of asset turns, that is, the
level of sales activity relative to total assets was too low.  Including 1997,
ROE has averaged 30% over the last twelve years.

Cash Flows and Capital Resources.

     a)  Cash flows.  EBDIT (EBT, adjusted for non-cash depreciation and
amortization expenses, asset write-offs, and interest expense) are the measure
of UM's ability to generate cash.  1997 EBDIT were $8.3 million, or as a ratio
of sales, 34%.  EBDIT has averaged 34% of sales over the last five years.
Generating cash at a rate of one-third of sales provides UM with a powerful
financial engine for growth.  The Company obtained additional cash in 1997
through the use of its credit line, which as of the end of the year, provided an
additional $5.6 million in cash to facilitate the timing of the CMI acquisition.

     Cash (and equivalent) balances were $1.0 million at the end of 1997, a
decrease of $3.5 million from December 31, 1996.  The two major uses of cash in
1997 were the CMI acquisition which used about $7.3 million in cash after
consolidating with CMI's cash accounts, and repurchases of UM's stock in the
amount of $5.4 million.  The $7.3 million for CMI was used for acquiring about
$1.0 million in non-cash working capital (inventories and receivables less
payables), $1.1 million in PP&E (primarily molds and molding presses), and $5.2
million in intangible assets (goodwill, acquisition fees, and patents). Net
working capital changes excluding CMI used $1.2 million, primarily as a
reduction in current liabilities.

     b) Capital expenditures.  In addition to the $1.1 million in P&E purchased
as part of the CMI acquisition, UM also spent another $35,000 in Oregon to make
communications and computer equipment compatible with Utah.  UM expended
$777,000 in Utah and $407,000 in Ireland during 1997 for P&E, including
improvements and capitalized repairs to facilities, new and replacement
furniture, manufacturing equipment and tooling required to sustain operations,
as well as additional communications and computer equipment.  UM realized $9,000
from the sale or disposal of P&E assets in 1997.  For reference, depreciation
expense of P&E in 1997 for CMI, Utah and Ireland was $121,000, $1,010,000, and
$170,000, respectively.

     In addition to the $5.2 million in intangible assets (including goodwill)
purchased as part of the CMI acquisition, UM expended $0.4 million on the
acquisition of patents and trademarks for potential new products.  For
reference, amortization expense of intangibles in 1997 for CMI and for Utah was
$160,000 and $54,000, respectively.

     Excluding the possibility of additional acquisitions of new products,
technology or marketing rights, UM plans for capital expenditures in 1998 to be
less than current depreciation rates.

     c) Financing activities.  Financing activities in 1997 netted a cash
increase of $399,000 compared to using cash of $13,982,000 in 1996 and
$3,080,000 in 1995.  The Company repurchased its own common stock during 1997 in
the amount of $5,390,000, compared to  $14,583,000 in 1996 and $4,154,000 in
1995.  Offsetting the 1997 repurchases, UM received $227,000 from the issuance
of 29,500 shares of stock due to exercises of employee options.  On April 4,
1997, UM signed a long-term revolving promissory note with its bank under which
the Company can borrow up to $10,000,000 at a floating interest rate tied to
LIBOR or the Prime Rate, at UM's election.  Amounts borrowed under the note are
unsecured and are due March 25, 1999.  The note provided $5,563,000 at year end
1997.

     Management believes that future income from operations and effective
management of its working capital assets will provide the liquidity needed to
finance its internal growth plans.  In addition to capital expenditures
supporting operations, UM plans to use cash during the remainder of 1998 to
reduce existing debt incurred in the acquisition of CMI.  Additionally, the
credit line may be used for liquidity for selective infusions of technological,
marketing or product manufacturing rights or additional acquisitions to broaden
the Company's product offerings.

Management's Outlook.

     Although UM's established business from prior years dramatically contracted
in 1997, management is looking forward to 1998 with renewed optimism.  The
Baxter DPT business has gone away.  The full financial impact of the change was
realized as expected in 1997.  On a positive note, UM no longer has a huge
dependence on one customer.  The balance of UM's critical care product sales
appear stable, particularly overseas where DPT sales increased by 6% in 1997
compared to 1996.  In 1998, UM will continue to recruit and support OEM
marketing partners in the U.S. with the knowledge it can leverage its ability to
cost effectively produce the commodity blood pressure monitoring DPTs and other
components without additional capital investments.

     The more important loss in 1997 business, in terms of potential impact on
long term success, resulted from the change in the competitive landscape with
respect to UM's core obstetrical IUP product, INTRAN.  Performance in 2H 1997
demonstrated that Intran sales volume lost has been essentially replaced with
synergistic obstetrics products via the acquisition of CMI.  With the help of
the CMI acquisition, UM now offers the most complete line of supplies needed in
labor & delivery departments of hospitals.  In prior years, Intran sales
represented more than 80% of UM's Ob/Gyn sales, representing a very high level
of dependence on one product.  After the CMI acquisition, Intran represented
less than 60% of UM's Ob/Gyn sales even though IUPC sales in 2H 1997 were 30%
higher than 1H 1997.

     UM's direct U.S. sales team demonstrated its ability to communicate the
value of reliability in 2H 1997 by successfully stopping further erosion of
Intran's dominant IUPC market share by cheaper competing products.
Knowledgeable physicians do not wish to increase their risk of a negative
surprise in an inherently risky birthing procedure in order to save a few
dollars.  Ironically, experience has shown a higher cost from increased multiple
insertions of new catheters of the cheaper products may result when readings
appear inaccurate.  In 1998, the sales team will continue to aggressively
reinforce the superiority of the clinical benefits of UM's Intran Plus,
augmented by several new versions designed to address differences introduced by
new competitors.  UM believes these competitors are infringing its patents as
alleged in pending litigation being pursued by UM to protect its patented
technology.  The Intran options allow physician choices of tip size, zero button
location and amniotic fluid visualization.  In addition, UM expects greater
activity in 1998 toward resolving UM's claims of patent infringement against low
priced competitors.  If the Federal Courts support UM's position, the outcome
will be significant monetary awards for UM.  UM's IUPC patents have about eight
years of life remaining.

     UM believes that the next generation of fetal monitoring should help
physicians more clearly identify a sustained trend of decreasing fetal tissue pH
indicating an increased risk of metabolic acidosis, the persistent physiologic
condition most indicative of a fetus in trouble.  The corollary would be
allowing a physician to recognize transitory respiratory low pH, or non-
decreasing pH in conjunction with a non-reassuring FHR pattern, thereby allowing
labor to continue without an unnecessary C-section.  The clinical elegance of
the UM fetal pH measurement system in development adds a more timely fetal pH
assessment into the same probe that currently measures fetal heart rate, the
current standard of electronic fetal monitoring. The optical chemistry between
tissue and the probe is patented.  In 1998, UM will accelerate investment in
this key project in order to overcome the remaining technical challenges, and
begin human clinical trails to establish the safety and efficacy of the system.

     The niche markets for which UM's gynecology /urology /electrosurgery
products are targeted have proven to require many and varied marketing
initiatives.  In many cases, they require individual user training together with
clear evidence of improved outcomes.  Although 1997 sales of UM's new products
Liberty and Epitome increased by over 50% relative to 1996, growth in dollar
terms remained modest.  In 1998, UM will continue to look for ways to increase
the rate of adoption of its newer products, and for additional specific Ob/Gyn
clinical needs where innovations can become the most recognized cost-effective
solution.  The Fowler Endocurette for uterine biopsies is an example of such a
device.  UM plans to begin marketing the Endocurette during 1998 after receiving
FDA premarketing concurrence.  UM will continue to maintain a long-term
perspective and seek to strengthen its disease management focus with Ob/Gyn
physicians who it believes are ultimately responsible for their patients' well-
being.

Year 2000 Compliance

     With respect to the potential impact of the turn of the century date
change, UM has reviewed the processing routines used in all its electronic
products for any potential faults and has determined that all products are
"Century Date Independent." The date change at the beginning of the year 2000
will have no effect on the use or operation of UM's products.  The software that
UM uses internally to control its business operations along with some equipment
is not currently fully year 2000 compliant.  The Company intends to have such
software and equipment year 2000 compliant by late 1999, and does not anticipate
any interruptions to its business operations.  It is expected that costs
associated with addressing this issue will not be material to UM's business,
operations or financial condition.

Accounting Policy Changes

     The Company has, during 1997, adopted Statement of Financial Accounting
Standards (SFAS) No. 128, "Earnings Per Share".  Accordingly, these statements,
including historical information, present basic EPS and diluted EPS, instead of
primary and fully diluted EPS as previously required.  Note 9 of the Notes to
Consolidated Financial Statements presents further information regarding SFAS
No. 128.

     The Company, during 1996, adopted the disclosure-only provisions of
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation".  Accordingly, no compensation cost has been
recognized in the financial statements.  Note 8 of the Notes to Consolidated
Financial Statements presents net income and earnings per share as if the fair
value provisions of SFAS No. 123 had been applied.

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 18, 1997, UM determined not to engage Deloitte & Touche LLP,
Salt Lake City, Utah ("D&T SLC") as the Company's principal accountant to audit
and report on the Company's financial statements for the year ended December 31,
1997.  Significantly increased fees (bid at least 50% higher than for the
previous year, despite UM's decreased business activity) is the reason for the
change.  The report of D&T SLC on UM's financial statements consisting of
consolidated balance sheets as of December 31, 1996 and 1995, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the three years in the period ended December 31, 1996, did not contain an
adverse opinion or disclaimer of opinion and was not qualified or modified as to
audit scope or accounting principles.

     In connection with the Company's two most recent fiscal year audits and any
subsequent interim period preceding the dismissal of D&T SLC, there were no
disagreements with D&T SLC 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
UM's 1996 financial statements, D&T SLC noted no matters involving the internal
control structure and its operations that they considered to be material
weaknesses.

     On November 18, 1997, UM engaged Tanner + Co., Salt Lake City, Utah as
independent accountant and auditor to report on UM's financial statements for
the year ended December 31, 1997.  No consultations occurred between UM and
Tanner + Co. during the two most recent fiscal years and any subsequent interim
period prior to Tanner + Co.' s 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 UM'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.



                                   PART III.
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

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

ITEM 11 - EXECUTIVE COMPENSATION.

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

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

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

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      None.

                                    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.

           SEC
Exhibit Reference
Number    Number    Title of Document                             Location
------- --------   ------------------------------------------   ---------------
   1        2      Stock Purchase Agreement, dated as of July   Incorporated by
                    20, 1997 between Utah Medical Products,      Reference(1)
                    Inc., and Columbia Medical & Surgical, Inc.
                   Articles of Incorporation and Bylaws
   2        3      Articles of Restatement of the Articles of   Incorporated by
                    Incorporation                                Reference(2)
   3        3      Bylaws                                       Incorporated by
                                                                 Reference (2)
   4        4      Rights Agreement dated as of October 28,     Incorporatedby
                    1994, between Utah Medical Products, Inc.,   Reference (2)
                    and Registrar and Transfer Company
   5        4      Designation of Rights, Privileges, and       Incorporated by
                    Preferences of Series "A" Preferred Stock    Reference (2)
   6        10     Employment Agreement dated December 21, 1992 Incorporated by
                    with Kevin L. Cornwell                       Reference (2)
   7        10     Utah Medical Products, Inc., 1986 Incentive  Incorporated by
                    Stock Option Plan*                           Reference (2)
   8        10     Utah Medical Products, Inc., 1994 Employee   Incorporated by
                    Incentive Stock Option Plan*                 Reference (2)
   9        10     Utah Medical Products, Inc., 1993 Directors' Incorporated by
                    Stock Option Plan*                           Reference (2)
  10        10     Utah Medical Products, Inc., Performance     Incorporated by
                    Option Plan*                                 Reference (2)
  11        10     Revolving Loan Agreement, dated April 4,     This Filing
                    1997 between Utah Medical Products, Inc.
                    and First Security Bank, N.A.
  12        21     Subsidiaries of Utah Medical Products, Inc.  This Filing
  13        23     Consent of Tanner + Co., Company's           This Filing
                    independent auditors for the year ending
                    December 31, 1997
  14        23     Consent of Deloitte & Touche LLP, Company's  This Filing
                    independent auditors for the years ending
                    December 31, 1996 and December 31, 1995
  15        27     Financial Data Schedule                      This Filing


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

(1)  Incorporated by reference from the Company's current report on form 8-K/A
     dated August 7, 1997.

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

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

     (b) Reports on Form 8-K.
     None



                                   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 24th day of March, 1998.

                              UTAH MEDICAL PRODUCTS, INC.



                              By /s/ Kevin L. Cornwell
                              Chairman and CEO

                              By /s/ Kevin L. Cornwell
                              Secretary and CFO


     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 24th day of March, 1998.


                              By /s/ Stephen W. Bennett, Director



                              By: /s/ Kevin L. Cornwell, Director



                              By: /s/ Ernst G. Hoyer, Director



                              By: /s/ Perry L. Lane, Director
                              By: /s/ Barbara A. Payne, Director



<PAGE>


                                   UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                     Index to Consolidated Financial Statements


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





                                                                           Page


Report of Tanner + Co.                                                      F-2

Report of Deloitte & Touche LLP                                             F-3

Consolidated balance sheet                                                  F-4


Consolidated statement of income                                            F-5


Consolidated statement of stockholders' equity                              F-6


Consolidated statement of cash flows                                        F-8


Notes to consolidated financial statements                                  F-10
--------------------------------------------------------------------------------




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


See accompanying notes to financial statements.
                                                                            F-1

<PAGE>

                                   UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                                   INDEPENDENT AUDITORS' REPORT








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


We have audited the consolidated balance sheet of Utah Medical Products, Inc. as
of  December  31,  1997,  and the  related  consolidated  statements  of income,
stockholders' equity, and cash flows for the year then ended. 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. The  consolidated  financial  statements of Utah
Medical  Products,  Inc. at December  31, 1996 and for the two years then ended,
were audited by other  auditors whose report dated January 24, 1997 expressed an
unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing standards.
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 1997 consolidated  financial  statements  referred to above
present fairly, in all material respects, the financial position of Utah Medical
Products,  Inc. as of December 31, 1997, and the results of their operations and
their cash flows for the year then ended in conformity  with generally  accepted
accounting principles.



                                                  TANNER+Co.




Salt Lake City, Utah
January 16, 1998

                                                                             F-2

<PAGE>

INDEPENDENT AUDITORS' REPORT
Utah Medical Products, Inc.:

We have audited the accompanying consolidated balance sheet of Utah Medical
Products, Inc. and subsidiary as of December 31, 1996, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the two years in the period ended December 31, 1996.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  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, such consolidated financial statements present fairly, in all
material respects, the financial position of Utah Medical Products, Inc. and
subsidiary as of December 31, 1996, and the results of their operations and
their cash flows for each of the two years in the period ended December 31, 1996
in conformity with generally accepted accounting principles.


/s/ Deloitte & Touche

Salt Lake City, Utah
January 24, 1997

<PAGE>                                                                      F-3

                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                                      Consolidated Balance Sheet

                                                             December 31,
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

<S>                                                <C>                <C>
            Assets                                       1997          1996
            ------
                                                    ----------------------------

Current assets:
    Cash                                               $   951,084    $3,038,956
    Investments available for sale (note 3)                      -     1,458,543
    Accounts receivable, net (note 2)                    4,653,805     5,010,842
    Inventories (note 2)                                 5,792,058     4,750,442
    Prepaid expenses and other current assets              107,203        91,273
    Deferred income taxes (note 7)                         548,230       595,639
                                                    ----------------------------

                Total current assets                    12,052,380    14,945,695

Property and equipment, net (note 4)                    13,340,105    13,367,597

Other assets, net (note 2)                               6,066,751       602,393
                                                    ----------------------------

                Total                                  $31,459,236   $28,915,685
                                                    ============================

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

Current liabilities:
    Accounts payable                                   $   843,199    $1,885,743
    Accrued expenses (note 2)                            1,840,357     2,054,096
    Deferred revenue (note 10)                              85,600       135,600
                                                    ----------------------------

                Total current liabilities                2,769,156     4,075,439

Note payable (note 5)                                    5,562,933             -
Deferred income taxes (note 7)                             489,989       369,759
Deferred revenue (note 10)                                   1,774        87,492
                                                    ----------------------------

                Total liabilities                        8,823,852     4,532,690
                                                    ----------------------------

Commitments and contingencies (note 6)                           -             -

Stockholders' Equity:
    Preferred stock $.01 par value; authorized
      5,000,000 shares; no shares issued or
      outstanding                                                -             -
    Common stock $.01 par value; authorized
      50,000,000 shares; issued 8,305,036 shares
      in 1997 and 8,785,736 shares in 1996                  83,050        87,857
    Unrealized gain on investments available-for-
      sale, net of  tax                                          -        58,494
    Cumulative foreign currency translation
      adjustments                                         (656,345)      217,444
    Retained earnings                                   23,208,679    24,019,200
                                                    ----------------------------

                Total stockholders' equity              22,635,384    24,382,995
                                                    ----------------------------

                Total                                  $31,459,236   $28,915,685
                                                    ----------------------------

See accompanying notes to financial statements.                              F-4
<PAGE>

                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
                                                Consolidated Statement of Income

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


</TABLE>
<TABLE>
<S>                                               <C>                <C>            <C>


                                                         1997            1996           1995
                                                 ----------------------------------------------

Net sales (notes 10 and 12)                          $24,271,640     $38,672,632    $42,038,082

Cost of sales (note 10)                               11,665,207      19,549,252     22,549,039
                                                 ----------------------------------------------

            Gross margin                              12,606,433      19,123,380     19,489,043

Expenses:
    Selling, general, and administrative               6,089,244       5,926,897      6,006,499
    Research and development                             958,166       1,387,088      1,789,167
                                                 ----------------------------------------------

Income from operations                                 5,559,023      11,809,395     11,693,377

Other income (expense):
    Dividend and interest income                          85,081         453,918        584,960
    Royalty income                                       732,267         703,352        652,894
    Interest expense                                    (249,852)              -              -
    Other, net                                           648,373         677,067        (79,326)
                                                 ----------------------------------------------

Income before income tax expense                       6,774,892      13,643,732     12,851,905
Income tax expense (note 7)                           (2,453,188)     (4,889,841)    (4,498,167)
                                                 ----------------------------------------------

            Net income                                $4,321,704      $8,753,891     $8,353,738
                                                 ----------------------------------------------

Earnings per common share (basic)
  (notes 8 and 9)                                           $.51            $.93           $.83
                                                 ----------------------------------------------

Earnings per common share (diluted)
  (notes 8 and 9)                                           $.51            $.93           $.82
                                                 ----------------------------------------------

</TABLE>

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


See accompanying notes to financial statements.                              F-5

<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES

                                 Consolidated Statements of Stockholders' Equity

                                       Years Ended December 31, 1997, 1996, 1995
--------------------------------------------------------------------------------


<TABLE>
<S>                              <C>           <C>         <C>       <C>           <C>       <C>
                                                                      Unrealized
                                                                     Gain (loss) on Cumulative
                                                                     Investments     Foreign
                                                          Additional Available-for-  currency
                                       Common Stock        Pain-In   Sale, Net of  Translation  Retained
                                 ------------------------
                                    Shares      Amount     Capital       Tax       Adjustments  Earnings
                                 -----------------------------------------------------------------------

Balance, January 1, 1995         9,993,559     $99,935     $     -   ($101,815)    $     -   $23,442,200

Shares issued upon exercise
of employee stock options for
cash                               124,840       1,248           -           -           -       811,179

Shares issued upon exercise
of employee purchase rights         39,668         397           -           -           -       260,736

Change in unrealized gain
(loss) on investments
available-for-sale                       -           -           -     134,522           -             -

Tax benefit attributable to
appreciation of common stock
related to stock options and
purchase rights                          -           -     355,779           -           -             -

Common stock purchased and
retired                           (367,130)     (3,671)   (355,779)          -           -    (3,794,112)

Net income                               -           -           -           -           -     8,353,738
                                -----------------------------------------------------------------------

Balance, December 31, 1995       9,790,937      97,909           -      32,707           -    29,073,741

Shares issued upon exercise
of employee stock options for
cash                                68,599         686           -           -           -       600,967

Change in unrealized gain
(loss) on investments
available-for-sale                       -           -           -      25,787           -             -

Foreign currency translation
adjustments                              -           -           -           -     217,444             -

Tax benefit attributable to
appreciation of common stock
related to stock options and
purchase rights                          -           -     163,164           -           -             -

Common stock purchased and
retired                         (1,073,800)    (10,738)   (163,164)          -           -   (14,409,399)

</TABLE>

--------------------------------------------------------------------------------
See accompanying notes to financial statements.                              F-6
<PAGE>
                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
                                 Consolidated Statements of Stockholders' Equity
                                                                       Continued


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

<TABLE>
<S>                              <C>           <C>         <C>       <C>           <C>       <C>


                                                                      Unrealized
                                                                     Gain (loss) on Cumulative
                                                                     Investments     Foreign
                                                          Additional Available-for-  currency
                                       Common Stock        Pain-In   Sale, Net of  Translation  Retained
                                 ------------------------
                                    Shares      Amount     Capital       Tax       Adjustments  Earnings
                                 -----------------------------------------------------------------------

Net income                               -           -           -           -           -     8,753,891
                                 -----------------------------------------------------------------------

Balance, December 31, 1996       8,785,736      87,857           -      58,494     217,444    24,019,200

Shares issued upon exercise
of employee stock options for
cash                                29,500         295           -           -           -       226,330

Change in unrealized gain
(loss) on investments
available-for-sale                       -           -           -     (58,494)          -             -

Tax benefit attributable to
appreciation of common stock
related to stock options and
purchase rights                          -           -      26,767           -           -             -

Common stock purchased and
retired                           (510,200)     (5,102)    (26,767)          -           -    (5,358,555)

Foreign currency translation
adjustments                              -           -           -           -    (873,789)            -

Net income                               -           -           -           -           -     4,321,704
                                 -----------------------------------------------------------------------

Balance, December 31, 1997       8,305,036     $83,050     $     -     $     -   ($656,345)  $23,208,679
                                 =======================================================================
</TABLE>



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


See accompanying notes to financial statements.                              F-7
<PAGE>


                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
                                            Consolidated Statement of Cash Flows

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

<TABLE>
<S>                                                      <C>           <C>           <C>

                                                            1997          1996          1995
                                                     ------------------------------------------
Cash flows from operating activities:
  Net income                                             $4,321,704    $8,753,891    $8,353,738
  Adjustments to reconcile net income to
    net cash provided by operating activities:
    Depreciation and amortization                         1,515,153     1,377,051     1,714,906
    Provision for (recovery of) losses on accounts
      receivable                                            (35,409)         (935)        5,359
    (Gain) loss on disposal of assets                      (278,360)      412,224        24,563
    Deferred income taxes                                   195,552      (113,854)      (74,293)
    Tax benefit attributable to exercise and
      disposition of incentive stock options and
      stock purchase rights                                  26,767       163,164       355,779
    (Increase) decrease in:
        Accounts receivable                                 544,542     2,669,888       (89,813)
        Accrued interest, grant claims, and other
          receivables                                       665,650      (984,323)       (8,632)
        Inventories                                        (237,299)   (1,472,460)      745,957
        Prepaid expenses and other current assets            11,512       106,083      (131,502)
    Increase (decrease) in:
        Accounts payable                                 (1,136,230)      101,903       (37,462)
        Accrued expenses                                   (445,298)      216,011       334,551
        Deferred revenue                                   (135,716)      (35,716)      (84,996)
                                                     ------------------------------------------
                Net cash provided by
                operating activities                      5,012,568    11,192,927    11,108,155
                                                     ------------------------------------------

Cash flows from investing activities: Capital
  expenditures for:
    Property and equipment                               (1,219,408)   (5,639,548)   (2,074,745)
    Intangible assets                                      (454,153)     (320,018)      (62,144)
  Purchases of investments                                 (112,200)   (3,315,186)   (6,888,832)
  Proceeds from sale and maturities of investments        1,577,238    10,015,766     4,483,010
  Proceeds from sale of property and equipment                8,510        21,750           350
  Net cash paid in acquisition                           (7,299,561)            -             -
                                                     ------------------------------------------
                Net cash (used in) provided by
                investing activities:                    (7,499,574)      762,764    (4,542,361)
                                                     ------------------------------------------

Cash flows from financing activities:
  Proceeds from issuance of common stock                    226,625       601,653     1,073,560
  Common stock purchased and retired                     (5,390,424)  (14,583,301)   (4,153,562)
  Increase in note payable                                5,562,933             -             -
                                                     ------------------------------------------
                Net cash provided by (used in)
                financing activities                        399,134   (13,981,648)   (3,080,002)
                                                     ------------------------------------------
</TABLE>



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


See accompanying notes to financial statements.                              F-8

<PAGE>
                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
                                             Consolidated Statement of Cash Flow
                                                                       Continued

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


<TABLE>
<S>                                                      <C>           <C>            <C>

                                                                    Years Ended
                                                                    December 31,
                                                     ------------------------------------------
                                                            1997          1996          1995
                                                     ------------------------------------------

Net (decrease) increase in  cash                         (2,087,872)   (2,025,957)    3,485,792

Cash at beginning of year                                 3,038,956     5,064,913     1,579,121
                                                     ------------------------------------------

Cash at end of year                                        $951,084    $3,038,956    $5,064,913
                                                     ==========================================

Supplemental disclosures of cash flow information:

  Cash paid during the year for:

        Income taxes                                     $2,306,515    $5,111,183    $4,156,894
                                                     ==========================================

        Interest                                           $249,852           $ -           $ -
                                                     ==========================================
</TABLE>

Supplemental schedule for non-cash investing and financing activities:

During 1997, the Company sold property in exchange for a receivable of $340,000.

During  1997,  the Company  purchased  all of the  outstanding  common  stock of
Columbia Medical,  Inc. (Columbia) in a purchase  transaction.  The Company paid
cash of  $8,159,829  for the  common  stock and  recorded  net  assets  from the
acquisition as follows:


Cash                                                                   $860,268
Accounts receivable                                                     477,746
Inventory                                                               804,317
Prepaids and other                                                       27,442
Deferred income taxes                                                    27,913
Property and equipment, net                                           1,061,896
Intangibles                                                           5,225,492
Accounts payable                                                        (93,686)
Accrued expenses                                                       (231,559)
                                                                 ---------------

Total cash paid                                                       8,159,829
Less cash received                                                     (860,268)
                                                                 ---------------

                Net cash investment                                 $(7,299,561)
                                                                 ===============



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


See accompanying notes to financial statements.                              F-9

<PAGE>


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

                                   Years Ended December 31, 1997, 1996, and 1995
--------------------------------------------------------------------------------


1.   Summary of Significant Accounting Policies
Organization
Utah Medical Products, Inc. and its wholly owned subsidiaries, Utah
Medical Products Ltd. which operates a manufacturing facility in Ireland,
and Columbia Medical, Inc. (the Company) are in the business of
producing cost-effective 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.

Basis of Presentation
Effective july 1, 1997, the Company acquired Columbia Medical, Inc. (Columbia)
in a purchase transaction.  Operations of Columbia have been included in the
consolidated operations since the date of purchase.  A pro forma conensed
income statement for the year ended December 31, 1997 as though the purchase
had taken place effective January 1, 1997 has not been presented as the
amounts are immaterial to the operations of the Company.

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.

Reclassifications
Certain changes to the presentation of the 1996 and 1995 consolidated  financial
statements have been made to conform with the 1997 presentation.

Investments Available-For-Sale
Investments consist of mutual funds,  bonds, and equities.  The Company complies
with the provisions of Statement of Financial  Accounting  Standards  (SFAS) No.
115,  Accounting for Certain  Investments in Debt and Equity  Securities.  Under
SFAS No. 115, the Company's  investments  are  classified as  available-for-sale
which results in an adjustment to stockholders'  equity for unrealized gains and
losses (see Note 3).  Realized  gains and losses are  determined by the specific
identification method.

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

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).


--------------------------------------------------------------------------------
                                                                            F-10

<PAGE>
                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
                                      Notes to Consolidated Financial Statements
                                                                       Continued


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



1.   Summary of Significant Accounting Policies Continued
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

Intangible Assets
Costs associated with the acquisition of patents, trademarks,  goodwill, license
rights,  and a non-compete  agreement,  are  capitalized and amortized using the
straight-line method over periods ranging from 5 to 17 years.

Income Taxes
The Company accounts for income taxes under SFAS No. 109,  Accounting for Income
Taxes,  whereby deferred taxes are computed under the liability method (see Note
7).

Deferred Revenue
Amounts  received in advance from  customers for the sale of product  rights and
price  reductions  are  recognized  as revenue as the related  products are sold
considering the future marketability of the products.

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

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

Statement of Cash Flow
For purposes of the consolidated statements 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.

--------------------------------------------------------------------------------
                                                                            F-11
<PAGE>

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

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

1.   Summary of Significant Accounting Policies Continued
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.  Income and expense
items are translated at the average rate of exchange  during the year. Net gains
or losses resulting from the translation of the Company's assets and liabilities
are reflected as a separate component of stockholders' equity.

Concentration of Credit Risk
Financial  instruments which potentially subject the Company to concentration of
credit risk consist  primarily  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.

The  Company's  customer  base  consists  primarily  of health  care  providers.
Although  the Company is  directly  affected  by the  well-being  of the medical
industry, management does not believe significant credit risk exists at December
31, 1997.

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

Use of Estimates in the  Preparation of Financial  Statements The preparation of
financial statements in conformity with generally accepted accounting principles
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.  Actual results could differ
from those estimates.


--------------------------------------------------------------------------------
                                                                            F-12

<PAGE>
                                    UTAH MEDICAL PRODUCTS, INC. AND SUBSIDIARIES
                                      Notes to Consolidated Financial Statements
                                                                       Continued

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


2.   Detail of Certain Balance Sheet Accounts

                                                        December 31,
                                            ------------------------------------
                                                   1997              1996
                                            ------------------------------------
Accounts receivable:
     Trade receivables                             $3,820,147        $3,886,943
     Grant claim receivables                          337,023           961,408
     Accrued interest and other                       543,312           244,577
     Less allowance for
       doubtful accounts                              (46,677)          (82,086)
                                            ------------------------------------

                                                   $4,653,805        $5,010,842
                                            ===================================

Inventories:
     Finished products                             $1,231,584        $1,000,438
     Work-in-process                                1,204,873         1,010,086
     Raw materials                                  3,355,601         2,739,918
                                            -----------------------------------

                                                   $5,792,058        $4,750,442
                                            ===================================

Other assets:
     Goodwill                                      $5,029,613            $1,000
     Patents                                        1,497,781           897,516
     License rights                                   293,151           293,151
     Trademarks                                       220,591           220,898
     Non-compete agrement                              50,000                 -
                                            -----------------------------------

                                                    7,091,136         1,412,565
     Accumulated amorization                       (1,024,385)         (810,172)
                                            ------------------------------------

                                                   $6,066,751          $602,393
                                            ====================================

Accrued expenses:
     Payroll and payroll taxes                       $777,773        $1,132,309
     Reserve for litigation costs                     761,556           649,840
     Other                                            301,028           271,947
                                            -----------------------------------

                                                   $1,840,357        $2,054,096
                                            ===================================

--------------------------------------------------------------------------------
                                                                            F-13

<PAGE>

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

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


3.   Investments
The amortized  cost and estimated  market values of investment  securities as of
December 31, 1996 were as follows:


                                        Gross          Gross       Estimated
                        Amortized     Unrealized    Unrealized       Market
                          Cost           Gain         Losses         Value
                     ----------------------------------------------------------

Municipal bonds             $521,040          $  -          ($411)     $520,629
Equities and other           843,633       104,286        (10,005)      937,914
                     ----------------------------------------------------------

Total                     $1,364,673      $104,286       ($10,416)   $1,458,543
                     ==========================================================



During the years ended December 31, 1997, 1996, and 1995, there were $1,577,238,
$10,015,766  and  $4,483,010,   respectively,  in  proceeds  from  the  sale  of
investment  securities  resulting in gross realized losses of $17,581,  $28,476,
and $8,328,  respectively,  and gross realized gains of $119,940, $15,341, and
$59,187, respectively.


The net unrealized gain on investment securities  available-for-sale included in
stockholders'  equity for the years ended  December 31, 1997,  1996, and 1995 is
$-0-,  $58,494,  and  $32,707,  respectively,  which are net of the deferred tax
liability of $-0-, $35,376, and $19,792, respectively.

-------------------------------------------------------------------------------
                                                                           F-14

<PAGE>

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

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

4.   Property and Equipment
Property and equipment consists of the following:

                                                        December 31,
                                            ------------------------------------
                                                   1997              1996
                                            ------------------------------------

Land                                               $1,008,598        $1,126,662
Buildings and improvements                          7,818,257         8,288,750
Furniture, equipment, and tooling                  12,162,583        10,066,608
Construction-in-progress                              562,641           900,622
                                            ------------------------------------

                                                   21,552,079        20,382,642

Accumulated depreciation and
amortization                                       (8,211,974)       (7,015,045)
                                            ------------------------------------

                                                  $13,340,105       $13,367,597
                                            ====================================

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

                                          December 31, 1997
                          -----------------------------------------------------
                              Utah         Oregon       Ireland       Total
                          -----------------------------------------------------

Land                         $  621,250    $        -   $  387,348   $1,008,598
Building and improvements     3,637,111        32,261    4,148,885    7,818,257
Furniture, equipment,  and
  tooling                    10,286,976     1,083,147      792,460   12,162,583
Construction-in-progress        561,549         1,092            -      562,641
                          -----------------------------------------------------

Total                        15,106,886     1,116,500    5,328,693   21,552,079

Accumulated depreciation
  and amortization           (7,802,719)     (120,596)    (288,659)  (8,211,974)
                          -----------------------------------------------------

Property and equipment, net  $7,304,167      $995,904   $5,040,034  $13,340,105
                          =====================================================


--------------------------------------------------------------------------------
                                                                            F-15

<PAGE>

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

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

4.   Property and Equipment Continued

                                                December 31, 1996
                                 -----------------------------------------------
                                       U.S.          Ireland         Total
                                 -----------------------------------------------

Land                                    $678,447       $448,215      $1,126,662
Building and improvements              3,551,139      4,737,611       8,288,750
Furniture, equipment, and
  tooling                              9,735,395        331,213      10,066,608
Construction-in-progress                 662,514        238,108         900,622
                                 -----------------------------------------------

Total                                 14,627,495      5,755,147      20,382,642

Accumulated depreciation
  and amortization                    (6,896,623)      (118,422)     (7,015,045)
                                 -----------------------------------------------

Property and equipment, net           $7,730,872     $5,636,725     $13,367,597
                                 ===============================================



5.   Note Payable
The  Company has a bank  line-of-credit  agreement  which  allows the Company to
borrow a maximum  amount of  $10,000,000 at an interest rate equal to the bank's
LIBOR rate plus 1.45% or .8% below the bank's  prime  rate.  The  line-of-credit
matures  on March 25,  1999,  is  unsecured  and had an  outstanding  balance of
$5,562,933 at December 31, 1997.


6.   Commitments and Contingencies
Operating Leases
The Company has an operating  lease  agreement for land  adjoining the Company's
U.S.  facilities  for a term of forty years  commencing on September 1, 1991. On
September 1, 1996 and  subsequent to each fifth lease year,  the basic rental is
adjusted for published changes in a price index. The Company also leases certain
buildings  under  noncancelable   operating  leases.  Rent  expense  charged  to
operations  under these operating lease  agreements was  approximately  $75,000,
$33,000 and  $32,000 for the years ended  December  31,  1997,  1996,  and 1995,
respectively.


-------------------------------------------------------------------------------
                                                                           F-16

<PAGE>

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

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



6.   Commitments and Contingencies Continued
Future  minimum lease  payments  under the  operating  lease  obligations  as of
December 31, 1997 were as follows:


Year ending December 31:                                       Amounts
                                                          -----------------

     1998                                                          $115,836
     1999                                                            68,607
     2000                                                            34,874
     2001                                                            34,874
     2002                                                            34,874
     Thereafter                                                     999,723
                                                          -----------------

Total minimum lease payments                                     $1,288,788
                                                          =================



Product Liability
The Company is self-insured for product liability risk.


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
















--------------------------------------------------------------------------------
                                                                            F-17

<PAGE>

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

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




7.   Income Taxes
Deferred tax assets (liabilities) consist of the following temporary
differences:


                                                     December 31,
                                       ----------------------------------------
                                               1997                1996
                                       ----------------------------------------
                                        Current  Long-term  Current  Long-term
                                       ----------------------------------------
Assets
Inventory write-down                     $103,376      $  -  $199,477      $  -
Allowance for doubtful accounts            17,737         -    30,946         -
Accrued liabilities                       393,914         -   349,471         -
Deferred revenue                           33,203         -    51,121    32,941
Other                                           -         -         -     9,732
                                       ----------------------------------------

Total                                     548,230         -   631,015    42,673

Liabilities
Unrealized gain on investments available-
  for-sale                                      -  (382,552)  (35,376)        -
Depreciation and amortization                                          (412,432)
Earnings from subsidiary                        -  (107,437)        -         -
                                       ----------------------------------------

Deferred income taxes, net               $548,230 ($489,989) $595,639 ($369,759)
                                       ========================================



The components of income tax expense are as follows:


                                                   Years Ended
                                                  December 31,
                                 -----------------------------------------------
                                       1997           1996            1995
                                 -----------------------------------------------

Current                               $2,285,549     $5,003,695      $4,572,460
Deferred                                 167,639       (113,854)        (74,293)
                                 -----------------------------------------------

Total                                 $2,453,188     $4,889,841      $4,498,167
                                 ===============================================



--------------------------------------------------------------------------------
                                                                            F-18

<PAGE>

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

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


7.   Income Taxes Continued
Income tax expense  differed  from amounts  computed by applying  the  statutory
Federal rate to pretax income as follows:


                                                    Years Ended
                                                    December 31,
                                     ------------------------------------------
                                          1997          1996          1995
                                     ------------------------------------------

Federal income tax expense at
  the statutory rate                     $2,303,463    $4,638,869    $4,369,648
Non-taxable investment income                (7,422)      (76,512)     (124,604)
State income taxes                          309,205       718,724       642,638
Foreign sales corporation                   (85,000)     (223,376)     (228,760)
Other                                       (67,058)     (167,864)     (160,755)
                                     ------------------------------------------

Total                                    $2,453,188    $4,889,841    $4,498,167
                                     ==========================================


8.   Stockholders' Equity 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  4,722,500 shares of common stock. All options granted under the plans
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.


--------------------------------------------------------------------------------
                                                                            F-19

<PAGE>

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

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



8.   Stockholders' Equity Continued
Changes in stock options were as follows:


                                                              Price Range
                                              Shares           Per Share
                                          --------------------------------------
1997
Granted                                      454,700        $6.75     -  $11.50
Expired or canceled                          229,452         6.75     -   14.25
Exercised                                     29,500         7.25     -   10.00
Total outstanding at December 31             888,348         6.75     -   14.25
Total exercisable at December 31             355,971         7.25     -   14.25

1996
Granted                                      451,500       $14.25     -  $20.50
Expired or canceled                          276,620         7.25     -   20.50
Exercised                                     68,599         7.25     -   11.33
Total outstanding at December 31             692,600         7.25     -   14.25
Total exercisable at December 31             295,996         7.25     -   11.33

1995
Granted                                      200,000        $9.50     -  $10.63
Expired or canceled                           39,517         6.58     -   10.00
Exercised                                    124,840         6.33     -   10.00
Total outstanding at December 31             586,319         7.25     -   11.33
Total exercisable at December 31             198,500         7.25     -   11.33


For the years ended  December  31, 1997,  1996,  and 1995,  the Company  reduced
current  income  taxes  payable  and  increased  additional  paid-in  capital by
$26,767,  $163,164,  and  $355,779,  respectively,  for the income  tax  benefit
attributable  to  appreciation  of common  stock  related to stock  options  and
purchase rights.


--------------------------------------------------------------------------------
                                                                            F-20

<PAGE>

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

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


8.   Stockholders' Equity Continued
Stock-Based Compensation
The Company has adopted the disclosure-only provisions of Statement of Financial
Accounting  Standards (SFAS) No. 123,  Accounting for Stock-Based  Compensation.
Accordingly,   no  compensation  cost  has  been  recognized  in  the  financial
statements.  Had  compensation  cost for the  Company's  stock option plans been
determined based on the fair value at the grant date for awards in 1997 and 1996
consistent  with the  provisions of SFAS No. 123, the Company's net earnings and
earnings  per share would have been reduced to the pro forma  amounts  indicated
below:


                                                   December 31,
                                        -----------------------------------
                                               1997             1996
                                        -----------------------------------

Net income as reported                          $4,321,704       $8,753,891
Net income pro forma                            $3,933,455       $8,580,509
Earnings per share assuming full
  dilution as reported                                $.51             $.93
Earnings per share assuming full
  dilution pro forma                                  $.46             $.91



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:


                                                       December 31,
                                            -----------------------------------
                                                   1997             1996
                                            -----------------------------------

Expected dividend yield                                   $  -             $  -
Expected stock price volatility                          47.6%            48.7%
Risk-free interest rate
  (weighted average)                                     6.27%            6.57%
Expected life of options                             3.8 years        3.6 years
                                            ===================================



The per-share  weighted  average fair value of options  granted  during 1997 and
1996 is $4.10 and $4.67, respectively.


--------------------------------------------------------------------------------
                                                                            F-21

<PAGE>

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

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


8.   Stockholders' Equity Continued
The following table summarizes  information  about stock options  outstanding at
December 31, 1997:


                        Options Outstanding              Options Exercisable
              ------------------------------------------------------------------
                             Weighted
                              Average
                 Number      Remaining    Weighted      Number       Weighted
   Range of    Outstanding  Contractual    Average    Exercisable    Average
   Exercise        at          Life       Exercise         at        Exercise
    Prices      12/31/97      (Years)       Price      12/31/97       Price
--------------------------------------------------------------------------------

$6.75 -  8.00    330,349       8.71       $ 7.13       148,136        7.28
 9.50 - 14.25    557,999       8.08        11.69       207,835       10.89
--------------------------------------------------------------------------------

$6.75 - 14.25    888,348       8.40       $ 9.99       355,971      $ 9.39
================================================================================



9.   Earnings Per Share
In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards No. 128 (SFAS 128)  "Earnings Per Share," which
requires  companies  to  present  basic  earnings  per share  (EPS) and  diluted
earnings per share,  instead of the primary and fully  diluted EPS as previously
required. The new standard also requires additional  informational  disclosures,
and makes certain  modifications  to the previously  applicable EPS calculations
defined in Accounting  Principles  Board No. 15. The new standard is required to
be adopted by all public  companies for reporting  periods ending after December
15, 1997, and requires restatement of EPS for all prior periods reported. During
the year ended December 31, 1997, the Company adopted this standard.


--------------------------------------------------------------------------------
                                                                            F-22

<PAGE>

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

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

9.   Earnings Per Share Continued
Earnings per share information in accordance with SFAS 128 is as follows:


                                          Year Ended December 31, 1997
                                 -----------------------------------------------
                                      Income          Shares        Per-Share
                                   (Numerator)     (Denominator)      Amount
                                 -----------------------------------------------

Net income                         $4,321,704
Less preferred stock
  dividends                                 -
                                 ----------------
Basic EPS
Income available to
  common stockholders               4,321,704        8,444,036             $.51
                                                                  --------------
Effect of Dilutive Securities
Stock options                               -           51,379
                                 ---------------------------------
Diluted EPS
Income available to common
  stockholders plus assumed
  conversions                      $4,321,704        8,495,415             $.51
                                 ===============================================




                                          Year Ended December 31, 1996
                                 -----------------------------------------------
                                      Income          Shares        Per-Share
                                   (Numerator)     (Denominator)      Amount
                                 -----------------------------------------------

Net income                         $8,753,891
Less preferred stock
  dividends                                 -
                                 ----------------
Basic EPS
Income available to
  common stockholders               8,753,891        9,270,861             $.94
                                                                  --------------
Effect of Dilutive Securities
Stock options                               -          180,720
                                 ---------------------------------
Diluted EPS
Income available to common
  stockholders plus assumed
  conversions                      $8,753,891        9,451,581             $.93
                                 ===============================================



--------------------------------------------------------------------------------
                                                                            F-23

<PAGE>

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

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

9.   Earnings Per Share Continued

                                          Year Ended December 31, 1995
                                 -----------------------------------------------
                                      Income          Shares        Per-Share
                                   (Numerator)     (Denominator)      Amount
                                 -----------------------------------------------

Net income                          $8,353,738
Less preferred stock
  dividends                                  -
                                 ----------------
Basic EPS
Income available to
  common stockholders                8,353,738        9,852,559             $.85
                                                                  --------------
Effect of Dilutive Securities
Stock options                                -          189,871
                                 ---------------------------------
Diluted EPS
Income available to common
  stockholders plus assumed
  conversions                       $8,353,738       10,042,430             $.83
                                 ===============================================



10.  Product Sale and Purchase Commitments
The Company had exclusive and  nonexclusive  agreements to sell certain products
to Baxter Healthcare Corporation (Baxter) under license agreements and had sales
to Baxter of approximately $1,286,000,  $11,132,000,  and $14,996,000 during the
years ended December 31, 1997, 1996, and 1995, respectively.


The Company has license  agreements  with other  unrelated  companies to provide
exclusive  and  nonexclusive  rights  to  purchase,   market,   distribute,   or
manufacture the Company's  products.  The Company received royalties and license
fees,  some of which  were  received  in  advance  and have  been  deferred  and
amortized over the terms of the respective agreements.


The Company has license  agreements for the rights to develop and market certain
products owned by unrelated  parties.  Under the terms of such  agreements,  the
Company is required to pay royalties  ranging from 1.5% to 5.0% of sales, and in
one case certain payments to the developer contingent upon the product achieving
certain annual revenue thresholds.



-------------------------------------------------------------------------------
                                                                            F-24

<PAGE>

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

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


11.  Employee Benefit Plan
The Company has a  contributory  401(k)  savings plan for  employees who work 30
hours or more each week, who are at least 21 years of age, and have a minimum of
one year of service with the Company.  The Company's  contribution is determined
annually by the Board of Directors and was approximately  $54,100,  $78,800, and
$57,200, for the years ended December 31, 1997, 1996, and 1995, respectively.

12.  Export Sales
Sales  to  customers  in  foreign  countries  were   approximately   $5,218,000,
$9,739,000,  and  $10,343,000  for the years ended December 31, 1997,  1996, and
1995, respectively.

13.  Fair Value of Financial Instruments
None of the Company's financial  instruments are held for trading purposes.  The
Company  estimates that the fair value of all financial  instruments at December
31, 1997, does not differ  materially from the aggregate  carrying values of its
financial  instruments recorded in the accompanying balance sheet. The estimated
fair value amounts have been  determined by the Company using  available  market
information and appropriate valuation  methodologies.  Considerable judgement is
necessarily  required in  interpreting  market data to develop the  estimates of
fair value, and,  accordingly,  the estimates are not necessarily  indicative of
the amounts that the Company could realize in a current market exchange.


14.  Recently Issued Accounting Statements
In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130 (SFAS 130),  "Reporting  Comprehensive  Income." SFAS 130 requires  entities
presenting  a  complete  set of  financial  statements  to  include  details  of
comprehensive  income that arise in the reporting period.  Comprehensive  income
consists  of net income or loss for the current  period and other  comprehensive
income, which consists of revenue,  expenses,  gains, and losses that bypass the
income  statement and are reported  directly in a separate  component of equity.
This statement is effective for fiscal years  beginning after December 15, 1997,
and requires  restatement  of prior period  financial  statements  presented for
comparative purposes.

--------------------------------------------------------------------------------
                                                                            F-25

<PAGE>